Competition and Markets Authority launches probe into bond market
The UK’s competition watchdog has launched an investigation into a suspected financial services cartel in the bond market.
The Competition and Markets Authority (CMA) said on Friday that it had launched a probe into alleged anti-competitive activity under Chapter One of the Competition Act 1998, which addresses price fixing and attempts to control markets.
The CMA did not give details of where its inquiry was focused, but Sky News reported that it suspected a cartel consisting of bond traders at international banking giants.
Banks with major London bond businesses include HSBC, Deutsche Bank and Citi, although it is not clear if any of them are affected by the probe.
London's multi-billion pound bond markets give companies and countries the opportunity to sell debt to institutional investors.
The CMA’s statement, which revealed that the investigation began on Tuesday, said: “The case is at an early stage and no assumption should be made at this point that competition law has been infringed.
“The CMA has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections to any of the parties under investigation.”
Typically a statement of objections would allow the CMA to outline its preliminary conclusions, giving subjects of investigations time to respond before making a final decision.
The CMA said it was too early to reveal any information about timing or further steps in the investigation.
The investigation into a suspected cartel in the bond market is the latest of a series of probes into the banking sector since the financial crisis
The Libor rigging scandal and the foreign exchange fixing scandal saw banks fined millions of pounds and led to jail time for traders who were found to have manipulated markets.
A CMA spokesperson said “We do not comment on speculation relating to investigations."