UBS bans chat rooms

UBS bans chat rooms

UBS has become the latest bank to ban traders from using multi-dealer and social chat rooms, which are being trawled by regulators for evidence of market manipulation.

In an internal memo from UBS's executive committee, seen by Bloomberg, employees at the investment banking division have been told that "all social related chat rooms are prohibited and must be closed immediately".

The ban also applies to multi-bank and dealer chat rooms, with requests for exceptions having to be approved by the executive committee member and compliance officer responsible for the specific business.

According to the FT, Barclays, RBS and Citigroup have all already banned chat rooms, while JPMorgan is reportedly mulling whether to follow suit.

Logs of chats between traders on Bloomberg terminals and Thomson Reuters desktops have formed a central plank of investigations into the Libor fixing scandal and the latest allegations of foreign exchange rates manipulation.

"Recent events within our industry serve as a serious reminder to be mindful at all times to use appropriate language and behavioral standards in all of our communication, no matter the channel," says the UBS memo.

The bank warns traders that it has "extensive monitoring" in place to "identify data leakage or misuse of electronic communication" and that failure to stick to the rules will be a sackable offence.

Comments: (5)

Neil Crammond
Neil Crammond - DIVENTO FINANCIALS - London 28 November, 2013, 11:10Be the first to give this comment the thumbs up 0 likes

so despite the fines for libor manipulation ; UBS still feel that cheating and abuse is going on !

Perhaps the offer on suspending their trading licences would be a better deterrent ?

Andrew Miller
Andrew Miller - Net Effect Ltd - London 28 November, 2013, 11:27Be the first to give this comment the thumbs up 0 likes

This response seems unfortunate in a couple of ways: (1) It may dampen enthusiasm for, or even kill, progress on proper open (and auditable) federated messaging / chat, along the lines of the Markit initiative; (2) It's treating a symptom, not the disease. Price fixing has long been illegal; I suspect that banning a visible channel will merely drive such traffic back to voice - much easier to avoid surveillance.

A Finextra member
A Finextra member 29 November, 2013, 11:57Be the first to give this comment the thumbs up 0 likes

Agree with Andrew here. 

The thing with BYOD, Social Networking is that there are so much positives to be derived from these. Understandably it can also be used for wrong purposes too. The trick would be to find a way to "listen to the chatter" which is where technology comes into play.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 29 November, 2013, 17:56Be the first to give this comment the thumbs up 0 likes

NetSpend And Actiance Show Banks The Social Media Way To Go

According to Actiance's website, "Actiance's valued customers include the top 10 banks in the US, the top 5 banks in Canada, and 8 of the 10 top banks in Europe." Wonder if banks are forced to take this step despite using Actiance and similar technologies.

Anthony Cossey
Anthony Cossey - Fixnetix ltd - London 06 January, 2014, 12:09Be the first to give this comment the thumbs up 0 likes

a modern phone with 3G or 4G circumvents any corporate bans, plus voice calls between disposbale PAYG cellphones is the the best of breed protection any market rigger needs. The evidence of the LIBOR riggers stunned me just by the fact how stupid someone breaking the law can be...."email, yeah they wil never check that". However not all riggers or market maniplulators will be so ill informed. the more tech savvy will be using private chat software like jabber or even public IRC chat rooms (like freenode) that computer hackers have been using for years. However i would wager that services like CRYPTOCAT will be the newest tool in the untraceable messaging game ""