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Wilsons Advisory and Stockbroking pays hefty infringement notice

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By Reporter
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3 minute read

Wilsons Advisory and Stockbroking has paid a penalty of $548,328 to comply with an infringement notice given by the Markets Disciplinary Panel. 

In a statement on Friday, the corporate regulator said it raised concerns with Wilsons in March 2022 after conducting a thematic review of Trade with Price Improvement (TWPI), that a significant number of transactions it reported as TWPI — a transaction that provides a meaningfully better price for investors to trade than what is displayed on-market — did not appear to offer price improvements.

Wilsons responded to ASIC on 8 April 2022 stating that it did not have a specific post-trade alert in place to identify this issue and that consequently, the issue had gone undetected.

The Australian Securities and Investments Commission (ASIC) has now revealed that its Markets Disciplinary Panel (MDP) subsequently found that Wilsons executed 2,306 trades away from an order book and reported those trades as TWPI in circumstances where it was not permitted to do so as the trades did not provide price improvement over the best available bid price and the best available offer price.

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“As a result, the MDP had reasonable grounds to believe that Wilsons contravened subsection 798H(1) of the Corporations Act 2001 by failing to comply with Rule 6.1.1 on 2,306 occasions during the period between 1 January 2020 and 31 March 2022,” the regulator said.

While characterising Wilsons’ conduct as serious, the MDP did concede that it was at the “high end of careless” rather than “reckless or intentional”.

“Wilsons was not aware of the issue, which had gone undetected for over two years until ASIC brought it to Wilsons’ attention. The MDP considered that the fact that the conduct went undetected for over two years was an aggravating factor,” the corporate regulator said.

Moreover, the MDP found that Wilsons was overly reliant on the knowledge of its designated trading representatives (DTRs) as a control and should have had more robust risk management systems in place.

Nonetheless, the MDP arrived at the conclusion that Wilsons generally had a sound compliance culture.

“Wilsons took swift action to investigate the conduct after being made aware of it by ASIC, cooperated with ASIC and undertook a thorough review of its trading history to identify the breaches and submit a breach report to ASIC. Wilsons also took remedial steps to ensure that the conduct does not re-occur by exploring additional internal systems controls with its surveillance service provider, retraining its DTRs and conducting individual training sessions with DTRs and sales traders about the pre-trade transparency requirement,” the ASIC stated.

“Although not directly at issue in the current matter, the MDP noted that it is important for market participants to have consequence management processes in place to deal with contraventions of the rules.”

The corporate regulator further clarified that compliance with the infringement notice is not an admission of guilt or liability, and that Wilsons is not taken to have contravened subsection 798H(1) of the Corporations Act.

 

Wilsons Advisory and Stockbroking pays hefty infringement notice

Wilsons Advisory and Stockbroking has paid a penalty of $548,328 to comply with an infringement notice given by the Markets Disciplinary Panel. 

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