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ASIC Australia ASX
Last Post 09 Nov 2016 07:07 AM by Peter Mathers. 26 Replies.
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20 May 2016 11:04 AM
Friday 20 May 2016
16-151MR Credit Suisse Equities (Australia) Limited pays $74,000

Credit Suisse Equities (Australia) Limited (“Credit Suisse”) has paid a penalty of $74,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (“MDP”).

The MDP had reasonable grounds to believe that Credit Suisse contravened subsection 798H(1) of the Corporations Act 2001 by reason of contravening Rule 5.6.1 of the ASIC Market Integrity Rules (ASX Market) 2010.

This Rule provides:

A Trading Participant which uses its system for Automated Order Processing must at all times:

(a) have appropriate automated filters, in relation to Automated Order Processing; and

(b) Ensure that such use does not interfere with:

(i) The efficiency and integrity of the Market;

(ii) The proper functioning of any Trading Platform; or

(iii) The efficiency and integrity of any Crossing System operated by the Trading Participant.

Credit Suisse used its Automated Order Processing system to submit orders through the ASX Trading Platform on a particular day, which caused price increases of 42.34% and 19.91% respectively in two classes of illiquid shares.

The MDP had reasonable grounds to believe that Credit Suisse did not have in place appropriate automated price filters in its system to ensure that use of the system did not interfere with efficiency and integrity of the Market.

Download the infringement notice

The compliance with the infringement notice is not an admission of guilt or liability, and Credit Suisse is not taken to have contravened subsection 798H(1) of the Corporations Act.

http://www.asic.gov.au/about-asic/m...ys-74-000/
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20 May 2016 11:07 AM
Friday 20 May 2016
16-150MR Greg Medcraft passes IOSCO leadership to Ashley Alder of the Hong Kong SFC

ASIC Chairman Greg Medcraft has confirmed he has decided not to seek a further term as chairman of the board of the International Organization of Securities Commissions (IOSCO). The new IOSCO Chairman will be Ashley Alder, CEO of the Securities and Futures Commission (SFC) of Hong Kong and Vice Chair of the IOSCO Board.

Mr Medcraft was Chairman of the IOSCO board for three years. He has decided not to seek a third term, in line with his belief that the IOSCO Chairman should serve no more than two terms in the interests of refreshing the organisation.

In announcing the transition, the IOSCO board acknowledged Mr Medcraft’s contribution. Under his leadership, IOSCO:

reinforced its position as the key global reference point for securities markets regulation;
increased its work on risk identification and mitigation, including developing standards and guidance;
intensified the assistance it provides members in building capacity and cooperating among themselves to develop, supervise and enforce laws in their jurisdictions; and
actively and strongly advocated the views of markets regulators in international forums, particularly the Financial Stability Board.
Mr. Medcraft was responsible for the 2016 - 2020 Strategic Direction which set the agenda for IOSCO to 2020, supported by resourcing and funding plans. The Strategic Direction aims to reinforce IOSCO’s position as the key global reference point for securities regulation and support capital markets to fund the real economy and support economic growth.

"IOSCO plays a critical role in setting and implementing international capital markets policy – policy that affects Australia and that ultimately affects the lives of Australians. That is why I was involved in IOSCO – it was important to have an Australian looking out for Australia.

"I congratulate Ashley Alder on his appointment. He is an outstanding regulator and an excellent person. I wish him all the best for his chairmanship of the IOSCO board," Mr Medcraft said.

IOSCO is the leading international policy forum for securities regulators. The organisation's membership regulates more than 95% of the world's capital markets in more than 120 jurisdictions.
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20 Jun 2016 02:08 PM
Monday 20 June 2016
16-197MR ASIC releases report highlighting significant failures in the retail OTC derivatives industry

ASIC today released a report detailing the findings of a recent surveillance program and identifying some serious and widespread compliance failures in the retail over-the-counter (OTC) derivatives industry.

In recent years, ASIC has made a number of public statements about the concerning degree of non-compliance in the retail OTC derivatives sector. ASIC considers retail OTC derivatives to be complex, high-risk products which are often difficult to understand, even for experienced investors.

