ANZ fine ‘up to a court’, says ASIC

ASIC has alleged ANZ engaged in a series of rate rigging contraventions over 44 days, with each carrying a penalty of $1 million, but the amount of any fine is ultimately "up to a court", says the regulator.

A panel of ASIC executives appeared before the Parliamentary Joint Committee on Corporations and Financial Services on Wednesday evening.

Labor Senator Deborah O'Neill asked ASIC commissioner Cathy Armour about discussions between ASIC and ANZ concerning the bank's alleged manipulation of the bank bill swap rate (BBSW) prior to the regulator's announcement that it would be taking legal action.

"Any discussions about legal proceedings are confidential and so it’s probably not appropriate to go into the details of those sorts of discussions," Ms Armour said.
"But generally we are open to working with organisations to consider whether or not there’s a more efficient way to resolve a matter than a lengthy court proceeding," she said.

Ms O'Neill asked ASIC chairman Greg Medcraft how the regulator weighs up whether it should accept a settlement or incur the costs of a lengthy court case.

"We generally don’t want to go to court unless we have to. But clearly we have to prosecute the law," Mr Medcraft said.

"And if you look at the case of this one there have been 44 days [of contraventions] and there’s a maximum [penalty] under the law so you speculate what that penalty maximum might be," he said.

Mr Medcraft pointed to ASIC's enforceable undertakings for UBS in December 2013 and BNP Paribas in January 2014, under which both banks agreed to contribute $1 million to fund independent financial literacy projects.

Ms Armour noted that, with the exception of the infringement notices regime, ASIC does not have the power to fine companies.

"It is the court that has the fining power. So generally irrespective of whether there’s an agreed outcome or a contested outcome it will be up to a court to determine what is the nature of the penalty given the nature of the contraventions we have discussed," Ms Armour said.

Ms Armour added that there is a fine for each contravention of the BBSW rules.

"For the unconscionable conduct it is $1.1 million per offence. And market manipulation is $1 million per offence," she said.

"There have been 44 days of contravention. It’s quite complex because there could be a number of contraventions on a day," Ms Armour said.

[Related: ASIC takes major bank to court]

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