ASIC is increasingly relying on financial services licences conditions as the basis for compliance information requests from licensees and prosecutions.
ASIC has announced that it has commenced legal proceedings against the Australia and New Zealand Banking Group Limited (ANZ) for unconscionable conduct and market manipulation in relation to the ANZ’s involvement in setting the bank bill swap reference rate (BBSW) in the period March 2010 to May 2012.
ASIC alleges 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.
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.
With respect to section 912A, ASIC is seeking declarations that ANZ has failed to comply with its financial services licence general obligations, in particular:
“(a) do all things necessary to ensure that the financial services covered by the licence are provided efficiently, honestly and fairly; ….
(c) comply with the financial services laws; …
(ca) take reasonable steps to ensure that its representatives comply with the financial services laws; ….
(f) ensure that its representatives are adequately trained, and are competent, to provide those financial services..”
These are broad obligations and go to the heart of a financial services provider’s ability to do business. Loss of a licence will put a licensee out of business.
Separately ASIC has imposed additional conditions on the Australian financial services (AFS) licence of Macquarie Bank Limited (Macquarie).
The additional conditions were imposed on Macquarie following an investigation by ASIC into a series of breach reports lodged by Macquarie relating to breaches of the client money provisions of the Corporations Act, between March 2004 to 2014.
If you are a financial services licensee you should review your compliance with Pro Forma 209 Australian financial services licence conditions [PF 209].
