The Australian Securities and Investments Commission (ASIC) has imposed new licence conditions on Macquarie Bank following repeated and significant compliance failures— some of which went undetected for years, including one for over a decade.
These failures relate to Macquarie’s futures dealing business and over-the-counter derivatives trade reporting. ASIC’s response mandates an overhaul of the bank’s compliance systems.
The enforcement action follows ASIC’s formal surveillance of Macquarie’s compliance arrangements, initiated after the bank self-reported multiple OTC derivatives reporting breaches.
The compliance issues identified by ASIC relate exclusively to Macquarie’s Commodities and Global Markets business and do not affect its Australian retail banking or home loan operations, which remain fully operational. While the affected division shares the same entity name—Macquarie Bank Limited—the matters are entirely separate from the services familiar to brokers and consumers.
“The compliance failures raised by ASIC relate to futures dealing and reporting of over-the-counter derivatives trades and not the services provided to customers by our Australian retail banking or home lending operations,” a Macquarie spokesperson told Australian Broker.
Under the new conditions, Macquarie must:
Macquarie must provide ASIC with the independent expert's report and a board-endorsed remediation roadmap by June 30.
ASIC Commissioner Simone Constant (pictured) expressed serious concern over the repeated compliance lapses.
“Our intervention underscores our concern with the recurrent nature of Macquarie’s failures, which were caused by ineffective supervision and weak compliance and control management,” Constant said.
ASIC, which recently unveiled two new dashboards aimed at enhancing transparency and accountability in the financial sector, found that the bank suffered from a range of systemic control issues, including poor change management, unclear roles and responsibilities, and a fragmented understanding of internal processes—especially in areas like data governance.
“The additional licence conditions are a significant administrative action to ensure Macquarie comprehensively addresses ASIC’s concerns. It cannot be a piece-meal or band-aid fix,” Constant said.
“Macquarie must take responsibility and put in place appropriate action to remediate the repeated failures and underlying governance and supervisory failures.”
Constant noted that Macquarie failed to block 11 suspicious orders on the electricity futures market even after being penalized for similar lapses.
“We were particularly disappointed that Macquarie failed to prevent 11 suspicious orders being placed on the electricity futures market via Macquarie terminals shortly after ASIC had referred similar failures to the Markets Disciplinary Panel which fined the bank just under $5 million,” she said.
ASIC’s intervention follows a troubling 18-month period during which nine separate market conduct issues were identified:
Some of these breaches continued for years without detection, raising alarms about transparency and systemic risk.
“Misreporting of OTC derivative transactions can undermine market transparency and hinders ASIC’s ability to monitor potential risks in Australia’s financial system,” Constant said.
“These licence conditions are necessary to give ASIC confidence the remediation will be effective and drive sustainable change,” Constant said.
She also acknowledged Macquarie’s cooperation throughout the process and noted the bank consented to the new licence conditions.
This latest action follows a record $4.995 million fine levied in September by ASIC’s markets disciplinary panel. That case involved Macquarie’s failure to stop suspicious orders in the electricity futures market, highlighting ongoing oversight issues.
Macquarie has recently reduced its fixed home loan rates by 20 basis points, positioning them among the most competitive fixed-rate offerings in Australia.
