ASIC Imposes $40,000 Infringement Notice Penalty on Pershing Securities

Pershing failed to comply with the ASIC’s rules relating to the use of appropriate automated filters for its AOP systems.

The Australian Securities and Investments Commission (ASIC) has published a statement announcing that Pershing Securities Australia Pty has paid a penalty of $40,000 to comply with an infringement notice issued by the Markets Disciplinary Panel (MDP).

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The penalty was imposed on the firm as the MDP had sufficient grounds to believe that Pershing contravened the Corporations Act by failing to comply with the ASIC Market Integrity Rules (ASX Market) 2010. This states that trading participants are required to have appropriate automated filters for their automated order processing (AOP) systems.


In December 2015, a market-making client of Pershing with direct market access through its AOP system entered orders into the trading platform of ASX in relation to exchange traded bond units. This resulted in a trade that was 99.9 percent from the last traded price and involved no change in beneficial ownership.

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Although Pershing used certified AOP market filters, when the firm initiated a new connection to enable the client to use its AOP system, the new connection was incorrectly mapped to a destination that did not contain the certified AOP market filters.

In addition, while Pershing tested the operation of the filters in the test environment, it failed to sufficiently check whether the filters were operating correctly in the live, production environment.

This conduct gave rise to an isolated incident which had a minimal market impact i.e. the trade was cancelled within minutes, nevertheless, appropriate automated filters had not been in place for a period of around three months for the client in question.

ASIC has stated that the compliance with the infringement notice is not an admission of guilt or liability.

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