UBS pays for market integrity breach
UBS Securities has forked out $30,000 in relation to an infringement notice from the Markets Disciplinary Panel (MDP) for a breach of market integrity rules.
According to the Australian Securities and Investment Commission (ASIC), UBS was involved in selling 1800 units in Betashares’ Gold Bullion exchange-traded funds (ETF), hedged to the Australian dollar on the ASX Trading Platform in December 2011.
The MDP found that although the last traded price had been $15.75, UBS submitted two market transactions at a price of $0.165 with a total value of $297 and one counter-party.
The transactions resulted in the price of the ETF shares to drop by $15.585, a 99 per cent decrease in the last traded price.
ASIC said the transactions gave the MDP reasonable grounds to believe UBS contravened Rule 5.9.1 of the ASIC Market Integrity Rules (ASX Market) 2010 and subsequently, section 798H(1) of the Corporations Act (Cth) 2001 (Corporations Act).
The order was submitted to the ASX Trading Platform by UBS’ automated order processing system, despite triggering one of the systems filters and being re-routed to a designated trading representative (DTR) for authorisation.
The DTR authorised the order despite two warning messages and despite the last trading price because they misapplied a decimal point.
The MDP noted that the mistake appeared to be inadvertent rather than deliberate. UBS had committed to retraining DTRs and updated its client order configuration.
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