Sydney-based stockbroking firm Petra Capital Pty Ltd (Petra Capital) has been fined $205,350 by the Markets Disciplinary Panel (MDP) for misreporting regulatory data on more than 3,600 occasions.
Following an ASIC investigation, the MDP found Petra Capital breached the market integrity rules by failing to provide accurate information, being a unique code used to identify clients executing orders or transactions.
Petra Capital's inconsistent use of client reference information when reporting regulatory data led to one client appearing as multiple clients on 3,632 occasions. This was caused by a system update and affected 14,741 trades between 3 March 2022 and 5 December 2023.
The MDP considered Petra Capital to be 'careless' and found that it should have taken steps to ensure its reporting format complied with the law, including by proactively and periodically reviewing its systems and the underlying assumptions in its coding.
In its decision, the MDP noted the importance of market participants' core obligation to provide accurate regulatory data, including consistent client reference information, which is critical to ASIC's role in supervising markets and ensuring market integrity.
Client reference information is key to ASIC's ability to conduct market surveillance and quickly identify connections between people and trades for the purpose of detecting misconduct, including market manipulation and insider trading.
ASIC and the MDP remind market participants to review and test their systems at least annually, and ensure compliance staff have sufficient involvement in technical aspects, including the collection and submission of regulatory data.
Market participants that rely on external expertise for regulatory reporting should also conduct their own reviews and testing to verify compliance.
Background
Petra Capital is a small Australian institutional stockbroking firm that provides services to wholesale financial clients and ASX-listed companies. Petra Capital is a market participant of ASX Limited and Cboe Australia Limited.
In September 2021, ASIC published Market Integrity Update - Issue 130, reminding market participants of their 'obligations to provide accurate and complete regulatory data' and also highlighted that a number of infringement notices had been issued by the MDP to address non-compliance with regulatory data obligations.
Petra Capital has complied with the infringement notice and paid the penalty.
Compliance with the infringement notice is not an admission of guilt or liability and by doing so, Petra Capital is not taken to have contravened subsection 798H(1) of the Corporations Act 2001.
View the infringement notice on ASIC's MDP Outcomes Register.
