WealthHub Securities Limited (WealthHub), an online broker owned by National Australia Bank (NAB), has been fined $1.055 million by the Markets Disciplinary Panel (MDP) relating to failures to accurately report regulatory data more than 9.5 million times over a 10-year period.
Following an ASIC investigation, the MDP found that from 28 July 2014 to 31 October 2024, WealthHub failed to provide complete and accurate regulatory data and did not have and maintain the necessary organisational and technical resources to comply with its reporting obligations.
Market participants have a core obligation under the ASIC Market Integrity Rules to report full and precise regulatory data. This equips ASIC with the capability to effectively supervise the market and detect misconduct, such as insider trading and market manipulation.
In its decision, the MDP identified that WealthHub repeatedly failed to provide the Intermediary ID, and in some cases provided the incorrect Intermediary ID, in certain orders and trade reports submitted to market operators, including ASX.
The Intermediary ID is the Australian Financial Services (AFS) licence number of the financial services entity responsible for placing orders and trades through a market participant’s trading system. Intermediary ID information helps ASIC to accurately identify orders and trading patterns within an entity, such as a securities dealer, and is used to calculate industry funding levies. Incorrect or missing data in the Intermediary ID field can undermine ASIC’s surveillance activities and ultimately market integrity.
The MDP considered that WealthHub failed to maintain the necessary systems, expertise and oversight, or dedicate the appropriate resources needed to ensure that it reported the Intermediary ID correctly in regulatory data.
It was concerned that WealthHub lacked the capacity and capability to identify and remediate breaches in a timely and effective manner, missed multiple opportunities to address the root cause of the reporting failures, failed to take adequate corrective action and did not lodge a reportable situation report to ASIC until January 2023.
The MDP emphasised that market participants are responsible for maintaining and regularly reviewing technology systems and ensuring they have people with the appropriate expertise to identify and address reporting issues.
WealthHub has complied with the infringement notice and paid the fine.
Compliance with the infringement notice is not an admission of guilt or liability and by doing so, WealthHub is not taken to have contravened subsection 798H(1) of the Corporations Act 2001.
Background
WealthHub, a wholly owned subsidiary of NAB, is a market participant and trading participant of the ASX Market and Cboe Market. WealthHub provides execution, clearing and settlement services via two business units, nabtrade and its private wealth business JBWere Ltd.
In September 2021, ASIC published Market Integrity Update – Issue 130, reminding market participants of their ‘obligations to provide accurate and complete regulatory data’ including the Intermediary ID requirements.
View the Infringement notice on ASIC’s MDP Outcomes Register.
