ASIC accepts Macquarie Bank EU
The corporate regulator has accepted an enforceable undertaking from Macquarie Bank in relation to its wholesale foreign exchange (FX) business.
Following an Australian Securities and Investments Commission (ASIC) investigation, the regulator was concerned that the bank failed to ensure that its systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by ASIC.
ASIC commissioner, Cathie Armour, said: “The wholesale spot foreign exchange market is one the world's largest financial markets and the proper functioning of this market is of vital importance to the Australian economy”.
“ASIC has now accepted undertakings from some of Australia's largest market participants to put in place forward looking processes and controls to ensure that their foreign exchange businesses provide financial services honestly, efficiently and fairly,” she said.
ASIC identified that employees of Macquarie’s spot FX business between 1 January 2008 and 30 June 2013 had:
- On a number of occasions, disclosed to external third parties confidential details of pending client orders including identification of a client;
- On a number of occasions, inappropriately disclosed to external third parties confidential and potentially material information about Macquarie’s trading activity associated with large pending AUD orders; and
- On a number of occasions, when the market approached the trigger price of a stop loss order, Macquarie spot FX traders responsible for managing the order traded in a manner that may have been intended to cause the trigger price to trade when it might not have traded at that time.
Macquarie would develop a program of changes to its existing systems, controls, training, guidance and framework for monitoring and supervision of employees in its spot FX and non-deliverable forwards businesses to prevent, detect, and respond to inappropriate disclosure of confidential information to external market participants, and inappropriate order management and trading in respect of stop loss orders.
ASIC said it would appoint an independent consultant to assess the program and implementation.
“Upon implementation of that program, for a period of three years, Macquarie will conduct an annual internal review of the program, which will be independently assessed, and provide an annual attestation from its senior executives to ASIC,” ASIC said.
Recommended for you
Sequoia Financial Group has declined by five financial advisers in the past week, four of whom have opened up a new AFSL, according to Wealth Data.
Insignia Financial chief executive Scott Hartley has detailed whether the firm will be selecting an exclusive bidder for the second phase of due diligence as it awaits revised bids from three private equity players.
Insignia Financial has reported a statutory net loss after tax of $17 million in its first half results, although the firm has noted cost optimisation means this is an improvement from a $50 million loss last year.
With alternative funds being described as “impossible” for fund managers to target towards advisers without the support of BDMs for education, Money Management explores the evolving nature of the distribution role.
