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SGX imposes fine, education programme on UOB Kay Hian trader
THE Singapore Exchange (SGX) on Thursday issued a circular saying that its Disciplinary Committee has on Sept 6 heard four charges brought by the exchange against UOB Kay Hian (UOBKH) trading representative Seow Jin Yuan Reymond for contraventions of exchange rules.
Mr Seow was present at the hearing and was not represented by any legal counsel, but presented his case himself.
Four charges were brought against Mr Seow in all. In the first charge, it was said that in March and April 2017, as a trading representative of the brokerage, he did not adhere to the principles of good business practice in the conduct of his business affairs, and executed pre-arranged trades in the shares of GSH Corporation.
For instance, on March 28, Mr Seow pre-arranged for the buy orders of an unnamed entity to be fully matched with the sell orders of his elder brother and as a result, executed 100,000 GSH shares at the volume-weighted average price (VWAP) of S$0.565. On April 4, he again pre-arranged for the buy orders of the unnamed entity to once more be fully matched with the sell orders of his brother, executing 230,000 GSH shares at the VWAP of S$0.555. This happened again on April 26, when Mr Seow pre-arranged for the buy orders of the unnamed entity to be fully matched with his own sell orders and as a result, executed 100,000 GSH shares at the VWAP of S$0.555.
Under the second charge, on April 26, Mr Seow traded as principal with his customer, the same unnamed entity, and sold it 100,000 GSH shares at S$0.555 each; prior to doing so, he did not inform the entity that he would be acting as principal to these transactions.
Under the third charge, on April 26, Mr Seow traded as principal with the same unnamed entity, and sold it 100,000 GSH shares, when the contract note pertaining to this transaction did not show that he had acted as principal, which meant that he had contravened exchange rules on both counts.
Under the fourth charge against him, it was said in March and April 2017, Mr Seow did not act in the best interests of the unnamed entity as his actions led the entity to pay more for the amalgamated quantity of GSH shares executed in the ready market and the unit share market, than if he had executed the entire quantity in the ready market.
The ready market is the established market for the trading of board lots, which is 100 shares. Conversely, the unit share market enables the trading of odd lots in any quantity less than a board lot of a security. Accordingly, orders with volume less than a board lot are traded on the unit share market. Compared with the ready market, the unit share market is less liquid and experiences a wider bid-ask spread. For buyers, prices in the ready market are better.
At the hearing, Mr Seow admitted to all four charges. SGX proceeded on the first and fourth charges, and applied for the second and third charges to be taken into consideration for sentencing purposes.
The Disciplinary Committee imposed a fine of S$15,000 for the first charge, a fine of S$10,000 for the fourth charge, and required him to attend an education programme; the second and third charges are still being taken into consideration.
Mr Seow has been employed by UOBKH since February 2010 for a period of about eight years to date.