Share trade warning over bank inquiry leaks

The stockmarket regulator will be on the lookout for suspicious trading in the wake of the banking royal commission report.

The stockmarket regulator has put the nation’s biggest banks on notice that it will be on the lookout for suspicious trading after the government is handed the final report from Kenneth Hayne’s royal commission on Friday.

The big four banks — Commonwealth Bank, Westpac, NAB and ANZ — wealth manager AMP, and a string of other listed financial institutions are bracing for damaging findings and recommendations that could severely impact their operating models when the government makes the final report public on Monday afternoon.

Mr Hayne, a former High Court judge, will hand his report to the government on Friday but it won’t be made public until after the close of trading on Monday — meaning there will be two trading days when bank stocks are vulnerable to trading on information that may leak from the report.

“Those impacted by the Hayne report will need to assess an appropriate response given their individual circumstances,” a spokesman for the Australian ­Securities Exchange said.

“ASX will be closely monitoring disclosure and share price and volume movements.

“Subject to confidentiality being retained, the market will be trading with equal information until the report is released publicly. This does not preclude speculation.”

It is unclear whether financial companies will voluntarily halt trade in their shares until Tuesday morning, which would give banks and wealth managers enough time to warn shareholders of any expected impact from the report.

Shares in the major banks were heavily sold off ahead of the 2017 federal budget after Sky News Business reported the government was poised to announce major tax changes on Australia’s biggest lenders.

Subsequent reports confirmed the imminent announcement of the $6.2 billion major bank levy before treasurer Scott Morrison’s speech and before the companies were notified of the proposal.

An Australian Federal Police investigation into the leak is yet to be finalised.

Opposition Treasury spokesman Chris Bowen criticised the government for holding on to the report for three days.

“Refusing to release the royal commission’s final report immediately would unnecessarily politicise the handling of the report and give rise to potential material market risks around leaks of all or part of the report,” he said.

Major banks and wealth managers said they were not currently planning to halt trade on their shares, given the report was being released publicly after the market closed.