FX dealers in London can trade trillions, without being registered
By Jamie McGeever
LONDON, April 28 (Reuters) - Three London-based traders suspended or fired as part of a global investigation into alleged collusion and price-rigging in the foreign exchange market were not registered by Britain's financial market watchdog, revealing inconsistencies in the oversight of the world's biggest marketplace, Reuters analysis of the Financial Conduct Authority's filings has shown.
This highlights one of the difficulties in monitoring large, cross-border, over-the-counter markets, such as foreign exchange which is the world's largest financial market yet also its least-regulated - a "regulatory hole", according to Tracy McDermott, director of enforcement at the FCA.
These gaps are not apparent in markets such as stocks, which are traded on more tightly monitored and regulated exchanges.
"Spot FX trading isn't a regulated activity," McDermott told the Reuters Global Regulation Summit on Monday.
Any change to this state of affairs is up to the government, not the FCA, she added.
London is the centre of the $5.3 trillion-a-day global currency market, and the top traders can earn (or lose) their banks tens of millions.
Highlighting the unregulated nature of the world's largest marketplace, they can do that without necessarily being registered or approved by the FCA.
Three of the 17 London-based FX operatives suspended or fired by their banks recently as the investigation by regulators around the world has gathered pace were not registered or approved by the FCA. Continued...