* ANZ, Macquarie pay $11 mln in fines for trading conduct in
* Banks still face prosecution in Australia over conduct
* ANZ, two other Australian banks face BBSW rate-rigging
* MAS censured 20 banks over same manipulation issues in
(Updates with MAS statement in paragraph 12)
By Byron Kaye
SYDNEY, Nov 25 Two Australian banks have offered
to pay fines for "cartel conduct" when trading foreign exchange
contracts for the Malaysian ringgit, in the latest controversy
engulfing banks and their manipulation of foreign exchange
Australia's No.1 investment bank Macquarie Group Ltd
and top corporate lender Australia and New Zealand
Banking Group Ltd on Friday said they offered to pay
fines totalling A$15 million ($11 million). The two banks,
however, will still face prosecution in Australia over the
matter and, potentially, from overseas authorities.
The admission may provide further ammunition for a recent
Malaysian government crackdown on foreign banks trading in the
ringgit in offshore market, seen by bankers as an attempt to
curb a devaluation of the currency.
The two Australian banks said in separate statements they
offered to pay the fines after the antitrust agency started
court proceedings over the companies' actions in Singapore when
trading foreign exchange contracts for the Malaysian ringgit in
"These proceedings are a reminder that Australian cartel
laws apply to financial markets, and capture cartel conduct by
firms that carry on business in Australia, regardless of where
that conduct occurred," Australian Competition and Consumer
Commission (ACCC) Chairman Rod Sims said in a statement.
Separately, three major Australian retail banks, including
ANZ but not Macquarie, are defending charges laid by the
country's securities regulator over allegations they manipulated
the benchmark bank bill swap reference rate (BBSW).
The Australian corporate regulator has also been
investigating whether the country's banks and currency traders
were colluding in foreign exchange markets, part of a global
crackdown in the sector.
The ACCC did not say on Friday whether the banks succeeded
in influencing the ringgit rates - which affect who profits from
a trade, and by how much - but said that rules required them to
make their pricing submissions independently.
ANZ admitted to 10 instances of cartel conduct by three
unidentified employees, all of whom had left the company, and
agreed to pay a A$9 million fine.
"While there is no evidence that FX benchmarks in Singapore
were successfully influenced, we accept responsibility and
apologise for the actions of our former employees," ANZ Chief
Risk Officer Nigel Williams said.
The lender noted that the Australian legal action came after
the Monetary Authority of Singapore (MAS) investigated 20 banks
in relation to the same matter in 2013 and found 133 traders had
tried to rig key borrowing and currency rates.
"MAS' regulatory actions announced in June 2013 had covered
foreign exchange spot benchmarks - including MYR - commonly used
to settle Non-Deliverable Forward FX contracts during the period
from 2007 to 2011," the MAS said.
Macquarie, which agreed to pay A$6 million, said it
terminated the unnamed junior employee involved in the actions
in 2012, and that "no Macquarie senior management or any other
Macquarie employees were involved in or aware of the conduct".
Both banks said they had offered to pay the fines, but the
ACCC said it was up to the court to decide what penalties were
Traders from Macquarie, ANZ and other banks communicated in
private online chatrooms about their daily submissions to the
Association of Banks in Singapore in relation to the benchmark
rate for the Malaysian currency, the ACCC said.
The traders "attempted to make arrangements" about making
"high or low submissions" to the Singapore authority, which
would then set the daily exchange rate for contracts in the
currency within the country.
Malaysia's central bank did not immediately respond to
requests for comment.
($1 = 1.3493 Australian dollars)
(Additional reporting by Jonathan Barrett in Sydney, Marius
Zaharia in Singapore and Praveen Menon in Kuala Lumpur; Editing
by Stephen Coates and Lincoln Feast)