Brussels, 26 March 2013
Antitrust: Commission extends CDS information market investigation to International Swaps and Derivatives Association (ISDA)
The European Commission has extended the scope of an investigation into credit default swaps (CDS) to include the International Swaps and Derivatives Association (ISDA), a professional organization of financial institutions involved in the over-the-counter (OTC) trading of derivatives. The Commission's inquiry found preliminary indications that ISDA may have been involved in a coordinated effort of investment banks to delay or prevent exchanges from entering the credit derivatives business. Such behaviour, if established, would stifle competition in the internal market in breach of EU antitrust rules. The opening of an investigation does not prejudge its outcome.
This investigation was opened in April 2011 and is currently on-going. The Commission is examining whether a number of investment banks may have used Markit, the leading provider of financial information in the CDS market, to foreclose the development of certain CDS trading platforms. This could have been achieved through collusion or an abuse of a possible collective dominance.
The Commission opened the investigation on the CDS information market in April 2011 (see IP/11/509).
Articles 101 and 102 of the Treaty on the Functioning of the European Union prohibit anticompetitive agreements and the abuse of dominant positions. The implementation of these provisions is defined in the EU's Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by national competition authorities. By initiating proceedings, the Commission relieves national competition authorities of their authority to apply the rules. National courts must also refrain from making decisions, which could conflict with a Commission own decision.
The Commission has informed ISDA and the national competition authorities that it has extended proceedings in this case.
There is no legal deadline to complete antitrust investigations. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertaking concerned cooperates with the Commission and the exercise of the rights of defence.