ICAP to fight €14.9m Brussels fine 

The UK interdealer broker said the fine handed out by the European Commission on Wednesday was “wrong both in fact and in law”.

A charge-sheet served against ICAP last year accused it of facilitating illegal arrangements between banks in markets for the yen-based London interbank offered rate and yen Tibor, the Tokyo interbank offered rate.

The allegations covered periods between 2007 and 2010. ICAP said the fine was based on the same underlying case for which it had been fined £55m by the UK and US regulators in September 2013.

“Today’s decision to fine the broker ICAP sends a strong signal that assisting companies in their cartel activities has severe consequences,” said Margrethe Vestager, the EU antitrust commissioner.

She added that the ruling marked the end of its investigation into alleged manipulation of rates based on the Japanese currency. That was only one strand of a long-running Commission investigation into manipulation of interbank lending benchmarks, such as Libor and its European sister benchmark Euribor, which involves up to 11 financial groups. So far, six banks and an interdealer broker have been fined €669m for colluding on yen-Libor products. The others admitted their involvement in the cartels.

ICAP’s fine is based on its alleged infringements of anti-competitive rules, whereas the penalties levied by the UK Financial Conduct Authority and the Commodity Futures Trading Commission were based on breaches of its systems and controls.

ICAP said it had not been shown any evidence of the effect of its actions on prices and competition in the market. The vast interest rate swap market is largely conducted bilaterally and on the phone between banks. The company acts as a middleman in the market, moving large and illiquid blocks of assets such as swaps between buyers and sellers. It did not participate in the daily Libor rate-setting process, although some of the products it does trade are based on it.