U.K. FCA Said to Write to Brokers About Swiss Franc Rout FalloutSuzi Ring
The U.K. Financial Conduct Authority has written to about 90 brokers asking how they were affected by last week’s decision to scrap the Swiss franc’s cap on the euro exchange rate, a person with knowledge of the move said.
The financial markets regulator contacted the brokers as currency dealers tallied their losses after the Swiss National Bank’s surprise Jan. 15 decision sent the franc up as much as 41 percent against the euro, according to the person, who asked not to be identified because the letters aren’t public.
Dealers around the world struggled to cope with the surge in the franc, which also climbed more than 15 percent against all 150 currencies tracked by Bloomberg. Alpari (UK) Ltd. went into administration after failing to find a buyer for the London-based company. FXCM Inc., the largest U.S. retail foreign-exchange brokerage, had to get a $300 million cash infusion after losses threatened its ability to comply with capital rules.
Lara Joseph, a spokeswoman for the FCA, didn’t immediately respond to an e-mail request for comment.
The FCA letters were reported earlier today by the Financial Times.