Instinet Australia Pty Ltd (ACN 131 253 686) (Instinet) has paid a penalty of AUD670,500 to comply with an infringement notice given by the Markets Disciplinary Panel

The infringement notice related to market integrity rules requiring Instinet to:

- Provide meaningful price improvement for client transactions conducted off-market;
- Disclose all necessary information to its clients about its crossing system; and
- Accurately report regulatory data about the execution venue of trades.

From a financial crime risk and compliance perspective, the issue is not the specific failure but, rather, the broader, systemic, question of review and revision of compliance systems.

In this case, according to ASIC, "3,093 trades matched off-market and reported as Trades with Price Improvement, did not provide meaningful price improvement over the NBBO for clients" because data was not kept up to date.

Also, and equally relevant "The Panel considered Instinet was negligent as it should have had procedures in place to prevent or detect possible non-compliance with the Rules applicable to crossing systems" demonstrating the importance of systems to check the systems and not to rely on one-dimensional compliance systems.

The Infringement Notice is here: https://asic.gov.au/regulatory-resources/markets/markets-disciplinary-p…