The Capital Markets Integrity Corporation has reprimanded and fined SB Equities Inc., a subsidiary of bilyonaryo Frederick Dy-led Security Bank, for trading-related irregularities that qualify as a grave violation.
The CMIC published the list of trading participants it has sanctioned for infractions committed from December 30, 2022 to July 25, 2023.
The list does not include those that have yet to be decided by the CMIC board or where the period to appeal has not yet lapsed.
According to the CMIC, SB Equities violated Article XI-B Section 2 of the rules, which refers to trading-related irregularities and which requires a trading participant to report to the CMIC in writing transactions of its client that it knows or suspect to constitute unusual trading activities within 24 hours from the receipt of the customer’s order of the transaction.
The CMIC classifies violations as minor, major, or grave.
The sanction for the first offense of a grave violation is a written reprimand and a fine of at least P25,000 but not to exceed P200,000. For the second violation, the punishment is a denial of the exercise of the trading right and access to the facilities and systems of the exchange. For the third violation, the trading participant will be barred from entry to or any kind of commercial association with the exchange or other trading participants.
The CMIC did not provide details on the violation committed by SB Equities.
Aside from the grave violation, SB Equities was also cited for two other violations that the CMIC considers as major: for violating the code of conduct and professional ethics for traders and salesmen and failing to establish an appropriate and effective compliance function. SB Equities was also fined for both violations.
SB Equities clarified that there was only one reporting violation and maintained that it remains compliant with the regulations established by the SEC and CMIC.
“While SB Equities acknowledges the three penalties imposed by CMIC, it has clarified that these relate to only one reporting violation. This violation involved one transaction which should have been tagged for possible irregularities,” SB Equities said.
“SB Equities has reviewed its procedures and strengthened its internal controls,” it added.
