ASIC takes ANZ to court over BBSW manipulation

ASIC takes ANZ to court over BBSW manipulation

ASIC has commenced legal proceedings against ANZ for "unconscionable conduct and market manipulation" in relation to the bank's involvement in setting the bank bill swap rate (BBSW).


The corporate regulator has commenced legal proceedings in the Federal Court in Melbourne against ANZ for manipulating the bank bill swap rate (BBSW) between March 2010 and May 2012.

"It is alleged that ANZ traded in a manner intended to create an artificial price for bank bills on 44 separate days during the period of 9 March 2010 to 25 May 2012," said ASIC.

"ASIC alleges that on these days ANZ had a large number of products which were priced or valued off BBSW and that it traded in the bank bill market with the intention of moving the BBSW higher or lower.

"ASIC alleges that ANZ was seeking to maximise its profit or minimise its loss to the detriment of those holding opposite positions to ANZ's.

"ASIC is seeking declarations that ANZ contravened s.12CA, s.12CB and the former s.12CC of the Australian Securities and Investments Commission Act 2001 (Cth), s.1041A of the Corporations Act 2001 (Cth) (Corporations Act), and s.912A of the Corporations Act.

"Further, ASIC has sought from the court pecuniary penalties against ANZ and an order requiring ANZ to implement a compliance program," said the regulator.

The BBSW is the primary interest rate benchmark used in Australian financial markets, administered by the Australian Financial Markets Association (AFMA).

On 27 September 2013, AFMA changed the method by which the BBSW is calculated. The conduct that the proceedings relate to occurred before the change in methodology.

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