A configuration error has cost the ASX more than $1 million in a fine issued by the Australian Securities and Investments Commission.
It’s the first such infringement notice the regulator has given to a market operator.
As a result of the mistake, the ASX failed to publish required pre-trade information for more than 8000 transactions on its TradeMatch system.
A type of Tier 3 equity product called a Block Trade should be reported under market transparency rules, unless the transaction is greater than $200,000.
Between April 4 2019 and December 22 2022, due to the configuration error, the threshold was set to $0 in TradeMatch, leading to 8417 breaches of the pre-trade transparency rule.
“The incorrect system configuration went undetected until drawn to ASX’s attention by a market participant,” ASIC stated.
“On at least two occasions before December 22 2022, ASX could have, but did not, identify the issue.”
ASIC said ASX had opportunities to identify a potential issue in 2016 and 2022.
“ASIC found that the circumstances giving rise to the system configuration issue were indicative of carelessness rather than recklessness or intentional misconduct. Once aware, ASX took immediate steps to remedy the issue and notify ASIC.”
According to the ASIC’s infringement notice [pdf], ASX applied a “manual fix” to the system on December 22 2022, and notified ASIC the following day.
A further system fix was implemented on January 9 2023.
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