Nine of the largest banks in the world are settling a long-running lawsuit that accuses them of conspiring to rig a $465.9 trillion market.

Lawyers representing investors have filed for preliminary approval of a $46 million cash settlement against JPMorgan Chase, Bank of America, Goldman Sachs, BNP Paribas, Citigroup, Deutsche Bank, Morgan Stanley, NatWest and UBS to end an eight-year-old antitrust suit.

Representing the Public School Teachers' Pension and Retirement Fund of Chicago, the Los Angeles County Employees Retirement Association and other institutional investors, lawyers say the banks have been conspiring for years to keep the interest rate swap market inefficient and antiquated in order to extract as much as possible in fees.

Interest rate swaps allow two parties to trade interest cashflows for a given period of time.

The plaintiffs say that the interest rate swap market is clearly ready for fast efficient trading on electronic exchanges, but that the defendant banks have gone out of their way to make sure it only exists in an antiquated over-the-counter (OTC) market that they dominate.

"By blocking the entry of exchanges into the IRS market, the Dealer Defendants Dealers force investors to trade with them in an opaque and inefficient over-the-counter market which allows the Dealer Defendants to extract billions of dollars in higher fees and costs, year after year, from the class members in this case.

The Dealer Defendants maintained this profit center by conspiring to squash every potential market entrant that threatened to bring competition and transparency to the buy-side in the IRS market. Since at least 2007, as detailed in the complaint, the Dealer Defendants have jointly threatened, boycotted, coerced, and otherwise eliminated any entity or practice that had the potential to bring exchange trading to investors in the IRS market."

According to lawyers, ironically, the banks have been using an electronic exchange-like platform to trade the instruments themselves, but have barred investors and the public from using it.

By keeping the IRS market inefficient and within their control, the plaintiffs say the defendant banks have raked in "tremendous profits" over the years.