Regulation  

FCA issues first warning notices to bankers

The Financial Conduct Authority has issued two warning notice statements against individual bankers connected to the manipulation of interest rate benchmarks.

Although the FCA has not named the individuals, it did say one was responsible for submitting interest rate benchmarks and another was a bank manager.

In the notice regarding the bank manager, the regulator claims the individual knowingly involved in regulatory breaches by the bank for failings in relation to an interest rate benchmark.

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The regulator not only says the individual was aware of the absence of systems and controls governing interest rate benchmark submissions, but add the person went so far as to have “facilitated others’ attempts to manipulate... submissions”.

The individual was aware of and condoned traders asking submitters to manipulate rates, and submitters taking those requests into account.

The second individual, a submitter, not only agreed to these manipulations but colluded with interdealer brokers and traders at another bank.

This is the first time the regulator has issued warning notice statements since it gained the power to do so in 2012.

In October last year the regulator said it would publish certain warning notices without naming the firm involved where there is a public interest in highlighting the issue, but where ‘naming and shaming’ would be considered unfair.

This follows a reconsideration from the FCA in response to industry outcry that naming those involved could unfairly damage their reputation.

In its policy statement the FCA did say “We also expect it will normally be appropriate to identify a firm that is the subject of a warning notice, but not to identify an individual.”

When asked was the benchmark the London Interbank-offered rate (Libor), the FCA declined to comment.

A warning notice is not a final decision, and the individual can still make representations to the Regulatory Decisions Committee, which will then make a decision.

If the RDC subsequently issues a decision notice, the individual can refer the matter to the Upper Tribunal for dispute.