Foreign exchange platforms are tightening rules for last-look liquidity providers that let market makers quit trades in a certain time period. The U.K.'s Fair and Effective Markets Review is seeking more information on whether the practice should be allowed in currency trading.
Traders have filed a complaint in federal court, accusing 12 banks of distorting the price of foreign exchange futures and options traded at CME Group and Intercontinental Exchange. A class action lawsuit previously accused the same banks of manipulating the WM/Reuters benchmark.
Three banks have agreed to pay the Office of the Comptroller of the Currency nearly $1 billion combined in connection with alleged manipulation of foreign exchange benchmarks. The OCC fines are separate from those imposed by the Commodity Futures Trading Commission, the U.K. Financial Conduct Authority and the Swiss Financial Market Supervisory Authority.
Some of the world's biggest banks are the target of an investigation by the U.S. Federal Reserve and others into allegations of manipulating benchmark currency rates, a source says. "The Fed has discretion whether to and how much to fine the banks if deficient controls or lack of supervision resulted in traders at these banks manipulating currency rates," said Jacob S. Frenkel, a former federal prosecutor.
The Swiss Financial Market Supervisory Authority says it is examining banks accused of working together to manipulate the foreign exchange market. The regulator says it is "coordinating closely with authorities in other countries as multiple banks around the world are potentially implicated."