Australian Securities and Investments Commission v Australia and New Zealand Banking Group Limited (Treasury Bonds Case)

This proceeding was brought by ASIC against ANZ in the Federal Court. It concerned ANZ’s dealings with the Australian Office of Financial Management, or AOFM, which issues Treasury bonds on behalf of the Commonwealth. ANZ was not just a participant in that market. The reasons say it was a registered bidder in AOFM tenders, provided monthly turnover information to the AOFM, and promoted itself for the role of joint lead manager and duration manager on syndicated issuances.

The dispute had two main parts. The first concerned ANZ’s conduct in April 2023 when it acted as duration manager for a syndicated issuance of Treasury bonds maturing on 21 December 2034. The second concerned inaccuracies in ANZ’s reporting of secondary market bond turnover to the AOFM between September 2021 and June 2023, and ANZ’s later failure to lodge a reportable situation report with ASIC.

The commercial setting matters. The duration manager role was described as prestigious and important to market reputation. But it also involved an inherent conflict. The duration manager managed interest rate risk as principal, using its own capital and seeking to manage profit and loss, while the AOFM expected that hedging would be carried out in an orderly way that minimised market disruption, price volatility and price impact. That tension sat at the centre of the case.

The reasons explain that in April 2023 ANZ was appointed as joint lead manager and duration manager for a $14 billion syndicated Treasury bond issuance. Investors could participate on an outright basis or on an exchange-for-physical basis, where the investor bought the bonds and sold 10-year Australian bond futures. In that structure, the duration manager accepted the risk associated with the futures leg and then needed to manage that risk, including by selling bond futures.

That risk management was permitted before, during and after pricing, and the AOFM had disclosed to the market that ANZ could trade in that way. But the court’s declarations show that permission to hedge did not remove the need for proper disclosure and orderly conduct. The pricing call was especially important because the prevailing bid-side futures price observed at that time helped set the price at which ANZ would acquire bond futures from investors. ANZ nominated the time of the pricing call, and the AOFM relied on ANZ’s judgment in selecting that time.

The court declared that ANZ failed to disclose its trading intentions and pre-hedging progress, failed to inform the AOFM of its intention to engage in significant hedging up to and during the pricing call, and failed to provide the AOFM with an opportunity to consult regarding the indicative time for the pricing call. The court also declared that ANZ failed to inform the AOFM of the state of its hedging when proposing or confirming the time for the pricing call, failed to propose delaying the pricing call and or failed to modify its strategy of being fully hedged by the time of pricing without disclosing that to the AOFM.

The declared trading pattern was also specific. ANZ traded a low volume of bond futures earlier in the day despite opportunities to sell more, then traded a significant volume in a compressed period ahead of and during the pricing call. The court declared that ANZ knew this would, or was highly likely to, have a downward impact on the price of 10-year Australian bond futures, and that it traded a significant volume during the pricing call itself, placing downward pressure on the reference price at the time of pricing.

After the transaction, the court declared that ANZ made misleading representations to the AOFM about the circumstances of its trading. So the case was not confined to what happened in the market at the time. It also covered what ANZ later told the customer about what had happened.

The second part of the case concerned ANZ’s reporting of secondary market bond turnover to the AOFM. The orders define secondary market bond turnover as the buying and selling of Treasury bonds and other Australian Government Securities to and from intermediaries, being market makers, to clients such as investment funds, asset managers, central banks and other financial institutions.

The court declared that on 24 occasions between 14 September 2021 and 22 June 2023 ANZ made false or misleading representations to the AOFM about this turnover. Those occasions comprised 23 monthly data submissions covering July 2021 to May 2023 and one annual attestation on 19 August 2022 for FY22. The problem was not a technicality in wording. The court declared that the submissions inaccurately represented trading volumes, counterparties and geographic locations.

The court also declared misleading or deceptive conduct under the Corporations Act on 27 occasions. That included three reports provided between 20 April 2023 and 3 May 2023 about ANZ’s trading activities as duration manager, 23 monthly turnover submissions, and the annual attestation that represented the FY22 monthly survey data as accurate.

Then came the escalation issue. The court declared that between 13 September 2023 and 6 June 2024 ANZ did not lodge a report with ASIC in relation to a reportable situation concerning the secondary market bond turnover data reporting, despite having reasonable grounds to believe it had breached a core obligation and that the breach was significant.

The AFSL findings are important because they show the court did not treat the matter as a few isolated errors. The declarations refer to failures to adequately prevent, supervise, monitor, review or identify the conduct, failures to adequately implement or enforce policies and procedures, failures to have adequate processes and procedures to prepare, review and verify turnover data, failures to monitor and supervise staff, failures to ensure staff were adequately trained or competent, failures to conduct risk or assurance reviews, and failures to identify and address root causes and escalate the issue for further risk assessment and compliance review even after the scale of inaccuracies was identified.

The court was dealing with admitted conduct and a statement of agreed facts and admissions. The main questions were whether the admitted conduct amounted to contraventions of the ASIC Act and the Corporations Act, and what declarations, penalties and other orders should be made.