ASIC has observed a material increase in the number of Australian financial services (AFS) licence applications from entities seeking to operate retail OTC derivatives financial services businesses in Australia. In conjunction with this trend, we also identified increasing non-compliance by existing AFS licensees with a number of their Australian regulatory requirements.

We recently undertook a review to assess a large proportion of the AFS-licensed retail OTC derivatives industry against the following seven compliance risks:

failure to comply with the net tangible assets (NTA) requirement
failure to comply with notification requirements for change of control events and issues around new ownership compliance
failure to comply with client money provisions
poor, misleading or deceptive Product Disclosure Statements (PDS) and website disclosure
failure to comply with financial reporting obligations
failure to supervise authorised representatives and non-compliance by authorised representatives, and
claims that no financial services are being provided under the AFS licence.

This report summarises the key findings of that review and identifies areas where compliance standards can be raised in the retail OTC derivatives sector.
Our findings

Our review identified a high degree of non-compliance. Over 70% of AFS licensees reviewed demonstrated issues with three or more of the seven compliance risks. In particular, our compliance review identified that:

over 80% demonstrated issues with the disclosure in their PDS or website
over 60% had undergone a change of control (with some issuers exhibiting multiple changes of control in a 12-month period) and 85% of those entities had failed to notify ASIC as required
over 50% had not adequately complied with their financial reporting obligations
around 50% required additional detailed assessment to determine whether they adequately complied with their NTA requirements, and
nearly 30% did not appear to be providing any financial service under their AFS licence, despite some being licensed for a number of years.

Many of the compliance concerns we detected were contraventions of well-established regulatory requirements or non-compliance with fundamental AFS licensing obligations. We also observed a significantly high number of smaller, foreign-owned or foreign-controlled AFS licensees demonstrating either a lack of awareness or understanding of their Australian regulatory obligations, or reluctance to invest resources in meeting compliance obligations for their Australian businesses.

In total, we obtained more than 150 regulatory outcomes as a result of our review, including:

recapitalisation to comply with financial requirements
improvements to defective disclosure
submission of overdue financial reports
corrections to registry and AFS licence information
improved supervision of authorised representatives
rectification of compliance failings
cessation of unlicensed conduct, and
AFS licence suspensions and cancellations.

Commissioner Cathie Armour said, ‘This report highlights some serious compliance failures in this industry. We expect industry to take note of our findings and proactively remediate any areas requiring improvement to ensure they have adequate and enduring compliance measures to fulfil their regulatory obligations.

‘The report also provides a prudent warning to investors. We hope the report will encourage them to be more aware of the risks of these types of products as well as improve their understanding of the standards of practice they should expect from retail OTC derivative providers.

‘As can be seen from our surveillance findings and announcements, many of these investment products may not be appropriate for average investors, who are often caught out by the complexity and may not understand the heightened risk profile,’ she said.

You can download the report, copy this link to your browser;

http://www.asic.gov.au/regulatory-r...es-sector/
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26 Jun 2016 06:20 AM
Friday 24 June 2016
16-202MR Insider trader sentenced to full time imprisonment
Cdpplogo 1 Asic Coporate Logo Standard Version Colour Gif (1)

Former banker, 30-year-old Oliver Curtis was today sentenced to two years imprisonment after being found guilty by a Supreme Court jury earlier this month of conspiring to commit insider trading with his former best friend, John Hartman. The Court ordered that Curtis be released after serving one year of imprisonment upon him entering into a recognisance to be of good behaviour for 12 months.

Curtis used confidential information between May 1 2007, and June 30 2008 to trade on shifts in share prices—ultimately resulting in a total net profit of $1,432,228.85.

The conspiracy involved an agreement between Curtis and Hartman, that Hartman would procure Curtis to trade in Contracts for Difference (‘CFDs’) (a financial product), when Hartman held inside information about the trading intentions of his employer Orion Asset Management Limited.

Hartman agreed to provide Curtis with instructions (informed by the inside information Hartman held) to engage in CFD trading that the pair expected to be profitable. They further agreed that the instructions would be provided by way of the Blackberry to Blackberry communication system known as ‘pinning’.

