SEOUL (Reuters) - South Korea’s competition watchdog said it had fined HSBC Holdings Plc’s Hong Kong unit and Deutsche Bank AG a combined 59 million won ($50,000) for colluding on foreign exchange swap bids - its first-ever penalty for an FX derivatives-related case.
Officials at the banks agreed to avoid competition and alternately win four rounds of bidding for a company’s FX swaps in 2011, the country’s Fair Trade Commission said in a statement. It did not identify the company.
The watchdog fined HSBC 46 million won and Deutsche 13 million won. HSBC’s Seoul branch said it has cooperated fully with the Fair Trade Commission. Deutsche declined to comment.
“As the first ever FX derivatives-related case the Fair Trade Commission has uncovered and penalized, the FTC hopes price collusion against clients in the FX market will decrease through this measure,” it said.
It added it would continue to monitor the foreign exchange market and related banks to eradicate unfair collusive acts concerning FX derivatives.
The action comes as regulators step up efforts to crack down on market manipulation.
In one of the biggest such efforts, global regulators including Britain’s Financial Services Authority and the U.S. Commodity Futures Trading Commission in 2014 imposed penalties totaling $3.4 billion on five major banks, including UBS, HSBC and Citigroup, for failing to stop their traders from trying to manipulate foreign exchange markets.
Reporting by Joyce Lee; Editing by Edwina Gibbs
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