Westpac and ANZ will overhaul aspects of their wholesale foreign exchange businesses under the eye of the corporate watchdog to address inadequacies in their systems.
Both banks have entered into enforceable undertakings with the Australian Securities and Investments Commission after the watchdog highlighted concerns about their systems and controls between January 2008 and June 2013, including instances of employees disclosing confidential details of currency trades.
“The foreign exchange market is a systemically important market that depends on all participants acting with integrity and fairness,” ASIC commissioner Cathie Armour said in a statement.
“ASIC is committed to ensuring that major financial institutions have the systems in place to ensure that financial services are provided fairly, honestly and efficiently.”
ASIC will appoint independent experts to assess each bank’s progress, with both having already made changes since the period in question.
“ANZ has co-operated fully with ASIC’s investigation on this matter and we accept that during this period aspects of our supervision and monitoring of the Spot FX business were not good enough,” ANZ chief risk officer Nigel Williams said.
“We have taken responsibility and we apologise.”
Westpac also apologised and said it will continue to enhance its policies and controls.
Each lender has agreed to donate $3 million to charity.
In December, National Australia Bank and Commonwealth Bank agreed to similar enforceable undertakings and to each donate $2.5 million as part of the same industry-wide investigation.