It was alleged that on 45 occasions Curtis traded in CFDs after he received instructions from Hartman. The 45 sets of trades occurred at around the same time as Orion’s trading in the underlying stock.

In return for providing trading instructions, Curtis provided Hartman with a share of the profits in the form of cash and by using the funds to purchase items for Hartman.

The Australian Securities and Investment Commission (ASIC) launched its investigation in 2009 and their conspiracy was exposed when Hartman confessed his crime to ASIC.

In passing sentence, Justice McCallum stated, '… punishment by a sentence of imprisonment has real bite as a deterrent to others in the case of white-collar crime. … The threat of being sent to gaol, provided it is perceived as a real threat and not one judges will hesitate to enforce, is likely to operate as a powerful deterrent to men and women of business.'

Sarah McNaughton SC, Commonwealth Director of Public Prosecutions said close collaboration with ASIC investigators was paramount in ensuring the offender was brought to justice.

'Insider trading is a serious crime—deliberate, planned and unlawful conduct for personal gain', said McNaughton.

'There are very serious penalties involved for those who cheat. As this case clearly demonstrates, this conduct can result in significant terms of imprisonment' added McNaughton.

Federal Prosecutors worked very closely with ASIC investigators in successfully prosecuting the matter.

ASIC Chairman Greg Medcraft said 'ASIC is serious about market misconduct and this matter reinforces ASIC's commitment to pursue complex insider trading cases no matter how long they take and how vigorously they are defended.'

'ASIC appreciates the hard work done by the CDPP and our strong working relationship was critical in bringing the case to this point.'

Hartman had been prosecuted by the CDPP in 2010 and 2011 for a number of charges arising from his own insider trading, as well as communicating inside information to Curtis. Following an appeal against his sentence, Hartman was ultimately sentenced to an overall period of imprisonment of three years, to be released after serving 15 months, upon entering into a recognizance to be of good behaviour for 18 months, with a number of other conditions.. That sentence included a discount for Hartman’s undertaking to provide assistance to authorities in testifying against Curtis.

CDPP Media Contact: communications@cdpp.gov.au or 02 6206 5708

ASIC Media Contact: media.unit@asic.gov.au or 1300 208 215
Charge:

Oliver Peter Curtis was convicted and sentenced in relation to:

One count of conspiracy contrary to sub-section 11.5(1) of the Criminal Code (Cth) to commit an offence, being the contravention of the sub-sections 1311(1) and 1043A(1)(d) of the Corporations Act 2001 (Cth).

The offence carried a maximum penalty of imprisonment for 5 years and/or a fine of $220,000.

For insider trading offences committed since 13 December 2010, the maximum penalty has increased to 10 years imprisonment and/or a fine of $495,000 or three times the value of the benefits attributable to the commission of the offence (whichever is greater).

Since 2011, 35 persons have been criminally prosecuted for insider trading by the CDPP as a result of ASIC investigations, with a conviction rate of over 85%.
About the CDPP:

The Office of the Commonwealth Director of Public Prosecutions (CDPP) is an independent prosecution service established by Parliament to prosecute alleged offences against Commonwealth law that are referred by agencies, including the Australian Securities and Investment Commission. The CDPP aims to provide an effective, ethical, high quality and independent criminal prosecution service for Australia in accordance with the Prosecution Policy of the Commonwealth.
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08 Jul 2016 10:43 AM
Friday 8 July 2016
16-221MR ASIC's inquiry into IOOF

In July 2015 ASIC commenced inquiries into allegations made against I.O.O.F. Holdings Limited and its subsidiaries (IOOF), including issues raised by a former employee of IOOF. The allegations have also been the subject of several media articles and an inquiry by the Parliamentary Joint Committee on Corporations and Financial Services.

ASIC has now finalised its inquiries.

