ASIC identifies mis-selling by securities dealers
Securities dealers are the latest to feel the scrutiny of the Australian Securities and Investments Commission (ASIC) with the regulator claiming some are giving inadequate advice while others are guilty of mis-selling securities and other financial products as a result of misleading advertising.
ASIC's assessment is attached to the release of proposed rules and guidance on automatic trading as part of its fourth report on the supervision of financial markets and market participants.
On the question of securities dealers it said that ASIC had found that some securities dealers were not taking adequate steps to ensure their advisers were giving adequate advice to clients.
"ASIC also found instances of mis-selling of securities and other financial products as a result of misleading advertising," it said.
ASIC deputy chairman Belinda Gibson said that the regulator intended including such information on securities dealers in future reports, separately from market participants.
ASIC's proposed rules and guidance on automated trading are designed to make the underlying system more robust, with Gibson saying enhancements in participant level controls together with market level controls would build confidence in the integrity and cleanliness of Australia's capital markets.
She said the increasing automation of trading and ASIC's focus on such practices had identified issues with high frequency trading.
"This type of trading, and algorithms generally, continue to be of concern," Gibson said. "The measures we are proposing will strengthen our protection against the type of disruption we have seen in other markets."
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