Regulators, including the Financial Conduct Authority (FCA) in the UK, are investigating if there has been misconduct in the foreign exchange market in a probe that could uncover
Earlier this month, the Swiss regulator, the Financial Market Supervisory Authority, said it was investigating several financial institutions in Switzerland in connection with possible manipulation in foreign exchange markets.
US and Hong Kong regulators are also reported to be conducting investigations into wrongdoing in a market worth about €3.5 trillion a day.
“We can confirm that we are conducting investigations alongside several other agencies into a number of firms relating to trading on the foreign exchange (forex) market,” says an FCA 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.”
In a separate announcement this week, the FCA released details of how it will use its new power to publicise warning notices about proposed enforcement action.
The regulator says it will issue a statement naming the firm under investigation and, in some circumstances, name an individual. However, the FCA says it will consider the circumstances of each case before deciding if it is appropriate to publish details of the warning notice.
The Association of Professional Financial Advisers (APFA), a trade group, says it is pleased the FCA has listened to the concerns of the industry. The FCA has agreed to give notices of discontinuance more prominence, for instance.
“The FCA has also recognised that the reputational and financial impact of an early warning notice on a smaller firm could be more significant than for a larger one, and they will therefore take the size of the firm into account when deciding whether publishing a warning notice would be unfair,” says Chris Hannant, director general at APFA.
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