Some of the allegations concerned an IOOF staff member's involvement in insider trading when they traded in securities prior to the release of IOOF research reports relating to those securities. ASIC's market surveillance team has completed a thorough review of the circumstances and trades involved. This review determined that the release of the research reports had no material effect on the price of the relevant securities and there was no other evidence to warrant the commencement of a formal investigation. As such we have decided to take no further action in relation to these allegations.

ASIC's inquiries also included a review into allegations relating to corporate governance and licensee breaches by IOOF. This review identified a number of concerns relating to IOOF's compliance arrangements, breach reporting, management of conflicts of interest, staff trading policy, disclosure, whistleblower management and protection and cyber security. We have raised these concerns with IOOF. We have also advised IOOF that in our view the corporate culture at that time within IOOF contributed to these issues occurring.

Concurrent with ASIC's inquiries, IOOF appointed PricewaterhouseCoopers to conduct an independent review of its regulatory breach reporting policy and procedures and the control environment within its research team. IOOF has made significant changes to their policies and procedures as a result.

While ASIC welcomes such initiatives and steps taken by IOOF to rectify these issues, ASIC has also reached an agreement with IOOF to engage an external compliance consultant to conduct an expanded, broader and more comprehensive review of compliance arrangements within all IOOF business units.

ASIC will continue to monitor and work cooperatively with IOOF and its board to ensure the necessary changes are properly effected.
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Last updated: 08/07/2016 09:37
Peter MathersUser is Offline
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16 Sep 2016 09:38 AM
Friday 16 September 2016
16-313MR ASIC bans alternative investment spruiker for four years

ASIC has banned Mr Geoffrey Woodcock of Auckland, New Zealand, from providing financial services for a period of four years.

Between November 2011 and October 2013, Mr Woodcock was the founder and manager of Capital Alternatives Pty Ltd and a director of Velvet Assets Pty Ltd. Both of those companies promoted alternative investments in Australia.

However, Capital Alternatives, Velvet Assets and Mr Woodcock were not holders of Australian financial services (AFS) licences. They were also not authorised representatives of a licensee.

Following an investigation, ASIC found:

a number of the alternative investments promoted by Capital Alternatives and Velvet Assets were financial products and as such the companies were required to hold an AFS licence;
as a consequence, Capital Alternatives and Velvet Assets carried on a financial services business without holding an AFS licence and so contravened s911A of the Corporations Act;
Mr Woodcock was involved in this contravention by the companies; and
Mr Woodcock personally induced clients to invest by failing to disclose that around 40-45 per cent of the money invested would be retained as commission.
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09 Nov 2016 07:07 AM
Tuesday 8 November 2016
16-378MR ASIC welcomes 'client money' reforms

ASIC today welcomed the Government’s decision to proceed with 'client money' reforms in respect of retail OTC derivatives.

'The reforms to the client money regime will strengthen protection of client money that is provided by retail derivative clients. By improving protection for retail client money, the reforms will help to increase investor confidence in the Australian financial system,' said ASIC Commissioner Cathie Armour.  

'Importantly, the reforms will remove an exception in the client money regime that allows Australian financial services licensees to withdraw client money provided in relation to retail OTC derivatives from client money trust accounts, and use it for a wide range of purposes including as working capital. This exception currently places retail derivative client money at greater risk of loss, particularly in the event the licensee becomes insolvent,' Ms Armour said.  

'Under the reforms, licensees would be required to hold retail derivative client money on trust. A fundamental protection of the trust requirement is that client money can be returned to clients, and not paid to creditors, in the event of the licensee's insolvency. The requirement to hold client money on trust already applies to the vast majority of financial products and financial services under Australia's client money regime.'  

ASIC also welcomed the Government's decision to give ASIC the power to write client money reporting and reconciliation rules.

'These reporting and reconciliation requirements would apply more formal and consistent standards to industry, and help to improve the handling of client money. They would also assist ASIC to detect breaches of the client money regime affecting retail derivative clients in a more timely way,' Ms Armour said.

It is important to note that the industry has a 12-month transition period in which to implement the reforms, allowing industry time to adapt to the new regime.

'ASIC has engaged extensively with Treasury and industry on client money reforms. We look forward to continued engagement with Government and industry to improve retail client protection.'
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