Ord Minnett Limited Ltd ACN 002 733 048 (Ord Minnett) has paid a penalty of AUD888,000 to comply with an infringement notice given by the Markets Disciplinary Panel (MDP).

On 1 September 2021, Ord Minnett received instructions to commence a buy-back on behalf of AWN Holdings Ltd (AWN). The MDP had reasonable grounds to consider that Ord Minnett twice contravened market integrity rules when conducting the buy-back.

The MDP considered that Ord Minnett did not intend to breach the rules but failed to adequately investigate the question of crossings in a buy-back. The MDP considered that Ord Minnett failed to recognise the contraventions or implement any changes to its systems to prevent or mitigate the risks of further breaches.

On 15 September 2021, Ord Minnett received instructions from a substantial shareholder of AWN (selling client) to sell its shares at AUD1.00. On that day, AWN shares traded between 89.5 and 87.5 cents.

On 27 September 2021, Ord Minnett executed crossings between the selling client and AWN under the buy-back for a total of 2,073,561 AWN shares at 99.5 cents. This was the maximum price that AWN was allowed to buy its shares under the buy-back on this day and represented 52.4% of the total shares to be purchased under the buy-back.

The Panel "had reasonable grounds to consider" that Ord Minnett breached the market integrity rules because the cross-trades resulted in the market in that share "not being fair and orderly."

The Panel said "the contravention was a genuine error and inadvertent [but] Ord Minnett did not have adequate internal controls to prevent or detect the contravention and on being alerted to the contravention, did not take remedial steps in response."

Source: Infringement notice here: https://asic.gov.au/regulatory-resources/markets/markets-disciplinary-p…