On the heels of settlements involving foreign exchange (FX) trader misconduct at a pair of big banks, the Ontario Securities Commission (OSC) is putting other large dealers on notice that it will be reviewing their oversight of FX trading.

An OSC hearing panel approved a pair of settlements on Friday with TD Bank and Royal Bank of Canada that will see them collectively pay more than $24 million to resolve allegations that they allowed FX traders to improperly share confidential client information in online chatrooms.

Now, the regulator is turning its sights on the rest of the industry by reviewing compliance oversight at the other large derivatives dealers.

“OSC staff are asking derivative dealers in Ontario to assess whether they have sufficient controls to manage the risks faced by their FX trading businesses,” the commission said in a statement on Friday, adding that it will review these assessments “and coordinate with other Canadian regulators as appropriate.”

“We expect derivative dealers in Ontario to take immediate action to assess their FX oversight program and confirm their compliance with the Global FX Code of Conduct,” said Kevin Fine, director of the OSC’s derivatives branch.

“Any dealers that identify problems with their compliance systems should promptly self-report to the OSC,” he added.

In Friday’s settlements, RBC agreed to pay $13.55 million while TD will pay $9.3 million, and both banks are paying $800,000 in costs to resolve the regulator’s allegations. The firms also agreed to audit their FX compliance systems.

“These are serious failings by two of the biggest, most sophisticated and well-resourced financial institutions in Canada,” said Jeff Kehoe, director of enforcement at the OSC.

“RBC and TD had the ability and means to properly monitor use of technology with known compliance risks in their FX trading, yet for more than three years, they failed to adequately do so. As a result, traders were free to engage in self-serving behaviour that put the banks’ economic interests ahead of their customers, other market participants and the integrity of the capital markets,” he said.

The OSC indicated that the sharing of confidential client information, including details such as trade sizes, timing, price or stop-loss levels, “allowed traders to gain a potentially unfair advantage in the market.”

Yet, the regulator also reported that it didn’t find any evidence of FX benchmark manipulation.