QUICK FACTS
-
New ASIC Action: Additional AFSL license conditions imposed on Macquarie
-
Reason: Repeated and significant compliance failures spanning up to a decade
-
Scope of Failures: Futures dealing business and OTC derivatives trade reporting
Key Requirements:
-
Remediation plan for futures dealing and OTC derivatives reporting
-
Independent expert review of remediation plan adequacy
-
Ongoing assessment of remediation effectiveness
A Second ASIC Intervention
In September 2024, Macquarie was fined a AUD 4.995 million by ASIC’s Markets Disciplinary Panel for failing to prevent suspicious orders in the electricity futures market.
This was covered in our previous blog here:
Despite this significant penalty and heightened scrutiny, ASIC has now identified further compliance gaps.
These newly revealed issues have prompted ASIC to take administrative action by imposing additional conditions on Macquarie’s Australian financial services license (AFSL).
According to ASIC Commissioner Simone Constant, Macquarie’s repeated compliance failures highlight "ineffective supervision and weak compliance and control management".
ADDITIONAL DISCOVERIES
Futures Dealing Business
-
ASIC cites 11 instances of suspicious orders placed on the electricity futures market, occurring shortly after Macquarie was already fined for similar misconduct.
-
Macquarie failed to identify and stop potential market abuse despite warnings, suggesting systemic shortcomings in monitoring and escalation processes.
OTC Derivatives Trade Reporting
-
More than 375,000 OTC derivative transactions were misreported over the last 18 months, undermining market transparency and limiting ASIC’s ability to monitor systemic risk.
-
Some breaches remained undetected for years, indicating breakdowns in data governance, change management, and internal controls.
The Additional License Conditions
ASIC’s action imposes new obligations on Macquarie’s license to ensure structural remediation:
Remediation Plan
-
Macquarie must develop and implement a comprehensive remediation plan to address the root causes of its compliance failures, focusing on governance, controls, escalation procedures, and data reporting accuracy.
Independent Expert Oversight
Assessment of Operational Effectiveness
- The independent expert will also conduct ongoing evaluations of Macquarie’s progress, confirming that any new or improved processes can effectively prevent, detect, and respond to future compliance risks.
RESTATED TIMELINE
-
January-February 2022: First client placed initial suspicious orders
-
February 2022: ASIC first alerted Macquarie about suspicious trading
-
May-June 2022: Second wave of suspicious orders from first client
-
June 2022: Second client began placing suspicious orders
-
September 2022: Third client placed 21 suspicious orders
-
October 2022: Macquarie finally implemented an interim surveillance measure
- September 2024: ASIC Enforcement Action
- May 2025: Additional conditions enforced by ASIC
Select QUOTES
Commissioner Constant emphasized that these license conditions are a "significant administrative action", calling for a “comprehensive fix, not a band-aid solution.” ASIC stressed that piecemeal or reactive measures would be insufficient to restore confidence in Macquarie’s compliance culture.
Sources:
