South Korea fines 15 bond dealers 1.6 trillion won

South Korea’s Fair Trade Commission imposed fines totalling 1.6 trillion won ($1.2 billion) on 15 domestic banks and brokerages for colluding at government-bond auctions, CNA Business said. The commission said the conduct artificially raised South Korean bond yields—the returns investors receive from holding the bonds.

The case concerns primary dealers, firms that buy government securities directly from the government for resale to other investors, acting as market makers for government securities. The commission said the dealers exchanged information about the yields they planned to bid in 150 government-bond auctions between January 2020 and June 2023.

The exchanges took place by phone or through the Telegram messaging app one or two minutes before auction deadlines. In 145 of those auctions, the dealers directly agreed on bidding yields and volumes—the amounts they would bid for—the commission said.

The commission said it expects the penalties to foster effective competition in bond auctions and make the management of national public finances more efficient.