Fund Regulatory Update

BGC Partners in breach of some trading rules and obligations, fined $110k

BGC Partners were found to have breached the ASX 24’s trading rules twice on 22 March 2019 by transacting pre-negotiated business orders without making the required enquiry via the market’s message facility.

The failure to complete the enquiry appears to have been an unintentional operator error, but the Markets Disciplinary Panel believed the error could have been avoided if systems were updated with proper technological safeguards.

Statewide Superannuation found to have misled members regarding insurance

Statewide Superannuation is facing $4 million in penalties after members were provided with misleading information regarding their insurance, with failures to report the breach to ASIC within the time limit imposed, as per the law.

Statewise was found to have sent over 14,000 annual statements or other communications to about 7,000 members saying they held insurance with the super fund, when in fact their insurance had lapsed. The fund was found to have overcharged members premiums of at least 2.5 million, and did not report the issues within 10 days of becoming aware of them.

A penalty of $3.5 million was imposed by the court for misleading correspondence, while $500,000 was imposed for not reporting the breach to ASIC. Affected members are being remediated.