The Financial Conduct Authority (FCA) has confirmed for the first time it has joined an international probe into the alleged rigging of the multi-trillion dollar trade in interest rate derivatives.
Martin Wheatley, chief executive of the FCA, said the regulator was investigating the potential manipulation of the ISDAfix that is used to price much of the $379trn (£242trn) interest rate swap market, the Telegraph reports.
"We have asked for records, the CFTC [US Commodity and Futures Trading Commission] have asked for records, and I think that one or two other others have as well," he said.
Giving evidence to the Treasury Select Committee, Wheatley said the probe had a "formal status", but was "at an early stage", adding it was "too early to say" how a big a scandal it could be.
Wheatley's admission marks the first public comments by the FCA on the ISDAfix probe and is the first confirmation the regulator has set up its own inquiry. The regulator was previously understood to have only been assisting a US investigation.
Wheatley's confirmation came in response to questions from Andrew Tyrie MP, chairman of the Committee, who asked whether the FCA was investigating ISDAfix and "Treasure Island".
Treasure Island is a reference to the nickname given to the New Jersey-based US interest rate swaps desk of ICAP, which was linked in reports earlier this year to allegations of price manipulation in the swaps market.
This week, ICAP was reported to be close to a £70m settlement over its alleged involvement in Libor-rigging.
A spokesman for ICAP said: "ICAP is cooperating with the CFTC's wider inquiry into this area and due to its pending nature, we will not be commenting further.
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