By Luke Jeffs
LONDON, Jan 24 (Reuters) - ICAP said it was being investigated by the British regulator over Libor setting, making the world's largest broker the first non-bank to confirm it has been linked with the scandal over fixing the lending rate.
As an inter-dealer broker, ICAP acts as an intermediary between the world's largest investment banks, many of which are involved in setting the Libor rate.
A British judge on Thursday forced Barclays to identify top executives alongside traders linked to the Libor probe, naming ex-CEOs Bob Diamond and John Varley and current Finance Director Chris Lucas despite requests for anonymity.
ICAP does not contribute to the Libor setting process but regulators have called into question the role that individual brokers, at ICAP and rival firms, may have played as conduits to manipulation by traders working at investment banks.
London-based ICAP said in a regulatory filing on Thursday it had been told by the Financial Services Authority (FSA) that one of its subsidiaries was under investigation.
ICAP shares were down 3 percent to 317.1 pence a share at 1534 GMT.
"The investigation is confidential, accordingly no further comment will be made at this stage," the broker said in a statement.
The admission followed a Financial Times newspaper report on Thursday that ICAP had been drawn into the FSA's investigation.
More than a dozen banks around the world have been scrutinised by regulators as part of an investigation into the suspected rigging of interbank rates, which are used to price trillions of dollars of financial instruments.
Barclays was fined $453 million by global regulators in June last year for manipulating key interest rates while UBS was hit with a $1.5 billion bill last month for its role in rigging the interest rate.
Royal Bank of Scotland is braced for fines of between 400 million pounds and 500 million pounds ($803 million) for its role in the interest rate rigging scandal, sources familiar with the matter said earlier this month.