Macquarie Bank Faces Tough Regulatory Action Over Compliance Failures

ASIC has imposed additional conditions on Macquarie Bank due to "multiple and significant" compliance breaches related to its futures dealing business and OTC derivatives trade reporting. The regulator has ordered the bank to develop a remediation plan, appoint an independent expert to assess its adequacy, and evaluate its effectiveness in preventing similar issues in the future. ASIC commissioner Simone Constant emphasized that a "comprehensive" response is needed to address the failures, which were caused by ineffective supervision and weak compliance and control management.

The Australian Securities and Investments Commission (ASIC) has taken significant administrative action against Macquarie Bank, imposing additional conditions on its financial services licence due to multiple and significant compliance breaches. The regulatory body has ordered the bank to develop a comprehensive remediation plan, appoint an independent expert to assess its adequacy, and evaluate its effectiveness in preventing similar issues in the future.

The compliance failures, as highlighted by ASIC, relate to Macquarie's futures dealing business and its over-the-counter (OTC) derivatives trade reporting. Some of these failures went undetected for many years, with one lasting a decade. ASIC attributed the issues to ineffective supervision and weak compliance and control management, including poor change management practices, unclear roles and responsibilities, and an incomplete understanding of its own processes and controls, particularly around data governance [1].

The additional licence conditions require Macquarie to:

1. Prepare a remediation plan to address the failures in its futures dealing business and OTC derivatives trade reporting functions and their root causes.
2. Appoint an independent expert to review and report on the adequacy of Macquarie's remediation plan to address the failures and their root causes.
3. Have the independent expert assess the operational effectiveness of Macquarie's remediation activities to prevent, detect, and respond to similar issues in its futures dealing and OTC derivatives businesses in the future [2].

ASIC's action follows nine market conduct matters over the last 18 months, with seven relating to misreporting of more than 375,000 OTC derivative transactions and two future dealing matters involving suspicious trading activity and the withholding of orders on the ASX24. Last year, Macquarie was fined $5 million for failing to prevent suspicious orders being placed on the electricity futures market [1].

Macquarie Bank Limited (MBL) has acknowledged ASIC's announcement and consented to the licence conditions. The bank takes its role as a licensed entity seriously and continues to invest in programs to strengthen its systems, controls, and supervisory arrangements. ASIC has acknowledged Macquarie's cooperation throughout the process [2].

The regulatory action comes amidst a broader context of market volatility and significant challenges in the financial sector. For instance, London Stock Exchange Group (LSEG) reported an 8.7% year-on-year increase in total income excluding recoveries in the first quarter of 2025, driven by strong trading volumes in fixed income, derivatives, and FX [3].

In contrast, Bon Natural Life Limited (BON) faces significant challenges with its listing status. The company has received two delisting notifications from Nasdaq due to non-compliance with the Minimum Bid Price Requirement and public interest concerns related to its March 2025 best efforts offering. BON has appealed and requested a hearing, which temporarily stays the delisting process pending the Panel's decision [4].

The regulatory actions against Macquarie and Bon Natural Life underscore the importance of robust compliance and control management in the financial sector. These actions highlight the potential consequences of ineffective supervision and the need for comprehensive remediation plans to address systemic failures.

References:

[1] https://www.capitalbrief.com/briefing/asic-hits-macquarie-with-additional-licence-conditions-61fac0c3-2dad-4339-9dd0-a04957ee1199/
[2] https://www.macquarie.com/au/en/about/news/2025/macquarie-statement-on-asic-action.html
[3] https://za.investing.com/news/earnings/lseg-q1-income-rises-87-on-markets-risk-intelligence-growth-3684529
[4] https://www.stocktitan.net/news/BON/bon-natural-life-limited-announces-receipt-of-nasdaq-delisting-y9m0nebyfxlp.html