More On Legal & Compliancefrom The Advisor's Professional Library
- Updating Form ADV and Form U4 When it comes to disclosure on Form ADV, RIAs should assume information would be material to investors. When in doubt, RIAs should disclose information rather than arguing later with securities regulators that it was not material.
- Agency and Principal Transactions In passing Section 206(3) of the Investment Advisers Act, Congress recognized that principal and agency transactions can be harmful to clients. Such transactions create the opportunity for RIAs to engage in self-dealing.
Regulators globally are broadening the spread of their investigations into rate setting that began with manipulation of LIBOR. As they explore how rates were set for pricing on foreign exchange derivatives, UBS and Royal Bank of Scotland Group have suspended traders in Singapore.
Bloomberg reported late Sunday that UBS suspended at least two foreign exchange traders and RBS one as investigations widen to include rates other than LIBOR.
Ken Choy, a director in the emerging markets foreign exchange trading unit at RBS, was identified by a source as the trader suspended by that bank. The two put on leave at UBS, said a person with knowledge of the matter, have run afoul of an internal probe into manipulation of nondeliverable forwards. These are derivatives used by traders to speculate on the movement of currencies subject to domestic foreign exchange restrictions.
Among the currencies involved in the rigging operation are the Malaysian ringgit and the Indonesian rupiah; both currencies’ movements against the dollar are among the NDFs traded in Singapore. Spot rates for both are set by the Association of Banks in Singapore, which arrives at the rates by using data submitted by banks. Profit can be increased by traders who can move those spot rates.
Last month the Monetary Authority of Singapore said it was adding an investigation into NDF rate-rigging to its broadening probe of rate manipulation that began with LIBOR.