The Competition Commission reports that it has reached a settlement agreement with UK-based multinational bank Standard Chartered Bank (SCB), in which SCB admits liability to the manipulation of the US dollar and rand currency pair.

The bank agreed to pay an administrative penalty of R42.7-million

The commission states that SCB participated in the manipulation of the dollar:rand currency pair by fixing bids, offers, bid-offer spread, the spot exchange rate and the exchange rate at the fixed income fund.

Further, SCB participated in dividing markets by allocating customers in terms of which one trader withholds or pulls his/her existing bid or offer from the market to allow the other trader to execute and complete his/her trade. This conduct contravenes Section 4 of the Competition Act.

The settlement comes at a time when respondent banks are currently appearing before the Competition Appeal Court seeking an order to set aside a March 30 Competition Tribunal order, compelling respondent banks to file their answers to the complaint referral. The hearing for the appeals and reviews before the court is set down from November 13 to 16.

SCB was one of 28 banks investigated by the commission for manipulating the dollar:rand currency pair between 2003 and 2017. The commission referred various banks to the tribunal for alleged price-fixing involving the rand in what is ultimately called the “Forex Cartel” case.

Citibank already settled for the same conduct with the commission in 2017, having paid a penalty of almost R70-million.

The commission says the manipulation impacted on the exchange rate of the rand, which, in turn, affects various parts of the economy, including trade, foreign direct investment, public and private debt and company balance sheets.

The tribunal on November 15 confirmed, as an order, the settlement agreement between the commission and SCB.

“The commission welcomes SCB’s decision to reach a settlement on this matter and encourages other respondent banks to consider settling the complaint against them.

“Further, this settlement affirms the Commission’s pursuit of allegations related to the manipulation of the dollar:rand currency pair, given the ultimate impact of the currency manipulation on the value of the South African rand," says Competition Commissioner Doris Tshepe.