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A Commerce Commission probe into the foreign exchange market was sparked by a whistleblower, the regulator said.
The commission is investigating possible manipulation of currency rates and benchmarks in foreign exchange markets, and said in a statement today it "was commenced as a result of a leniency application under the commission's cartel leniency policy."
The regulator can offer immunity from prosecution to the first member of a cartel who comes clean and provides evidence, as a means to stamp out anti-competitive conduct.
Policymakers have been sitting on legislation to criminalise cartel conduct since it was first introduced to Parliament in 2011. Commerce Minister Craig Foss introduced a supplementary order paper tweaking the legislation in December.
The New Zealand regulator's investigation into currency trading comes as at least a dozen authorities in North America, Asia and Europe conduct inquiries into claims traders colluded with their counterparts at rival banks to set foreign exchange rates by sharing client information.
The New Zealand dollar was the world's 10th most traded currency with US$105 billion in average daily turnover in April 2013 and accounting for about 2 percent of the global US$5 trillion traded daily, according to the Bank for International Settlements. The bulk of trading in the kiwi occurs outside New Zealand.