ANZ and NAB enter EUs with ASIC
The Australian Securities and Investments Commission (ASIC) has accepted enforceable undertakings (EUs) from ANZ and National Australia Bank (NAB), following Federal Court declarations against the conduct of each bank earlier this month.
The EUs are in relation to bank bill trading business of each bank, and their participation in setting a Bank Bill Swap Rate (BBSW), a key Australian benchmark and reference interest rate.
The EUs require the banks to each take certain steps and pay $40 million, half of which is to be applied for the benefit of the community and half of which is to be paid towards ASIC’s investigation and other costs.
ASIC commenced legal proceedings against both banks in the Federal Court last year, leading to declarations from the Court on 10 November 2017 that ANZ and NAB had both attempted to engage in unconscionable conduct in connection with the supply of financial services.
The conduct was in regard to attempts by the banks to seek to change where BBSW set on certain days between 2010 and 2012. ANZ attempted to do so on 10 occasions and NAB on 12. The Court also found that both banks failed to do all things necessary to ensure that they provided financial services honestly and fairly.
In addition to the declaration and EUs, the Court also imposed pecuniary penalties of $10 million on each bank.
The Government has recently introduced legislation to reform financial benchmark regulations, on which ASIC has consulted. ASIC has also reported on issues regarding the manipulation of financial benchmarks and related conduct.
ASIC currently has ongoing proceedings in the Federal Court for Westpac Banking Corporation for its alleged involvement in setting the BBSW and acting unconscionably.
AUTHOR
Hannah Wootton
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