ANZ and ASIC settle swap rate case

  • By Elizabeth Fry

ANZ on Friday said the Federal Court of Australia has approved its settlement with the corporate watchdog in relation to attempted unconscionable conduct and also compliance controls in the bank bill swap market.

In a statement after the settlement ANZ has acknowledged that, in the course of trading on the BBSW market, a small number of traders attempted to engage in unconscionable conduct on ten dates between September 2010 and February 2012.

ANZ also said it did not have in place adequate policies and systems to monitor trading and communications of its BBSW traders.

There has been no allegation by ASIC of collusion between ANZ and other institutions.

“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," said ANZ Chief Risk Officer Nigel Williams.

Trader training

Since 2015, he said, the lender has significantly changed the way it manages its Markets business, including new policies and systems as well as introducing extensive training for all its traders.

As part of the resolution, ANZ has agreed to a $10 million penalty. This is line with the deal struck by National Australia Bank with ASIC on October 27.

The banks will also make a further payment of $20 million to a Financial Consumer Protection Fund and a pay $20 million toward ASIC’s costs.

Both banks have agreed to enter into an enforceable undertaking with ASIC, where an independent expert will be appointed to review controls, policies, training and monitoring of BBSW trading.

As previously announced, ANZ said the financial impact of the agreement was reflected in the 2017 Financial Year results and was largely covered by the provisioning held as at 31 March 2017.