The regulator announced the decision on May 7, citing failures in Macquarie’s oversight of its futures trading and OTC (over-the-counter) derivatives reporting processes. Some issues were undetected for extended periods, with one lapse reportedly spanning a decade.
As part of the new requirements, Macquarie must design a remediation strategy aimed at resolving deficiencies in its futures and OTC derivatives compliance systems.
The bank will also need to engage an independent expert to evaluate the plan and assess its implementation. This expert will be responsible for ensuring the measures are capable of detecting and preventing future regulatory breaches.
ASIC commissioner Simone Constant said the conditions reflect the agency’s concerns about the recurrence and severity of the problems uncovered.
“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,” she said.
ASIC’s investigation found a range of shortcomings in the bank’s internal systems, including poor change control processes, vague role definitions, and insufficient understanding of its internal procedures – particularly around data management.
The regulator also noted that 11 suspicious transactions were placed on the electricity futures market through Macquarie terminals, even after a prior enforcement case involving similar conduct.
In September 2024, the Markets Disciplinary Panel fined Macquarie close to $5 million for those earlier breaches.
Over the past 18 months, ASIC has flagged nine conduct-related matters involving Macquarie’s markets business. Seven involved inaccurate reporting of more than 375,000 OTC derivative transactions, while two focused on the bank’s handling of suspicious trading and order management on the ASX24.
“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.”
While Macquarie has cooperated with the regulator throughout the process and consented to the new licence conditions, ASIC stressed that the bank must take full responsibility for past shortcomings.
The move aligns with ASIC’s broader enforcement priorities. At a November 2024 parliamentary committee hearing, ASIC chair Joe Longo outlined recent regulatory actions and highlighted enforcement outcomes across the financial sector, including the Macquarie case.
