UBS fined for careless conduct

ASIC's Markets Disciplinary Panel confirmed UBS Securities paid a $120,000 fine for breaching market integrity rules over a series of trades on the ASX in 2017.

The Markets Disciplinary Panel issued the infringement notice for transactions in relation to six on-market buy-backs conducted by UBS on the ASX 2017. The movements "were not in the ordinary course of trading and were not in accordance with the clients' instructions."

This gave the panel reasonable grounds to believe that UBS contravened Rule 3.3.1(b) of the ASIC Market Integrity Rules (ASX Market) 2010.

The panel said UBS purchased about 18 million securities over a seven-month period in relation to the buy-backs in circumstances where UBS purchased the securities other than by the matching of orders on an order book. UBS reported the transactions to the ASX as 'Trades with Price Improvement.'

ASIC regulatory guidance states: 'Trades with Price Improvement' are not in the ordinary course of trading and are not permitted for on-market buy-backs.

The panel considers that UBS' conduct was careless, an ASIC statement said.

"The traders that executed the trades did not know such trades were not in the ordinary course of trading. UBS' internal training was not sufficient. UBS' internal controls were not effective," ASIC said.

"UBS has subsequently adopted remedial measures including conducting further training for the traders, updating the equities desk manual, and is implementing or developing trade monitoring enhancements."

The panel said it accepts there was no intention to contravene market integrity rules.

"The conduct neither caused financial loss to UBS' clients or to third parties nor benefitted UBS beyond the brokerage that would otherwise have been received by UBS," the ASIC statement said.

Read more: ASICASXMarkets Disciplinary PanelUBS Securitiesinvestment
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