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Australia : ASIC accepts enforceable undertaking from The Royal Bank of Scotland.

ASIC today accepted an enforceable undertaking (EU) from The Royal Bank of Scotland plc and The Royal Bank of Scotland N.V. (RBS) in relation to potential misconduct involving the Australian Bank Bill Swap Rate (BBSW).

RBS will also make a voluntary contribution of $1.6 million to fund independent financial literacy projects in Australia.

This is the third outcome ASIC has achieved as part of its ongoing enquiries in relation to the BBSW submission process. UBS AG and BNP Paribas have each entered into EUs and paid a $1 million voluntary contribution (refer: 13-366MR and 14-014MR).

Following ASIC enquiries, RBS reported to ASIC that it had found evidence of conduct seeking to influence its BBSW submissions, based on how the submissions may benefit RBS's derivatives positions. RBS had withdrawn from the BBSW submissions panel on 30 April 2012.

RBS also reported to ASIC that it had found limited instances of communications discussing trading of Reference Bank Bills with reference to the setting of BBSW.

As a result of the information provided by RBS and ASIC s enquiries, ASIC is concerned that RBS may not have complied with its obligations under the Corporations Act by reason of its conduct in relation to the BBSW rate set process.

The EU requires RBS to ensure its contribution to Australian interest rate benchmark settings is in accordance with its obligations under the United States Commodity Futures Trading Commission (CFTC) Orders. RBS is also required to undertake certain remedial measures with respect to its trading in Reference Bank Bills. An Independent Compliance Expert will be required to review and report on RBS s compliance with the EU in respect of these remedial measures. ASIC will make public the outcome of that review.

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Publication:Mena Report
Date:Jul 22, 2014
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