The U.S. Commodity Futures Trading Commission (CFTC) issued an order simultaneously charging and settling with Australia and New Zealand Banking Group Limited (ANZ). ANZ, a financial services company temporarily registered as a swap dealer, violated regulatory obligations by failing to ensure the effective operation of its deceptive surveillance tool.

ANZ admitted to the facts in the order. The order requires ANZ to pay a civil monetary penalty of $500,000 and to cease and desist from further violations of the Commodity Exchange Act and CFTC regulations.

During the CFTC's investigation into ANZ's trading activities, ANZ disclosed to CFTC staff that its surveillance tool used to monitor its traders' deceptive activities failed to operate effectively with futures data provided by a vendor during two periods: November 2019 to June 2020 (the first gap period) and November 2020 to February 2021 (the second gap period). During both gap periods, there was a mismatch between the timing of the relevant data input into the surveillance tool and the tool's operation.

Specifically, during both gap periods, the tool ran daily and then had certain data input into it, resulting in the tool not monitoring any futures data from the vendor.

Furthermore, even after discovering the first gap period and resetting the timing to run the tool after receiving the relevant data, ANZ did not take additional safeguards to prevent the timing issue from recurring. Indeed, the issue did recur. The second gap period resulted from the same problem as the first gap period and lasted for approximately four months before ANZ discovered it.

As a result, thousands of orders were not timely subjected to deceptive surveillance, and ANZ should have received numerous surveillance alerts that it did not receive, which should have occurred during the two gap periods.

In accepting ANZ's offer, the CFTC acknowledged ANZ's substantial cooperation during the enforcement division's investigation of this matter. The CFTC also recognized ANZ's representations regarding the remedial measures it took concerning this matter. Specifically, during the investigation, ANZ disclosed the two gap periods to the CFTC.

ANZ also stated that it promptly corrected the timing mismatch upon becoming aware of it and installed additional safeguards after the second gap period to prevent recurrence.