Banks Hit With £105 Million Pound Fine For UK Bond Trading Misconduct

Four of the world’s largest banking institutions have been slapped with fines totalling nearly £105 million by Britain’s competition watchdog after their traders were caught sharing confidential information about UK government debt pricing through online chat platforms.

The Competition and Markets Authority revealed today that Citigroup, HSBC, Morgan Stanley and Royal Bank of Canada reached settlements over illegal information exchanges occurring between 2009 and 2013. Deutsche Bank, despite having a trader involved, escaped financial penalties by being the first to report the misconduct to authorities.

The illicit behaviour centred on gilts – British government bonds – with traders exchanging sensitive details about bonds being sold by the UK Debt Management Office on behalf of the Treasury. The misconduct extended to trading government bonds, associated derivatives, and gilt sales to the Bank of England’s quantitative easing programme.

Royal Bank of Canada received the heftiest penalty at £34.2 million, followed by Morgan Stanley at £29.7 million and HSBC at £23.4 million. Citigroup’s fine was reduced to £17.2 million after receiving both a 35% leniency discount for cooperation and a 20% settlement reduction.

The traders, all UK-based, utilised private Bloomberg terminal chatrooms for their bilateral communications. The CMA’s executive director of competition enforcement, Juliette Enser, noted that the penalties would have been substantially higher if the banks had not already implemented extensive preventative measures.

The investigation, which began in 2018, comes amid growing governmental pressure on the CMA to boost economic growth. The settlements mark a significant milestone in the regulator’s efforts to maintain market integrity and fair competition within the UK’s financial sector.