Macquarie hit with extra licence conditions over client money breaches

Friday, 11 Mar 2016 10:58:04 | Thuy Ong

Macquarie Bank will be required to have an independent expert oversee its client money handling procedures. (Sergio Dionisio: AAP Images)

The Australian Securities and Investments Commission has imposed additional licence conditions on Macquarie Bank after it self-reported breaches that occurred over a ten-year period between March 2004 and 2014.

The watch dog ruled Macquarie Bank had breached client provisions by failing to deposit money into designated client trust accounts and making withdrawals that were not permitted from those accounts.

ASIC says the additional conditions will require the bank to engage an independent expert to review its procedures and make recommendations for improvements.

"ASIC expects licensees to maintain strict controls and follow proper procedures in their handling of client funds," ASIC commissioner John Price said in a statement.

"Where that does not occur, ASIC will take action to ensure a licensee's ability to continue operating is contingent on its compliance with these requirements."

Macquarie Bank in response has filed an application for review of the decision to the Administrative Appeals Tribunal, arguing ASIC's conditions duplicate the work the bank has already done.

Macquarie said in 2013 it had appointed KPMG, an independent professional services firm, to put in place new frameworks that have since resulted in "improvements in client handling controls".

"Macquarie treats client money with the utmost seriousness and, in self-reporting these incidents to ASIC, took a conservative and consultative approach," the bank noted in a statement, adding there were no losses to clients.

"The incidents reported included errors in atypical situations, and all were addressed with improvements to processes and controls."

It argued that current rules have failed to keep with new market developments, including the internationalisation of markets.

"The Australian Financial Markets Association has made submissions which highlighted a number of flaws within the current client money regime," Macquarie said.

"Addressing these matters will help achieve the key objective of securing client money."

AustraliaPlus

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Macquarie hit with extra licence conditions over client money breaches

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