The Swiss bank, UBS, imposed additional rules in 2014 on employees that restricts their ability to place personal trades while they are handling the transactions of other clients. This happened as several investigations were being made into possible improprieties in the foreign-exchange market.
Until this decision was made currency traders who worked at UBS were allowed to place their own trades while they were performing trades on behalf of UBS for clients. This comes from a variety of sources including former traders and other people familiar with the situation at UBS. Most of the biggest rivals of UBS have barred traders from making personal trades while on the job for years. Personal trading was limited to certain circumstances.
British regulators were investigating personal account trading by currency traders. They were looking for potential manipulation of foreign exchange markets. There are several large banks that were looking to settle with the British Financial Conduct Authority. They were likely to be found at fault for not preventing improper trading among its traders.
Several banks had even gone on record as saying that they have already set aside money in case they get fined by either U.S. or British investigations. One group of banks that includes Citigroup Inc., Royal Bank of Scotland, and Barclays PLC has admitted that they have set aside almost two billion dollars to cover possible penalties.
UBS stated that it was trying to cooperate with regulators probes as much as possible. They have already admitted to manipulating interest rates and to having a rogue trader that racked up more than a billion dollars in losses. These tightened rules allowed traders to carry out personal trades only if they get approved by managers and other compliance staff. These trades then had to be executed by brokers that have been preapproved by UBS compliance staff. On top of these new rules UBS has also banned mobile phones from trading floors.
Many traders used to perform a ton of day trades along with all of trades they were performing for work. Sometimes they would hold a position for an hour or less. Banks often have issue with personal trading because their traders sometimes have to switch currencies just like everyone else when they need to go on vacation. There are also no insider trading rules for trading. That being said many banks have started curbing personal trading in order to prevent the bank from getting in trouble.