• CMA and 4 banks agree to settle separate cases related to UK government bonds, known as gilts
• Citi, HSBC, Morgan Stanley and Royal Bank of Canada will pay fines totalling over £100 million – Deutsche Bank has immunity for reporting its conduct which began in 2009 and ended in 2013
• Individual traders at each of the banks took part in private one-to-one Bloomberg chatrooms in which they shared sensitive information relating to buying and selling gilts on specific dates

Gilts are an important type of UK government bond that help to finance public spending. Investors in gilts lend money to the UK government and in return receive a steady and stable stream of cash interest payments.

Healthy competition drives investment, innovation and growth, and it is important that competitors decide their price and strategies independently in order to ensure effective competition in a market.

Following an investigation by the Competition and Markets Authority (CMA), the banks have agreed to pay fines for specific instances in which traders shared competitively sensitive information about aspects of the pricing of UK bonds. The sharing of information occurred in one-to-one exchanges between traders about the buying and selling of gilts and gilt asset swaps.

This conduct took place on various dates between 2009-2013, with the last exchanges occurring in 2010 for HSBC, 2012 for Morgan Stanley, and 2013 for each of Citi, Deutsche Bank and Royal Bank of Canada. Since then, the banks have implemented extensive compliance measures to ensure this behaviour does not happen again.

Juliette Enser, Executive Director of Competition Enforcement at the CMA, said:

Following constructive engagement between the banks and the CMA, we are pleased that we have been able to settle these 5 cases involving the past sharing of competitively sensitive information about pricing.

The financial services sector is an integral part of the UK economy, contributing billions every year, and it’s essential that it functions effectively. 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.

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.

Unlawful exchanges in one-to-one chatrooms

Each of the exchanges took place in separate bilateral online Bloomberg chatrooms between individual traders at 2 banks [see Figure 1] and included information relevant to the pricing of UK government bonds – specifically, gilts and gilt asset swaps.

In particular, each one-to-one exchange of information took place in relation to one or more of the following: firstly, the sale of gilts by the UK Debt Management Office via auctions on behalf of HM Treasury, secondly the subsequent buying and selling, i.e. trading, of gilts and gilt asset swaps, and thirdly the selling of gilts to the Bank of England – known as ‘buy back’. Not all banks were involved in unlawful exchanges in all 3 contexts.

Figure 1 – Parties to the separate one-to-one exchanges

Consequences

Four banks – Citi, HSBC, Morgan Stanley and Royal Bank of Canada – have settled and agreed to pay fines totalling £104,460,000.

Deutsche Bank is exempt from a financial penalty as it alerted the CMA to its participation in the chats via the authority’s leniency policy. Citi applied for leniency during the CMA’s investigation and as a result has received a reduced fine.

In agreeing to settle with the CMA, the banks have agreed to pay these fines, bringing the investigation to a close.

The fines for each bank are:

• Citi: £17,160,000 – this includes a 35% leniency discount and a 20% reduction for settling in advance of the CMA issuing its Statement of Objections
• HSBC: £23,400,000 – this includes a 10% reduction for settling after the CMA issued its Statement of Objections
• Morgan Stanley: £29,700,000 – this includes a 10% reduction for settling after the CMA issued its Statement of Objections
• Royal Bank of Canada: £34,200,000 – this includes a 10% reduction for settling after the CMA issued its Statement of Objections

The fines take into account the length of time that has passed since the end of the infringements and the extensive compliance measures that the banks have implemented since then – some of which were in place before the start of the CMA’s investigation.

The firms have until 22 April 2025 to pay their fines.

More information on this investigation and the CMA’s update is available on the UK government bonds: suspected anti-competitive arrangements case page.

Source: CMA