Report suspicious activity
Reports of suspicious activity help ASIC to identify market misconduct and take action?
Market participants have an obligation to report suspicious activity to ASIC as soon as practicable. This means once you become aware of the activity, not after you have investigated it.
A suspicious activity report (SAR) must be lodged if you suspect that a person has traded while in possession of inside information – or if an order or trade creates or maintains an artificial price or a false or misleading appearance in the market or price of financial products.
Examples of suspicious activity that must be reported include:
- unusual or unexpected trading activity
- trading ahead of a price-sensitive announcement
- transactions that make no economic sense
- instructions to place an order immediately or urgently
- orders inconsistent with previous behavior or profile.
Your obligations also extend to suspected share sale fraud: see Information Sheet 237?Protecting against share sale fraud.
You should also make sure your staff are provided with effective training to identify potentially suspicious transactions and orders.
If you have already submitted a suspicious matter report (SMR) about the activity to the Australian Transaction Reports and Analysis Centre (AUSTRAC) you are not required to notify ASIC of the same information.
For more information on your obligations, see:
- Regulatory Guide 265 Guidance on ASIC market integrity rules for participants of securities markets
- Regulatory Guide 266 Guidance on ASIC market integrity rules for participants of futures markets
As part of our increased focus on fixed income, currency and commodity (FICC) markets, we also expect FICC market participants to inform ASIC of any unusual or suspicious trading activity observed in wholesale markets.