ETF broker pays $25,000 penalty
Exchange-traded fund (ETF) broker Susquehanna Pacific Pty Ltd has paid a penalty of $25,000 for switching off the price filter in its automated order processing (AOP) system for ETFs, according to the Australian Securities and Investments Commission (ASIC).
The fine is in compliance with the infringement notice given to the broker by the Markets Disciplinary Panel (MDP) for not having in place at all times an appropriate price filter in its automated order processing system for ETFs.
According to ASIC, Susquehanna inadvertently disabled a price filter for ETFs due to the upgrade of the AOP system. However, the upgrade did not affect the trading of products other than ETFs.
The following Monday, Susquehanna's automated quoting system miscalculated the price of fully paid units in SPDR MSCI Australia Select High Dividend Yield Fund (SYI) and amended the price of an existing order to sell SYI from $22.71 to $0.046.
The order resulted in four market transactions for a total of $8,000 SYI at the buy price of $0.055 0 - a 99.76 per cent decrease.
A Susquehanna Representative then requested trade cancellations from the Australian Securities Exchange Market Control, which were granted.
However, the events resulted in an infringement notice issued to the company by the MDP. Susquehanna was ordered to pay $25,000, though the maximum penalty that MDP could require the company to pay is $600,000.
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