IAP.L Regulatory News (IAP)

9 Nov 2005 15:00

ICAP PLC09 November 2005 ICAP receives complaint from NAB regarding FX Options business in Singapore London, November 9 2005. ICAP plc (IAP.L) has received correspondence fromNational Australia Bank (NAB) alleging that revaluation data, supplied by anindividual within one of ICAP's Singapore subsidiaries (a member of the TFS-ICAPjoint venture), helped mask trading losses in NAB's foreign exchange (FX)options business. On 27 January 2004 NAB announced that it incurred FX trading losses of A$360million (£158 million). Detailed reports following full investigations intothese losses were published by PriceWaterhouseCoopers & the AustralianPrudential Regulation Authority (APRA) in March 2004* and indicated that NABincurred these FX trading losses between April 2003 and January 2004. The PWCreport includes descriptions of how certain NAB dealers concealed losses byprocessing false spot FX and false FX option transactions, booking one-sidedinternal FX option transactions and using incorrect dealing rates for genuinetransactions. The reports analyse the cause of these trading losses, includingthe methods of concealment employed by the NAB dealers, repeated failures of NABrisk management, absence of NAB financial controls, gaps in NAB back officeprocedures, inadequate NAB corporate governance and NAB corporate culturalweaknesses. NAB accepted the findings of the PWC report on 28 April 2004. Neither the ICAP Group nor TFS-ICAP accept any responsibility for these NAB FXtrading losses and intend to vigorously contest any claim which may be madeagainst them in this matter. ICAP has been informed that a similar allegation has been asserted by NABagainst another inter-dealer broker, which is not a party to the joint venture,in respect of these NAB FX trading losses. Enquiries Mike Sheard (44) 20 7050 7103 Information for editors: TFS-ICAP was originally formed in July 2000 as a joint venture by merging theOTC FX Options divisions of the TFS Group and the ICAP Group. TFS-ICAP hasoffices in New York, London, Frankfurt, Copenhagen, Sydney, Tokyo and Singapore. About ICAP: ICAP is the world's largest interdealer broker and following the acquisition ofthe BrokerTec fixed income securities businesses is the world's leadingelectronic broker of fixed income securities with a daily average transactionvolume in excess of $1 trillion, 50% of which is electronic. The Group is activein the wholesale markets for OTC derivatives, fixed income securities, moneymarket products, foreign exchange, energy, credit and equity derivatives. Pleasego to www.icap.com for more information. * Copies of the PriceWaterhouseCoopers and Australian Prudential RegulationAuthority reports can be found at http://www.nabgroup.com/0,,44213,00.html andhttp://www.nabgroup.com/0,,45453,00.html respectively. This information is provided by RNS The company news service from the London Stock Exchange