(Adds New York banking regulator source)
By Steve Slater and Jamie McGeever
LONDON, Nov 7 (Reuters) - British regulators investigatingallegations of collusion and manipulation in the foreignexchange market could fine a group of six banks as early as nextWednesday, people familiar with the matter said.
The six banks are Switzerland's UBS, U.S. banks JPMorgan and Citigroup and Britain's HSBC,Barclays and Royal Bank of Scotland, sourcessaid. They are expected to be fined a total of about 1.5 billionpounds ($2.37 billion).
It would be the first settlement in the year-long globalprobe into the $5.3 trillion-a-day foreign exchange market.Around 35 traders have been suspended or fired by their banks.No individual or institution has so far been accused of anywrongdoing.
A group settlement could be appealing to the banks, afterBarclays in 2012 was singled out as the first bank to settlewith regulators over a global investigation into the rigging ofbenchmark interest rates.
Three sources said the Financial Conduct Authority (FCA) wasworking to release the coordinated settlement with the banks onWednesday, although they said that timetable could slip ifproblems emerge with details.
The regulator said there was no date confirmed for anysettlement. JP Morgan could not be immediately reached forcomment, and the other five banks all declined to comment.
U.S. regulators are also working towards a settlement. TheU.S. Commodity Futures Trading Commission could announce asettlement with a group of banks around the same time, one U.S.based source said.
The group of banks in the U.S. settlement was notnecessarily the same as the group in the UK deal, although therewould be overlap.
New York's banking regulator does not plan to coordinatewith the impending settlements involving the FCA and certainU.S. authorities, according to a person familiar with theregulator, New York's Department of Financial Services (DFS).
DFS superintendent Benjamin Lawsky views them as too weak,the source said, an indication he's likely to go after the bankslater and demand larger penalties.
Estimates on how much banks will be fined in total varywildly, especially because it is unclear how much the U.S.Department of Justice will seek as part of is ongoing criminalprobes into a group of global banks.
The UK fines are expected to be for lax internal complianceat the banks, oversight failures and possible market conductbreaches by individual employees, but not deliberate marketmanipulation, sources have said.
The British regulator could fine one bank between 300million and 400 million pounds, and the other five are expectedto be fined 200-300 million, one of the sources said.
The six banks all set aside money for potential settlementsof forex investigations in their third quarter results,signalling part of the process was near to a conclusion. The sixbanks and Bank of America, Deutsche Bank andCredit Suisse have set aside about $7 billion forlegal provisions.
HSBC this week specifically set aside $378 million for apotential settlement with the UK watchdog.
The regulator notified the six banks of its plannedsettlement eight weeks ago, the sources said. One said they hadto submit responses by Friday.
Earlier this year, banking research firm Autonomous put theworldwide potential settlement costs at around $35 billion.(1 US dollar = 0.6321 British pound) (Additional reporting by Karen Freifeld in New York and KirstinRidley Editing by Jane Merriman; Editing by Bernard Orr)
Barclays (BARC)
HSBC Holdings (HSBA)
