ABN AMRO Clearing Sydney Pty Ltd (ABN AMRO) has paid a penalty of $222,000 to comply with an infringement notice given by the Markets Disciplinary Panel (MDP).
The MDP found that, on three occasions on 7 January 2021, 14 April 2021 and 15 April 2021, ABN AMRO registered block trades on the ASX 24 Market in the SPI 200 Futures contract, each of which included split allocations below the Minimum Value Threshold of 200 lots.
A block trade facility is a trading mechanism enabling market participants to arrange and transact orders of significant size off-market. Rule 3.4.2(1) of the ASIC Market Integrity Rules (Futures Markets) 2017 (Rules) prohibits market participants from aggregating separate orders in order to meet the Minimum Value Threshold for block trades.
As a result, the MDP had reasonable grounds to believe that ABN AMRO contravened subsection 798H(1) of the Corporations Act by failing to comply with Rule 3.4.2(1) of the Rules.
The MDP found that although ABN AMRO’s operations team performed a check for the Minimum Volume Threshold of the total aggregate of each of the relevant block trades, that check was not applied individually to each order within the relevant block trade to confirm those individual orders also met or exceeded the Minimum Volume Threshold requirement. This reflected ABN AMRO’s block trade checklist at the time, which did not specify the need to check whether allocations for split orders were greater than or equal to the Minimum Value Threshold. The MDP also noted that ABN AMRO’s procedures document dealing with block trades placed considerable reliance on hyperlinks to the underlying obligations, rather than providing key details concerning those obligations in the procedures document itself.
The MDP considered that ABN AMRO’s conduct was careless. It noted that ABN AMRO undertook a compliance review and implemented subsequent remedial action in relation to the alleged contraventions.
The MDP also noted that, consistent with legislative reforms that significantly increased the maximum penalties that can be specified in an infringement notice for alleged contraventions of market integrity rules for conduct occurring on or after 13 March 2019, the penalties imposed were significantly greater than the penalties that would have been imposed had the conduct occurred under the previous penalty regime.
Compliance with the infringement notice is not an admission of guilt or liability, and ABN AMRO is not taken to have contravened subsection 798H(1) of the Corporations Act.
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Editor's Note:
On 2 April 2024, the trial was relisted to commence on 28 October 2024 on an estimate of 10 days.