The Australian Securities and Investments Commission (ASIC) has imposed additional licence conditions on Macquarie Group Ltd due to repeated compliance and control failures.
ASIC criticised the financial institution for weak governance, unclear responsibilities, and poor change management, particularly within its over-the-counter (OTC) derivatives and futures trading operations. These failures included the placement of 11 suspicious futures market orders even after Macquarie had been placed under regulatory scrutiny.
ASIC commissioner Simone Constant said that some compliance failures had persisted for decades.
“The additional licence conditions are a significant administrative action to ensure Macquarie comprehensively addresses ASIC’s concerns. It cannot be a piecemeal or Band-Aid fix,” Constant said.
The bank had already been fined $5 million by the Markets Disciplinary Panel, the maximum allowable penalty under that body, for prior misconduct.
Under the newly imposed licence conditions, Macquarie is required to identify the root causes of its compliance issues, implement a remediation plan, and engage an independent expert to review and verify its corrective measures.
“Macquarie must take responsibility and put in place appropriate action to remediate the repeated failures and underlying governance and supervisory failures,” Constant said.
“‘These licence conditions are necessary to give ASIC confidence the remediation will be effective and drive sustainable change,” she said.
ASIC reported nine conduct breaches over the past 18 months, involving 375,000 misreported OTC derivative transactions and two improperly reported futures trades.
Constant emphasised the importance of addressing systemic weaknesses to restore regulatory confidence and ensure market integrity.
Macquarie stated it is cooperating with ASIC and continues investing in improved systems, controls, and supervisory processes ahead of its full-year results announcement on Friday.
“In addition to working constructively with ASIC on these remediation activities, MBL continues to invest in a broader range of existing programs to strengthen its systems, controls and supervisory arrangements,” Macquarie stated.