The Australian Securities and Investments Commission (ASIC) has fined JP Morgan Securities Australia $30,000 for performing two off-market special crossings, which is prohibited in the country.
The crossing was done on behalf of health insurance company NIB during the term of an on-market buy-back offer being conducted by the investment firm.
ASIC’s Markets Disciplinary Panel alleged that on 31 August 2011, NIB issued a company announcement advising it intended to implement the fourth tranche of an on-market buy-back of its fully-paid ordinary shares and that JP Morgan would act as the broker.
JP Morgan received instructions from an institutional client to sell a total of eight million shares on 24 February 2012 and instructions from NIB, the issuer, to buy eight million pursuant to the buy-back. JP Morgan executed the instructions via a special crossing. Then, on 28 February 2012, JP Morgan received instructions from two clients to sell a total of five million shares and instructions from NIB to purchase five million shares.
The Markets Disciplinary Panel said it had “reasonable grounds to believe” that as a result, JP Morgan contravened Australia’s special crossing rules.
The Markets Disciplinary Panel is a peer review body which exercises ASIC’s power to issue infringement notices and accept enforceable undertakings in relation to alleged breaches of the market integrity rules. The market integrity rules are made by ASIC and apply to market operators, market participants and prescribed entities under the regulations.