Hong Kong regulator slams UBS for role in Hibor fixing

14 Mar 2014

Hong Kong's central bank has slammed UBS AG traders for trying to rig Hong Kong's benchmark interest rate between 2006 and 2009, after it conducted a probe extending over a year.

The Hong Kong Monetary Authority came across over 100 internal chat messages with ''change requests'' by several traders for the bank's submissions to set the Hong Kong Interbank Offered Rate, according to a statement today.

While there was ''negligible impact'' of the change requests on fixings and no fines would be imposed, the regulator has asked the lender to initiate disciplinary action against the employees responsible.

''When they discovered the requests, they did not draw that to our attention,'' Arthur Yuen, the HKMA's deputy chief executive, said at a press briefing today. ''They did not report the cases to us. We equally find that unacceptable.''

The investigation into possible misconduct behind setting Hibor started with UBS in December 2012.

It later widened to cover eight lenders, including HSBC Holdings Plc (HSBA), after the US, UK, Japan and Singapore cracked down on the banks.

According to the HKMA, the probe came across no evidence of collusion between the banks to manipulate the Hibor fixing and no evidence of misconduct at the other firms.

According to a Hong Kong-based businessman who spoke to Reuters, the traders involved no longer worked at the firm. He declined to say if they had quit on their own accord or had been asked to leave, Reuters said.

UBS had been at the centre of global investigations into rate rigging with British and US regulators, fining the lender $1.5 billion in December 2012 for Libor manipulation.

In June 2013, the lender was awarded one of the stiffest punishments in Singapore for attempted manipulation of currency and lending rates in the city-state.

"We have not been part of the Hibor fixing panel since 2010 and have taken appropriate steps to incorporate the HKMA's suggested improvements into our operations," UBS said in a statement.

HKMA said in October that it was in discussion with foreign regulators about possible fixings manipulations in the spot foreign exchange market.