Openmarkets Australia Limited, a retail broker, has been fined a record AU$4.5 million (about US$3 million) by the Australian Securities and Investments Commission (ASIC ASIC The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the The Australian Securities and Investments Commission (ASIC) is the prime regulator in Australia for corporate, markets, financial services, and consumer credit. It is empowered under the financial service laws to facilitate, regulate, and enforce Australian financial laws. The Australian Commission was set up and is administered under the Australian Securities and Investment Commission Act of 2001. ASIC was initially the Australian Securities Commission based on the 1989 ASC Act. Initially, the Read this Term) for several violations of the market integrity rules.

ASIC Slaps Record Fine on Openmarkets

Announced today (Thursday), the penalty came after the Australian financial market regulator had identified suspicious trading by an Openmarkets client in its routine surveillance. The regulator highlighted that the penalty could be higher but was reduced as the broker agreed to enter into an enforceable undertaking and not contest the allegations.

An Openmarkets client placed simultaneous bid-and-ask orders in the same security at the same price on 2,011 occasions. According to ASIC, the broker should have an appropriate system in place to identify that these orders might have been made to create artificial trading prices or to create a misleading appearance of active trading.

Interestingly, the same Openmarkets client was involved in suspicious trading in 2017, for which the platform was slapped with an infringement notice earlier.

“Openmarkets did not have appropriate supervisory procedures to ensure compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term with requirements under the market integrity rules dealing with suspicious trading,” the regulator said. “Openmarkets had insufficient staff with the appropriate skills, knowledge, and experience to carry out effective trade surveillance.”

The Aussie watchdog also highlighted that Openmarkets had a “history of compliance failures” and its surveillance systems are “very poor.”

Now, the terms of the enforceable undertaking require the Aussie broker to appoint an independent expert to assess and report the shortcomings around trade surveillance, client onboarding, and client money.

Action against Former Executive

Apart from the monetary penalty against the company, the regulator also banned Virginia Owczarek, the former Acting Head of Trading and designated trading representative (DTR) at Openmarkets, from providing any financial services for three years.

“ASIC found that Ms. Owczarek is not fit and proper to provide financial services or to participate as an officer in the financial services industry,” the regulator added. “ASIC found Ms. Owczarek, among other things, accepted a $2,000 payment from a client for stock tips and engaged in inappropriate and unprofessional communications with a client regarding SMARTs alerts.”

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