Source · Select Committees · Public Accounts Committee
Recommendation 8
8
Deferred
CMA provisionally found major banks broke competition laws affecting DMO gilt auctions.
Recommendation
In May 2023, the Competition and Markets Authority (CMA) provisionally found that five major banks broke competition laws on UK gilts. Each bank allegedly unlawfully shared competitively sensitive information relating to the buying and selling of UK government gilts. The alleged behaviour, which was identified by the CMA and potentially impacted the DMO’s gilt auctions, took place at varying times between 2009 and 2013. We asked the DMO how it ensured that buyers were not co-operating behind the scenes to manipulate its auctions and thereby disadvantage taxpayers. The DMO, which sells gilts directly to its primary dealers via bids it receives during auctions, explained that all its primary dealers, known as Gilt-edged Money Makers (GEMMs), were regulated organisations and manipulation and collusion was “illegal and against the law”.13
Government Response Summary
The government accepts the implicit recommendation and commits to writing to the Committee with the requested information within two months of the CMA's investigation concluding, but the target implementation date is TBD due to the CMA's open-ended timeline.
Government Response
Deferred
HM Government
Deferred
3.1 The government agrees with the Committee’s recommendation. Target implementation date: To be advised 3.2 As requested, HMT, together with the DMO, will write to the Committee with this information within two months of the conclusion of the Competition and Market Authority’s (CMA) investigation. There is currently no statutory deadline for when the CMA will issue a final decision on the case. The government will therefore look to inform the Committee with more information on timing in the future, subject to this being made available by the CMA.