Brussels, 28/04/2016 (Agence Europe) - European Commission is inviting comments from interested parties regarding the commitments offered separately by the association ISDA and the British company Markit to address competition concerns on the information market regarding contracts providing cover against the risk of default by a debt issuer ('credit default swaps', CDS) traded on stock-exchange platforms.
The International Swaps and Derivatives Association (ISDA) and the company Markit offered a list of commitments which would apply for 10 years and would be assessed independently.
Amongst other things, ISDA undertakes to issue licences over its proprietary rights to set the final price for trading, the settlement and/or post-market delivery of CDS products. The final price is used as a basis to determine the delivery price of a CDS contract in the event of a default by the issuer. ISDA also suggests submitting to third-party arbitration with binding effect and preventing investment banks from influencing its decisions to grant the above-mentioned licences.
Markit's commitments include issuing licences on the rights it owns in the iTraxx and CDX indices for over-the-counter trading in CDS based on these indices. It suggests submitting to binding third-party arbitration and preventing investment banks from influencing its decisions to grant licences.
Interested parties will have one month to react to these commitments once they have been published in the Official Journal of the EU.
In July 2013, the Commission issued a statement of objections against ISDA, Markit and 13 investment banks, accusing them of having agreed to exclude trading platforms from the credit swaps market (see EUROPE 10878). The 13 banks were cleared of any wrongdoing in December 2015 (see EUROPE 11446). (Original version in French by Mathieu Bion)