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2 Australian banks enter enforcement undertaking with regulator over forex biz

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2 Australian banks enter enforcement undertaking with regulator over forex biz

The Australian Securities and Investments Commission accepted enforceable undertakings from National Australia Bank Ltd. and Commonwealth Bank of Australia in relation to the banks' wholesale spot foreign exchange businesses.

ASIC said both banks failed to ensure that their systems and controls were adequate to address risks relating to instances of inappropriate conduct identified by the commission between Jan. 1, 2008, and June 30, 2013.

Under the enforceable undertaking, the banks will develop and implement programs of changes to their systems and controls for three years. The programs and their implementation will be assessed by an ASIC-appointed independent consultant.

National Australia Bank will develop a program of changes to its existing systems, controls, monitoring and supervision of employees within its forex business to prevent, detect and respond to attempts to manipulate the market for a currency, inappropriate trading and disclosures of client confidential information, among others.

CBA will develop a program of changes relating to the management of fix orders, management of stop loss orders and external communications containing specific confidential information to address such conduct.

The banks also agreed to make community benefit payments of A$2.5 million each toward advancing financial literacy education related to the aged care sector.

The settlement represents the latest in a series of probes by the Australian regulators. In November, Australia & New Zealand Banking Group Ltd. and Macquarie Bank Ltd. agreed to settle with the Australian Competition and Consumer Commission in relation to alleged attempts to engage in cartel conduct and agreed to pay A$15 million in total penalties.

As of Dec. 21, US$1 was equivalent to A$1.38.