The payment, compensating for alleged damage to British markets and resolving all outstanding claims against Sumitomo, represents the biggest payment made to the FSA.
Sumitomo, which employed Hamanaka, paid the City's super-regulator pounds 5m to cover its time, effort and expenses in investigating the fraud.
In the US, the Commodity Futures Trading Commission (CFTC) fined Sumitomo $125m (pounds 77m). Sumitomo expects to set aside $25m to compensate other interested parties.
Hamanaka confessed in June 1996 to conducting unauthorised trades in copper futures on a huge scale in an effort to corner the market. The illegal trading had gone on for 10 years, during which time he became known as "Mr Five Per Cent" - because of his alleged share of the copper market.
He was charged in Tokyo with forgery and fraud and pleaded guilty. Tokyo District Court has sentenced him to eight years in prison but he has appealed.
The FSA had begun investigating Hamanaka's activities in early 1996. Traders had pointed to a large and unexplained "backwardation" in copper - the cash price was higher than the future price.
Regulators' suspicions were aroused because the cost of storing and funding the copper should push the future price higher than the cash price. Market rumours at the time said the cause was deliberate manipulation of the market.
The FSA alleged that Hamanaka's conduct had damaged the reputation of British markets and claimed it had incurred hefty costs. Sumitomo did not accept the allegations but has co-operated with investigators.
The American CFTC said it had found that markets were unlawfully manipulated in 1995 and 1996 because of Hamanaka's unauthorised trades. It also said he had carried out the illegal trades through a New York-based copper merchant, which it refused to name.
The FSA is still involved in an international investigation of the copper scandal, which cost Sumitomo $2.6bn, in partnership with Japanese and US authorities. British individuals and companies, including traders and market-makers in copper, are still being investigated.
The Serious Fraud Office is also investigating whether there was a conspiracy to defraud which went wider than Hamanaka.
Martin London, a partner at Paul Weiss Rifkind Wharton & Garrison, lawyers for Sumitomo, said the company itself had been defrauded. "The company will, in the US, UK, Japan and elsewhere, vigorously pursue those who helped Mr Hamanaka defraud Sumitomo," he said.
The FSA said it had received "prompt valuable and extensive co-operation" from Sumitomo since Hamanaka's confession in June 1996.
The pounds 5m settlement is a fraction of the pounds 77m CFTC fine because the FSA has no power to fine companies directly.Reuse content