The Australian Securities Exchange has paid a $1.05 million penalty to the securities regulator for breaching integrity rules related to market transparency.
The Australian Securities and Investments Commission said on Thursday that the ASX breached pre-trade transparency rules on 8,417 occasions between April 4, 2019 and December 22, 2022 because of an incorrect system configuration.
The system error meant that certain block trades by exchange traded funds and warrants did not have to meet pre-trade transparency requirements, when in fact they should have.
ASIC said that while there was no evidence of losses suffered as a result of the conduct, the commission considered it a serious breach because of the potential damage to public trust in the market.
“Confidence in Australia’s market operators is fundamental to fair and efficient markets," said ASIC chairman Joe Longo.
"This action demonstrates that ASIC will hold market operators to the highest standards.”
It's the first time ASIC has issued an infringement notice to a market operation, the commission said.
The ASX said it identified the error in late 2022, corrected it, brought it to ASIC's attention and fully cooperated with the investigation.
ASX chief executive and managing director Helen Lofthouse said that the availability of pre-trade information was fundamental to a fair and transparent market, and the bourse took seriously any impairment to that.
"We are very disappointed this error happened," Ms Lofthouse said.
The ASX did note that while the infringement notice related to 8,417 orders, on a given day an average of 76 million order book changes were received on the ASX market.
