UK regulator probes suspected financial services cartel

The UK’s competition regulator has launched an investigation into a suspected cartel in the financial services sector.

The Competition and Markets Authority gave few details of the inquiry other than to say it related to “certain types of financial product”. It added that the case was at an early stage “and no assumption should be made at this point that competition law has been infringed”.

The watchdog added that the investigation was being undertaken under UK and EU legislation that covers price-fixing and cartels.

“The CMA has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections to any of the parties under investigation,” the statement issued on Friday reads.

Statements of objection lay out the watchdog’s preliminary findings, and companies have the ability to respond to them before a final decision is made. The CMA has the power to conduct interviews, visit and search premises and issue written requests for information before deciding whether competition law has been breached.

While the Financial Conduct Authority also has the power to look into suspected anti-competitive practices in the sector — even beyond firms that are not regulated directly by the FCA — the two watchdogs have agreed that the CMA will lead the probe. The FCA declined to comment.

Competition fines can reach 10 per cent of global turnover of a relevant market if wrongdoing is proven. But those who go in first to blow the whistle on an alleged cartel can get full immunity from fines.

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