UK Financial Conduct Authority Joins Foreign Exchange Probe

The UK banking regulator the Financial Conduct Authority (FCA) has joined a widening global investigation into possible manipulation of the foreign exchange (FX) markets.

The FCA’s announcement comes after the
Swiss Financial Market Supervisory Authority (FINMA) 
said earlier this month that it was conducting investigations into several Swiss financial institutions (FIs) in connection with possible collusion between traders and FX markets manipulation.

Recent media reports suggest they used instant messaging services to work together to fix exchange rates. The Hong Kong Monetary Authority (HKMA) has said that it is also investigating similar allegations.

“We can confirm that we are conducting investigations alongside a number of other agencies both in the UK and abroad into a number of firms relating to trading on the FX market,” the FCA said in a statement.

“As part of this we are gathering information from a wide range of sources including market participants. Our investigations are at an early stage and it will be some time before we conclude whether there has been any misconduct which will lead to enforcement action.”

Royal Bank of Scotland (RBS) confirmed it was among those contacted by the FCA, and said it was co-operating fully.

The UK regulator’s involvement in the investigation was widely expected, due to the central role that London plays in the market with more than 40% of FX trading taking place in the UK.

The scrutiny of the FX markets became evident when the Bloomberg news agency reported allegations that traders may have been able to influence the way currency benchmarks that are used by fund managers to value their investments were set.

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