Pershing Securities hit with $40,000 infringement
Execution and clearing house solutions provider, Pershing Securities Australia Pty Ltd has paid a penalty of $40,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (MDP).
The penalty related to the MDP declaring that it had reasonable grounds to believe that Pershing had contravened subsection 798H(1) of the Corporations Act by failing to comply with the ASIC Market Integrity Rules requiring trading participants to have appropriate automated filters for their automated order processing (AOP) systems.
The MDP announcement said that in December 2015, a market-making client of Pershing with direct market access through their AOP system had entered orders into the trading platform of the ASX in relation to exchange traded bond units. It said this resulted in a trade that was 99.9 per cent from the last traded price and involved no change in beneficial ownership.
It said Pershing used certified AOP market filters but that when it initiated a new connection to enable the client to use its AOP system, the new connection was incorrectly mapped to a destination that did not contain the certified AOP market filters.
The announcement said that while the conduct gave rise to an isolated incident, which had a minimal market impact (the trade was cancelled within minutes), appropriate automated filters had not been in place for a period of approximately three months for the client.
Pershing is business of Bank of New York Mellon.
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