Royal Bank of Canada and Toronto-Dominion Bank have agreed to pay a combined C$24.5 million ($18.5 million) to settle charges of foreign exchange trading malpractices brought against the Canadian banks by a regulator, following a settlement hearing held on Friday. In separate statements of allegations, the Ontario Securities Commission (OSC) said this week that TD and Royal Bank of Canada had failed to have sufficient supervision and controls in their foreign exchange trading businesses from at least 2011 to 2013.

"The settlement will send a clear message to firms about the importance of promoting a culture of compliance," Cullen Price, Manager, Market Abuse Team, Enforcement at OSC said during TD's hearing. The two banks allowed the inappropriate sharing of confidential customer information by traders at the banks with their counterparts at other firms, the OSC said in the statement of allegations.

TD agreed to pay a combined C$10.1 million, split between fines to the commission and investigation cost, the OSC said. The total bill for RBC, Canada's biggest bank, came to C$14.4 million. "TD takes its obligations to have sufficient controls in its business very seriously. It's integral to its culture of serving customers efficiently. Bottom line is that TD's controls on FX trading is quite different today than it was 6-8 years ago," a TD representative told the hearing. Ahead of Friday's settlement hearing, RBC said the bank was "pleased to resolve this matter in cooperation with the OSC.

Copyright Reuters, 2019