Brussels, 04/02/2015 (Agence Europe) - On Wednesday 4 February, the European Commission decided to fine the UK-based broker ICAP €14.9 million for facilitating six of the seven cartels discovered on the derivatives market for yen interest rates. The Commission presented its objections in June 2014 and ICAP opted not to settle the case with the Commission.
In December 2013, the Commission uncovered seven separate bilateral infringements in the yen interest rate derivatives market, which lasted between one and ten months over the period from 2007 to 2010, involving five banks - UBS, RBS, Deutsche Bank, JP Morgan, Citigroup and RP Martin. For its part, ICAP communicated misleading information to certain JPY Libor panel banks, which was presented as predictions or expectations of the level at which the yen libor rate would be set. This information aimed to influence certain panel banks not involved in the infringements to submit yen Libor rates in line with the adjusted predictions or expectations, the Commission explains. ICAP also used its contacts with several yen Libor panel banks not involved in the infringements to influence their yen Libor submissions. Lastly, ICAP served as a communications channel between a Citigroup trader and an RBS trader, thereby enabling the anti-competitive practices between them.
“Today's decision to fine the broker ICAP sends a strong signal that assisting companies in their cartel activities has severe consequences. It marks the successful completion of our anti-trust investigation in the yen interest rate derivatives sector - but not the end to our efforts to fight anti-competitive practices in financial markets”, said Margrethe Vestager, the competition commissioner.
Interest rate derivatives are financial products used by banks and businesses to manage the risk of interest rate fluctuation and play an essential role in the global economy. (EL)