The Commerce Commission has delayed filing proceedings against ANZ, ASB and Westpac over allegations the three banks misrepresented interest rate swap contracts in sales to farmers.
Before Christmas the commission announced that it had advised the three banks it intended to issue legal proceedings against them in March 2014.
"The Commission has advised the banks that in its view there is sufficient evidence that they may have breached sections 9, 11 and/ or 13 of the Fair Trading Act (FTA), and that it wishes to place the matter before the Court for its decision," Commerce Commission chairman Mark Berry said in a December statement.
But March has been and gone and now the commission says in a brief new statement "it is currently assessing new information received concerning the banks involved in the interest rate swaps investigation".
"Last December the Commission reported that it anticipated filing proceedings against ANZ, ASB and Westpac by the end of March. However, the Commission has been able to actively advance its investigation since then, including through using its new compulsory interview powers, which came into law just before Christmas. The Commission has used these powers to interview current and former bank staff," the statement said.
"This is a particularly complex case where different facts and circumstances apply to each of the three banks involved. This complexity along with the new information that has been obtained meant that the original March time-frame was no longer realistic.
"The Commission now anticipates making a further announcement mid-year, once it has furthered discussions with each bank about the information it holds and any possible resolution of the commission’s concerns. The commission has entered into a ‘standstill agreement’ with each bank that means there will be no barrier to any proceedings brought by the Commission as a result of taking this extra time.
"As this remains an active investigation with prospective court proceedings, the Commission will not be commenting further at this time."
The commission also included the following background note:
On 17 December 2013, the Commerce Commission announced that it has advised three major New Zealand banks (ANZ, ASB and Westpac), that it intended to issue legal proceedings in March 2014 over their sales of interest rate swap contracts to rural customers.
Interest rate swaps are a financial derivative product that allows a borrower to manage the interest rate exposure on their borrowing. They were typically provided to large corporate and institutional customers, but from 2005 were offered by various banks to rural customers throughout New Zealand.
In August 2012 the Commission began enquiring into whether interest rate swaps were misleadingly marketed from 2005. More information about the interest rate swaps case can be found at -http://www.comcom.govt.nz/fair-trading/interest-rate- swaps-2/
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