Macquarie Securities receives fine from ASIC

The cash brokering entity of Macquarie Group Ltd , Macquarie Securities (Australia) Limited, has paid a $126,000 fine to the Australian Securities and Investment Commission (ASIC).

May 20, 2021, | AtoZ Markets -Macquarie Securities (Australia) Limited (‘MSAL’) has paid a penalty of $126,000 to comply with an infringement notice given by the Markets Disciplinary Panel (‘the MDP’).

The cash brokering entity of Macquarie Group Ltd based in Australia, has paid a $ 126,000 fine to the Australian Securities and Investment Commission (ASIC).

The infringement notice was delivered after it was discovered that Macquarie Securities failed to follow the instructions of its clients during a share buyback. This is the fifth time ASIC has fined Macquarie Securities.

MSAL were engaged by an ASX-listed company to act as the broker to conduct, on behalf of the company, an on-market buy-back.
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What Is a Buyback

Share buyback occurs when a company buys its own shares from investors. Once the shares have been reacquired they are considered canceled, although they can also be kept for future distribution.

In addition, it is a tax-effective alternative to return money to shareholders. In this case, the MDP was considered that orders that are matched otherwise than in price / time priority are not in the ordinary course of trading.

Also, MDP was not satisfied that MSAL’s conduct in relation to any of buy-back transactions on ASXC resulted in the market for the shares not being both fair and orderly.

Download the infringement notice 

To comply with this notice MSAL must pay a penalty to ASIC, on behalf of the Commonwealth, in the sum of $126,000. This penalty amount represents 600 penalty units, where the amount of a penalty unit is $210.

The MDP is not satisfied that MSAL’s conduct resulted in the market for the shares not being both fair and orderly in respect of any of the 3 Bids, which resulted in 6 buyback transactions.

Even in relation to the transaction the MDP is not satisfied that MSAL’s conduct affected the price of the shares.


TRON buyback plan


The broker isn’t the only entity to be caught up in poor behaviour during buy-back exercises.

Previously, the MDP has sanctioned UBS Securities Australia Ltd and Credit Suisse Equities (Australia) Ltd for their conduct during on-market buy-backs.

Remember, that the share buyback can help improve public confidence in the company, as it would demonstrate that it has sufficient funds to pay investors. However, it could also give the impression that the company does not anticipate strong growth potential.


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