Brussels, 02/06/2004 (Agence Europe) - On Wednesday, the European Commission published a decision that Clearstream Banking AG, the only central securities depository in Germany, and it parent company Clearstream International SA have infringed competition rules by refusing to provide cross-border securities clearing and settlement services, and by practising discriminatory pricing and denying Euroclear access to its clearing and settlement services in Germany for over two years.
The proceedings were not opened following a complaint, but are part of an in-depth inquiry launched by the Commission in March 2001 on the clearing and settlement mechanisms which conclude transactions on the share market in the EU (see EUROPE of 1 April 2003). The inquiry showed two kinds of abuse by Clearstream: 1) refusal to supply: Clearstream refused to supply Euroclear Bank with clearing and settlement services for registered shares (the most widely internationally-traded German shares, blue-chip shares such as DaimlerChrysler, Siemens, Deutsche Post etc). Although companies have the right to choose their commercial partners, Clearstream did not have the right to prevent Euroclear from having access to its information, as it is the only central depository in Germany for securities kept in collective safe custody, which it the only significant form of custody today for securities traded. Clearstream is therefore an unavoidable trading partner, and its behaviour towards Euroclear Bank lead to a reduction of the latter's capacity to provide Single Market clients with efficient clearing and settlement services on a cross-border basis; 2) Price discrimination; between January 1997 and January 2002, Clearstream invoiced Euroclear Bank a higher price for the same clearing and settlement services than other securities depositories outside Germany.
Although the infringements have in the meantime stopped, the Commission nonetheless adopted a decision to clarify the legal position, in order to remove any uncertainty for other companies carrying out clearing activities (a process by which the contractual obligations of the buyer and the seller are established) or settlement (transfer of shares from the seller to the buyer and transfer of corresponding funds from the buyer to the seller). Furthermore, no fine was imposed, as there is no Community caselaw on competition in this field.