Investment bank Credit Suisse was slapped with a $170,000 fine from the Australian Securities and Investment Commission for failing to have the appropriate price limits in place across its automated order processing (AOP) systems.
The watchdog found Credit Suisse did not have the appropriate price filters for more than five years, during which about 9800 orders for options were transacted.
The glitch in its AOP system surfaced when one of its clients in April 2016 mistakenly entered orders to purchase options that referenced an incorrect limit price 96% below the extreme trade price range. The orders were cancelled soon after entry.
The orders were allowed to go through to the market because Credit Suisse did not have filters in place to determine limit price appropriateness for these kinds of option market contracts, ASIC found.
ASIC's Market Disciplinary Panel (MDP) found Credit Suisse's system deficiencies existed for an "unacceptable period of time."
Further, the MDP noted it had made past findings with the bank's filter deficiencies; repeat conduct of the same or similar kind is likely to result in higher penalties being specified in infringement notices.