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CBA and NAB enter enforceable undertakings

ASIC has accepted enforceable undertakings from both the Commonwealth Bank of Australia (CBA) and NAB regarding the conduct of their wholesale spot foreign exchange businesses.


Following an investigation, the regulator said it was “concerned” that the two banks had failed to ensure their systems and controls were adequate “to address risks relating to instances of inappropriate conduct identified by ASIC”.

“A well-functioning foreign exchange market depends on all participants acting with integrity and fairness,” said ASIC commissioner Cathie Armour.

“ASIC is committed to ensuring that major financial institutions have in place effective mechanisms for ensuring that their employees are trained, monitored and supervised to provide financial services efficiently, honestly and fairly.”

The regulator found an employee of NAB had on several occasions shared confidential information and disclosed confidential details of pending client orders.

ASIC also said two employees of CBA had disclosed confidential information regarding pending client orders on a number of occasions.

Additionally, the CBA employees were found to have twice traded in a manner intended to cause the trigger price for a stop loss order to trade when it may not have done so at that time, and “acquired proprietary positions in a currency after coming into possession of knowledge of large CBA fix orders in that currency”.

Both banks will develop and implement a set of changes to their existing “systems, controls, monitoring and supervision” of their systems and controls to address the issues identified by the review, ASIC said.

 

 

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