The report follows an announcement in April that Mr Smith would conduct a thorough review of the issues surrounding ANZ’s Securities Lending business and publicly release its findings. Mr Smith was assisted by David Crawford, one of Australia’s most experienced company directors with an extensive background in financial services and insolvency administration, and three senior ANZ executives.
The Review Committee examined business practice, governance and management accountability related to the Securities Lending business within ANZ and developed a comprehensive remediation plan to address its findings.
The issues examined in the report are not those which caused the collapse of Brokers including Opes. Nor does the report address broader legal issues, particularly those associated with the losses incurred by the clients of Opes. Those issues are the subject of several legal actions and commercial mediation involving the Opes administrators, the Australian Securities and Investments Commission and other financiers. ANZ continues to believe it has a strong legal position in relation to these claims.
“The release of this report delivers on a commitment to provide an open and transparent account of ANZ’s involvement in Securities Lending, to examine accountabilities within ANZ and to identify the remedial actions necessary,” Mr Smith said.
“The Review Committee found weaknesses in the management and oversight of the Equity Finance business within ANZ’s Securities Lending unit. Taken together, this meant that ANZ did not adequately identify and manage the range of risks which arose from the operation of a business of this nature.
“In reviewing this issue, it’s clear the findings have some wider implications for ANZ’s management of other non-traditional businesses, particularly in our Institutional Division.
“We have developed a comprehensive 13-point remediation plan to address all the management, control and accountability issues identified in the report. I believe this plan will provide ANZ with a step change in the management of risk, particularly in Institutional, and will draw a line in the sand at ANZ about performance and accountability in the future,” Mr Smith said.
The Review Committee identified breaches of ANZ’s Code of Conduct by two employees who will leave ANZ.