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ANZ Settles With Regulator Over Benchmark Case In a brief statement today, ANZ has announced it has reached a confidential in-principle agreement with the Australian Securities and Investments Commission (ASIC) to settle court action relating to the Australian interbank BBSW market. ANZ, along with NAB and Westpac, has been charged by ASIC in respect of allegations it attempted to manipulate the local interest rate benchmark setting process – the Bank Bill Swap Rate. The bank has not said how much it has agreed to pay, nor whether it is admitting guilt.
CLS Volumes Up Double Digits in September The average daily traded volume submitted to CLS was $1.75 trillion in September, up 10.7% from $1.58 trillion in August 2017. This increase is consistent with data that has already been reported by various FX platforms, which all showed a substantial increase in trading activity last month. The ADV of swap activity submitted to CLS was $1.14 trillion in September, up 8% from August and up 16% compared to September 2016. The average daily traded volume submitted to CLS was $1.75 trillion in September, up 10.7% from $1.58 trillion in August 2017. This increase is consistent with data that has already been reported by various FX platforms, which all showed a substantial increase in trading activity last month. The ADV of swap activity submitted to CLS was $1.14 trillion in September, up 8% from August and up 16% compared to September 2016.
HSBC Fined by Fed for “Unsafe and Unsound” FX Practices The Federal Reserve Board has fined HSBC just over $175 million for the firm's “unsafe and unsound practices” in its FX trading business. The Fed says it levied the fine for deficiencies in HSBC's oversight of, and internal controls over, FX. It adds that the firm failed to detect and address its traders misusing confidential customer information, as well as using electronic chatrooms to communicate with competitors about their trading positions. The Board's order requires HSBC to improve its controls and compliance risk management concerning the firm's FX trading.
Deutsche Settles FX Manipulation Claim One of two banks still to settle a class action lawsuit over FX manipulation claims has agreed to pay $190 million. Court documents filed today (September 29) show that Deutsche Bank has agreed to settle, leaving Credit Suisse as the only bank of 16 that were named in the class action yet to agree a deal. The proposed settlement remains subject to a Fairness Hearing – Deutsche has also agreed to provide “reasonable cooperation” in the continued prosecution of the Action, according to court documents.
Investec Bank Joins TraderTools’ ULN TraderTools has announced that Investec Bank has joined its Unique Liquidity Network (ULN). Through hosted facilities in Equinix LD4 and Equinix NY4, the ULN now consists of over 60 unique liquidity providers, making prices in G10 and emerging and underserved market currencies, the firm says. Using the ULN, Investec plans to provide its customers with improved pricing and execution, and to increase its reach within the electronic FX marketplace. Access by Investec customers will be via the TraderTools API, and through a variety of FX venues.
CLS to Launch Same-Day Settlement CLS Group plans to launch a same-day settlement service in the second half of 2018, subject to regulatory approvals. The new service, CLSNow, will offer bilateral, same-day, payment-versus-payment gross settlement in CAD, CHF, EUR, GBP and USD, with plans to extend the service to additional currencies in the future, based on client demand. The aim is to enable counterparties to optimise the use of available liquidity in the same-day market, while mitigating settlement risk. Currently, some of CLS’s largest clients have in excess of 10% of their daily euro business being transacted on a same-day basis, and the expectation is that the launch of CLSNow will further facilitate the growth of this same-day market.
CLS Volumes Flat in August Average daily volume (ADV) submitted to CLS was $1.58 trillion in August, down 1% from July. CLS recorded an ADV of $1.05 trillion in swaps in August, up from $1.04 trillion the previous month. Spot ADV submitted to CLS in July was $433 billion, down marginally from the $453 billion recorded in July. The ADV of forwards products submitted to CLS last month was $96 billion, down from $101 billion in July. Despite this month-on-month decrease, CLS volumes were up 14.8% year-on-year.
Judge Ticks Latest FX Benchmark Settlement Claim Judge Lorna Schofield of the Southern District Court of New York has approved the proposed settlement that sees five banks pay $111 million for alleged FX benchmark manipulation. The settlement, which was first proposed in July, involves Bank of Tokyo-Mitsubishi UFG, BNP Paribas, Morgan Stanley, Royal Bank of Canada and Standard Chartered Bank – all five banks continue to deny wrongdoing. The approval of the latest settlement means banks have now paid in excess of $2.1 billion to settle claims related to the benchmark litigation.
Former SocGen Bankers Indicted in US Over Libor Two former senior managers at Société Générale have been indicted by the US Department of Justice for their role in allegedly manipulating London Interbank Offered Rate (Libor) rates. Danielle Sindzingre and Muriel Bescond, 49 were charged in the Eastern District of New York with one count of conspiring to transmit false reports concerning market information that tends to affect a commodity, and four counts of transmitting such false reports. Sindzingre was the global head of treasury and Bescond was the head of treasury, Paris, at the bank.
HSBC’s Execution of Cairn Order “Followed Standard Industry Practice” Documents lodged by the team representing HSBC’s former global head of FX trading, Mark Johnson, in his defence against market manipulation claims, indicate that should a defence case be needed it will focus on proving that the bank – and Johnson’s conduct – was in line with standard industry practice. Johnson and former head of EMEA FX trading Stuart Scott have been charged by the US Department of Justice with allegedly front running a large fix order from Cairn Energy.