Credit Suisse Slapped with $170,000 Penalty for Automated Lapses

Credit Suisse Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term Limited, Credit Suisse’s Australian subsidiary, forked over a penalty of $170,000 following an infringement notice from the Markets Disciplinary Panel (MDP), per an Australia 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) filing.

The MDP operates as ASIC’s forum for disciplinary action against participant and market operators for alleged breaches of market integrity rules. The body is peer reviewed, and consists of an assortment of part-time members with relevant market or professional experience.

The infringement notice stemmed from a discrepancy surrounding Credit Suisse Limited’s automated filters, as part of its automated order processing (AOP) systems. More specifically, the MDP believed that Credit Suisse had gone against specific regulations, i.e. subsection 798H(1) of the Corporations Act 2001, thereby failing to comply with Rule 5.6.1(1) of the ASIC Market Integrity Rules (ASX Market) 2010. This rule specifically requires trading participants to utilize appropriate automated filters for their AOP systems.

Five-Year Period

Moreover, back in April 2016, Credit Suisse also came into conflict with these rules after a client of the group accidentally entered orders in relation to options market contracts via the AOP system that referenced an incorrect limit price. This episode showed that a number of transactions took place at prices that were 96% below the extreme trade range reference price for those products – the orders were cancelled soon after entry.

On the MDP’s part, it asserted that these orders were allowed to proceed through the market given that Credit Suisse did not utilize the appropriate filters to effectively determine limit price appropriateness for these respective options market contracts. As such, Credit Suisse failed to implement these filters for a period of more than five years, which included upwards of 9,800 orders for option market contracts entered via its AOP system.

Following the infringement notice and monetary penalty of $170,000, the MDP also warned that any repeated conduct of a similar vein is likely to incur much higher penalties being specified in subsequent infringement notices for Credit Suisse Limited.