ANZ Bank Faces Probe over Issuance of Treasury Bonds

Australia’s corporate regulator is investigating ANZ Bank for suspected violations in the issuance of 10-year treasury bonds, the bank’s holding company said on Monday.

ANZ was appointed by the Australian Office of Financial Management (AOFM) in 2023 to manage the Australian government’s debt portfolio.

Australia’s four big banks and some international investment banks, assist the AOFM to issue new bonds through a ‘syndication’ process in which they are appointed to manage orders from investors, while the agency sets the final price.

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The banks are meant to act as risk managers in relation to the issuance of the treasury bonds, but a newspaper report on Monday alleged that ANZ “had admitted to rigging the debt market in the past” and that action was taken against three or four banks in 2016.

Earlier on Monday, the Australian Financial Review reported, citing sources, that the Australian Securities and Investments Commission (ASIC) begun work to probe the bank’s actions.

It said ANZ is one of the largest players in Australia, alongside UBS, Westpac and Deutsche Bank, and had received more than $37 million in syndication fees since 2014.

“It is one of a limited number of banks that can act as intermediary between the AOFM and superannuation funds, central banks, insurers and others which buy Australia’s debt.”

ASIC is said to have received a complaint from the AOFM, with the agency reportedly concerned about the way in which some of its debt had been sold.

“ANZ understands that ASIC is investigating suspected contraventions of a number of provisions of the ASIC Act and the Corporations Act,” it said in a statement.

It added that it takes compliance with its regulatory obligations and is cooperating fully with the regulator.

The ASIC and the AOFM did not immediately respond to request for comment.