Fair Trade Commission imposes surcharges on 15 government bond dealers
The latest in this situation
How it started
What happened
The Fair Trade Commission imposed corrective orders and 1.626575 trillion won in surcharges on 15 government bond primary dealers, covering ten brokerages and five banks. The commission stated that the dealers shared bid-yield and volume information across 150 government bond auctions held between January 2020 and June 2023, agreeing on specific yields or volumes in 145 auctions. The total penalty was reported by Reuters to be approximately $1.2 billion.
From econotimes.com
Why it matters
The commission found that the coordination restricted competition and artificially raised winning yields, which weakened competition in the market. The Fair Trade Commission noted that government bond yields influence the pricing of other financial products and help set interest rates.
From econotimes.com
Who's involved
- Fair Trade CommissionGovernment agency that imposed the surcharges and referred firms for investigation
- Industrial Bank of KoreaOne of the five banks penalized for coordinating bond bids
- NH Investment & SecuritiesOne of the ten brokerages penalized for coordinating bond bids
- Korea Development BankOne of the primary dealers referred for investigation
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Industrial Bank of KoreaSpeculative
Industrial Bank of Korea might face reduced revenue or increased operational costs due to regulatory action and the risk of losing primary dealer status.
- NH Investment & SecuritiesSpeculative
NH Investment & Securities could face increased costs and reduced funding opportunities due to regulatory action and the risk of losing primary dealer status.
- Korea Development BankSpeculative
Korea Development Bank might face increased costs and reduced funding opportunities due to regulatory action as a primary dealer.
How it developed
Newest first. Tap a step to see who reported it.- The Korea Fair Trade Commission fined NH Investment & Securities for bond auction collusion.Sub-event
FTC imposes surcharges on bond dealers.1 source
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The entities involved
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Industrial Bank of Korea
company
Nothing else this week.
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Fair Trade Commission
Taiwan government agency