To enjoy the full Mail & Guardian online experience: please upgrade your browser
Gemma Ritchie, Lynley Donnelly 06 Feb 2019 10:54
The commission is seeking an order from the tribunal to declare that the banks contravened the Competition Act. (Reuters)
The Competition Commission said it will consider the recent settlement between banking group Standard Chartered and US authorities in its own case against rand manipulation among local and international banks.
In a statement on Tuesday, the commission said it “noted a consent agreement” between Standard Chartered and the New York State department of financial services.
Standard Chartered pleaded guilty to currency manipulation (which included the rand) between 2007 and 2013. It was fined $40-million (approximately R536-million) after reaching an agreement in New York.
Standard Chartered is not the only bank to be fined by the state authorities. have all been fined by the New York department of financial services over “unlawful conduct in foreign exchange trading”.
The commission began investigating a case of forex manipulation in 2015 and found that beginning in 2007, several banks “had a general agreement to collude on prices for bids, offers and bid-offer spreads” in currency trading involving the US dollar and the rand.
The commission also found that the banks had “manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times”.
According to the commission’s statement, the banks used trading platforms, like Reuters currency and Bloomberg’s instant messaging system “to carry out their collusive activities”.
Last year Citibank reached a settlement with the commission, paying an administrative penalty of R69.5-million. But a number of the banks cited have, however, filed exception applications with the Competition Tribunal arguing, among other things, that the commission’s case is “vague”. But during hearings into the exception applications held in July last year, the commission said it remained confident of its case and sought to have the merits of the matter heard.
The commission is seeking an order from the tribunal to declare that the banks contravened the Competition Act and an order which would make the banks liable to pay an administrative penalty equating to 10% of their annual turnover.
The banks cited by the commission are the Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank N.A, Investec Ltd, Standard New York Securities Inc, HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group, Standard Bank of South Africa Ltd, Commerzbank AG, Australia and New Zealand Banking Group Limited, Nomura International Plc, Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc and Barclays Bank Plc.
Read more from Gemma Ritchie
Create Account | Lost Your Password?