Deutsche Bank was also subject to the probe but received immunity under the UK CMA’s leniency policy for alerting the regulator to its participation in the information sharing, as we reported last week.

A small number of traders from the five banks utilized private one-to-one Bloomberg chatrooms to share competitively sensitive information about “aspects” of the pricing of UK bonds. None of the traders involved in the scheme “remain employed by the bank they worked for at the time.”

Juliette Enser, Executive Director of Competition Enforcement at the CMA, said that 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.”

Rob Mason, Director, Regulatory Intelligence Strategy & Market Intelligence at Global Relay, was unsurprised at the size of the fines, pointing out that “fines under competition law are much higher in the UK and can be a multiple of global turnover” and suggested that the settlement represented a “positive outcome for the regulators” more generally.

He added that it was “interesting” that it was the CMA who brought this successful enforcement action because “while arguably information sharing is anti-competitive, the similarities to the FX scandal are stark, and that was an FCA (and other conduct regulator) enforcement action.”

The information sharing took place on various dates between 2009 and 2013 and involved exchanges deemed unlawful about the:

• sale of gilts by the UK Debt Management Office via auctions on behalf of HM Treasury;
• subsequent trading of gilts and gilt asset swaps; and
• selling of gilts to the Bank of England – known as ‘buy back’.

The CMA’s investigation, opened in November 2018, found that all the banks were involved in exchanges related to trading. Some of the banks were found to have shared information in connection with:

• auctions – Citi, Deutsche Bank, HSBC, and Morgan Stanley;
• buy-back auctions – Deutsche Bank, Citi, and Morgan Stanley.

And, on a limited number of occasions, Deutsche Bank, and RBC also coordinated their strategies for trading gilts via brokers.

The bank’s participation in the information sharing also stopped at different times:

• HSBC – 2010;
• Morgan Stanley – 2012;
• Citi, RBC and Deutsche – 2013.

The fines levied against the four banks are significant:

• Citi: £17,160,000 ($21,663,110) – the only bank to receive a leniency discount of 35% in addition to a 20% reduction for settling in advance of the CMA issuing its Statement of Objections;
• HSBC:  £23,400,000 ($29,540,605) – 10% reduction for settling;
• Morgan Stanley: £29,700,000 ($37,493,845) – 10% reduction for settling;
• Royal Bank of Canada:  £34,200,000 ($43,174,731) – 10% reduction for settling.