Picture: ISTOCK
Picture: ISTOCK

Sixteen local and international banks are facing fines of up to 10% of their annual turnover after the Competition Commission decided to prosecute them for colluding to fix prices and allocate markets while trading foreign currency from 2007.

Among the local banks referred to the Competition Tribunal for prosecution are Investec, Standard Bank and Absa. The commission will also prosecute megabanks Bank of America Merrill Lynch, JP Morgan, HSBC, Standard Chartered, Credit Suisse and Nomura.

The commission found the banks breached the Competition Act by generally agreeing to collude on the prices dealers at these banks quoted to customers to buy the rand or dollar (offers) and the prices these dealers paid for these currencies on the market (bids). The dealers also colluded on the difference between the two prices, called the bid-offer spread.

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