CFTC lauds Australian swap dealer’s cooperation in $500K enforcement

Australia and New Zealand Banking Group (ANZ) agreed to cease and desist from further violations in reaching settlement, the CFTC announced in a press release Tuesday.

The agency recognized ANZ’s cooperation with its Enforcement Division’s investigation and acknowledged prompt remedial efforts the firm undertook.

The details: During a CFTC probe into its trading activities, ANZ disclosed two gap periods in which a surveillance tool used to monitor spoofing activity by traders was not effective.

The first gap occurred for futures data supplied by one vendor between November 2019 to June 2020 and then again between November 2020 and February 2021.

For both periods, there was a “mismatch between the time when the relevant data was ingested into the surveillance tool and the time when the tool was run,” the CFTC stated.

Because of the mismatch, the tool failed to surveil any of the futures data from the vendor at issue, the CFTC found. Further, ANZ did not put into place additional safeguards to prevent the timing issue from recurring.

As a result, thousands of orders were not timely surveilled for spoofing, the agency said.

Compliance considerations: The CFTC said in its order that ANZ instituted and completed a remedial program, including re-running its spoofing tool on previously unanalyzed data and dispositioning the alerts the tool had previously failed to generate.

The firm created an automatic alert to advise it when its system might not be timely or accurately processing or receiving relevant data.

Company response: “ANZ takes compliance with all applicable laws and regulations seriously and continues to devote significant effort and resources to operating all of our businesses in compliance with those laws and regulations,” a ANZ spokesperson said in an emailed statement.