By Elena Vardon

The U.K.'s competition regulator is fining Citi, HSBC, Morgan Stanley and Royal Bank of Canada a total of 104.5 million pounds ($132.3 million) after a probe into the exchange of sensitive information about government bonds.

The Competition and Markets Authority said Friday that it reached a settlement with the four banks in separate cases about the conduct of certain traders on specific instances between 2009 and 2013.

The watchdog said its investigation found that individual traders shared competitively sensitive information about the pricing of U.K. government bonds--gilts and gilt asset swaps--on various dates. The CMA said unlawful exchanges of information took place in one-to-one chatroom conversations between certain traders at Citi and Deutsche Bank, Citi and Morgan Stanley, Deutsche Bank and HSBC, Deutsche Bank and Morgan Stanley and Deutsche Bank and RBC.

"It is important that competitors decide their price and strategies independently in order to ensure effective competition in a market," the CMA said.

Deutsche Bank was also included in the probe but granted immunity for stepping forward and providing information to the regulator. "Deutsche Bank proactively reported the issue to the U.K. authority and co-operated fully in the subsequent investigation which related to activity prior to 2014," a spokesperson for the German lender said.

The banks have since implemented compliance measures to prevent similar incidents from happening again, the CMA said. The settlement ends the investigation that opened in late 2018. In May 2023, the regulator said it had provisionally found that the five banks had broken competition law.

Citi received a reduced fine of 17.2 million pounds after successfully applying for leniency during the investigation. "We are pleased to resolve this longstanding matter with the CMA from over a decade ago. We cooperated fully with the CMA and remain committed to ensuring full regulatory compliance," a spokesperson said.

A spokesperson for RBC, which was fined 34.2 million pounds, also said the bank was pleased about the resolution. "The conduct in question was historic and our compliance environment has significantly enhanced over the last decade since it occurred," the bank said.

HSBC will have to pay a 23.4 million-pound fine and said it was happy to put the investigation behind it. "Since that period we have transformed our controls and the CMA itself has acknowledged we now have a robust compliance program," a spokesperson for the bank said.

Morgan Stanley--which was handed a 29.7 million-pound fine--said it had taken a commercial decision to draw a line under the investigation, "The CMA has made no findings regarding impact on the market or of financial benefit to the firm," a spokesperson said.

"Since the time in question the whole industry, including Morgan Stanley, has undergone significant changes, including enhanced supervision and compliance controls," the spokesperson added.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

February 21, 2025 04:36 ET (09:36 GMT)

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