The Australian Securities and Investment Commission is taking legal action in the Federal Court in Melbourne against the Australia and New Zealand Banking Group Limited for unconscionable conduct in relation to the setting of the bank bill swap reference rate.

The alleged rate-fixing activity happened between March 2010 and May 2012. The 'BBSW' rate, as it is known, is the primary interest rate benchmark used in Australian financial markets, administered by the Australian Financial Markets Association. On 27 September 2013, AFMA changed the method by which the BBSW was to be calculated. The conduct that the proceedings relate to occurred before that change.

It is alleged that ANZ traded in a manner intended to create an artificial price for bank bills on 44 separate days during the two years in question. ASIC says that on these days ANZ had a large number of products that were priced or valued off 'BBSW' and that it traded in the bank bill market with the intention of moving the BBSW higher or lower. ASIC alleges that ANZ was trying to maximise its profit or minimise its loss to the detriment of speculators holding positions opposite to its own.

ASIC wants the court to declare that ANZ contravened ss12CA, 12CB and (the now-repealed) 12CC Australian Securities and Investments Commission Act 2001, and ss1041A and 912A Corporations Act 2001. It wants the court to impose pecuniary penalties and order ANZ to implement a compliance programme. In July, ASIC published Report 440, which addresses the potential manipulation of financial benchmarks other issues related to the nebulous concept of 'conduct.'