UPDATE 1-Singapore ready to assist in global currency rigging probe

Thu Oct 24, 2013 1:50pm BST

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By Rachel Armstrong and Kevin Lim

SINGAPORE Oct 24 (Reuters) - Singapore's central bank said it was ready to assist in investigations into alleged manipulation of foreign exchange rates, potentially widening a probe in the $5.3 trillion-a-day FX market that already involves authorities in the United States, Britain, Switzerland and Hong Kong.

The announcement by the Southeast Asian city-state, the world's third-largest FX trading centre after London and New York, comes just a week after Hong Kong said it was talking to foreign regulators and banks about the market rigging allegations.

"MAS has been in touch with foreign regulators on the issue of alleged manipulation in the WM/Reuters foreign exchange benchmark rates. We stand ready to assist in their investigations," the Monetary Authority of Singapore (MAS) said in a statement on Thursday.

In echoes of the global probe into interest rate rigging, authorities are examining electronic messages between currency traders to see whether they colluded with counterparts.

Several media reports have suggested that traders manipulated the fixings - snapshots of where currencies are trading at a particular time in the market - which are used to price trillions of dollars worth of investments.

Britain's Financial Conduct Authority (FCA) said last week it had progressed from asking banks for information relating to FX trading to opening a formal probe, and is working with agencies overseas.

The Hong Kong Monetary Authority was the first regulator in Asia to confirm its involvement in the probe, saying last week it had spoken to foreign regulators about the issue and was following up with individual banks. Hong Kong is Asia's third-largest FX trading centre after Singapore and Tokyo.

SWITZERLAND, BRITAIN

Switzerland's financial markets regulator FINMA said earlier this month it was investigating several Swiss banks. FINMA did not name the banks under scrutiny, but said multiple banks around the world were potentially implicated.

The chairman of Credit Suisse, Switzerland's second-largest bank, told a local newspaper this month that it had not found any evidence of malpractice in the FX market following inquiries from regulators.

Investment banks, including Royal Bank of Scotland and Deutsche Bank, have handed over instant messages and emails to the FCA in Britain as part of its probe, banking sources have said.

In Singapore, the MAS censured 20 banks, including UBS , RBS and ING, in June following a review into the setting of benchmark rates, and ordered them to set aside additional reserves for a year.

BENCHMARK RATES

The WM/Reuters FX rates, compiled using data from Thomson Reuters and other providers, are calculated by WM, a unit of State Street Corp. The rates are one of several benchmarks used throughout the course of the global trading session in the major FX centres of London, New York and Tokyo.

In a response to Reuters queries, Thomson Reuters said "WM ... is the administrator for the WM/Reuters Service. Through an agreement, Thomson Reuters is a primary source of rates to WM from which WM applies its methodology and calculates the benchmark. Thomson Reuters is one of the various distributors of the rate."

"Thomson Reuters would lend its expertise to support any authorities' investigation into alleged disruptive behaviour on benchmarks."

In a statement earlier this month, State Street said "WM supports efforts by the industry to determine and address any alleged disruptive behaviour by market participants. We welcome further discussions on these issues and what preventative measures can be adopted."

Thomson Reuters is the parent company of Reuters News, which is not involved in the rate fixing process.

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