Cape Town — The South African Reserve Bank (SARB), National Treasury (NT), and the Financial Sector Court Authority (FSCA), are working on a new law that will curb currency manipulation.
This comes after UK bank, Standard Chartered, was given a R43m fine for it’s involvement in the rand manipulation. Standard Chartered were among 28 banks who were investigated for rand manipulation, and these were local and international banks.
The new law will be tabled in the national legislature soon and, according to Chief Director of Financial Sector Policy in the NT, Vukile Davidson and Olano Makhubela of the FSCA, the new law will prevent practise of price fixing in the markets, IOL reported.
Davidson said wpork was already underway with the banks to deal with the banks involved in this conduct in the future. He said they needed to ensure that they improved the system and that the markets could operate with integrity.
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“To that end, as you are aware, we intend to introduce the Conduct of Financial Institutions Bill very soon into Parliament, as well as amendments to the Financial Markets Act soon after that,” said Davidson.
According to Makhubela, the FSCA, SARB and NT were working to address the challenges by tabling laws and that one of the interventions was that they have started licencing over-the-counter derivative providers.one of the interventions was that they have started licencing over-the-counter derivative providers.
“The FSCA, together with the Prudential Authority and National Treasury, is currently amending the Financial Markets Act to include in its definition foreign currency as a security. Currently, we don’t have that definition in the Act, and once this is done, it will give authorities the power to use the Financial Markets Act to supervise the conduct of institutions in the foreign currency market,” he said.
Makhubela said the Conduct of Financial Institutions Bill will give them powers to deal with currency manipulation.
Doris Tshepe of the Competition Commission said the settlement with Standard Chartered brings to the number of banks that have reached a settlement, to five in total, while the other 23 banks are still challenging the findings of the commission.
For full statement go to: https://t.co/wO2BD6NHVs @GovernmentZA @GCISMedia pic.twitter.com/AGkUISfucm
— National Treasury RSA (@Treasury_RSA) November 24, 2023
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Compiled by Matthew Petersen
