FX-Linked Note Market Is Shrinking as Regulator Circles
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The U.S. market for currency-linked structured products, after shrinking by two-thirds in the past three years, may see more investors flee after regulators are said to be broadening a foreign-exchange investigation.
The U.S. Justice Department is looking into whether UBS Group AG misled clients in the marketing and selling of its V10 Enhanced FX Carry Strategy to institutional investors, according to people with knowledge of the situation. The inquiry is part of a broader investigation into manipulation in the currency market where six banks, including UBS, paid $4.3 billion in November to settle charges with regulators in the U.S., U.K. and Switzerland.