Credit Suisse Equities has been fined $74,000 by ASIC after its automated trading software caused substantial price increases in two illiquid securities.
In an infringement notice issued to Credit Suisse Equities, ASIC's Markets Disciplinary Committee (MDP) found the company had interfered with the "efficiency and integrity" of the markets for Payce Consolidated Limited (PAY) and Alcoa Inc (AAI).
On 18 February 2015, Credit Suisse Equities' automated trading system purchased baskets of PAY and AII securities that caused the prices of the two illiquid securities to jump by 42.34 per cent and 19.91 per cent, respectively, according to the MDP.
"The MDP had reasonable grounds to believe that Credit Suisse did not have in place appropriate automated price filters in its system to ensure that use of the system did not interfere with the efficiency and integrity of the Market," said ASIC.
Credit Suisse Equities contravened sub-section 798H(1) of the Corporations Act 2001 by reason of contravening Rule 5.6.1 of the ASIC Market Integrity Rules (ASX Market) 2010, ASIC said.
The relevant rule requires trading participants to use automated systems that do not interfere with market efficiency and integrity or the "proper functioning of any trading platform".