The Australian branch of French major BNP Paribas has become only the second bank - after UBS, in December 2013 - to enter into an enforceable undertaking with ASIC over potential misconduct involving Australia's Bank Bill Swap Rate process. The agreement requires BNP "to ensure its participation in relation to the setting of Australian interest rate benchmarks upholds the integrity and reliability of those benchmarks."The BBSW is the primary interest rate benchmark used in Australian financial markets. At the time of the Libor and Euribor scandals, which drew in almost all of the world's largest investment banks, commentators in Australia dismissed any suggestion the contagion could spread this far. However, ASIC released documents yesterday showing how, in November 2012, after being pressured by the Monetary Authority of Singapore to review communications between traders in its Singapore branch and their colleagues in Sydney, BNP reported conduct by its staff between 2007 and 2010 that was "indicative" of attempts to influence BBSW submissions. ASIC requested BNP conduct a more detailed review."BNP Paribas did not find any evidence of market impact on public prices; no evidence that improper submissions were made by staff in Australia; no evidence that the theoretical profit in Australia was more than a minimal sum," said a spokeswoman for BNP Paribas' Australian branch."BNP Paribas also took action last year to sanction the staff involved, as they did not uphold the standards we expect. That included the dismissal of a small number of staff members previously based in an overseas office from 2007 to 2010. BNP Paribas also made a voluntary donation of $1 million to fund an independent financial literacy project," she said."In entering the [undertaking], BNP Paribas makes no admission of wrongdoing, but acknowledges ASIC's concerns," she added.For its part, ASIC has also acknowledged BNP Paribas' full and early co-operation, and the remedial measures put in place.In addition, there have been further market-wide measures put in place to make this type of transaction obsolete, said David Lynch, executive director of the Australian Financial Markets Association: "In September, the AFMA adopted a process to extract live executable prices direct from the trading venues, through brokers and electronic markets each day," he said.Lynch noted that even back in the days of the Libor offshore rate-setting scandals, the AFMA's approach was to use a panel of 14 banks, and exclude eight bids, "topping and tailing" the highest and lowest rates, making it much harder for any outlying estimates to affect the system.The AFMA's efforts notwithstanding, since mid-2012 ASIC has been undertaking inquiries of BBSW panel bank members over the integrity of their involvement in the submission process. Lynch responded that the AFMA "has no specific information in relation to any other ASIC investigations underway" in this area.