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ASIC Market Integrity Report

The Market Integrity Report released by Australian Securities and Investments Commission (ASIC) last Friday identified $3.65 million in civil penalties and $15.5 million in benefit payments. The Report covers the beginning of July 2018 to the end of December of the same year.

“Maintaining the integrity of Australia’s financial markets is crucial to a prosperous economy. At ASIC, we do this by setting standards and educating stakeholders, pursuing behavioural change and taking enforcement action to disrupt market misconduct,” ASIC Commissioner Cathie Amour said, at the Report’s official release.

According to the Report:

Poor conduct harms our financial system and results in adverse consumer outcomes. Where we see poor conduct, we will take action.

The Report highlighted that there had been two people charged in criminal proceedings, four criminal charges laid again two people and one person found guilty of two charges. Three people were banned from providing financial services, two Australian financial services licences were cancelled, two infringement notices were issued and, finally, $153,000 in infringement notices was paid.

The acceptance of a court-ordered Enforceable Undertaking from CBA for their part in the setting of the Bank Bill swap rate was also mentioned, and the Report highlighted that CBA admitted culpability and paid $5 million in pecuniary penalties and $15 million in community benefits.

The Report also made mention of ASIC’s enhanced supervision approach that will include more on-site visits to meet with wider range of employees within the business, as well as more requests for demonstrations of systems and processes within the business.

The regulator announced they have started their wholesale FX on site reviews.

Other elements mentioned in the Report included ASIC’s enhanced supervision around Bank Bill Swap Rate (BBSW) bench-marking process. The regulator will be focussing particularly on those transactions they deem to be having ‘undue influence’.

The Report also addressed the FX global code, including over-the-counter derivatives, Initial Coin Offerings and Crypto-Assets.

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