Thu. Sep 19th, 2019

Planet Compliance

Innovation & Regulation in Finance

FCA publishes Decision Notice for former LIBOR trader

3 min read

The Financial Conduct Authority (FCA) has today published a Decision Notice in respect of Mr Arif Hussein, formerly a derivatives trader at UBS in London. This sets out the FCA’s finding that Mr Hussein is not a fit and proper person and its decision to prohibit him from any role in regulated financial services.

Mr Hussein disputes the FCA’s decision and has referred the matter to the Upper Tribunal at which the FCA and Mr Hussein will be able to present their cases. Accordingly, this decision notice has no effect pending the determination by the Tribunal. In relation to the FCA’s decision to prohibit Mr Hussein from any regulated role, the Tribunal will determine whether to dismiss the reference or remit it to the FCA with a direction to reconsider and reach a decision in accordance with the findings of the Tribunal. The Tribunal’s decision will be made public on its website.

Mr Hussein was Head of UBS’s GBP Rates Desk where he traded interest rate derivative products referenced to benchmarks including GBP LIBOR. The FCA has found that Mr Hussein understood that it would be improper for UBS’s Trader-Submitters to make LIBOR submissions with the aim of benefitting UBS’s trading positions. However, between 28 January and 19 March 2009 Mr Hussein engaged in 21 communications in which he informed UBS’s GBP Trader-Submitters of his preferences (or, occasionally, his lack of a preference) for GBP LIBOR rates. Mr Hussein’s preferences were based upon his trading positions. During this period such communications were routine and they ended only when Mr Hussein resigned from UBS. Mr Hussein closed his mind to the risk that UBS’s GBP Trader-Submitters would use his preferences to influence the GBP LIBOR submissions they made on behalf of UBS, with the aim of benefitting his trading positions. In so doing, the FCA found that he acted recklessly and so lacks integrity.

The FCA statement and related information can be found here.

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