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The UK Competition and Markets Authority (CMA) has imposed a £104.5 million ($132.4 million) fine on Citi, HSBC, Morgan Stanley, and the Royal Bank of Canada (RBC) for exchanging sensitive information related to the UK government bond market.
The investigation, covering activities between 2009 and 2013, found that traders at these banks had engaged in one-on-one discussions via Bloomberg chatrooms, where they shared competitively sensitive details about UK bonds, also known as gilts. The exchanges took place in the aftermath of the global financial crisis, during a period when the Bank of England was conducting regular government bond auctions to stabilize the economy.
The CMA had already ruled in May 2023 that these banks, along with Deutsche Bank, had violated competition laws. However, Deutsche Bank was granted immunity from penalties after self-reporting its involvement and cooperating with the investigation.
The traders’ conversations included market-sensitive information about government debt auctions, gilt asset swaps, and sales of gilts to the Bank of England, according to the CMA.
A spokesperson for Citi stated:
“We are pleased to resolve this longstanding matter with the CMA from over a decade ago. We cooperated fully with the CMA and remain committed to ensuring full regulatory compliance.”
Deutsche Bank also emphasized its cooperation, noting that it proactively reported the issue to UK authorities. The other banks have yet to comment on the ruling.
Juliette Enser, executive director of competition enforcement at the CMA, reinforced the regulator’s stance, stating:
“The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anti-competitive conduct. The fines would have been substantially higher had the banks not already taken unusually extensive steps to ensure this does not happen again.”
This ruling highlights the CMA’s strict approach to financial market integrity and reinforces the importance of regulatory compliance in the banking sector.
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