NZ Regulatory Body Launches Forex Probe as Scope of Allegations Widens

The widening scope of a global Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term investigation has now extended to New Zealand, as the country’s Commerce Commission has announced the launch of a probe into the manipulation of currency rates.

The regulatory announcement comes a little over a week after the Australian Securities and Investment Commission (ASIC) began its own such investigation into what has thus far amounted into currency fixing allegations. The extension of these probes into antipodean markets represents a truly global phenomenon, specifically after a litany of violations across Europe and the United States – New Zealand’s Commerce Commission represents the country's paramount oversight committee and the newest regulatory body to open up an investigation into the $5.3 trillion-a day market.

According to a recent statement by the Commission, "The Commerce Commission has confirmed that it has an investigation into possible manipulation of currency rates and possible influencing of benchmarks in foreign exchange markets. The investigation was commenced as a result of a leniency application under the Commission's cartel leniency policy."

Of the banks already under the investigation by global regulators, Citi, Deutsche Bank, and UBS each operate within New Zealand. Meanwhile, the country’s four Australian-owned banks New Zealand Bank, Auckland Savings Bank, Bank of New Zealand and Westpac, have thus far not been been contacted by the commission.

The Latest Country to Be Put Under the Microscope

New Zealand itself has a developed forex market, albeit dominated by a number of unmargined brokers that has since warranted mounting Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term. Along with Australia, the region constitutes a bourgeoning locale for forex investors, however there have been no such formal charges announced thus far in either country. Presently, a panel of global regulators is working to ascertain the latitude and scope of a series of trading violations that have stemmed from currency rate fixings and collusion via chartrooms at leading financial institutions.

As recently as last week, UBS AG suspended at least six forex traders, though it is hardly the first bank to have done so in recent months. According to a spokesman for New Zealand’s Financial Markets Authority (FMA) in a recent email, “The Financial Markets Authority is aware of the international inquiries, and will continue to monitor developments here and abroad, and to liaise with agencies in New Zealand, Australia and further afield.” The FMA is slated to launch its Financial Reporting Act beginning April 1, which will ultimately help to foster greater transparency measures in the country.