FX Fixing Scandal: FCA Expects More Foreign Regulators Involved as Investigation Widens

The Financial Conduct Authority expects to receive an increase in requests for help from foreign regulators, as it widens its investigation into cross-border misconduct within currency markets.

The FCA said in its Enforcement Annual Performance Account that it received 52 requests from foreign regulators in 2013/14 for assistance on forex inquiries, following allegations of misconduct by major banks last year.

"We anticipate that trend increasing this year as our investigation progresses," the FCA said in the report.

"We have seen a steady increase in the number of cases we conduct in parallel with overseas regulatory authorities over the last few years as misconduct across borders becomes increasingly common."

"We have worked with the international regulatory community to build on existing relationships and expertise to work together to tackle misconduct that often crosses borders."

The FCA said its forex investigation, which was publicly announced on 16 October 2013, has prompted unprecedented global cooperation.

"The lessons learned, and relationships built, during the LIBOR investigations have helped to ensure the process is as efficient and effective as possible," it added.

Banks allegedly manipulating key foreign exchange contracts have, in 2013, become the focus of yet another major scandal. Following the revelations, a number of banks said they are conducting internal investigations into the matter and assisting regulators in a number of countries.

The daily $5tn (£3.1tn, €3.7tn) currency market is the largest in the financial system and is pegged to the value of funds, derivatives and financial products.

The investigation over forex fixing comes after a similar probe into the rigging of benchmark interest rates such as Libor, which has resulted in regulators fining 10 major banks and brokerages around $6bn along with the arrests of several involved people.