Australian regulatory chief voices concern amid global FX rigging probe
As we have been covering here at LeapRate, international investigations of price-rigging by banks and currency traders have now reached down under. Amid international pressure from other jurisdictions, Greg Medcraft, chairman of the Australian Securities and Investment Commission (ASIC), told the Financial Times last week: “We are commencing a review to ascertain whether any misconduct relating to foreign exchange trading may have occurred in Australia.” The investigation into manipulation in global foreign-exchange markets is expected to be among the largest and most serious examinations in recent times.
According to Reuters, “It is the first time Australian banks have been drawn into price-fixing probes in currencies. The investigations are already underway in Europe and the United States.” Some consider ASIC to be a bit too soft on market participants. However, Australia is looking to toughen up that reputation. ASIC commissioner Cathie Armour commented on the results of the 7th ASIC report on the Supervision of Australian Financial Markets. She stated that highlighted in the report were testaments to the significant energy ASIC dedicated to the supervision and surveillance of Australia’s financial markets. “These results are crucial to the further strengthening of investor confidence in the integrity of our markets,” she said.
The Monetary Authority of Singapore last year censured 133 traders within bank trading desks for market manipulation using a one-year surveillance of the market. Australia does this on a real-time basis and we believe strongly in Australia’s regulatory framework going forward and believe ASIC will continue to root out market abuse.
It seems to be that Australia’s authorities are very keen to demonstrate the first class corporate and regulatory environment it possesses. Furthermore, it wants to show now and going forward that the country is a highly reputable region in which to conduct FX business from top to bottom. With the wealth of the Far East being within easy reach and credibility among far eastern market participants being very highly sought after, it is important Australia crack down on any leaky regulatory frameworks and white collar crimes as hard as the FCA or SEC would. A strong Australian regulatory framework is an asset to the FX industry and serves as a strategic regional center for business. Aussie authorities should re-enforce this with their investigations and punishments.