Central bank says room to improve market regulation

folarin okunola

October 19, 2015 4:43 PM

A parallel investigation by the Competition Commission into the fixing of foreign exchange trades by several global banks was still underway, the bank said, and it would take action if irregularities were uncovered.

Lesetja Kganyago, Governor of the Reserve Bank of South Africa, poses for a photo in the Manhattan borough of New York October 6, 2015. REUTERS/Carlo Allegri

A year-long investigation into the domestic foreign exchange market found no evidence of misconduct or malpractice on the part of major banks, South Africa's central bank said on Monday.

But the South African Reserve Bank said that it had found instances of confidential client information being shared amongst foreign exchange dealers and that it would look into stepping up surveillance in this regard.

"We were concerned that this would render the rand currency vulnerable to manipulation," the central bank's Deputy Governor Daniel Mminele said.

"The Competition Commission made known that they have information relating to what could possibly relate to unlawful conduct by certain international banks in relation to rand trading in offshore centres," Mminele said.

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The bank's foreign exchange review committee, set up in October 2014, said the rules regulating traders dealing in their individual capacity were insufficient. It recommended the authorisation and regulation of interdealer brokers be reviewed.

In May the competition watchdog said it was probing BNP Paribas, Citigroup, Barclays, JP Morgan, Investec, Standard Bank and Standard Chartered for alleged price rigging and collusion.