AOFM tables actions to strengthen market integrity after ANZ bond scandal
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The news: The Australian Office of Financial Management (AOFM) has set out a number of actions to strengthen market integrity after ANZ was handed a record-breaking $240 million penalty from the corporate regulator last month.
The context: Appearing before the Senate Economics Legislation Committee on Thursday, AOFM chief executive Anna Hughes said the office needed to see a "demonstrable change in the risk culture" at ANZ before it could be considered for future syndications.
The AOFM has taken action to protect the integrity of federal debt issuance moving forward, including:
- Excluding ANZ from participation in any further syndicated bond issuances since April 2023;
- Updated syndication processes to strengthen governance and risk management; and
- Commencing a joint project with state borrowing authorities to standardise bank turnover reporting requirements across jurisdictions.
ANZ earned $9.98 million in revenue from its trading activities as duration manager and a $2.8 million fee as joint lead manager of the syndicated bond deal.
While ANZ has offered to pay an amount equal to the revenue it earned as duration manager, the government declined to accept any payment while the matter remains before the Federal Court.
The AOFM said it will refrain from commenting further on the matter until court proceedings have concluded.
The source: AOFM media release
