The Royal Bank of Scotland is among a number of banks under investigation by the Financial Conduct Authority over allegations of price manipulation in the £3 trillion-a-day foreign exchange market.
The FCA's inquiry, joining investigations by Hong Kong and Swiss regulators, could take months to conclude and has the potential to be as big as the interest rate investigation into the fixing of the Libor interbank lending rate benchmark.
Last April, RBS handed over to the regulator from its traders who called themselves "The Cartel" and "The Bandits' Club". London is the central to the foreign exchange market, with 40% of trades taking place in the capital.
The FCA warned that banks and traders could face fines and bans if misconduct is found, after previously fining Barclays, RBS, UBS and money broker ICAP for Libor rigging.
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The benchmarks, which are used by fund managers to value their investments, are calculated by the median price of trades taking place in a 60-second window. It is alleged that traders were putting in client orders ahead of this window in order to influence the benchmark.
An FCA spokesman said: “"We can confirm that we are conducting investigations alongside a number of other agencies both in the UK and abroad into a number of firms relating to trading on the foreign exchange [forex] market.
"We are gathering information from a wide range of sources including market participants. Our investigations are at an early stage and it will be some time before we conclude whether there has been any misconduct which will lead to enforcement action."
RBS said: "We can confirm that we were contacted by the FCA on this matter. Our ongoing enquiry into this matter continues and we are cooperating fully with the FCA and our other regulators."
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