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ASIC takes trading platforms to court
ASIC has launched civil penalty proceedings against CommSec and AUSIEX for “compliance failures” over a significant period of time.
ASIC takes trading platforms to court
ASIC has launched civil penalty proceedings against CommSec and AUSIEX for “compliance failures” over a significant period of time.
ASIC alleged that CommSec overcharged customers on 120,933 occasions, totalling $4,352,194 between August 2010 and February 2020, which, ASIC confirmed, CommSec has admitted guilt to.
According to the corporate watchdog, CommSec overcharged brokerage fees to customers, while it and AUSIEX failed to comply with client money reconciliation requirements.
As part of its case, ASIC also alleged that CommSec and AUSIEX did not provide accurate confirmations to customers for certain market transactions and failed to comply with their best execution policies and procedures.
“CommSec and AUSIEX have also agreed to enter into a compliance program requiring a review by an independent expert of remediation relating to the conduct, as well as a review of all systems and controls which relate to the financial services provided by CommSec and AUSIEX under their respective AFS licences,” ASIC’s statement said.
Moreover ASIC found that the pair failed to do all things necessary to ensure that the financial services covered by their licences were provided efficiently, honestly and fairly due to failures in their systems, processes and people.
CommSec and AUSIEX submitted over 60 notifications to ASIC relating to the conduct.
ASIC is seeking declarations of contraventions, pecuniary penalties and other orders against CommSec and AUSIEX.
In a statement, CommSec said the issues arose from errors such as information technology system coding or systems issues, human error and/or data entry errors.
The only issue where there was any direct financial loss to some customers was in relation to instances of brokerage overcharging.
CommSec has paid total remediation of $6.5 million (including interest), comprising refunds and other compensation payments to customers affected by the issues.
“We apologise to our customers who were impacted by our mistakes. These errors never should have happened. We acknowledge the importance of meeting our compliance obligations, and we are committed to continuing to invest in strengthening our systems and procedures,” Richard Burns, managing director of CommSec, said in a statement.
CommSec and AUSIEX have agreed with ASIC to enter into a court-ordered compliance program. The compliance program will include review by an independent expert, and is aimed at ensuring that all the remedial work undertaken by CommSec and AUSIEX has been adequately completed and ongoing systems and controls are effective.
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