The UK Competition and Markets Authority (CMA) has fined four major banks—HSBC, Citi, Morgan Stanley, and Royal Bank of Canada (RBC)—a total of £100.5 million after finding that traders used Bloomberg chatrooms to exchange sensitive information about UK government bonds (gilts).
The fines follow a long-running investigation by the CMA, which uncovered that individual traders at Citi, HSBC, Morgan Stanley, RBC, and Deutsche Bank had shared details of bond trading activity on specific dates between 2009 and 2013.
Breakdown of Fines
- RBC: £34.2 million (largest fine)
- Morgan Stanley: £29.7 million
- HSBC: £23.4 million
- Citi: £17.2 million
Deutsche Bank avoided a fine after self-reporting the misconduct, while Citi’s penalty was reduced by over 50% for settling during the investigation.
The banks have until 22 April to pay.
Regulator’s Response
Juliette Enser, the CMA’s interim executive director of competition enforcement, emphasized the importance of a well-functioning financial sector:
“The financial services sector is an integral part of the UK economy, contributing billions every year, and it’s essential that it functions effectively. The fines imposed today reflect the CMA’s commitment to dealing with competition law breaches and deterring anti-competitive conduct. The penalties would have been substantially higher had the banks not taken extensive steps to prevent similar misconduct.”
Bank Responses
- HSBC stated it was “pleased to put this investigation behind us,” noting that the misconduct involved a small number of historic communications with Deutsche Bank from 2009-2010. It highlighted that it has since transformed its compliance controls, which the CMA acknowledged.
- Morgan Stanley said it made a commercial decision to settle the case, which related to a single former employee’s actions nearly 15 years ago. The bank emphasized that there were no findings of market impact or financial benefit from the misconduct.
- Deutsche Bank confirmed that it proactively reported the issue to UK authorities and fully cooperated with the investigation, which covered activity before 2014.
The case underscores the CMA’s crackdown on anti-competitive practices in financial markets and the growing emphasis on compliance and transparency within the banking industry.
