Manipulations sur le marché des changes: Cinq banques écopent d

Manipulations sur le marché des changes: Cinq banques écopent d'amendes records

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Communiqué de presse de l'Autorité de Conduite Financière (UK)

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Publié le 12 novembre 2014
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Langue English

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Between 1 Januar 2008 and 15 October 2013 ineffective controls at the Banks allowed G10 s ot FX traders to ut their Banks’ interests ahead of those of their clients other market artici ants and the wider UK financial s stem. The Banks failed to mana e obvious risks around confidentiality, conflicts of interest and trading conduct.
These failin s allowed traders at those Banks to behave unacce tabl . The shared information about clients’ activities which the had been trusted to kee confidential and attem ted to mani ulate G10 s ot FX currenc rates includin in collusion with traders at other firms in a wa that could disadvantage those clients and the market.
£1,114,918,000 ($1.7 billion) on five banks for failing to control business
o
erations: Citibank
The Financial Conduct Authority (FCA) has imposed fines totalling
N.A. £225 575 000
JPMor
Toda ’s fines are the lar est ever im osed b the FCA or its redecessor the Financial Services Authorit FSA and this is the first time the FCA has ursued a settlement with a rou of banks in this wa . We have worked closel with other re ulators in the UK Euro e and the US: toda the Swiss re ulator FINMA has dis or ed CHF 134 million 138 million from UBS AG and in the US the Commodit Futures Tradin Commission ‘the CFTC’ has im osed a total financial enalt of over $1.4 billion on the Banks.
e FX tradin
n exchan
million) (‘the Banks’).
an Chase Bank N.A. £222 166 000
358 million
Scotland Plc £217 000 000
ot forei
344 million and UBS AG £233 814 000
al Bank of
The G10 s ot FX’s actionmarket is a s stemicall im ortant financial market. At the heart of toda is our findin that the failin s at these Banks undermine confidence in the UK financial s stem and put its integrity at risk.
Since Libor eneral im rovements have been made across the financial services industr and some remedial action was taken by the Banks fined today. However, despite our well-publicised
The Ro
352 million
HSBC Bank Plc £216 363 000
This com lements our on oin su ervisor work and the wider reforms to the fixed income commodit and currenc markets which are the sub ect of the UK Fair and Effective Markets Review.
In relation to Barcla s Bank Plc we will ro ress our investi ation into that firm which will cover its G10 spot FX trading business and also wider FX business areas.
ractices in their G10 s
In addition to takin enforcement action a ainst and investi atin the six firms where we found the worst misconduct we are launchin an industr -wide remediation ro ramme to ensure firms address the root causes of these failin s and drive u standards across the market. We will re uire senior mana ement at firms to take res onsibilit for deliverin the necessar chan es and attest that this work has been completed.
371
343 million
action in relation to Libor and the s stemic im ortance of the G10 s ot FX market the Banks failed to take adequate action to address the underlying root causes of the failings in that business.
Martin Wheatley, chief executive of the FCA, said:
“The FCA does not tolerate conduct which im erils market inte rit or the wider UK financial s stem. Toda ’s record fines mark the ravit of the failin s we found and firms need to take res onsibilit for uttin it ri ht. The must make sure their traders do not ame the s stem to boost rofits or leave the ethics of their conduct to com liance to worr about. Senior mana ement commitments to change need to become a reality in every area of their business.
But this is not ust about enforcement action. It is about a combination of actions aimed at drivin u market standards across the industr . All firms need to work with us to deliver real and lastin chan e to the culture of the tradin floor.the ublic’s This is essential to restorin trust in financial services and London maintaining its position as a strong and competitive financial centre.”
Tracey McDermott, the FCA’s director of enforcement and financial crime, said:
“Firms could have beenin no doubt, especially after Libor, that failing to take steps to tackle the conse uences of a free for all culture on their tradin floors was unacce table. This is not about having armies of compliance staff ticking boxes. It is about firms understanding, and managing, the risks their conduct mi ht ose to markets. Where roblems are identified we ex ect firms to deal with those quickly, decisively and effectively and to make sure they apply the lessons across their business. If the fail to do so the will continue to face si nificant re ulator and re utational costs.”
Clive Adamson, the FCA’s director of supervision, said:
“The su ervisor measures that we are announcin toda will hel make sure that real cultural change is delivered across the industry, and that senior management take responsibility for ensuring that the highest standards of integrity operate across all oftheir trading businesses.”
