Craigs Investment Partners has been fined for failing to correctly record retail client orders in the stock market's trading system for almost two years. Photo / Joel Ford
Craigs Investment Partners has been fined for failing to correctly record retail client orders in the stock market's trading system for almost two years. Photo / Joel Ford
Craigs Investment Partners has been fined $30,000 and censured by NZX's disciplinary tribunal for failing to correctly record retail client orders in the stock market's trading system for almost two years.
The brokerage and the Wellington-based stock market operator reached a settlement over Craigs' breach of market rule 15.5, whichrequires all retail client orders to be entered into NZX's trading system with a common shareholder number (CSN), the NZ Markets Disciplinary Tribunal said in a statement. Craigs accepted it had breached the rules, while saying no clients had been adversely affected.
NZX first detected the breach in April 2013 and asked Craigs to take steps to comply in December that year. Between April 2013 and September 2014, Craigs entered retail client orders under wholesale, multiple or custody common shareholder numbers by default.
As part of the settlement, Craigs agreed to implement new software to allow CSNs to be automatically applied during the trading process, and to implement written training and compliance procedures in line with listing rules.
"The tribunal considers breaches of the rules relating to the reporting of trade data to be a serious matter," it said in its decision. "The tribunal is very concerned that despite being directed by NZX in 2013 to address its compliance in this area, the breaches of Rule 15.5 by AACA (Craigs) continued. The tribunal considers that AACA lacked the internal controls expected of a market participant to adequately oversee its compliance in this area."
The tribunal said aggravating factors included the length of the breach, during which it implemented three different methods of entering retail client orders, none of which complied with the requirements of the rule. The brokerage also didn't have any internal systems to help compliance with rule 15.5, the tribunal said.
The stock market's disciplinary arm is looking to beef up the penalties for breaches of listing rules and last month asked for feedback on the proposals.