The key legal issues identified in the reasons and orders included unconscionable conduct under section 12CB(1) of the ASIC Act, false or misleading representations under section 12DB(1)(a) of the ASIC Act, misleading or deceptive conduct under section 1041H(1) of the Corporations Act, failure to lodge a reportable situation report under section 912DAA, and multiple AFSL obligation breaches under section 912A.

One notable feature of the unconscionability finding was the court’s treatment of the AOFM’s position. The reasons say some AOFM personnel were sophisticated participants in the Australian fixed income market. Even so, the court treated the AOFM as situationally vulnerable in relation to ANZ’s conduct. The declarations tie that vulnerability to ANZ’s failure to disclose its trading intentions and pre-hedging progress, its failure to inform the AOFM of intended significant hedging up to and during the pricing call, and its failure to provide an opportunity for consultation about the indicative time for the pricing call.

The declarations also show that the court considered ANZ’s own representations and internal standards. The unconscionability declaration refers to ANZ having represented that it would be transparent with the AOFM, and to ANZ’s conduct and manner of trading breaching its own hedging policies, breaching industry guidance and falling outside the range of ordinary behaviour of duration managers appointed by the AOFM.

That combination is important for business readers. Courts do not only compare conduct against black-letter statutory rules. They may also look at what you told the customer, what your own policies required, what industry guidance said, and whether the customer was dependent on you for information at the critical moment.

Beach J made declarations that ANZ contravened the ASIC Act and the Corporations Act in multiple ways. The court declared that ANZ engaged in unconscionable conduct in connection with supplying financial services to the AOFM relating to the issuance of the December 2034 Treasury bonds. It also declared that ANZ made false or misleading representations to the AOFM about secondary market bond turnover, engaged in misleading or deceptive conduct in relation to post-transaction reports and turnover data, failed to lodge a reportable situation report with ASIC, and breached several AFSL obligations concerning efficient, honest and fair provision of services, reasonable steps, and training and competence.

The court ordered ANZ to pay total pecuniary penalties of $135 million. The orders break that down as $80 million for the unconscionable conduct contravention, $40 million for the false or misleading representations contravention, $2 million for the reportable situation contravention, $5 million for the contraventions grouped in paragraphs 5 to 7 of the orders, and $8 million for the contraventions grouped in paragraphs 8 to 10. ANZ was also ordered to pay ASIC’s costs fixed at $1 million.

The court further ordered a compliance program at ANZ’s cost. Within four months, ANZ must undertake a self-assessment and prepare a report assessing the adequacy and effectiveness of its systems, controls, policies, procedures, training, guidance, monitoring, supervision and governance in ANZ Institutional Bank in relation to risks arising from pre-hedging of Australian material size transactions, including reference price transactions, and related client disclosures. Within two months after finalising that report, ANZ must instruct an independent expert approved by ASIC to assess those matters and provide a written report identifying deficiencies and recommendations. ANZ must then action all reasonable recommendations within six months of receiving the expert report, or explain to ASIC why a recommendation has not been adopted or implemented.

The reasons also state that ASIC and ANZ had jointly proposed total penalties of $125 million, but the judge increased the total to $135 million. The published text available here confirms that increase, although the fuller reasoning on penalty may sit in parts of the judgment not reproduced in this version.

Most businesses will never act as duration manager on a Treasury bond syndication. But the compliance themes are much broader than that market setting. Many businesses are trusted to manage a process where they hold more information than the customer. Many also control the timing of a key step, provide specialist services while managing a conflict, or submit recurring reports and attestations that others rely on. This case shows how those features can create serious legal risk if disclosure, verification and escalation are weak.

The court’s treatment of situational vulnerability is especially useful outside financial markets. A customer can be commercially sophisticated overall and still be vulnerable in a particular transaction if your business controls the critical information and the key timing decisions. If you know facts the customer cannot see, the law may expect candour and process discipline rather than tactical silence.

The case also shows that governance failures can amplify front-line conduct. The declarations did not stop at the trading desk or the reporting team. They extended to supervision, monitoring, review, training, competence, implementation of policies, risk reviews, root-cause analysis and escalation. In practical terms, that means businesses should not separate operational process from legal compliance. The process is part of the service.

For smaller businesses, the lesson is not that you need a bank-sized compliance function. It is that you need a reliable system. Important customer-facing data should be checked before it is sent. Staff should know what must be disclosed and when. Someone should own escalation decisions. If a significant inaccuracy or conduct issue is identified, the business should document the assessment, the corrective action and whether any external reporting obligation is triggered.

The judgment is dated 19 December 2025. The hearing took place on 2 and 3 December 2025. The orders record conduct spanning several periods: the duration manager conduct and related post-transaction reporting between 19 April and 3 May 2023, turnover reporting between 14 September 2021 and 22 June 2023, and the failure to lodge a reportable situation report between 13 September 2023 and 6 June 2024.

This page can confidently report the declarations, penalty amounts, costs order and compliance program because those matters are set out in the orders. Some finer detail about the chronology and the judge’s full reasoning may require checking against the complete judgment text if you need to rely on the case for detailed legal analysis.