BNP Paribas S.A. ("BNP") agreed to pay a $246 million fine to settle charges that it engaged in "unsafe and unsound practices in the foreign exchange" ("FX") markets.
In a July 2017 Order, the Board of Governors of the Federal Reserve System ("FRB") alleged that certain BNP traders used electronic messaging systems to communicate with competitors about trading positions, including by providing confidential customer information. The FRB determined that BNP did not have adequate policies, procedures or oversight mechanisms to identify and address misconduct by the FX traders. The FRB found that BNP cooperated fully with the investigation and undertook remediation efforts. As part of the settlement, BNP agreed to comply with certain enhanced requirements. (See also previous coverage of FRB Executive Vice President Simon Potter encouraging FX market participants to adopt the FX Global Code, a set of best-practice principles for operating within FX markets.)
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