South Korea fines 15 bond dealers 1.6 trillion won for collusion

South Korea's regulatory body imposed a combined fine of 1.6 trillion won ($1.2 billion) on 15 local brokerage firms and banks. This penalty was levied for their alleged collusion during government bond auctions spanning from January 2020 to June 2023. The Fair Trade Commission discovered that the 15 primary dealers communicated via phone calls or the Telegram messaging app to coordinate their bidding yields just one or two minutes before the auction deadlines.

In 145 out of these 150 auctions, the dealers explicitly agreed upon the bidding yields and volumes. The commission argues that these practices led to an artificial increase in South Korean bond yields. The regulator expects the penalty to promote healthy competition among bond dealers and enhance the efficiency of the national fiscal management.