Commonwealth Bank has entered into a court-enforceable undertaking with ASIC, Australia’s financial services regulator.
The enforceable undertaking relates to Commonwealth Bank’s bank bill trading business and its participation in the setting of the bank bill swap rate (BBSW), a benchmark interest rate.
ASIC said that as part of the enforceable undertaking, Commonwealth Bank would:
- Pay $15 million for the benefit of the community
- Pay $5 million for ASIC’s investigation and legal costs
- Engage an independent expert to assess changes Commonwealth Bank has made and will make regarding how employees trade in prime bank bills
Today’s announcement comes after the Federal Court’s decision, in June 2018, to impose pecuniary penalties of $5 million on Commonwealth Bank for attempting to engage in unconscionable conduct with the BBSW.
“CBA admitted to attempting to seek to affect where BBSW set on five occasions in the period 31 January 2012 to 15 June 2012,” according to ASIC.
“CBA also admitted that it failed to do all things necessary to ensure that they provided financial services honestly and fairly and that its traders were adequately trained.”
Click here for a copy of the enforceable undertaking.
ASIC v the big four banks
4 March 2016 – ASIC initiates Federal Court proceedings against ANZ.
5 April 2016 – ASIC initiates Federal Court proceedings against Westpac.
7 June 2016 – ASIC initiates Federal Court proceedings against NAB.
30 January 2018 – ASIC starts legal proceedings in the Federal Court against Commonwealth Bank.
24 May 2018 – The Federal Court finds that Westpac engaged in unconscionable conduct over its involvement in setting BBSW on four occasions.
11 July 2018 – ASIC accepts an enforceable undertaking from Commonwealth Bank.
12 October 2018 –Westpac will appear in court for a hearing on penalty and relief.