Japanese regulator orders 30-day suspension of Citigroup, UBS operations

Japan's securities watchdog has orderd the Japanese arms of Citigroup and UBS to suspend operations for 30 days for allegedly trying to manipulate short-term interest rates for inter-bank trading.

The suspension would start from 10 January 2012.

The regulator's decision came after former staff at UBS Securities Japan and Citigroup Global Markets Japan were accused of trying to gain an unfair advantage for their firms through interest rate manipulation.

Last week, the Securities and Exchange Surveillance Commission had said that a British trader with UBS Securities Japan had asked banks participating in the Tokyo inter-bank offered rate, or Tibor, to offer rates that would help his derivative transactions.

He also allegedly made similar moves related to the London inter-bank offered rate or Libor, it added.

The rates are the average interest rate that major banks in Tokyo and London charge for inter-bank lending, and are widely used as benchmark rates for other loans such as corporate borrowing.