Macquarie Securities (Australia) Limited (MSAL) has admitted to misleading conduct in relation to misreporting millions of short sales over several years, caused by repeated failures in its systems and processes.
ASIC and MSAL will ask the NSW Supreme Court to impose a penalty of $35 million and to make other orders against MSAL. The penalty and orders are subject to consideration and approval by the Court.
In a statement of agreed facts filed with the Court, MSAL has admitted it failed to correctly report at least 73 million short sales between 11 December 2009 and 14 February 2024. It is estimated that MSAL misreported between 298 million and 1.5 billion short sales.
The inaccurate reporting was due to multiple systems-related failures, many of which remained undetected for more than a decade.
In addition to the misleading conduct, MSAL has also admitted it failed to:
- have appropriate supervisory policies and procedures,
- have and maintain the necessary organisational and technical resources, and
- have adequate risk management systems
to ensure compliance with its short sale reporting obligations.
MSAL has also admitted to incorrectly reporting regulatory data for more than 633,000 orders submitted to the market operator between 16 November 2022 and 21 March 2023.
ASIC Chair Joe Longo said, 'Accurate and reliable data underpins confidence in our financial markets. ASIC and the market rely on short sale and regulatory reporting data - especially during periods of volatility - to understand market activity and make informed decisions.
'Without accurate data, market transparency is undermined.
'Market participants must have the proper systems and processes in place to comply with their regulatory obligations.
'It's essential for public transparency, market integrity and trust in our system.'
ASIC's action against MSAL is part of our broader body of work addressing misconduct and failures to comply with regulatory obligations by large Australian financial institutions.
Background
Short selling is the practice of a seller selling a financial product (including a security) that the seller does not currently own and with the intention of benefiting from that sale in various ways.
ASIC initiated civil proceedings against MSAL in this case on 14 May 2025 (25-074MR). This is ASICs first short-sale reporting case.
MSAL has admitted to contraventions of s798H(1) of the Corporations Act 2001 (Corporations Act) by reason of breaches of the ASIC Market Integrity Rules (Securities Markets) 2017:
- Rule 2.1.3 - failing to have appropriate supervisory policies and procedures,
- Rule 5.5.2 - failing to have and maintain necessary organisational and technical resources, and
- Rule 7.4.2 - failing to provide correct Regulatory Data to the market operator.
MSAL has also admitted to a contravention of each of the following provisions of the Corporations Act:
- s912A(1)(h) - failing to have adequate risk management systems, and
- s1041H(1) - engaging in conduct that is misleading or deceptive, or likely to mislead or deceive, in relation to a financial product.
Further information on short selling, reporting and disclosure obligations can be found in Regulatory Guide 196 Short Selling (RG 196).
