Standard Chartered Bank has admitted to exchange rate manipulation in South Africa and will pay an administrative penalty of R42.7 million.
Charges against the British international finance institution arose in 2015 when the South African Competition Commission launched a complaint against various financial entities, including Barclays Bank Plc, Barclays Africa Group Ltd, BNP Paribas, BNP Paribas South Africa, Citigroup Inc and Standard Chartered among others.
The charges centred on allegations that the banks had “engaged in an agreement or concerted practice to manipulate prices related to certain foreign currency pairs” tied to the South African rand. The Competition Commission argued that this was a violation of South African laws.
On its part, Standard Chartered has admitted to participating “in the manipulation of USD/ZAR currency pair by fixing bid, offers, bid-offer spreads, the spot exchange rate” and the exchange rate, said the Competition Commission.
“Further, SCB participated in dividing markets by allocating customers in terms of which one trader withholds or pulls his/her existing bid or offer from the market to allow the other trader to execute and complete his/her trade.”
The settlement by Standard Chartered comes at a time when banks charged for similar offences are currently appearing before the Competition Appeal Court where they are seeking an order to set aside a Competition Tribunal order of 30 March 2023. The order directed the respondent banks to file their answers to the complaint referral.
“The Commission welcomes SCB’s decision to reach a settlement on this matter and encourages other respondent banks to consider settling the complaint against them. Further, this settlement affirms the Commission’s pursuit of allegations related to the manipulation of the USD/ZAR currency pair, given the 2 ultimate impact of the currency manipulation on the value of the South African Rand," said Doris Tshepe, a commissioner with the Competition Commission on Wednesday.
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