The Competition Commission on Wednesday referred a case of collusion against a number of international banks, for alleged price fixing, to the Competition Tribunal for prosecution.
This follows an investigation into alleged price fixing and market allocation in the trading of foreign currency pairs involving the rand, since April 2015.
Besides having two of the four big banks in South Africa on its list, including Standard Bank and Absa, the commission had also investigated Bank of America Merrill Lynch International, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank, Investec, Standard New York Securitie, HSBC Bank, Standard Chartered Bank, Credit Suisse Group, Commerzbank, Australia and New Zealand Banking Group, Nomura International, Macquarie Bank, Barclays Capital and Barclays Bank.
The commission found that, from at least 2007, the respondents 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 the rand/dollar currency pair.
It further found that the respondents manipulated the price of bids and offers through agreements to refrain from trading and creating fictitious bids and offers at particular times.
Traders of the respondents primarily used trading platforms such as the Reuters currency trading platform to carry out their collusive activities, as well as used Bloomberg instant messaging system (chatroom), telephone conversations and face-to-face meetings to coordinate their bilateral and multilateral collusive trading activities, the commission alleges.
“They assisted each other to reach the desired prices by coordinating trading times and reached agreements to refrain from trading, taking turns in transacting and by either pulling or holding trading activities on the Reuters currency trading platform. They also created fictitious bids and offers, distorting demand and supply to achieve their profit motives,” the commission said in a statement.
It was now seeking an order from the tribunal declaring that the respondents had contravened the Competition Act.
Further, the commission is seeking an order declaring that a number of the respondents are also liable for the payment of an administrative penalty equal to 10% of their yearly 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 Competition Commission commissioner Tembinkosi Bonakele.