The UK Competition and Markets Authority (CMA) has provisionally determined that Citi, Deutsche Bank, HSBC, Morgan Stanley and the Royal Bank of Canada illegally shared confidential information relating to UK sovereign bond trading in chat room conversations conducted at various times between 2009 and 2013.
“Information was exchanged in individual Bloomberg chat rooms between a small number of operators (“dealers”) who worked in banks and were involved in the buying and selling of UK government bonds (…) and included details about prices and other “aspects of of their business strategies.
In this sense, the Authority considers that by unlawfully exchanging sensitive information for the sake of competition rather than perfect competition, the banks allegedly involved “could have deprived those with whom they negotiated all the benefits of competition”, including, among others, Pension funds, the UK’s Debt Management Office and the UK’s taxpayers at last.
The CMA’s investigation is still ongoing, and if the regulator reaches a final conclusion that two or more banks are involved in anti-competitive activity, it will publish an infringement decision and could impose fines.
In this sense, the Capital Markets Authority confirmed that it was Deutsche Bank that alerted about its participation, while Citi requested leniency during the investigation.
“Both banks have admitted to engaging in anti-competitive activities,” the authority reported, adding that as long as they continue to cooperate and comply with the leniency terms, Deutsche Bank will not be fined and any fine charged by Citi, which has also entered into a settlement agreement with the CMA under which it will receive an additional discount. any fine imposed.
Similarly, the body determined that HSBC, Morgan Stanley and the Royal Bank of Canada had not admitted any wrongdoing, emphasizing that at this point, none of the banks should be presumed to have broken the law.
“In the aftermath of the global financial crisis, five global banks breached the law of competition by engaging in a series of one-on-one online exchanges of competitively sensitive information about the prices and other aspects of their trading strategies in UK bonds,” said Michael Grenfell, CEO. Compliance with the Capital Markets Authority.
“These alleged activities are extremely serious and justify the detailed investigation we have undertaken,” he added.
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