George Osborne
George Osborne has apparently written the SFO, granting it more cash to fuel its FX fixing probeReuters

Britain's government is set to grant the Serious Fraud Office additional funding to deal with a "major" criminal investigation into a number of individuals that were allegedly trying to manipulate currency markets.

According to a UK treasury letter, seen by a source that was cited by Reuters, UK Chancellor George Osborne wrote to the SFO, confirming that the Treasury will give the group the money it needs for its extensive probe.

"I understand that the SFO is in the early stages of a major investigation into forex trading. Given the importance of this work, the Treasury will provide the required funding for this investigation," said the letter.

Last month, the SFO requested an additional £26.5m (€33.5m, $42.4m) from the government in a bid to tackle the raft of complex investigations it has under its belt.

On 13 November, the FCA and CFTC fined five banks - Citibank, HSBC, JPM, the Royal Bank of Scotland (RBS) and UBS - a combined total of $3.4bn (£2.1bn, €2.7bn) for their role in the manipulation of the foreign exchange market.

Other authorities have hit a number of these banks with extra penalties.

The Swiss Financial Market Supervisory Authority (Finma) also initiated enforcement proceedings against eleven people involved in the UBS case.

The FX Market

The FX market is one of the largest and most liquid markets in the world with a daily average turnover of $5.3tn, 40% of which takes place in London.

The spot FX market is a wholesale financial market and spot FX benchmarks (also known as "fixes") are used to establish the relative value of two currencies. Fixes are used by a wide range of financial and non-financial companies, for example to help value assets or manage currency risk.

The FCA's investigation focused on the G10 currencies, which are the most widely-used and systemically important, and on the 1600 hours WM Reuters and 1315 hours European Central Bank fixes.

Source: FCA