Thursday 16, February 2017 by Matthew Amlôt

Seventeen South African banks colluded to rig rand

Both local and international banks have been accused of working together on rigging the price of the ZAR, says the South Africa’s competition watchdog.

Seventeen banks have been named in the investigation:

  • BofA Merrill Lynch
  • BNP Paribas
  • JP Morgan Chase & Co
  • JP Morgan Chase Bank N.A
  • Investec
  • Standard New York Securities
  • HSBC
  • Standard Chartered
  • Credit Suisse
  • Standard Bank
  • Commerzbank AG
  • Australia and New Zealand Banking Group
  • Nomura International
  • Macquarie Bank
  • ABSA Bank
  • Barclays Capital
  • Barclays PLC

The investigation has been ongoing since April 2015, and has focused on price fixing and market allocation in the trading of foreign currency pairs involving the rand.

From at least 2007, the Commission noted, the banks have had a general agreement to collude on prices for bids, offers and bid-offer spreads for the spot trades in relation to currency trading involving USD/ZAR pair.

Collusion primarily occurred on online trading platforms, such as Reuters’ currency trading platform and Bloomberg’s instant messaging system. Members involved assisted each other in reaching desired prices by coordinating trading times, and group decisions were made on when to refrain from trading. Fictitious bids and offers were further used in order to distort demand and supply in order to achieve their profit motives.

The Commission is seeking a Tribunal order to declare that those involved contravened the Competition Act. The Commission is also seeking to impose a penalty on 14 of the banks equal to 10 per cent of the institution’s annual turnover.

“The referral of this matter to the Tribunal marks a key milestone in this case as it now affords the banks an opportunity to answer for themselves,” said the Commissioner, Tembinkosi Bonakele.

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