The FX Market
The FX market is one of the lar est and most li uid markets in the world with a dail avera e turnover of $5.3 trillion, 40% of which takes lace in London. The s ot FX market is a wholesale financial market ands ot also known as “fixes” FX benchmarks are used to establish the relative value of two currencies. Fixes are used b a wide ran e of financial and non-financial com anies, for example to help value assets or manage currency risk.
The FCA’s investi ati-used andon focused on the G10 currencies, which are the most widel systemically important, and on the 4pm WM Reuters and 1:15pm European Central Bank fixes.
The FCA’s findings
Toda ’s action shows that we will not tolerate conduct that undermines the inte market or the wider UK financial system.
rit of this crucial
We ex ect firms to identif assess and mana e a ro riatel the risks that their business oses to the markets in which the o erate and to reserve market inte rit whether or not those markets are re ulated. Althou h there are no s ecific rules overnin the unre ulated s ot FX market the im ortance of mana in risks associated with s ot FX business throu h effective s stems and controls is widely recognised in industry codes.
We found that between 1 Januar 2008 and 15 October 2013 the Banks did not exercise ade uate and effective control over their G10 s ot FX tradin businesses. For exam le olicies were hi h level and firm-wide in nature there was insufficient trainin and uidance on how these olicies a lied to this business, oversi ht of G10 s ot FX traders’ conduct was insufficient, and monitorin was not designed to identify the behaviours found in our investigation.
The ri ht values and culture were not sufficientl embedded in the Banks’ G10 s ot FX businesses which resulted in those businesses actin in the Banks’ own interests without ro er re ard for the interests of their clients, other market participants or the wider UK financial system.
Traders at different Banks formed ti ht knit rou s in which information was shared about client activit , includin usin code names to identif clients without namin them. These rou s were described as, for exam le,ers“the la ”, “the 3 musketeers”, “1 team, 1 dream”, “a co-o erativeand “the A-team”.
Traders shared the information obtained throu h these rou s to hel them work out their tradin strate ies. The then attem ted to mani ulate fix rates and trier client “sto loss” orders which are desi ned to limit the losses a client could face if ex osed to adverse currenc rate movements . This involved traders attem tin to mani ulate the relevant currenc rate in the market, for exam le, to ensure that the rate at which the bank had a reed to sell a articular currenc to its clients was hi her than the avera e rate it had bou ht that currenc for in the market. If successful, the bank would profit.
Firms can le itimatel mana e risk associated with client orders b tradin in the market and ma make a rofit or loss as a result. It is com letel unacce table, however, for firms to en a e in attem ts at mani ulation for their own benefit and to the otential detriment of certain clients and other marketmade aartici ants. les where each Bank’s tradin Our Final Notices include exam significant profit.
In settin the fine for each Bank we have considered, amon st other thin s: the Bank’s relevant revenue, the seriousness of the breach, each Bank’s disci linar record and res onse to the wider issues around Libor, the degree of co-operation shown by each Bank, and knowledge and/or involvement of certain of those responsible for managing this part of the Bank’s business.
We have also increased the enalt to reflect s ecificall the seriousness of the risks osed to a systemically important market and the failure across the industry to learn the necessary lessons about tackling these risks, given the similar failings which arose in the context of Libor.
The Banks a reed to settle at an earl sta e and therefore ualified for a 30% discount under the FCA’s settlement discount scheme. Without the discount the total fine would have amounted to £1,592,740,000 $2.5 billion : Citibank N.A. £322,250,000 $511 million , HSBC Bank Plc £309,090,000 ($490 million), JPMorgan Chase Bank N.A. £317,380,000 ($503 million), The Royal Bank of Scotland Plc £310,000,000 ($492 million) and UBS AG £334,020,000 ($530 million).
Our investi ation lasted 13 months involved over 70 enforcement staff and un recedented cooperation with domestic and international regulators. We welcome the Serious Fraud Office’s criminal investigation into individuals.
Tackling the root causes
It is clear from our findin s that there has been wides read oor ractice in the s ot FX market. The FCA has sou ht to take swift enforcement action a ainst the worst offenders and has toda announced it will carr out an industr -wide su ervisor remediation ro ramme for firms to drive up standards across the market.
The FCA is alread conductin broader reviews of how effectivel firms reduce the risk of traders mani ulatin benchmarks and ensure confidential information is not abused and will also look at how firms mana e conflicts of interest. We will use our findin s to inform the remediation programme as appropriate.
