Market waiting for regulator update on rate swaps probe

In August 2012, the commission began looking into whether these interest swaps were misleadingly marketed to those customers. Photo / File

The Commerce Commission has missed its own deadline on whether it will file court action against three banks involved in its interest rate swaps probe.

The regulator said last December that it expected to file legal action against ANZ, ASB and Westpac banks by March over their sales of interest rate swap contracts to rural customers.

Then, in April, it said its initial time-frame for filing proceedings had become unrealistic and it expected to make an announcement "mid-year".

The commission then said in September it expected to make an "update" the following month.

This update would aim to confirm whether the commission would file action against the banks.

But the regulator has now missed that deadline and a spokeswoman on Friday could not say when this update would be delivered to the market.

The commission earlier this year said it was continuing to receive and process complaints about the swaps, which are a financial derivative product that allows borrowers to manage the interest rate exposure on their borrowing.

They are usually offered to companies, but the commission said that from 2005 some banks offered them to rural customers throughout New Zealand.

In August 2012, the commission began looking into whether these interest swaps were misleadingly marketed to those customers.

The Financial Markets Authority also said earlier this year it was probing whether the sales or marketing of the swaps have breached laws.

The commission, which received more than 140 complaints about how the swaps were sold, said in May it was not clear how much money farmers had lost as a result of the alleged conduct.