The UK markets watchdog has launched a preliminary investigation into the foreign exchange market after receiving complaints alleging that banks traded ahead of customer orders and attempted to manipulate benchmarks.

The Financial Conduct Authority requested information from several banks with large London foreign exchange businesses about their trading, people familiar with the matter said.

The two biggest players in the foreign exchange market, Citigroup and Deutsche Bank, with a combined market share of around 30 per cent, are among the institutions that have been asked for information, people familiar with the matter said. But there has been no suggestion that either institution is a target of the investigation, which was first reported by Bloomberg.