The $4700bn-a-day currency market is one of the financial world's least regulated, with transactions conducted over the counter (OTC) and away from exchanges. But ongoing global investigations into the manipulation of benchmark foreign exchange (FX) rates and front-running of client orders have put the FX market firmly in the spotlight.
Allegations of collusion, market manipulation and improper practices by FX dealers of the WM/Reuters (WMR) benchmark have plagued currency markets since the middle of 2013. Earlier this year, the Financial Stability Board, an international advisory group on financial regulation, announced it would create a sub-group for FX to be chaired by Guy Debelle, assistant governor at the Reserve Bank of Australia, and Paul Fisher, executive director for markets at the Bank of England. The new group will analyse market practices in relation to the use of FX rate benchmarks. Its findings will be presented to the 2014 G20 summit in Brisbane in November.
