UBS Australia Pays $120,000 Infringement Fine To ASIC

  • Nov 20, 2018 AEDT
  • Team Kalkine
UBS Australia Pays $120,000 Infringement Fine To ASIC

UBS Securities Australia Limited has been hit by $120,000 penalty on contravening the market integrity rules defined by Australian Securities and Investment Commission.

The Markets Disciplinary Panel of ASIC identified that on-market buy-backs conducted by UBS during 2017 on behalf of its six ASX-listed clients were “not in accordance with the ordinary course of trading and client’s instructions.” 

Over a period of 7-month, UBS purchased about 18 million shares as ‘Trades with price Improvement’ in relation to buy-back instead of trading through the matching of orders on an order book. This led to a breach of market integrity rules as ‘Trades with Price Improvement’ are not considered as a part of ordinary course of trading and are prohibited to be undertaken for on-market buy-back.

ASIC’s media release read that traders who executed the trades were not aware that the trades are not in accordance with the ordinary course of trading, which reflects UBS’ insufficient internal training to traders and lack of effective internal controls.

However, UBS has reportedly adopted several remedial measures immediately after the breach was discovered by ASIC. According to the information provided by ASIC, UBS is conducting further internal training for traders, developing trade screening enhancement, and updating the equities desk manual.

MDP stated that UBS’ conduct was careless and there were no intentions to breach the market integrity rules. Moreover, the breach neither had any financial impact on UBS’ clients or to third parties nor it profited UBS beyond the brokerage that would have otherwise being receive by UBS.

In respect of alleged breaches of the market integrity rules, Markets Disciplinary Panel look into the issue of infringement notices and acceptance of enforceable undertakings through the sitting panels of its peer review panel.

Based in Sydney, UBS Securities Australia Limited is a subsidiary of private company UBS Holdings Pty Limited, a subsidiary of UBS AG, Australian Branch. The company is engaged into the provision of securities trading and broking services across Australia. While trading under the umbrella of NYSE listed UBS Group AG, UBS Securities Australia Limited also offers clearing, execution and settlement services.

UBS Group AG (NYSE: UBS) last traded at lower levels. Its’s share price plunged 0.36% to close at US$13.65 as on 19 November 2018, 4:11 pm GMT-5. The group is a largest Swiss banking institution in the world. It operates as a Swiss multinational financial services company and investment bank based in Switzerland.


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