CommSec has paid a penalty of $200,000 to comply with an infringement notice given to it by ASIC’s Markets Disciplinary Panel (MDP).
The MDP found CommSec contravened the Corporations Act by entering a market transaction for a client who was deceased without instructions from an authorised person.
On 25 March 2014, CommSec received formal notification of the death of one of its clients, who held two accounts with CommSec – an equities account and a margin loan account, said ASIC.
“At that time, CommSec failed to apply a holder record lock to either of the accounts,” said ASIC.
“Between 25 March 2014 and 14 October 2014, CommSec entered into 59 market transactions on behalf of the deceased client on the instructions of a family member of the deceased client through CommSec’s online trading portal.
“Although the family member was authorised in relation to trading on the margin loan account in the event of a margin call, the family member was not authorised to provide instructions to enter into any of the market transactions.
“CommSec allocated the market transactions to the deceased client’s accounts.
“The MDP was satisfied that CommSec entered into the market transactions for the deceased client, and allocated them to the deceased client’s accounts, without the instructions of the deceased client or of a person authorised by the deceased client.”
The MDP was satisfied that CommSec failed to implement its deceased estate policies and procedures designed to prevent unauthorised trading on deceased client accounts.
“The compliance with the infringement notice is not an admission of guilt or liability, and CommSec is not taken to have contravened subsection 798H(1) of the Corporations Act,” said ASIC.
Update: Commsec managing director Paul Rayson said the stockbroker “acknowledges and regrets the process error”.
“There were no losses to customers or complaints, and our processes have since been updated to ensure compliance,” Mr Rayson said.
“We have worked collaboratively with ASIC on this matter since we self-reported the issue in 2014. Our customer and regulatory responsibilities are of paramount importance and we are committed to providing secure and convenient services to our customers,” he said.
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