UBS Securities paid $280,000 in penalties following two infringement notices issued by ASIC's Markets Disciplinary Panel .
The first infringement notice pertained to UBS' PIN crossing system, in which orders are executed based on algorithms reflecting a given client's investment strategy. ASIC explained that UBS has the ability to enter, amend and withdraw orders as appropriate so as to "achieve best execution."
Between December 2014 and June 2015, though, ASIC found that deficiencies in the PIN system's "hard coded logic" resulted in a number of pending orders losing time priority to other orders relating to the same product and price parameters. Ten retail clients and 536 wholesale clients were affected by this, although ASIC noted that the retail clients suffered no financial loss; the loss to wholesale clients was described as "negligible."
The second infringement notice related to Competition Rule 5A.2.1, wherein a participant must identify whether they are the principal or agent of a client for a given order and transaction.
The panel determined that between August 2015 and June 2016, UBS transmitted 78,833 orders to the ASX and Chi-X that "included regulatory data that incorrectly reported that UBS had acted as agent for a client when it in fact had acted as principal in relation to the orders."
ASIC also found that UBS had submitted 924 trade reports to the same exchanges which included the above inaccurate data.
"The provision of this regulatory data to market operators ensures that ASIC is able to obtain sufficient and appropriate market data in a timely manner to enable it to monitor and detect market misconduct in light of rapidly developing technology and increasingly complex trading strategies," ASIC said.
"The provision of incorrect regulatory data to market operators impedes informed regulatory decision-making by market operators and by ASIC."