Australia to Launch Own Probe on Allegations of Forex Malpractices

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Australia to Launch Own Probe on Allegations of Forex MalpracticesAustralia has launched an investigation on its foreign exchange market, as the global probe into the alleged price-rigging by currency traders and banks in the $US5.3 trillion-a-day worldwide forex market widens.

This is the first time that Australian lenders have been included on a probe into currency price-fixing. The current global investigation has sucked in at least 15 banks and over a dozen regulators across Asia, US and Europe.

The investigations aim to find whether traders assisted in or colluded to share information on client requests and tried to fix core forex benchmarks.

“We are commencing a review to ascertain whether any misconduct relating to foreign exchange trading may have occurred in Australia,” Greg Medcraft, chairman of the Australian Securities and Investment Commission (ASIC), told the Financial Times. “And whether from an Australian perspective ASIC has concerns about the foreign exchange market.”

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Currently, the U.S. Department of Justice and UK’s Financial Conduct Authority (FCA) have been looking into the forex rigging allegations, which is expected to trigger a raft of billion-dollar fines for lenders. In line with other regulators such as FCA, Medcraft said the investigations will take at least a year.

“We are monitoring what is happening with FX. We do co-operate globally with our fellow regulators, so we know what is going on,” he added.

The announcement by Australia, whose forex market transacts an estimated $168.6 billion a day, comes hot on heels after remarks by the head of FCA Mark Wheatley who lambasted Asian regulators for not moving with speed to launch their own investigations into the malpractice.

Mr Medcraft is the current chairman of International Organisation of Securities Commissions, which is responsible for setting international standards for the securities sector. He is also a member of the Financial Stability Board.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com