UBS Securities Australia Limited (鈥楿BS鈥�) has paid a penalty totalling $120,000 to comply with an infringement notice given by the Markets聽Disciplinary Panel (鈥榯he MDP鈥�).
The MDP had reasonable grounds to believe that UBS contravened Rule聽3.3.1(b) of the ob体育聽Market Integrity Rules (ASX聽Market) 2010. The MDP found that a number of transactions in relation to six on-market buy-backs conducted by UBS on the ASX market in 2017 were not in the ordinary course of trading and were not in accordance with the clients鈥� instructions.
UBS purchased approximately 18 million securities over a 7-month period in relation to the buy-backs in circumstances where UBS purchased the securities other than聽by the matching of orders on an order聽book. UBS reported the transactions to ASX as 鈥楾rades聽with Price Improvement鈥�.
ob体育 Regulatory Guide 223: Guidance on ob体育 market integrity rules for competition in exchange markets (May 2015) states that 鈥楾rades with Price Improvement鈥� are not in the ordinary course of trading and are not聽permitted for on-market buy-backs. The MDP considers that guidance to correctly reflect the law and prevailing market practice.
The MDP considers that UBS鈥� conduct was careless. The traders that executed the trades did聽not聽know such trades were not in the ordinary聽course of trading. UBS鈥檚 internal training was聽not聽sufficient. UBS鈥� internal controls were not effective.
UBS has subsequently adopted remedial measures including conducting further training for the traders, updating the equities desk manual, and is implementing or developing trade monitoring enhancements.
The MDP accepts that there was no聽intention to contravene the market聽integrity rules. The conduct neither caused financial loss to UBS鈥� clients or to third parties nor benefitted UBS beyond the brokerage that would otherwise have been received by UBS.
The compliance with the infringement notice is not an admission of guilt or liability, and UBS is not聽taken to have contravened subsection 798H(1) of the Corporations Act.