(Reuters) - The Ontario Securities Commission has issued a notice of hearing to Royal Bank of Canada (TO:RY) and Toronto-Dominion Bank (TO:TD) to settle charges of forex trading malpractices, the Canadian regulator said on Monday.
Both banks face charges relating to allegations that their traders used confidential customer information to gain potential advantage in foreign exchange transactions that took place between 2011 and 2013, the regulator said.
The hearing will be held on Friday at the commission's office in Toronto.
The banks are accused of failing to have sufficient controls in their FX trading business during the three-year period, according to two separate 'statements of allegations' from the Ontario Securities Commission.
The regulator also said the banks' lack of sufficient controls allowed inappropriate sharing of confidential client information by their respective FX traders with traders at other competitor firms.
The commission's staff have identified hundreds of prohibited disclosures throughout 2011-2013, the notices said.
"The conduct covered by the allegations occurred many years ago, and we have taken a number of steps since that time to enhance our controls," RBC said in a statement cited by Canadian media.
"We will discipline, up to and including termination, anyone on our platform who does not comply with our high standards of behavior and the applicable laws and regulations in any jurisdiction," RBC said in a statement quoted by the Financial Post
A TD Bank statement quoted by the media said the bank takes "matters of this kind extremely seriously," without adding further details.
The banks did not immediately respond to Reuters requests for comment outside regular business hours.