September 17, 2015

CFTC Orders Australia and New Zealand Banking Group Ltd. to Pay a $150,000 Penalty for Inaccurate Large Trader Reports for Physical Commodity Swap Positions

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Australia and New Zealand Banking Group Ltd. (ANZ), an Australia-based financial services company, for failing to comply with its obligation to submit accurate large trader reports (LTRs) for physical commodity swap positions, in violation of Section 4s(f) of the Commodity Exchange Act (CEA) and CFTC Regulations 20.4 and 20.7. The CFTC Order requires ANZ to pay a $150,000 civil monetary penalty and to cease and desist from committing further violations of the CEA and CFTC Regulations, as charged.

This is the CFTC’s first case enforcing the new Dodd-Frank Act large trader reporting requirements for physical commodity swap positions pursuant to Section 4s(f) of the CEA and Part 20 of the CFTC’s Regulations. According to the Order, large trader reporting for physical commodity swaps is essential to the CFTC’s ability to conduct effective surveillance of markets in U.S. physical commodity futures and economically equivalent swaps.

The Order finds that during the period from at least March 1, 2013 through November 30, 2014, ANZ filed LTRs that routinely contained errors. Specifically, the Order finds that (1) prior to September 2013, the LTRs did not identify any underlying commodity, (2) the LTRs routinely populated the field for “Commodity Reference Price” in a format other than the one provided by the CFTC’s Guidebook for Part 20 Reports, (3) in some cases, ANZ reported certain non-zero positions with a value of zero, (4) ANZ reported its positions in units of the underlying commodity rather than in futures contract equivalents, and (5) ANZ submitted LTRs misidentifying counterparty positions as its own positions as the principal. Also, the Order finds that ANZ failed to submit reports for certain days in July and September 2013. As noted in the CFTC Order, ANZ implemented changes to its reporting procedures and submitted corrected historical LTRs.

CFTC Division of Market Oversight staff members responsible for this matter are Matthew Hunter, Kenneth Danger, and Lynn Riggs. CFTC Division of Enforcement staff members responsible for this action are Lara Turcik, Patryk J. Chudy, Lenel Hickson, Jr., and Manal M. Sultan.

Media Contact
Dennis Holden
202-418-5088
 

Last Updated: September 17, 2015