UBS Securities Australia has paid a fine of US$30,000 to comply with an infringement notice issued by the Markets Disciplinary Panel (MDP) for the breach of market integrity rules.
The penalty relates to an order for Betashares Gold Bullion, an exchange-traded fund, placed by UBS for a client on December 16, 2011 at an incorrect price.
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Though the ETF had closed trading the previous day at US$15.75, the MDP found that a misplaced decimal point had led to UBS submitting two transactions at a price of US$0.165.
The resulted error forced the value of the shares to decrease 99% from US$15.56 to US$0.165.
Australian market regulator ASIC said UBS had cooperated with its investigation of the issue and had introduced additional training for its traders and a system upgrade to avoid ‘human error’ in future.
The MDP said it had reasonable grounds to believe that UBS contravened Rule 5.9.1 of the ASIC Market Integrity Rules (ASX Market) 2010 (MIR 5.9.1), and thereby contravened section 798H(1) of the Corporations Act (Cth) 2001 (Corporations Act), which requires compliance with the market integrity rules.
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By GlobalDataUBS had in place filter parameters that automatically routed the client order for authorisation by a supervisor, a UBS designated trading representative (DTR).
However ASIC said, "Although the DTR involved in this matter was an experienced DTR with no history of previous errors, he failed in this case to perform this function to the requisite high standard,"
ASIC said this was an isolated incident and UBS had cooperated fully and has agreed not to contest the matter, thereby saving the regulators time and costs.
UBS has conducted additional training for its DTRs and updated its client order configuration for client orders into this particular AOP system to avoid human error.
