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Friday 13 April 2018

18-105MR ASIC bans client adviser for trading in 'MINI' warrants

ASIC has banned Mark Menzies, the sole director and officer of Menzies Securities Pty Limited (Menzies Securities), from providing financial services for four years. 

ASIC banned Mr Menzies following an ASIC investigation which found he had manipulated the price of MINI warrants issued by Credit Suisse (commonly called 'MINIs'). MINIs are a type of derivative product traded on the Australian Securities Exchange (ASX).

ASIC' found the prices at which Mr Menzies and Credit Suisse arranged to trade MINIs were designed to transfer the profit or loss from previous transactions and had, or were likely to have, the effect of creating an artificial price for trading in the affected MINIs on the ASX.

ASIC also found that Menzies Securities had not kept all necessary records of client instructions as required.  As the sole director and operator of Menzies Securities, ASIC found that Mr Menzies was knowingly involved in Menzies Securities' contraventions.

Mr Menzies was banned by ASIC with effect from 19 July 2016. Mr Menzies appealed the decision to the Administrative Appeals Tribunal (AAT) and sought a stay of the banning.

On 9 September 2016, the AAT granted Mr Menzies a conditional stay pending review of the decision. On 22 March 2018, the AAT revoked the stay and the effect of the banning continued. Mr Menzies is now banned until 28 January 2022, pending review.

On 22 February 2018, ASIC cancelled the Australian financial services licence of Menzies Securities (AFSL 340198).

Background

A MINI is a type of 'derivative' in that it derives its value from another 'thing' which is commonly referred to as the 'underlying instrument' or 'reference asset'.  The underlying instrument of a MINI may be, among other things, a share, a share price index (including the S&P/ASX 200 Index), a pair of currencies or a commodity.

ASX SPI 200 Index Futures (SPI Futures)are a derivative product which tracks the value of the S&P/ASX 200 Index.

Credit Suisse ceased issuing MINIs on ASX in October 2013.

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Last updated: 13/04/2018 04:51