Pershing Securities Australia Pty Ltd (Pershing) paid infringement notice penalty of $15,000 for failing to give trade confirmations to retail clients.
The problems were identified in April 2012 when Pershing realised that 701 transactions were executed for which they failed to issue a trade confirmation. The problems occurred between 2010 and 2012 when 37 trading accounts were set up incorrectly by Pershing and third party intermediaries, mainly due to omission or incorrect postal address and email address. As a result, clients did not receive confirmation from Pershing in respect of trades executed on the ASX.
The Market Disciplinary Panel believed that Pershing has breached Rule 3.4.1 of Market Integrity Rule (ASX Market). This rule requires market participants to give a confirmation to the client in respect of each market transaction entered into on the client’s instructions (or MDA).
What does this mean for me?
For market participants, you would be aware of the importance of timely delivery of confirmation to all retail clients. However, it is important that you consider:
- Are your client on-boarding procedures documented and current?
- Do your processes adequately address your obligations where certain services are delivered by intermediaries or other third parties?
- Do you conduct regular reviews to confirm whether accounts are being set-up correctly during the client on-boarding process?
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