15 February 2017

South Africa: Competition Commission Prosecutes Banks for Collusion

Photo: allafrica.com
Standard Bank, ABSA, Investec.

The Competition Commission on Wednesday referred a collusion case to the tribunal for prosecution against 17 banks, including three of South Africa's big banks.

The commission said in a statement it has been investigating a case of price-fixing and market allocation in the trading of foreign currency pairs involving the rand since April 2015. It has now referred the case to the tribunal for prosecution.

The banks are Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank NA, Investec Ltd, Standard New York Securities Inc, HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc, Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc (Respondents).

The commission is seeking an order from the tribunal declaring that the respondents have contravened the Competition Act.

Further, the Commission is seeking an order declaring that 14 of the banks - Bank of America Merrill Lynch, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank, Investec, Standard New York Securities, HSBC Bank, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa, Commerzbank; Australia and New Zealand Banking Group, Nomura International and Macquarie Bank - are liable for the payment of an administrative penalty equal to 10% of their annual turnover.

The commission said it 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 US dollar / rand 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.

The commission said traders of the respondents primarily used trading platforms such as the Reuters currency trading platform to carry out their collusive activities. They also used Bloomberg instant messaging system (chatroom), telephone conversation and had meetings to coordinate their bilateral and multilateral collusive trading activities.

They assisted each other to reach the desired prices by coordinating trading times. They 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 in order to achieve their profit motives.

"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 Commissioner Tembinkosi Bonakele.

Fin24

More on This

Treasury On Competition Commission Findings

The National Treasury notes with concern the statement issued by the Competition Commission on the completion of an… Read more »

Copyright © 2017 News24Wire. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 900 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.