So electronic and automated is the world in which today’s financial markets economy operates, and that it was only a matter of time before regulatory authorities, especially those which oversee some of the most prominent institutional trading locations, begin to apply rulings to devices used for trading, and hand down penalties for the improper use of such.
Yesterday, the Monetary Authority of Singapore (MAS), issued a civil penalty enforcement action to the sum of $50,000 against a trader named Ng Yu Jin for contravening section 201(b) of the Securities and Futures Act (SFA), which prohibits the employment of manipulative and deceptive devices in connection with the subscription, purchase or sale of securities.
The MAS is the Singapore’s national financial markets regulator charged with ensuring correct practice is adhered to among banks and non-bank financial markets participants.
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This serves to point towards an age in which the usage of devices such as electronic advisers or automated signals could come under the scrutiny of the authorities, a subject which has been a recent topic of discussion within the Forex Magnates Meet The Experts forum.
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As yet, no regulatory authority in any jurisdiction has stipulated that electronic advisers or lead traders on copy trading platforms should be registered as either financial advisers or have their conduct monitored by regulatory officials.
This particular case occurred within Asia’s largest institutional FX location, yet as the world’s retail FX industry has become increasingly automated, especially among some of the participants in the Asia-Pacific region, the potential onset of regulatory involvement in monitoring the use of devices could be a point of interest as time goes by.
The events which led up to this particular enforcement against Mr. Ng began in October 2007, when he opened trading accounts with OCBC Securities Pte Ltd. (OSPL) for the benefit of Mr. Norman Phua Chun Han.
Between January and April 2008, Mr. Phua was the assistant to Mr. Anthony Soh Guan Cheow, who at the time held the position of CEO of Singaporean company Jade Technologies Ltd. Between November 2007 and April 2008, Mr. Ng allowed Mr. Phua to trade the market by using the trading accounts opened with OSPL. This was a contravention of section 201(b) of the SFA as Mr. Ng’s dealings with OSPL had led OPSL to believe that the accounts were opened and operated for Mr. Ng’s benefit.
Mr. Ng has admitted to contravening section 201(b) of the SFA and paid a civil penalty of $50,000 to MAS without court action. MAS has also publicly announced that it has commenced civil penalty court action against Mr. Phua for contravening sections 201(b) and 218(2) of the SFA. The Attorney-General’s Chambers is representing MAS for this purpose.