UK watchdog fines four banks sharing bond market information

London — Britain’s competition regulator has fined Citi, HSBC, Morgan Stanley and Royal Bank of Canada a combined £104.5m for exchanging sensitive information about UK government bonds.

The Competition and Markets Authority (CMA) said it had reached settlements with the banks over the sharing of information between 2009 and 2013.

The watchdog had found the four lenders and Deutsche Bank in breach of competition rules in relation to the matter in May 2023. Deutsche Bank, which along with Citi, had admitted to anticompetitive activity, was given immunity from the fine.

The investigation had found that the banks’ traders shared competitively sensitive information about aspects of the pricing of UK bonds, known as gilts, in one-to-one exchanges in Bloomberg chat rooms in the aftermath of the global financial crisis.

The Bank of England shored up the UK economy and markets after the financial crisis by buying government debt through regular auctions.

Individual traders began sharing market-sensitive information on those auctions by the UK’s debt management office, the subsequent buying and selling of gilts and gilt asset swaps and sales of gilts to the Bank of England, the CMA said.

A Citi spokesperson said: “We are pleased to resolve this long-standing matter with the CMA from over a decade ago. We co-operated fully with the CMA and remain committed to ensuring full regulatory compliance.”

A Deutsche Bank statement said that it “proactively reported the issue to the UK authority and co-operated fully in the subsequent investigation”.

The other banks did not respond immediately to requests for comment.

“The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anticompetitive conduct,” said Juliette Enser, executive director of competition enforcement at the CMA.

“The fines would have been substantially higher had the banks not already taken unusually extensive steps to make sure that this doesn’t happen again.”

Reuters