UPDATE 1-ANZ reaches settlement with regulator over rate rigging

(Adds background, share movement, details of settlement)

Oct 23 (Reuters) - Australia and New Zealand Banking Group Ltd said it had reached a deal with the Australian Securities and Investments Commission (ASIC) to settle court proceedings relating to possible manipulation of the bank bill swap rate.

Australia's No.3 lender declined to say how much it would have to pay under the terms of the "confidential in-principle agreement" with the regulator.

The financial impact of the settlement would be reflected in the bank's fiscal 2017 earnings due later this week.

ASIC's allegations of rate rigging have centred around Australia's major banks setting benchmark bank bill swap rates (BBSW) at levels that benefited their trading books.

ANZ added that the regulator had asked for the hearing to be halted for 48 hours to allow the agreement to progress, following which the bank would make a more detailed statement.

ANZ shares were up 0.2 percent in early trade.

(Reporting by Shashwat Pradhan in Bengaluru; Editing by Stephen Coates)