By Rory Gallivan

LONDON--U.K. regulator the Competition and Markets Authority said that First Trust Bank and HSBC Holdings PLC (HSBA.LN) breached its rules by forcing small and medium-sized businesses to open business accounts if they want a loan.

The CMA said Wednesday it has issued the two banks with directions after an investigation into eight banks concluded First Trust Bank and HSBC "breached the undertakings by indicating to some SMEs that opening an account with them was a condition for obtaining a business loan."

"Breach of these undertakings is a serious matter and we have directed First Trust Bank and HSBC on the actions they must take to immediately correct the situation--so that it is clear to both their staff and their SME customers that obtaining a business loan is not dependent upon opening an account," CMA Chief Executive Alex Chisholm said.

Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter: @RoryGallivan

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