Brussels, 20/07/2016 (Agence Europe) - On Wednesday 20 July, the European Commission accepted the commitments of the association ISDA and the British company Markit to enable competition on the market for information on contracts to cover the risk of default of the debt issuer ('credit default swaps', CDS) which are traded on stock exchange platforms.
In April of this year, the European institution consulted the stakeholders on the commitments proposed by the two entities in question (EUROPE 11542). ISDA and Markit will exclude CDS traders from making decisions to grant individual licenses and will prevent them from influencing these decisions. ISDA will issue licences on the rights it owns on setting the 'final price' for the purposes of stock-exchange trading under fair, reasonable and non-discriminatory conditions. The 'final price' is the price used as a basis to calculate the supply price of a CDS in the event of the issuer's default. The company Markit will grant licences on the rights it owns on the iTraxx and CDX indexes for the over-the-counter trading of CDS on the basis of these indexes.
The Commission therefore concluded that these commitments, which will apply for a period of 10 years, would resolve the competition problems observed and has made them binding upon ISDA and Markit.
In July 2013, the Commission issued a statement of objections against ISDA, the company Markit and 13 investment banks, accusing them of having reached an agreement to exclude certain trading platforms from the credit swap market (EUROPE 10878). In December 2015, the 13 banks were cleared in the matter (EUROPE 11446). (Original version in French by Elodie Lamer)