LONDON, March 25 Thomson Reuters Corp
is proposing changes to its foreign exchange trading rules and
implementing controls it hopes will minimise the scope for
market manipulation and abuse, the company said on Tuesday.
Foreign exchange, the largest and one of the least regulated
markets in the world, has for the past six months been the
subject of investigations by regulators around the world into
allegations of price-rigging and collusion between traders.
Thomson Reuters is one of the two dominant global currency
trading platforms along with ICAP Plc-owned EBS.
After 12 months of consultation with market participants,
Thomson Reuters is proposing changes to its Rule Book, a code of
conduct designed to foster higher trading standards "through a
combination of platform controls and behavioural rules", Phil
Weisberg, global head of FX at Thomson Reuters, said.
There will be a six-week window for feedback before
publication in the summer, a Thomson Reuters spokesman said.
The proposals include more clearly defined guidelines making
it easier to execute orders and promoting closer surveillance
and reporting of client trading activity.
"By raising the bar on expected trading behaviour, the rules
aim to discourage abuse, manipulation or disorderly conduct, as
well as behaviours that do not enhance liquidity for the market
as a whole," Thomson Reuters said in a statement.
The consultations with market participants began six months
before regulators including Britain's Financial Conduct
Authority and the U.S. Department of Justice formally opened
their probes into allegations of wrongdoing.
At the centre of the investigations are allegations that
senior traders shared market-sensitive information relevant for
the London fix, which is set at 4 p.m. London time, using actual
London is the hub of the global currency market, accounting
for some 40 percent of the $5.3 trillion traded on an average
The key benchmark, known as the WM/Reuters fix, relates to
several exchange rates including the euro, sterling, Swiss franc
and yen. These are compiled using data from Thomson Reuters and
other providers, and are calculated by WM Company, a unit of
State Street Corp, and are important because they are
used as reference rates for trillions of dollars worth of
investments, trade and corporate deals around the world.
WM Company is the administrator for the WM/Reuters Service.
Through an agreement, Thomson Reuters is a primary source of
rates to WM, to which WM applies its methodology and calculates
the benchmark. Thomson Reuters is one of the various
distributors of the rate.
Thomson Reuters is the parent company of Reuters News, which
is not involved in the fixing process.
(Reporting by Jamie McGeever and Patrick Graham; Editing by
Alex Smith and David Holmes)