Global banks Deutsche Bank AG and BNP Paribas are slapped a combined fine of 176 million won ($157,872) for fixing prices of forward exchange contracts in South Korea, the country’s antitrust regulator said on Tuesday.

According to the Fair Trade Commission (FTC), the two foreign banks allegedly rigged bidding prices for forward currency contracts in a series of auctions after they agreed to take turns to win the financial contracts from two local companies. The regulator fined Deutsche Bank and BNP Paribas with 71 million won and 105 million won, respectively.

The FTC said Deutsche Bank and BNP Paribas rigged prices for dollar forwards in 44 auctions placed by one company between April 2011 and November 2014 by discussing and choosing a successful bidder in advance through online messengers and phone calls.

The two foreign banks were also alleged to agree to let BNP Paribas to win in a separate euro currency forward bid placed by another company in November 2011 by fixing the bidding price in advance.

Forward exchange contract is a type of foreign currency transaction that allows two parties who sign on a forward currency agreement to swap two designated currencies at a certain rate at a specific time in the future. Companies often use forward currency contract to hedge a foreign exchange position, and the rate is determined by adding swap basis to the current rate.

The regulator said that it will continue to monitor the foreign derivatives products market to root out rigging activities.

By Na Hyun-joon

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