ANZ has reached a settlement with the Australian Securities and Investments Commission (ASIC) today, following its misconduct surrounding some of its traders. Both parties have reached an accord that will see ANZ fork over upwards of $50 million in penalties and payments after a series of trading incidents stemming back to 2010-2012.
Between the period of September 2010 and February 2012, a small cadre of traders at ANZ attempted to engage in unconscionable conduct across ten instances while trading on the bank bill swap (BBSW) market. ANZ has acknowledged episodes of misconduct while also admitting its lack of adequate policies and systems in place to monitor trading and communications of its BBSW traders.
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Consequently, ANZ has agreed to a $10 million penalty along with a payment of $20 million to a Financial Consumer Protection Fund, and a $20 million payment toward ASIC’s costs. The settlement was approved by the Federal Court of Australia.
In addition, as part of the resolution, ANZ has also agreed to enter into an enforceable undertaking with ASIC. This will see the appointment of an independent expert that will be reviewing controls, policies, training, and monitoring of BBSW trading to ensure proper compliance.
Of note, there has been no allegation by ASIC of collusion between ANZ and other institutions, making this an isolated instance. For its part, ANZ had already been undertaking a series of sweeping changes to the way it manages its business since 2015. This included new policies and systems as well as introducing extensive training for all its traders – by extension these trading breaches of conduct occurred upwards of three years prior to this initiative.
ANZ Chief Risk Officer Nigel Williams commented on the settlement: “We know our customers and the community expect better from us and we apologise for both the attempted unconscionable conduct and our inability to prevent or detect the behaviour.”