ASIC accepts EUs from Westpac and ANZ
The Australian Securities and Investments Commission (ASIC) has accepted enforceable undertakings (EUs) from Westpac and ANZ in relation to the banks’ wholesale foreign exchange (FX) businesses.
According to regulator’s investigation, both banks put in place inadequate systems to address risks relating to inappropriate conduct between 2008 and 2013.
ASIC found that employees of both Westpac and ANZ disclosed specific confidential details of pending customer orders to external third parties.
In addition, the investigation found that Westpac’s employees:
- Acted together with an external party to share confidential information and enter and cancel offers on a trading platform;
- Inappropriately received and/or disclosed confidential information about the institution’s orders;
- Altered a proprietary position prior to the fix upon receipt of confidential information in relation to other institutional fix orders; and
- Disclosed confidential fix order information to an external party to inform their joint personal account trading strategy.
At the same time, ASIC found that ANZ’s employees:
- Traded orders in a manner which was potentially inconsistent with a proper approach to market making or hedging, and
- A former ANZ spot FX trader exchanged with an external market participant confidential information about other institutions’ customer flow.
Under the terms of the EU, both organisations have been obliged to develop programmes of changes to its existing systems and the way they supervised the employees within its spot FX businesses to help prevent and respond to:
- Disclosure of confidential information;
- Inappropriate order management and trading; and
- Inappropriate personal trading
Additionally, the programmes would be assessed by an independent consultant appointed by ASIC and after the implementation of the programmes, both organisations would be providing to ASIC an annual attestation from senior executives that the systems and controls remained adequate for three years.
Westpac would also make a community benefit payment of $3 million to support the financial capability of vulnerable people, including women experiencing family violence and to elderly and youth at risk, while ANZ would pay $3 million to Financial Literacy Australia.
ASIC’s commissioner, Cathie Armour, said: “The foreign exchange market is a systemically important that depends on all participants acting with integrity and fairness".
“ASIC is committed to ensuring that major financial institutions have the systems in place to ensure that financial services are provided fairly, honestly and efficiently.”
Recommended for you
It can be extremely hard to realise the gains from financial advice M&A, according to Peloton Partners’ Rob Jones, and more could be gained from firms looking inward at their own practice.
With platforms reporting their quarterly results, there is a clear divide in the adviser markets they are targeting, according to platform specialist Recep Peker, and which would be right for your clients.
The Federal Court has imposed a $10 million penalty on Macquarie Bank for failing to prevent and control unauthorised fee transactions by third parties including financial advisers.
A financial advice firm has seen a weekly decline of 10 advisers, with all moving to a new licensee, while Centrepoint Alliance continues its “growth story”.
