OpenMarkets will have to negotiate additional licence conditions and the attentions of regulatory consultant MIntegrity after an ASIC surveillance found the company's compliance procedures wanting.
The ASIC surveillance found problems with OpenMarkets' automated order processing and post-trade monitoring arrangements, which gave the regulator reason to doubt the company's ability to identify and prevent potential market misconduct.
ASIC also uncovered concerns about OpenMarkets' reconciliation of client trust accounts, as well as problems with the stockbroker's supervisory arrangements and organisational/technological resourcing.
As part of the licence conditions, OpenMarkets has appointed MIntegrity to review the company's arrangements, identify any deficiencies and recommend any improvements. MIntegrity will report to ASIC and OpenMarkets in March 2017.
ASIC commissioner Cathie Armour commented, "Market participants have an important gatekeeper role. Those providing direct market access to clients should be vigilant in ensuring they maintain appropriate controls to ensure that trading messages do not interfere with the efficiency, fairness, order or integrity of the market. These controls include appropriate filters and a robust trade monitoring framework."
The regulator acknowledged OpenMarkets' "co-operative response" and its engagement of MIntegrity to undertake the review.
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