SFC slaps Instinet Pacific with $17.3m fine

The electronic trading company’s algorithms generated false market orders thrice.

The Securities and Futures Commission (SFC) slapped a $17.3m fine on electronic trading company Instinet Pacific Limited (IPL) for violations in relation to its electronic and algorithmic trading systems and alternative liquidity pool, according to a press release.

IPL failed to ensure that mechanisms were in place to prevent its algorithmic systems from generating false and disorderly market orders on three separate occasions from 2014 to 2016.

The company also failed to implement execution priority on non-proprietary orders over proprietary orders in its ALP before May 2016.

“The SFC also took into consideration an undertaking by IPL’s board of directors that reasonable steps will be implemented to ensure the failures set out above will be rectified within 12 months; otherwise, similar failures would have resulted in a substantially higher level of fine,” the regulator added.