The Australian unit of Credit Suisse Equities Limited has paid a penalty of $75,000 to comply with an infringement notice from the Markets Disciplinary Panel (the MDP).
The MDP alleged that Credit Suisse failed to comply with regulation regarding client instructions. The financial services company conducted on-market buyback of shares on behalf of three of its clients. From March 2017 to November 2018, the company entered into a number of sales for buying and selling clients. Credit Suisse then reported these trades to the ASX as ‘Trades with Price Improvement’ (NXXT Trades).
According to ASIC regulation NXXT Trade is not a transaction permitted for an on-market buy-back. The MDP considered that Credit Suisse had failed to act in accordance with its clients’ instructions to conduct an on-market buy-back when it had entered the NXXT trades.
The MDP alleges that Credit Suisse was careless as it did not train its execution desk employees well so they were not aware that NXXT Trades were not permitted during an on-market buy-back. In addition, the company’s surveillance systems also didn’t prevent these trades to be executed.
Credit Suisse’s Australian branch reported the NXXT Trades to ASIC and took measures to remedy the situation by contacting its clients about the NXXT Trades. The company also cunducted training for its execution desk employees, updating the reminder emails sent to execution desk employees not to execute NXXT Trades during an on-market buy-back, and implementing further processes to review certain trades (including NXXT Trades).
