Four of the largest banks in the world will pay fines totalling over £100m to the UK competition watchdog after traders shared market sensitive information about gilts in private chatrooms.
Individual traders at HSBC, Morgan Stanley, Citi, Deutsche Bank and Royal Bank of Canada all shared sensitive information about the pricing of UK government bonds in Bloomberg chatrooms between 2009 and 2013.
In a statement released this morning, the Competition and Markets Authority (CMA) confirmed that the banks have agreed to pay fines for this anti-competitive behaviour.
Citi faces a £17.2m fine, which includes a 35 per cent leniency discount and a 20 per cent reduction for settling before the CMA published its initial findings from the investigation.
HSBC will have to pay £23.4m, Morgan Stanley £29.7m and Royal Bank of Canada £34.2m, all of which include a 10 per cent discount for settling before the initial findings were released.
Deutsche Bank was exempt from a fine through the CMA’s leniency policy, which grants immunity or a reduction in penalty for a business that is involved in cartel activity, but reports it to the regulator.
“It is important that competitors decide their price and strategies independently in order to ensure effective competition in a market,” the CMA said.
It confirmed that the banks have put in place “extensive compliance measures” to ensure this behaviour does not happen again. The firms have until 22 April to pay their fines.
“Only through healthy and competitive markets can we ensure businesses and investors have confidence to invest and grow – for the benefit of all in the UK,” Juliette Enser, executive director of competition enforcement at the CMA said.
“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 make sure that this doesn’t happen again.”