APRA opens file on ASIC investigation into ANZ-AOFM bond placement

APRA has opened a file on ANZ’s alleged rigging of government borrowing rates, as it mulls whether to hand back a $500m capital penalty to the Melbourne bank, documents reveal.

Documents show APRA is looking closely at an ASIC investigation into ANZ. Picture: John Gass

The Australian Prudential and Regulation Authority has opened a file on ANZ’s alleged rigging of government borrowing rates, as it mulls whether to hand back a $500m capital penalty to the Melbourne bank, documents reveal.

A freedom of information request shows the prudential regulator, charged with overseeing the stability and functioning of Australia’s financial markets, is holding a document relating to the corporate regulator’s investigation into ANZ over the bond trades.

In response to The Australian, APRA revealed it had one document regarding a report made to the Australian Securities and ­Investments Commission over a complaint made by the Australian Office of Financial Management, which is responsible for managing the country’s cash and debt portfolios.

The Australian does not suggest any wrongdoing on ANZ’s part, only that ASIC is investigating the bank after a referral.

This document was revealed after a search of all of APRA’s records of documents relating to ASIC’s investigation into ANZ over the AOFM issue.

But APRA refused to reveal the nature of its documentation into ASIC’s investigation into ANZ, citing secrecy provisions.

An APRA FOI officer said the document held by the regulator contained “protected information” relating to information gathered for the purposes of prudential regulation of Australia’s banks or relating to the affairs of a “financial sector entity”.

“The relevant document was produced under, or for the purposes of, these prudential regulation framework laws and contains information relating to the affairs of this financial sector entity.”

The disclosure reveals APRA, the regulator charged with the stability and security of Australia’s banking system, is keeping a close watch on ASIC’s investigation into ANZ.

ASIC and APRA signed an ­information-sharing deal in 2019 that sees the two regulators exchange documents on key issues.

The deal commits APRA and ASIC to engage with each other “on matters that are relevant to each other’s responsibilities”.

Further, APRA holds the power to personally discipline senior banking executives over concerning behaviour within the banks under the Financial ­Accountability Regime.

This allows APRA to direct banking executives to take certain actions or hit directors with penalties of $15,650 or disqualify them from future senior roles in a bank “for a period the regulator considers appropriate”.

An APRA spokesman declined to comment.

APRA’s interest in the alleged trading scandal comes after the AOFM reported concerns over ANZ’s role in a 2023 issuance of a 10-year treasury bond, one of two major deals done in that year.

ANZ has previously told the market it understood ASIC was investigating the bank over “suspected contraventions of a number of provisions of the ASIC Act and the Corporations Act”.

“ANZ takes compliance with its regulatory obligations seriously and is co-operating fully with ASIC,” an ANZ spokesman previously said.

The AOFM has previously said it had “made no specific complaint to ASIC about ANZ”.

However, APRA’s interest into the ASIC investigation comes as the regulator considers what to do with a $500m capital penalty imposed on ANZ in 2019 in the wake of the royal commission into banking which identified a number of governance and risk issues at the bank.

APRA imposed $500m penalties on ANZ, NAB, and Westpac all on the same day in 2019.

APRA recently removed NAB’s $500m capital penalty.