Nomura fined by ASIC for trader error
Nomura Australia has paid a $30,000 penalty to ASIC after receiving a market infringement penalty from ASIC's Markets Disciplinary Panel.
The decision to fine Nomura stems from two orders to sell the security Alumina Limited (AWC) that resulted in the market for AWC not being "fair and orderly" - breaching rule 5.9.1 of the ASIC Market Integrity Rules.
On 18 March 2011 a Nomura trader sought to enter a 'parent order' (which subsequently splits up the order into smaller 'child' orders that are entered into the market) to sell one million AWC shares at $2.16.
Less than one minute later, the trader entered a second order to sell one million AWC shares at $2.00, under the mistaken belief that the first trade had not registered in the system.
As a result of the second trade, the asking price for AWC decreased by 9 per cent from $2.20 to $2.00.
Nomura did not contest the matter, and ASIC noted that the company has "no recorded non-compliance with the Market Integrity Rules or the prior ASX Market Rules".
However, ASIC found that Nomura "did not have any specific controls in place to prevent an error such as the one in this matter".
Recommended for you
As advisers risk losing two-thirds of FUA during the $3.5 trillion wealth transfer, two co-founders underscore why fostering trust with the next generation is vital to retaining intergenerational wealth.
As advisers seek greater insights into FSCP determinations, what are the various options considered by the panel and can a decision be appealed?
Amid the current financial adviser shortage, advice firm Link Wealth is looking to expand its financial literacy program for high school students across the country.
TAL Risk Academy has updated its range of ethics courses to help financial advisers meet their CPD requirements following adviser feedback, including interpreting FSCP determinations.
