Standard Chartered Bank (SCB), which has admitted to manipulating the USD/ZAR currency exchange rate between 2007 and 2013, is expected to give evidence that will assist in prosecuting other financial institutions.
The settlement agreement, concluded between the South African Competition Commission and SCB on Wednesday, has been confirmed as an order of the Tribunal, with the British multinational bank agreeing to pay a R42,7 million fine.
It has also agreed to cooperate in the Commission’s prosecution of at least 26 other banks accused of engaging in the same prohibited practices – price fixing and dividing markets.
In a statement, the Commission says SCB is no longer involved in the currency manipulation and agrees to fully cooperate in relation to the prosecution of this matter.
“In addition, SCB agrees to provide evidence, written or otherwise, which is in its possession or under its control (and which is not subject to legal privilege).”
The Bank also agrees to:
– refrain from engaging in any conduct that may be in contravention of the Competition Act
– refrain from engaging in any prohibited practice in future
– prepare and circulate a statement summarising the contents of the settlement agreement to its employees, managers and directors who have market-making responsibilities at SCB
– continue to implement its existing competition law compliance programme as part of its corporate governance policy.
The eight-year litigation process between the Commission and SCB – which is the official shirt sponsor of England’s Liverpool Football Club, began in April 2015 when the Commission launched a complaint against it, and other financial entities, for allegedly agreeing to manipulate prices related to certain foreign currency pairs tied to the South African rand (ZAR).
The Commission accused the Respondents of conspiring to assist each other by allowing a trader with a significant open risk position to complete trades before others, and manipulate liquidity, which is contrary to typical market trading practices. These actions constituted price fixing and market allocation.
SGB is the second of 28 respondents accused in the matter to admit liability and enter into a settlement agreement with the Commission. Citibank N.A settled in April 2017, admitting to its involvement in spot trading of ZAR currency pairs between September 2007 and October 2013. It agreed to pay an administrative penalty totalling R69,500,860 and to fully cooperate in the prosecution of the matter.