FX Rigging Trial to Begin Next Year in South Africa as Regulator Needs More Time

South Africa is stepping up its forex rigging probe, but more than three years after Western financial watchdogs issued multi-billion dollar fines to global banks. The SA Competition Commission today said it will need more time to conclude an investigation into whether banks took part in a cartel to rig currency quotes for customers who were buying or selling its local currency.

The South African watchdog will allow the legal processes initiated to run their course early 2019 and will continue to monitor developments closely in accordance with its mandate.

“Our case against the banks is very strong and we want to deal with all these technicalities so the matter can go on trial, maybe by the second quarter of next year,” it said.

The move signals that South Africa’s watchdog may be gearing up to open settlement although it did not indicate whether the fines will be imposed on the global revenues of each bank or just to their domestic arms. Either way, the figure is expected to be a starting point in settlement discussions, with some banks to be asked for more and some less.

Following a string of similar lawsuits in the US and UK, the Competition Commission believes the banks in question acted in concert to manipulate either prices for bids, offers or spreads for spot trades involving the rand and the US dollar.

While the filing didn’t provide details of the investigation, which was launched back in April 2015, the commission said that Competition Tribunal prosecutors will be looking into whether banks conspired to fix prices quoted to clients for buying and selling currencies, known as a bid-ask spread.

The Commission added that the cases will be brought under anti-trust rules, which effectively limit the class action to South African claimants.

A further 18 banks have been involved in the case. The list includes Investec, JP Morgan, BNP Paribas, Credit Suisse Group, Commerzbank AG, Standard New York Securities Inc, Macquarie Bank, Bank of America Merrill Lynch, ANZ Banking Group Ltd, Standard Chartered Plc, and Barclays Africa (Absa), part of the Barclays Plc.