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Merrill Lynch fined over futures trading ‘failures’

ASIC has handed Merrill Lynch’s Australian future business an infringement notice and a $60,000 penalty.


An ASIC Market Disciplinary Panel (MDP) investigation found the financial institution has been “careless” in its risk management procedures in relation to futures trading.

Between October 2010 to June 2016, Merrill Lynch (Australia) Futures (MLAF) was found to have set “inappropriate limits to varying degrees in respect of number of pathways to the ASX 24 Market,” a statement from ASIC said.

“The limits were considered to be inappropriate because they were set at ASX 24 Market default levels.

“For some of the pathways, the inappropriate default limits were set at both the downstream terminals level and at the upstream order system level.”

However, the MDP acknowledged MLAF undertook a compliance review of market limits in 2016 and, once made aware of the matter, “promptly” took steps to rectify it.

 

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