Royal Bank of Scotland will pay $85 million to settle CFTC charges that it tried to manipulate the U.S. Dollar International Swaps and Derivatives Association Fix rate, a benchmark for global interest-rate swaps and related derivatives.
The bank engaged in the activity over a five-year period from January 2007 to March 2012, making multiple trades to try and benefit “certain derivatives positions it held that were priced or valued off the USD ISDAFIX benchmark,” the Commodity Futures Trading Commission said in a news release issued Friday.
RBS traders offered and executed transactions in targeted interest rate products, including both swap spreads and U.S. Treasuries, at the critical 11 a.m. ET fixing time to benefit cash-settled swaptions held by RBS that were priced or valued against the USD ISDAFIX benchmark, the CFTC said.
The RBS settlement brings the total penalties issued by the CFTC since 2012 over benchmark abuses to $5.2 billion, of which $570 million is related to US ISDAFIX manipulation. Prior to the RBS settlement, the last announced CFTC penalty involving US ISDAFIX manipulation was on Dec. 21 to Goldman Sachs, which paid $120 million to settle charges.
Officials at RBS could not be immediately reached for comment.