Credit Suisse pays $75,000 to comply with infringement notice issued by ASIC

Maria Nikolova

From March 2017 to November 2018, Credit Suisse entered into a number of trades by matching orders on behalf of both its buying and selling clients, and reported these to ASX as “Trades with Price Improvement”.

The Australian Securities and Investments Commission (ASIC) today announces that Credit Suisse Equities (Australia) Limited has paid a penalty of $75,000 to comply with an infringement notice given by the Markets Disciplinary Panel (MDP).

The MDP believes that Credit Suisse contravened Rule 3.3.1(b) of the ASIC Market Integrity Rules (ASX Market) 2010 by failing to act in accordance with its clients’ instructions. The ASX Rules were superseded by the ASIC Market Integrity Rules (Securities Markets) 2017 on May 7, 2018.

Credit Suisse was engaged as a broker to conduct an on-market buy-back of shares on behalf of three clients. The MDP determined that from March 6, 2017 to November 8, 2018, Credit Suisse entered into a number of trades by matching orders on behalf of both its buying and selling clients rather than by the matching of orders on an order book. Credit Suisse reported these trades to the ASX as ‘Trades with Price Improvement’ (NXXT Trades).

The regulator explains that ASIC Regulatory Guide 223 Guidance on ASIC market integrity rules for competition in exchange markets (RG 223) and the superseding ASIC Regulatory Guide 265 Guidance on ASIC market integrity rules for participants of securities markets (RG 265) states that an NXXT Trade is not in the ordinary course of trading and is not a transaction permitted for an on-market buy-back. The MDP regards the guidance in RG 223 and RG 265 to correctly reflect the law and prevailing market practice.

The MDP considered that Credit Suisse had failed to act in accordance with its clients’ instructions to conduct an on-market buy-back when it had entered the NXXT trades.

The MDP concluded that Credit Suisse’s conduct is careless because its execution desk employees were inadequately trained in relation to on-market buy-backs and were therefore unaware that NXXT Trades were not permitted during an on-market buy-back. Additionally, Credit Suisse’s surveillance systems had also failed to prevent the NXXT Trades from being executed.

The MDP considers that all shareholders should be given a reasonable opportunity to participate in the buy-back of shares during an on-market buy-back. Market participants should be guided by this in the configuration of their trading systems when they conduct an on-market buy-back of shares on behalf of a listed company.

Credit Suisse reported the NXXT Trades to ASIC and took remedial measures by contacting its clients about the NXXT Trades, conducting further training for its execution desk employees, updating the reminder emails sent to execution desk employees not to execute NXXT Trades during an on-market buy-back, and implementing further processes to review certain trades (including NXXT Trades).

The MDP was satisfied that Credit Suisse did not appear to derive any benefit from the conduct beyond the brokerage fees and commissions, and that the conduct did not cause financial loss to its clients or third parties.

Read this next

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

<