CFTC Imposes Fine on Australian Swap Dealer ANZ for Supervision Failures in Spoofing Surveillance

The Commodity Futures Trading Commission (CFTC) has imposed a penalty of $500,000 on an Australian swap dealer for admitted supervision failures linked to a deficient spoofing surveillance tool. The Australia and New Zealand Banking Group (ANZ) has agreed to halt further violations as part of the settlement, as announced by the CFTC in a press release on Tuesday.

The CFTC acknowledged ANZ's cooperation during the investigation by its Enforcement Division and recognized the prompt remedial actions taken by the firm. According to the details disclosed during a CFTC probe into ANZ's trading activities, the firm revealed two gap periods where a surveillance tool employed to monitor spoofing activity by traders was found to be inadequate.

The first gap spanned from November 2019 to June 2020, followed by another gap from November 2020 to February 2021. The CFTC highlighted a mismatch between the time when relevant data was ingested into the surveillance tool and when the tool was executed during both periods. Consequently, the tool failed to surveil any of the futures data from the vendor in question, leading to thousands of orders not being timely monitored for spoofing.

In response to the compliance concerns raised, the CFTC noted that ANZ had implemented and completed a remedial program. This program included re-running the spoofing tool on previously unanalyzed data and addressing the alerts the tool had previously failed to generate. ANZ also implemented an automatic alert system to notify the firm when its system might not be timely or accurately processing relevant data.

In a statement provided via email, a spokesperson for ANZ emphasized the firm's commitment to compliance with all applicable laws and regulations. The spokesperson reiterated ANZ's dedication to allocating significant effort and resources towards ensuring compliance across all of its business operations.

The settlement underscores the importance of robust surveillance tools and adherence to regulatory requirements in the financial sector, with ANZ's proactive remedial measures reflecting its commitment to compliance and regulatory integrity.

By fLEXI tEAM