The Securities & Futures Commission has fined Instinet Pacific $50,000 for breaching the client identity rule.

Instinet Pacific failed to provide the commission with details of the underlying clients of certain transactions within two business days, in contravention of the Client Identity Rule Policy. It also did not have adequate internal measures to ensure compliance with the policy.

Instinet Pacific failed to comply with an undertaking it gave the commission in 1999 that it would not trade with two German clients until they provided details of the underlying clients of certain securities transactions and also expressly confirmed they would comply with the policy.

Due consideration 

In deciding the level of fine, the commission considered the Disciplinary Fining Guidelines and all the circumstances of the case, including the fact that:

* no loss or damage was suffered by clients, the public, or market users;

* Instinet Pacific co-operated fully with the investigation;

* the delay in providing the client information was not deliberate; and,

* Instinet Pacific has strengthened its internal control systems.

The commission's Executive Director of Enforcement Alan Linning said: "In accordance with the Client Identity Rule Policy, Instinet Pacific had a duty to provide details of the underlying clients of securities transactions within two business days. This was not done. All licensed persons have a duty to know with whom they are dealing. This is a fundamental requirement."