The remediation ro ramme will re uire firms to review their s stems and controls and olicies and rocedures in relation to their s ot FX business to ensure that the are of a sufficientl hi h standard to effectivel mana e the risks faced b the business. The work at each firm will de end on a number of factors for exam le the size of the firm and its market share and im act the remedial work already undertaken, and the role the firm plays in the market.
In some cases the reviews will extend be ond G10 s ot FX and we will re uire firms to ex lore an read across into FX Emer in Markets FX Sales derivatives and structured roducts referencing FX rates and precious metals.
Senior mana ementwill be asked to attest that action has been taken and that firms’ s stems and controls are ade uate to mana e these risks. This will ensure that there is clear accountabilit and senior mana ement focus on the s ecific issues at each firm where the FCA ex ects to see change.
The FCA has la ed a ke role in develo in internationall a reed re ulator standards on benchmarks includin work b the International Or anisation of Securities Re ulators IOSCO and Financial Stabilit Board. We are activel en a ed in develo in EU re ulation on benchmarks and co-chair the UK Fair and Effective Markets Review which is considerin wider reforms to the fixed income, commodity and currency markets.
Notes for Editors
1.The Final notices2. A summary of the FX market and example of attempted manipulation at each of the Banks.
Citibank N.A. HSBC Bank PlcJPMor an Chase Bank N.A.The Ro al Bank of Scotland PlcUBS AG
3. S ot FX describes the exchan e of two currencies a currenc air where the rice exchan e rate is a reed toda and ownershi is transferred shortl thereafter usuall two business da s from the trade date . 4. The G10 currencies are US dollar, Euro, Ja anese en, British ound, Swiss franc, Australian dollar New Zealand dollar Canadian dollar Norwe ian krone and Swedish krona. 5. In April 2014,the FCA announcedit would review how effectively:
Firms reduce the risk of traders manipulating benchmarks;
Firms ensure confidential information the receive in one art of the business is not used b another business area in an abusive wa and Firms control conflicts of interest that can exist between obli ations to clients and sales and the tradin ositions the take. We are also reviewin firms’ com liance with new re ulations on Libor the London Interbank Offer Rate which were introduced in A ril 2013 followin a number of enforcement actions against firms for attempted manipulation of this key interest rate benchmark
6. The CFTC has im osed the followin financial enalties: Citibank N.A. $310 million HSBC Bank Plc 275 million JPMor an Chase Bank N.A. 310 million The Ro al Bank of Scotland Plc $290 million and UBS AG $290 million. 7. References in this ress release and in our Final Notices to the Banks’ G10 s ot FX tradin business or o erations or traders refer to its relevant voice tradin desk based in London, or in the case of UBS onl based in Zurich. 8. TheWM Reuters fix4 m a articular electronicreference to tradin activit on is calculated b brokin latform durin a one minute window or “fix eriod” 30 seconds before and 30 seconds after 4 m. 9. TheECB fix. Thisis based on information exchan ed between different central banks each da kind of fix is described as a “flash” fix –articulare rate at that a fix that reflects an exchan moment in time. 10. Clients lace sto loss orders to limit the amount the can lose on a articular osition if the market rate moves unfavourabl . 11. Exam les of relevant industr codes include theNon-Investment Products Codeand theACI Model Code. 12. The FCA co-chaired work banisation of Securities Re International Or ulatorsto develo re ulator standards for all benchmarks in 2013 andreview how effectivel these standards have been a liedbenchmarks in 2014. We have also co-chaired theto ke Financial Stabilit Boardthe introduction of ourwork on reforms to interest rate benchmarks, followin  FSB re ulations on Libor. TheFair and Effective Markets Review FEMR was established b the Chancellor in June 2014, to conduct a com rehensive and forward-lookin assessment of the wa wholesale financial markets o erate. HM Treasur is considerin FEMR’srecommendationm WM Reuters fix and sixthat the 4 other ke benchmarks should be formall re ulated. 13. On 1 A ril 2013 the Financial Conduct Authorit FCA became res onsible for the conduct su ervision of all re ulated financial firms and the rudential su ervision of those not su ervised b the Prudential Re ulation Authorit PRA . 14. The FCA has an overarchin strate ic ob ective of ensurin the relevant markets function well. To su ort this it has three o erational ob ectives: to secure an a ro riate de ree of rotection for consumers; to rotect and enhance the inte rit of the UK financial s stem; and to romote effective com etition in the interests of consumers. 15. Find out moreinformation about the FCA.