South Korea fines 15 bond dealers 1.6 trillion won for collusion

On November 11, South Korea's Fair Trade Commission announced the imposition of 1.6 trillion won ($1.2 billion) in fines on 15 domestic brokerage firms and banks for colluding during government bond auctions. This collusion occurred over a period of more than three years, from January 2020 to June 2023. The primary dealers communicated bid yields and volumes to one another via phone calls or the Telegram messaging app within one or two minutes of the auction deadline in 150 instances.

In 145 of these auctions, they explicitly agreed on the bid yields and volumes. The commission asserts that these actions led to an artificial increase in South Korean bond yields. The regulator anticipates that this penalty will promote healthy competition in bond auctions and enhance the efficiency of national fiscal management.