The Investment Management Association (IMA), which represents the U.K. investment management industry, is applying pressure on the Financial Conduct Authority (FCA) to release more information about its investigation into the alleged manipulation of the FX market.
The IMA wrote to the FCA in recent weeks, asking how it should respond to clients’ inquiries about whether currency markets are being rigged, but the FCA replied that it could not comment on a current investigation, as was reported by Bloomberg yesterday.
The IMA is a trade group representing the British investment management industry, whose members manage over £4.5 trillion of assets on behalf of U.K. and overseas clients. Today, the IMA confirmed to Forex Magnates that they wrote to the FCA on the issue of FX currency manipulation.
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The FCA announced in October that it is investigating an alleged FX manipulation, writing to Forex Magnates: “We can confirm that we are conducting investigations alongside several other agencies into a number of firms relating to trading on the foreign exchange (forex) market.”
The investigations focus on Bloomberg terminal chat groups with names such as ”The Cartel” and “The Bandits’ Club,” where major banks’ traders allegedly shared information with their supposed competitors, allowing them to execute their own trades before filling client orders and manipulating the benchmark FX rates. The allegations have already led to at least two class action lawsuits against Barclays, Citigroup, Credit Suisse, Deutsche Bank, JPMorgan Chase, Royal Bank of Scotland and UBS.
Investment managers represented by the IMA stand to lose a lot if the FX markets are rigged, as they are among the biggest clients of banks’ foreign-exchange desks. Colin McLean, IMA member and CEO of SVM Asset Management Ltd., controlling about $970 million, told Bloomberg: “We deserve to know which mechanism is involved in any wrongdoing. Even very small errors or issues could involve large sums of money in absolute terms and that is why it’s a concern.”