ASIC has wrapped up its investigations of potential market misconduct at UBS and NAB after striking deals with the two banks over the Christmas week.
ASIC was looking at NAB in relation to an ASX 200 share price spike on 18 October 2012, when opening prices would set expiry prices for the S&P/ASX200 SPI Future for the month.
The regulator found that a contractor in charge of NAB’s index arbitrage trading had put through a large volume of sell orders prior to the open, but reduced the volume by about 70% just 19 seconds before the open, causing prices to spike. The contractor and its traders are still under investigation.
ASIC on Monday accepted NAB’s offer to contribute $2 million to Financial Literacy Australia by 14 March, develop and implement new monitoring and control systems by 30 May and review its agreements and regulatory risks around direct market access by 28 February.
It accepted a separate enforceable undertaking from UBS on the same day over how it handled the Australian Bank Bill Swap Rate (BBSW).
The UBS investigation began in July 2012, when UBS reported to ASIC that “it had found evidence of conduct seeking to influence its BBSW submissions, based on how the submissions may benefit UBS’ derivatives positions”.
UBS pulled out of the panel of banks that determined the BBSW in February this year. The BBSW has been determined electronically – without submissions from panel banks – since 27 September 2013.
ASIC said this week that an independent review found that any market impact of UBS’ potential misconduct was insignificant, and accepted UBS’ offer to contribute $1 million to Financial Literacy Australia.
The AFR reports today that investor advocates, including the Australian Shareholders’ Association, are unhappy about the size of fines and timing of the announcements.
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