South Africa: Problems in FX trading but no misconduct by major banks

An investigation into the South African foreign exchange market found instances of confidential client information being shared by foreign exchange dealers but no evidence of misconduct by major banks, the country’s central bank said on Monday.

The South African Reserve Bank will look into stepping up surveillance to protect confidential client information and regulate foreign exchange dealers more closely, the bank said, following a year-long investigation.

“We were concerned that this would render the rand currency vulnerable to manipulation,” Deputy Governor Daniel Mminele said.

Big moves on the foreign exchange market will now get closer scrutiny from the central bank, Mminele said. In addition, steps are under way to improve electronic monitoring of messages between dealers.

The bank’s foreign exchange review committee, set up in October 2014, said regulation of traders who were dealing individually was insufficient. It recommended the authorisation and regulation of inter-dealer brokers be reviewed.

Full content: IOL

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