UPDATE 1-Mexico readies FX, bond conduct rules in wake of price fixing probe

(Adds background)

MEXICO CITY May 24 Mexico’s central bank is
preparing to implement a new code of conduct governing foreign
exchange and bond trading in the second half of the year,
according to a copy of a presentation published Wednesday.

The announcement follows news last month of a probe by
Mexico’s anti-trust agency into collusion by major banks to fix
prices in central bank debt auctions.

Banco de Mexico Governor Agustin Carstens gave the
presentation on Monday at a closed door meeting of the
International Council of Securities Associations that was hosted
by the Mexican Association of Securities Intermediaries (AMIB).

Carstens said Mexico’s central bank will only trade with
banks that adhere to best practice forex rules, designed by the
Bank for International Settlements’ Foreign Exchange Working
Group that are due to be published on May 25, according to the
presentation.

The central bank declined a request for further comment.

Carstens said the bank will organize a local foreign
exchange committee during the second half of this year to meet
market players, who will have between six and 12 months to
implement the code of conduct or face the ban on dealing with
Banxico.

Carstens added that the central bank will continue to work
with other authorities to create a code of conduct in the coming
months for local fixed income markets.

The BIS code emerged out of market manipulation scandals
where global banks were fined billions of dollars surrounding
the fixing of the Libor rate and foreign exchange trading.
(Reporting by Gabriel Stargardter and Michael O’Boyle; Editing
by Alistair Bell)

Source: Reuters

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