UPDATE 1-SEC probing possible manipulation of FX options -Bloomberg

Mon Mar 10, 2014 11:35am EDT

March 10 (Reuters) - The U.S. Securities and Exchange Commission (SEC) is investigating whether currency traders distorted prices for options and exchange-traded funds by manipulating benchmark foreign exchange rates, Bloomberg News reported on Monday.

The SEC's probe is at an early stage, Bloomberg reported, citing two people with knowledge of the matter.

The Commodity Futures Trading Commission (CFTC), which regulates foreign exchange derivatives, is also investigating possible manipulation, Bloomberg reported, citing a person with knowledge of the matter.

People familiar with the probes had told Reuters that regulators were examining the effects of currency manipulation on related options contracts, but did not identify whether the SEC was involved.

An SEC spokeswoman declined comment. The CFTC did not respond to a request for comment.

Britain's Financial Conduct Authority was unavailable for comment.

Regulators across Europe, Asia and the United States are investigating allegations that senior traders exchanged market-sensitive information via electronic communications to manipulate key currency rates, known as "fixings."

Bank of England Governor Mark Carney is to face questioning from UK lawmakers on Tuesday into what Bank officials knew about the allegations, after the central bank suspended an employee last week in connection with the investigation.

Some of the world's biggest banks have already placed on leave, suspended or fired more than 20 traders.

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