The commission claimed that the accused organizations joined together and thwarted exchanges, including Deutsche Boerse and the Chicago Mercantile Exchange, from entering the credit derivatives business (CDS) between 2006 and 2009.
A statement of objections has been dispatched by the Commission to BofA Merrill Lynch, Barclays, Bear Stearns, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley, RBS, UBS, ISDA and data service provider Markit.
European Commission competition policy vice president in charge Joaquín Almunia said, "It would be unacceptable if banks collectively blocked exchanges to protect their revenues from over-the-counter trading of credit derivatives."
"Over-the-counter trading is not only more expensive for investors than exchange trading, it is also prone to systemic risks," Almunia added.
The preliminary findings of the commission unveils that the exchanges sought necessary licenses for data and index benchmarks from ISDA and Markit, while both were denied for relevant data for exchange trading under the pressure of their controlling organizations.
It highlights that the banks acted in a group to close exchanges from the market as they feared that exchange trading would have decrease their revenues from acting as intermediaries in the OTC market.
A monetary penalty of up to 10% of a company’s annual worldwide turnover could be imposed based on the findings related to infringement of rules.
