JP Morgan Securities Asia receives 15-day suspension of stock index futures

Risk staff
01 Apr 2006

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Regulation

According to a statement from the FSA, the Securities and Exchange Surveillance Commission (SESC) conducted an inspection of JP Morgan Securities Asia's Tokyo branch, and found evidence that in November 2004, "conducting the Topix futures transactions on its overseas affiliated company's account, a trader of the branch placed in the TSE market a series of selling orders and purchasing orders at the same index point both by himself and matched them to each other. As a result, the branch conducted cross trades in the Topix futures transactions with no intention to transfer the rights represented by the Topix futures".

The FSA also accused the firm of "acts of making representation of a false statement or a misleading statement on any material matter, in connection with the sale or purchase of, or any other form of transaction in a security" in relation to an real estate securitisation product.

As a result, the regulator suspended stock index futures trades on the firm's own account for 15 days, and business in the real estate finance division for five days. It also demanded improvements in the firms' systems and controls.

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