London FX dealers can trade trillions, without being registered

Three London-based traders suspended or fired as part of a global investigation into alleged collusion and price-rigging in the foreign exchange market were not registered by Britain's financial market watchdog, revealing inconsistencies in the oversight of the world's biggest marketplace, Reuters analysis of the Financial Conduct Authority's (FCA) filings has shown.

This highlights one of the difficulties in monitoring large, cross-border, over-the-counter markets, such as foreign exchange which is the world's largest financial market yet also its least-regulated - a "regulatory hole", according to Tracy McDermott, director of enforcement at the FCA. These gaps are not apparent in markets such as stocks, which are traded on more tightly monitored and regulated exchanges.

"Spot FX trading isn't a regulated activity," McDermott told the Reuters Global Regulation Summit on Monday.

Any change to this state of affairs is up to the government, not the FCA, she added.