ASIC Slaps Commonwealth Bank of Australia With $20 Million Fine
- The CBA has to pay $15 million to the community, and $5 million to the Australian regulator.
The Australian Securities and Investments Commission (ASIC) announced on that it has fined the Commonwealth Bank of Australia (CBA) $20 million following their participation in the setting of the Bank Bill Swap Rate (BBSW), a key benchmark and reference interest rate in the Australian financial system.
According to the statement, the multinational bank has entered into a court enforceable undertaking with ASIC, due to Federal Court proceedings that were launched by the regulator in January.
In the proceedings, the Australian bank admitted to the Federal Court in Melbourne that it tried to affect where the BBSW set on five separate occasions between January 31, 2012, and June 15, in 2012. As a result, CBA was fined a pecuniary penalty of $5 million on June 21, 2018.
CBA to appoint independent expert
According to the statement, the CBA will also appoint an independent expert to assess changes the bank has made and will make, to its policies, procedures, systems, controls, training, guidance and framework for the monitoring and supervision of employees and trading in Prime Bank Bills.
In addition, the statement also says that the bank admitted to failing to adequately train its traders and not doing everything necessary to ensure it provided financial services honestly and fairly.
Commenting on the enforceable undertaking and the additional $5 million penalty, Justice Beach of the Federal Court said: “…that sum together with the other Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term all totalling $25 million should be an adequate denouncement of and deterrence against the unacceptable trading behaviour of individuals within CBA that ought to have known better and a bank that ought to have better supervised its personnel.’
ASIC initially began the legal proceedings in the Federal Court against the bank on January 30, 2018. The watchdog alleged that on three specific occasions between January and October 2012 CBA traded in an unconscionable manner. This is because it created an artificial price which resulted in a false appearance on the market for certain financial products that were priced or valued off BBSW.
Benchmark reforms
The CBA is not the only bank in Australia to come under fire for trying to manipulate the BBSW. In fact, the Australia and New Zealand Banking Group (ANZ), National Australia Bank (NAB) and the Westpac Banking Corporation (Westpac) have been accused by the regulator of trying to tamper with the BBSW. Both ANZ and NAB had to pay fines up to $50 million each, while Westpac’s case is awaiting a hearing in October 2018.
To try and counter this, the Australian government has recently introduced legislation to implement financial benchmark regulatory reform. ASIC has consulted on the proposed Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term.
The Australian Securities and Investments Commission (ASIC) announced on that it has fined the Commonwealth Bank of Australia (CBA) $20 million following their participation in the setting of the Bank Bill Swap Rate (BBSW), a key benchmark and reference interest rate in the Australian financial system.
According to the statement, the multinational bank has entered into a court enforceable undertaking with ASIC, due to Federal Court proceedings that were launched by the regulator in January.
In the proceedings, the Australian bank admitted to the Federal Court in Melbourne that it tried to affect where the BBSW set on five separate occasions between January 31, 2012, and June 15, in 2012. As a result, CBA was fined a pecuniary penalty of $5 million on June 21, 2018.
CBA to appoint independent expert
According to the statement, the CBA will also appoint an independent expert to assess changes the bank has made and will make, to its policies, procedures, systems, controls, training, guidance and framework for the monitoring and supervision of employees and trading in Prime Bank Bills.
In addition, the statement also says that the bank admitted to failing to adequately train its traders and not doing everything necessary to ensure it provided financial services honestly and fairly.
Commenting on the enforceable undertaking and the additional $5 million penalty, Justice Beach of the Federal Court said: “…that sum together with the other Payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term all totalling $25 million should be an adequate denouncement of and deterrence against the unacceptable trading behaviour of individuals within CBA that ought to have known better and a bank that ought to have better supervised its personnel.’
ASIC initially began the legal proceedings in the Federal Court against the bank on January 30, 2018. The watchdog alleged that on three specific occasions between January and October 2012 CBA traded in an unconscionable manner. This is because it created an artificial price which resulted in a false appearance on the market for certain financial products that were priced or valued off BBSW.
Benchmark reforms
The CBA is not the only bank in Australia to come under fire for trying to manipulate the BBSW. In fact, the Australia and New Zealand Banking Group (ANZ), National Australia Bank (NAB) and the Westpac Banking Corporation (Westpac) have been accused by the regulator of trying to tamper with the BBSW. Both ANZ and NAB had to pay fines up to $50 million each, while Westpac’s case is awaiting a hearing in October 2018.
To try and counter this, the Australian government has recently introduced legislation to implement financial benchmark regulatory reform. ASIC has consulted on the proposed Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term.