ASIC has accepted an enforceable undertaking (EU) from UBS AG (UBS) in relation to potential misconduct involving the Australian Bank Bill Swap Rate (BBSW).
UBS will also make a voluntary contribution of US$1 million to fund independent financial literacy projects in Australia.
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In July 2012, UBS reported to ASIC that it had found evidence of conduct seeking to influence its BBSW submissions, based on how the submissions may benefit UBS’ derivatives positions. In February 2013, UBS withdrew from the BBSW submissions panel.
The EU requires UBS to ensure its participation in relation to the setting of Australian interest rate benchmarks upholds the integrity and reliability of those benchmarks and are in accordance with its obligations under the Commodity Futures Trading Commission (CFTC) Orders.
At ASIC’s request, UBS engaged an independent expert to conduct a review of BBSW submissions. The expert found that any market impact was insignificant.
Cathie Armour, commissioner, ASIC, said: "Organisations must have the correct procedures in place to ensure this type of conduct does not occur. Enforceable undertakings are a timely, effective way to ensure significant cultural and organisational change."
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