Antitrust: Commission sends Statement of Objections to Deutsche Bank and Rabobank over Euro-denominated bonds trading cartel case

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This article is brought to you in association with the European Commission.


The European Commission has informed Deutsche Bank and Rabobankof its preliminary view that they breached EU antitrust rules by colluding to distort competition when trading Euro-denominated Sovereign, SSA (Supra-Sovereign, Foreign Sovereign, Sub-Sovereign/Agency), Covered and Government Guaranteed bonds.

The Commission has concerns that between 2005 and 2016 the two banks, through some of their traders, exchanged commercially sensitive information and coordinated their pricing and trading strategies when trading these bonds in the secondary market in the European Economic Area (‘EEA’). These exchanges would have taken place mainly through emails and online chatroom communications.

If the Commission’s preliminary view was confirmed, such behaviour would violate EU rules that prohibit anticompetitive business practices such as collusion on prices and other trading conditions (Article 101 of the Treaty on the Functioning of the European Union and Article 53 of the EEA Agreement).

The Commission initially agreed to explore the possibility of a settlement with the companies involved but later discontinued the talks due to lack of progress and decided to quickly revert to the normal antitrust procedure. The normal antitrust procedure will now run its course.

The sending of a Statement of Objections does not prejudge the outcome of an investigation.

Background on bond markets

Bonds are debt securities paying a defined rate of interest, which enable entities to raise funding in international financial markets, and which are subsequently held as investments or traded like any other financial instrument.

Bonds are first issued on the “primary market” for sale through auctions or syndicates. Subsequently, bonds are traded between banks, brokers and investors on the “secondary market”.Bonds can be distinguished by the identity of the issuer, the currency in which they are denominated or even by the type of guarantor (government authority or financial institutions or other corporations).

The bonds concerned by this investigation are all Euro-denominated and include:

Sovereign bonds (also known as European Government Bonds – EGBs): issued by the central governments of the Eurozone Member States.

SSA bonds: an umbrella term for three types of bonds: (i) Supra-Sovereign bonds issued by supranational institutions or agencies whose mandate extends across national borders, such as the European Investment Bank; (ii) Foreign Sovereign bonds issued by governments under a law different from their own and/or in a different currency other than their own; (iii) Sub-Sovereign/Agency bonds issued by governmental or government-related entities below the level of the central government, such as regions or municipalities, government-owned banks, or social security facilities.

Covered bonds: issued by credit institutions that are secured by a protected pool of high-quality assets, such as mortgage loans or public sector debt.

Government Guaranteed bonds: offer a secondary guaranteed interest where principal payment will be made by a government authority upon default of the issuer. These bonds were issued in response to the 2008 financial crisis and for a limited period of time.

Background on procedure

A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The parties can then examine the documents in the Commission’s investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities.

If, after the parties have exercised their rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of a company’s annual worldwide turnover.

There is no legal deadline for the Commission to complete antitrust inquiries into anticompetitive conduct. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.

This is the third investigation conducted by the Commission involving cartels affecting the market for bonds trading. In April 2021, the Commission fined three investment banks a total of € 28 million for participating in a US Dollar-denominated SSA bonds trading cartel. In May 2021, the Commission found that seven investment banks participated in an EGB trading cartel and imposed fines totaling € 371 million.

For More Information

More information on this case will shortly become available under the case number AT.40512 in the public case register on the Commission’s competition website.

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