Macquarie Securities in Australia will pay a AU$35m fine after admitting to misleading conduct in relation to the misreporting millions of short sales over several years, caused by “repeated failures” in its systems and processes, the Australian Securities & Investments Commission (ASIC) has said.
ASIC said it will ask the New South Wales (NSW) Supreme Court to impose the penalty, and make other orders against Macquarie Securities (Australia) Limited (MSAL) after the firm admitted it failed to correctly report at least 73 million short sales between 11 December 2009 and 14 February 2024. It is estimated that MSAL misreported between 298 million and 1.5 billion short sales.
The inaccurate reporting was due to multiple systems-related failures, ASIC said, many of which remained undetected for more than a decade. The firm also failed to have appropriate supervisory policies and procedures, have and maintain the necessary organisational and technical resources, and have adequate risk management systems to ensure compliance with its short sale reporting obligations.
MSAL has also admitted to incorrectly reporting regulatory data for more than 633,000 orders submitted to the market operator between 16 November 2022 and 21 March 2023.
ASIC chair Joe Longo said: “Accurate and reliable data underpins confidence in our financial markets. ASIC and the market rely on short sale and regulatory reporting data – especially during periods of volatility – to understand market activity and make informed decisions. Without accurate data, market transparency is undermined.
“Market participants must have the proper systems and processes in place to comply with their regulatory obligations. It’s essential for public transparency, market integrity and trust in our system.”
ASIC said its action against MSAL is part of its broader body of work addressing misconduct and failures to comply with regulatory obligations by large Australian financial institutions.
