ICAP Europe Ltd Reaches Settlements with FCA and CFTC
London, 25 September, 2013 – ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, today announces that one of its Global Broking division's subsidiaries, ICAP Europe Limited (IEL), has reached settlement agreements with the Financial Conduct Authority (FCA) and the U.S. Commodity Futures Trading Commission (CFTC) relating to the involvement of certain brokers in the attempted manipulation of YEN Libor by bank traders between October 2006 and January 2011.
Under the terms of the settlements, IEL has agreed to pay penalties of £14 million to the FCA and $65 million to the CFTC, totalling £55 million ($87 million). The detailed findings of the investigations are set out in the final notices published on the websites of the FCA and CFTC.
The Company has also been working closely and co-operating fully with an ongoing investigation by the U.S. Department of Justice (DOJ). The DOJ has not taken action against IEL nor any other ICAP company to date. Based on ICAP's present assessment of this matter, no provision has currently been made.
Michael Spencer, Group Chief Executive Officer, said: “We deeply regret and strongly condemn the inexcusable actions of the brokers who sought to assist certain bank traders in their efforts to manipulate YEN Libor. Their conduct contravenes all that ICAP stands for. As soon as their actions came to light, we provided assistance to regulators in the U.S. and U.K. to understand what had happened. None of the three individuals at the centre of the activity remains with the firm. Others are either no longer with the company or are being disciplined.
"There were no findings that any senior management were involved in this matter nor that the firm engaged in deliberate misconduct. Both the CFTC and the FCA have acknowledged our co-operation and the FCA notes the significant improvements the entire Group has made to its control infrastructure since 2010.
"ICAP companies play a vital role in global markets. It is deeply regrettable that the actions of these individuals have compromised the efforts of our 5,000 employees around the world, who work hard to earn the trust and confidence of our customers and other stakeholders. We have learned from this, we will further improve our risk and compliance systems and we will continue to provide our clients with the highly professional service that they expect across many markets and geographies."
|Brigitte Trafford||Director of Corporate Affairs||+44 (0)20 7050 7103|
|Alex Dee||Head of Investor Relations||+44 (0)20 7050 7123|
|Neil Bennett/Rebecca Mitchell||Maitland||+44 (0)20 7379 5151|
|Dawn Dover/Jim Fingeroth||Kekst||+1 212 521 4817/4819|
The ICAP Group is a leading markets operator and provider of post trade risk mitigation and information services. Group companies provide services that match buyers and sellers in the wholesale markets in interest rates, credit, commodities, FX, emerging markets and equity derivatives through voice and electronic networks. Through our post trade risk and information services we help our customers manage and mitigate risks in their portfolios. For more information, please go to www.icap.com.
Notes to editors
ICAP now spends £17 million per year on compliance, risk and internal audit.
The Group substantially increased its investment in compliance in 2010. The changes ICAP made were reviewed by an external accountancy firm on two occasions in 2011, which concluded that the restructuring of the compliance function had been "transformational" and that the comprehensive market abuse oversight framework that ICAP had developed and introduced placed it ahead of many other firms.
Key features of ICAP's control risk infrastructure include:
- Trade Surveillance: ICAP uses an automated surveillance system to review all alerts generated. It has used this since June 2011.
- Communications Monitoring: ICAP conducts comprehensive communications monitoring. It has used Global Relay in EMEA since July 2012 and Bloomberg Orchestria before that.
- Compliance Disciplinary Policy: ICAP has a specific Compliance Disciplinary Policy.
- Team: ICAP's approximately 50 dedicated compliance staff have a range of skills and backgrounds, including legal, broking, compliance and exchange experience.
- Group Head of Compliance appointed in 2010 with access to ICAP plc Board.
- Whistleblowing: Since 2011, ICAP has operated a confidential whistleblowing hotline.
- Training: Since 2010, ICAP employees around the world have completed some 27,000 training packages. Since 2011 they have made almost 4,500 references to compliance advisory staff (approximately 8 per day). ICAP believes this indicates a "check first" culture.
- Compliance Risk Management Framework (CRMF): ICAP has a holistic CRMF, a document that summarises its assessment of the regulatory risks facing the Group and ICAP's planned response to them by region and jurisdiction.
- Assurance Reviews: ICAP has a compliance assurance review program which complements its forensic Desk Review programme.
ICAP Europe Limited is authorised and regulated by the FCA.