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Criminal probe into the Forex markets.

THE Serious Fraud Oce (SFO) has con rmed it has launched a criminal inquiry into the alleged rigging of foreign exchange (Forex) markets.

e investigation into whether traders beneted from the manipulation of benchmark forex prices comes amid an existing probe by Britain's nancial watchdog.

e Financial Conduct Authority (FCA) said in October it had joined other regulators around the world in scrutinising rms over the potential manipulation of the PS3 trillion-a-day forex market.

e SFO said in a brief statement: "e director of the Serious Fraud Oce has opened a criminal investigation into allegations of fraudulent conduct in the foreign exchange market."

Regulators have been looking into whether currency traders shared information about their positions and knowledge of client orders through instant messages to rig the foreign exchange market in their favour.

Currency exchange rates are set on a daily basis by analysing trading volumes at leading banks during a short time window.

It is thought that traders could potentially inuence exchange rates by pushing through large orders during the 60-second window to make a prot. Even a small movement in exchange rates could a'ect the value of investments worldwide, including pension funds.

It threatens to engulf the industry in yet another embarrassing scandal at a time when many nancial rms are still battling to restore their reputations following the Libor rigging revelations.

According to the Bank for International Settlements, global foreign exchange activity rose to 5.3 trillion dollars (PS3.3 trillion) a day in 2013, from four trillion dollars (PS2.5 trillion) in 2010.

London accounts for the bulk of currency trading, with 41% of global turnover in the market, followed by the United States, which has a 19% share, Singapore with 5.7%, Japan with 5.6% and Hong Kong with 4.1%.

Taxpayer-backed Royal Bank of Scotland has already said it has been contacted by the FCA over the issue and was "co-operating fully".

Chief executive Ross McEwan said last week that the forex probe had the "hallmarks" of being a more expensive scandal than Libor or payment protection insurance.

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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Jul 22, 2014
Words:345
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