SGX imposes fine, education programme on UOBKH trader for misconduct

The Singapore Exchange (SGX) on Thursday issued a circular saying that its Disciplinary Committee had, on Sept 6, heard four charges against UOB Kay Hian (UOBKH) trading representative Seow Jin Yuan Reymond for contravening exchange rules.

Mr Seow, unrepresented by legal counsel at the hearing, took on the case himself.

The first charge alleged that in March and April 2017, he failed to follow the principles of good business practice in the conduct of his business affairs, and executed pre-arranged trades in the shares of GSH Corporation in the unit share market.

On March 28 for instance, he pre-arranged for the buy orders of an unnamed entity to be fully matched with the sell orders of his elder brother, resulting in the execution of 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 be fully matched with the sell orders of his brother. This involved transacting 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 entity to be fully matched with his own sell orders to execute 100,000 GSH shares at the VWAP of S$0.555.

Under the second charge, Mr Seow on April 26 traded as principal with his customer, the same unnamed entity, and sold it 100,000 GSH shares at S$0.555 each. Before doing that, 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.

A fourth charge pertained to the unit share market. In March and April 2017, Mr Seow was said to have failed to act in the best interests of the unnamed entity, given that his actions led to the entity paying 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 trade 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. Orders with volumes of less than a board lot are thus 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.

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 to be taken into consideration for sentencing.

The Disciplinary Committee imposed a fine of S$15,000 on him on the first charge and a fine of S$10,000 on the fourth. He is also required to attend an education programme.

Mr Seow has been employed by UOBKH since February 2010.

Lee Meixian

03 November 2018