Westpac and ANZ have both had enforceable undertakings (EUs) accepted for the behaviour of their staff in the spot FX market between 1 January 2008 and 30 June 2013.
Both banks have agreed to make $3 million “community benefit payments” as part of their EUs, as well as appoint ASIC-appointed independent consultants to improve “systems, controls and supervision” in their spot FX businesses.
Westpac will donate $3 million to “support the financial capability of vulnerable people including women experiencing family violence, the elderly and youth at risk”, and ANZ will donate $3 million to Financial Literacy Australia.
Yesterday’s ASIC announcement means that all four major banks are now taking measures to remedy their spot FX businesses. CBA and NAB both entered EUs with ASIC regarding spot FX trading in December 2016.
According to yesterday’s ASIC announcement, between 1 January 2008 and 30 June 2013 Westpac employees disclosed confidential details of pending client orders to external traders in the spot FX markets “on several occasions”.
ANZ admitted to similar conduct breaches by its FX spot traders, including the disclosure of specific confidential details of pending customer orders to external third parties and the identification of customers through the use of code names.
Both EUs include examples of electronic chat transcripts between traders at both Westpac and ANZ with external market participants.
Westpac and ANZ both issued statements in response to their respective EUs.
ANZ chief risk officer Nigel Williams said, “ANZ has co-operated fully with ASIC’s investigation on this matter and we accept that during this period aspects of our supervision and monitoring of the spot FX business were not good enough. We have taken responsibility and we apologise.”
Westpac Institutional Bank chief executive Lyn Cobley said, “We continue to enhance our policies and controls across the spot FX business and we look forward to continuing this process as we fulfil our commitments set out in the enforceable undertaking.”
InvestorDaily asked both banks if any disciplinary action had been taken against staff as a result of the misconduct acknowledged in the EUs.
A spokesman for ANZ said, “The EU is focused on ANZ’s compliance and oversight up until 2013. ANZ has already made significant improvements in its oversight systems and will work with the ASIC appointed expert as set out in the undertaking.”
Westpac did not respond to InvestorDaily before deadline.
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