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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.
CLS Volumes Dip Slightly in July The average daily volume (ADV) submitted to CLS was $1.6 trillion in July, down 2% month-on-month, but up 11.9% year-on-year. CLS recorded an ADV of $1.04 trillion in swaps in July, down from $1.08 trillion the previous month. Spot ADV submitted to CLS in July was $453 billion, basically flat from the $455 billion recorded in June. The ADV of forwards products submitted to CLS last month was $101 billion, down from $108 billion in June. However, year-on-year, forwards ADV in July was up 46%, while spot ADV was up 13.9%. By contrast, the spot ADV submitted to CLS in July 2016 was $446 billion, only 1.6% less than July 2017.
ING Launches EM FX Indices ING is launching proprietary global emerging markets indices, aiming to provide clients with a new route for gaining exposure to emerging markets currencies. Bloomberg is responsible for providing the independent calculation and administration of these indices. In addition to leveraging Bloomberg's expertise in strategy index development, calculation and administration, ING is using Bloomberg’s BFIX data source to use in the index, stating in a release issued today that it is an independent benchmark for currency rates that is regularly updated and widely used by the FX market.
Five More Banks Settle Benchmark Claims Five banks have filed to settle a class action lawsuit brought against them over FX benchmark manipulation claims. According to papers filed in New York, the settlement agreements resulted from “arm’s-length negotiations between highly experienced counsel and fall within the range of possible approval”. Morgan Stanley has agreed to pay $50 million; Societe Generale $18 million; Standard Chartered Bank $17.2 million; Royal Bank of Canada $15.5 million; and Bank of Tokyo-Mitsubishi UFJ $10.2 million. All five banks continue to deny wrongdoing.
ECB Encourages Commitment to Global Code by May 2018 The European Central Bank (ECB) is publicly endorsing the statement of Commitment set out in the FX Global Code of Conduct and is encouraging FX trading counterparties to do the same. The FX Global Code is a set of global principles of good practice in foreign exchange markets, developed by central banks and market participants from 16 jurisdictions around the globe in order to promote a robust, fair, liquid, open and appropriately transparent market. Today the ECB invited FX market participants to publicly commit to the principles set out in the Code by endorsing the statement of commitment annexed to the Code by the end of May 2018.
Deutsche, JPM Move to Settle Libor Class Action Deutsche Bank and JP Morgan have filed court documents seeking to settle a class action claim brought against them and other market participants over alleged Yen interest rate benchmark manipulation. The documents were filed Friday in the US District Court of Southern New York and while the two banks do not admit liability or wrongdoing, Deutsche has agreed to pay $77 million and JP Morgan $71 million. These settlements are more than double those agreed by HSBC and Citi last year.
CLS Volumes Up in June The average daily volume (ADV) of trades submitted to CLS was $1.64 trillion in June, up 6% from $1.55 trillion in May, and up 1.64% year-on-year. The main driver of this growth appears to have been an increase in swaps and forward activity. Swaps accounted for $1.08 trillion of the ADV submitted to CLS in June, up 9.3% month-on-month and 7.5% year-on-year. The ADV of $108 billion in FX forwards in June represented a 3.8% increase from the previous month and a 20% growth from June 2016, when an ADV of $90 billion was recorded.
BNP Paribas Agrees $246m FX Settlement BNP Paribas (BNPP) has agreed a $246 million settlement with the Board of Governors of the Federal Reserve System (FRB) relating to past misconduct in its foreign exchange business. The settlement will be covered by existing provisions. This follows the announcement by BNPP of a settlement with the New York State Department of Financial Services on the 24th May relating to the same issue. In reaching this settlement, the FRB acknowledged the bank’s group-wide remediation initiatives and the full cooperation of BNPP in the investigation.