ANZ, Macquarie Collectively Fined $11 Million Over Attempted Cartel Conduct

Josh O'Neill

15 December 2016

Australia's federal court has slapped multi-million dollar penalties on Australia and New Zealand Banking Group and after a probe conducted by the country's competition authorities revealed attempted cartel conduct.

During the relevant period of misconduct, traders employed by a number of banks in Singapore communicated through online chatrooms about daily submissions to be made to the Association of Banks in Singapore in relation to the benchmark rate for the Malaysian ringgit (ABS MYR Fixing Rate).

The ABS MYR Fixing Rate is used as a reference rate for settling non-deliverable forward contracts. Non-deliverable currencies are not freely tradeable outside of the domestic economy, so a benchmark rate must be set by banks submitting their views on the appropriate rate.

In 2011, and Macquarie Bank traders attempted to make arrangements with other banks to make high or low submissions to the ABS MYR Fixing Rate, which would ultimately have affected settlement payments for MYR denominated NDFs.

ANZ was fined A$9 million ($6.8 million) after it admitted during litigation that it had engaged in 10 instances of attempted cartel conduct in breach of Australia's Competition and Consumer Act.

Macquarie Bank was not hit quite as hard. The court imposed a A$6 million fine for engaging in eight instances of attempted cartel conduct.

Both banks were also ordered to contribute to the Australian Competition and Consumer Commission's legal costs.

“These penalties underline the seriousness of the conduct involved in these proceedings. Two significant Australian banks have admitted that on several occasions their traders communicated with other banks in an attempt to influence the ABS MYR Fixing Rate. This conduct had the potential to undermine the integrity of foreign exchange markets and undermine healthy economic growth,” said ACCC chairman Rod Sims.