RBS bans multi-dealer online chat rooms

Chat rooms have been a focus for regulators investigating manipulation of interest rates

Royal Bank of Scotland’s markets division has banned the use of multi-dealer online chat rooms. Photo: Bloomberg

Royal Bank of Scotland’s markets division has banned the use of multi-dealer online chat rooms. Photo: Bloomberg

Thu, Dec 19, 2013, 10:09

Royal Bank of Scotland’s markets division has banned the use of multi-dealer online chat rooms, joining rival banks that have taken similar action in response to regulatory scrutiny.

Chat rooms have been a focus for regulators investigating manipulation of the Libor and Euribor benchmark interest rates and possible rigging in the $5.3 trillion-a-day foreign exchange market.

Permanent chat rooms with workers at other banks, bank entities or competitors are prohibited, as well as those with clients, brokers and securities firms, unless certain criteria are met, according to the person.

RBS told the division’s trading staff that internal chats should be limited to its own systems and used only for business purposes, said the person, asking not to be named because the move wasn’t public.

JPMorgan Chase will ban traders from using multidealer chat rooms, a person briefed on the matter said this week.

Deutsche Bank said it will widen a prohibition on such exchanges to include its entire investment- bank unit and transaction-banking business next year.

RBS handed over records of instant messages to UK regulators after concluding a former currency trader’s communications with counterparts at other firms may have been inappropriate, two people with knowledge of the matter said in October.

The messages related to the dealer’s trading positions, those people said.

Agencies