The UK regulator, the Competition and Markets Authority (CMA), has imposed fines totaling £104.5 million on Citi, HSBC, Morgan Stanley, and the Royal Bank of Canada for sharing confidential information regarding UK bonds from 2009 to 2013.
In May 2023, the CMA accused these four banking institutions, along with Deutsche Bank, of breaching competition rules. The violations involved communications among individual traders in online Bloomberg chatrooms, which entailed divulging details regarding the pricing of UK government bonds, especially gilts and gilt asset swaps.
Deutsche Bank was granted immunity from fines after confessing to anti-competitive behavior and participating in the CMA’s leniency program. Citi also acknowledged its involvement and received a reduced penalty. All four banks have come to a settlement agreement with the CMA.
A spokesperson for Citi expressed satisfaction at resolving the issue, stating, “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.” Meanwhile, Deutsche Bank emphasized its proactive reporting of the issue to UK authorities and its full cooperation during the investigation.
The fines levied against the banks are as follows, taking into account leniency and settlement discounts:
– Citi: £17.16 million
– HSBC: £23.4 million
– Morgan Stanley: £29.7 million
– RBC: £34.2 million
Juliette Enser, the executive director of competition enforcement at the CMA, stated, “Following constructive engagement between the banks and the CMA, we are pleased to have settled these five cases involving the sharing of competitively sensitive information about pricing. The financial services sector is crucial to the UK economy, contributing billions annually, and it is essential for it to operate effectively. Only through healthy and competitive markets can we ensure businesses and investors have the confidence to invest and grow—for the benefit of all in the UK.”