ASB settles with NZ's FMA over rural swaps 23 June 2015 3:42PM Bernard Hickey Commonwealth Bank of Australia's ASB has settled with the New Zealand Financial Markets Authority over the regulator's concerns ASB may have misled rural customers over interest rate swaps agreements.The FMA said the settlement followed on from ASB's December 2014 settlement with the New Zealand Commerce Commission over alleged breaches of the Fair Trading Act between 2005 and 2009. The Commission regulated the Act for financial institutions over that time, while the FMA has regulated financial markets conduct since April 2014.The FMA, which has been responsible for regulating misleading and deceptive conduct under the Financial Markets Conduct Act applying from April 1 2014, said its settlement focused on the regulator's expectations for ASB's future conduct and processes."As part of the FMA settlement agreement, ASB has agreed to appoint an independent third-party to review its sale, promotion and marketing of two sample products being interest rate swaps and term funds," the FMA said."The report from a third-party will be provided to ASB and then to the FMA. Following consultation with the FMA, ASB will implement the required recommendations in the review," the regulator said. ASB has previously said it did not accept the Commerce Commission's conclusions, but admitted that some of its conduct breached the Fair Trading Act. In December ASB agreed to pay out NZ$2.7 million to affected customers and a further NZ$250,000 each to a rural charity and to the Commission for its legal costs.The FMA said its enquiries led to concerns rural customers of ASB may have been misled over the swaps agreements' bank margins and break fees. The FMA said it had agreed not to pursue any civil or criminal claims and the agreement did not specify any financial compensation or the payment of legal costs.This is the third and final settlement the FMA has reached over rural interest rate swaps agreements. It settled with ANZ in December last year and with Westpac in February.