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Thursday, 15 December 2016

Australian Federal court fined two aussie banks fined for trying to rig Malaysian RInggit Forward Contracts

Report: Aussie banks fined for trying to rig Malaysia’s forex markets

THE STAR
    - Reuters file pic
    - Reuters file pic
     
    PETALING JAYA: Australia’s Federal Court has fined ANZ Bank A$9mil (RM29.8mil) and Macquarie Group A$6mil (RM19.9mil) after their traders, operating out of their Singapore offices, were found to have tried to rig a key benchmark rate in Malaysia’s foreign exchange markets.
    According to The Sydney Morning Herald (SMH), this comes after the two banks last month admitted to attempted cartel conduct.
    The fines are the result of an Australian Competition and Consumer Commission legal action against the two banks over private online chatroom conversations between Singapore-based traders in 2011, SMH reported.
    The traders were trying to influence the daily fixing of a price for forward contracts of Malaysian ringgit. The banks last month agreed with the allegations and offered to pay the fines above, the daily said.
    On Wednesday, Federal Court Justice Michael Wigney set the penalties in line with those proposed by the competition regulator and the banks, which have cooperated with the investigation.
    Justice Wigney underlined the severity of the misconduct, describing it as “very serious” and saying it had the “capacity to undermine the integrity and efficacy of the market in Malaysian ringgit forward contracts,” according to SMH.
    “Forward contracts” are used as a foreign currency hedge when an investor has an obligation to either make or take a foreign currency payment at some point in the future.
    The two banks failed to properly monitor their Singapore offices to ensure they complied with the law, and penalties needed to be set to make sure that they would not be seen by other banks as an “acceptable cost of doing business,” he added.
    “The conduct of the traders employed by ANZ and Macquarie was deliberate, systematic and covert,” Justice Wigney said in a summary of his decision.
    “ANZ and Macquarie bore corporate responsibility for the conduct of their traders because they failed to establish satisfactory training, compliance and surveillance systems in their Singapore offices,” he added.
    In stressing the severity of the issue, ACCC chairman Rod Sims said the banks’ conduct “had the potential to undermine the integrity of foreign exchange markets and undermine healthy economic growth.”
    The original SMH report can be found here.

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