Competition Commission says it can't charge foreign banks in rand-rigging case
The Competition Commission concluded on Wednesday that it has no powers to charge foreign banks being investigated in an exchange-rate rigging case unless they have a presence in the country.
Partly on that basis, the tribunal sent the case back to the country's competition watchdog, giving it 40 days to clarify the charges it plans to bring. It also dismissed a request from the banks involved to have the case dropped altogether.
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In a probe that has rumbled on since 2015, the Competition Commission has been seeking fines against 23 local and foreign banks that it alleges colluded to coordinate activities when giving quotes to customers buying or selling the rand and the dollar.
It joined a global clampdown that has led to dozens of traders being fired and several big banks fined around $10 billion in total for rigging the level of Libor and other forex benchmarks.
The foreign banks being investigated without a presence in South Africa are Bank of America Merrill Lynch International, JP Morgan Chase & Co, Australia and New Zealand Bank Ltd, Standard New York Securities Inc, Nomura International PLC, Macquarie Bank Ltd, HBC Bank USA, National Association (N.A), Merrill Lynch Pierce Fenner and Smith and Credit Suisse Securities (USA) LLC.
The tribunal also ordered the watchdog to confine its case to "one of a single over-arching conspiracy" while "providing more detail on such a conspiracy."
In line with common law precedent, it "found that it did not have jurisdiction to issue an order requiring the foreign banks to pay any administrative penalty as such an order would not be effective," it said.
But the commission may instead seek an order declaring the conduct of these foreign banks with no presence in South Africa - if found guilty - to be anti-competitive, without issuing penalties to them.
With regards to foreign banks with a presence in South Africa, fines in the event of a conviction will be calculated based on the turnover of the representative unit in the country, the Tribunal said.
The commission said the tribunal's verdict "takes us closer to the banks to respond and attend to the merits of the case."
"Considering that this is quite a lengthy judgment, we are currently studying it and will respond in full once we have applied our mind to the contents," it added in a statement.