EU Charges Isda, Markit and 13 Banks With EU Antitrust Breach

European Union regulators have charged 13 banks and two financial data companies with breaching EU antitrust rules after saying the institutions blocked rival exchanges in the credit derivatives business between 2006 and 2009.

The European Commission (EC) said in a charge sheet, also known as a statement of objections, that the companies had participated in anti-competitive activities. The claim that they were involved in a cartel followed a two-year investigation.

"The commission takes the preliminary view that the banks acted collectively to shut out exchanges from the market because they feared that exchange trading would have reduced their revenues from acting as intermediaries in the over-the-counter (OTC) market," said the EU competition authority.

Financial data companies Markit and a major derivatives industry group that is tasked with making the markets safer and more efficient through standardised contracts, the International Swaps and Derivatives Association (Isda), were charged by the EC.

European authorities also charged Bank of America Merrill Lynch, Barclays, Bear Stearns, BNP Paribas, Citigroup, Morgan Stanley, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JP Morgan, RBS and UBS.

An Isda spokesperson told IBTimes UK: "[The company] can confirm it has received the statement of objections relating to the European Commission's investigation into the credit default swap market, which is being reviewed."

"As previously stated, Isda is confident that it has acted properly at all times and has not infringed EU competition rules. Isda is co-operating fully with regulatory authorities."

Credit Suisse, JP Morgan, Goldman Sachs, HSBC, UBS and Citi have declined to comment.

All other remaining firms cited have yet to return calls for comment from IBTimes UK.

In March, the commission said it was expanding antitrust probe into the credit derivatives market, by including Isda, after alleging that there are 'initial signs' that it may have colluded with banks to manipulate the credit derivatives market.

In April 2011 the EC launched two antitrust investigations concerning the CDS market and revealed that, in the first probe, 16 investment banks and independent financial information group Markit would be examined.

Regarding the second investigation, the EC said it opened proceedings against 9 of the banks and one of the largest clearing houses for CDS, ICE Clear Europe.