The $505,000 penalty stems from Macquarie Securities’ failure to quickly suspend the account of a client who was trading on the Chi-X exchange in 2014.
According to the findings of ASIC’s Markets Disciplinary Committee, the client had a business model that “represented a departure from Macquarie’s traditional client base”.
The activity of the client generated a series of alerts in Macquarie’s trade surveillance monitoring software, and the firm’s management were made aware of the issue, said ASIC.
“Macquarie’s management believed that additional analysis was required before they could consider suspending or terminating the client’s account,” said ASIC.
“Internal communications continued for some time. Macquarie’s management had considered lodging a Suspicious Activity Report (SAR), but this was never finalised.”
ASIC was satisfied that Macquarie had contravened the regulator’s Market Integrity Rules by permitting trading to continue for 39 days “after a reasonable market participant in the same position as Macquarie ought reasonably have taken prompt steps to temporarily suspend the client’s account”.
“The key organisational failure was the inexplicable delay of Macquarie’s management in completing the SAR and further failing to temporarily suspend the account until it was satisfied that it was meeting its obligations under the market integrity rules,” said ASIC.
The compliance with the infringement notice is not an admission of guilt or liability, said ASIC, and Macquarie is not taken to have contravened the Corporations Act.
