Open Markets has paid a penalty of $200,000 to comply with an infringement notice given to it by ASIC’s Markets Disciplinary Panel (MDP).
According to a statement by ASIC, the MDP had reason to believe that OpenMarkets breached the market integrity rules in relation to the ASX and Chi-X.
The rules “require market participants to have appropriate filters in place for use of their automated order processing system (AOP)”, said ASIC in a statement.
The MDP found that OpenMarkets did not have appropriate filters to:
- prevent trades that involved no change of beneficial ownership;
- reject the placement of sell orders which exceeded maximum order value limits;
- reject the placement of sell orders that were prohibited short sales; and
- identify orders that were priced far away from the prevailing price in other markets.
OpenMarkets avoided a larger penalty of $560,000 by agreeing to the imposition of conditions on their licence in December 2016.
“These conditions, which required OpenMarkets to engage an independent expert to review their systems, were imposed to address ASIC’s concerns with the financial services business carried on by OpenMarkets, including the use of its AOP system,” said ASIC.
