Macquarie ends ASIC battle

The bank has appeased the regulator following its financial services licence breaches.

Macquarie has ended its battle with the corporate regulator after conditions were imposed on the bank’s financial services licence earlier this year for breaches of client account rules.

The Australian Securities and Investments Commission ruled in March that Macquarie would need to engage an ASIC-approved expert to review the bank’s compliance with the client money provisions of the Corporations Act.

“ASIC expects licensees to maintain strict controls and follow proper procedures in their handling of client funds. Where that does not occur, ASIC will take action to ensure a licensee’s ability to continue operating is contingent on its compliance with these requirements,” ASIC Commissioner John Price said in March.

The planned review was slated to result in the release of recommendations for improvements, after ASIC found Macquarie had on occasions failed to deposit monies into a designated client trust account and made withdrawals that were not permitted from such an account in the 10 years to 2014.

Macquarie pushed back against the request to hire an independent expert, taking its case to the Administrative Appeals Tribunal and receiving a stay of proceedings while the AAT adjudicated.

In the meantime, Macquarie had commissioned KPMG to assess its Client Money Framework, with the consequent report from KPMG appeasing the corporate regulator.

The case with the AAT has been aborted as a result, with the financial services licence of Macquarie no longer impacted by the shadow of extra conditions.

“Today’s announcement by ASIC comes after ASIC’s receipt of a KPMG report on Macquarie’s application of its framework for the handling of client money. The report, which was voluntarily commissioned by Macquarie, said the manner in which Macquarie applies its client money framework supports positive compliance outcomes,” the bank said in a statement.

“Macquarie treats client money with the utmost seriousness and in self-reporting the incidents to ASIC took a conservative and consultative approach.”