“The International Swaps & Derivatives Association, a financial industry derivatives group, is being probed as part of a European Union antitrust investigation into how data on credit derivatives is shared.
Regulators found “indications that ISDA may have been involved in a coordinated effort of investment banks to delay or prevent exchanges from entering the credit derivatives business,” the European Commission said in a statement today. The EU started a probe in April 2011 into whether 16 lenders, including Citigroup Inc. (C) and Deutsche Bank AG (DBK), colluded by giving pricing information to data provider Markit Group Ltd.
The commission “is examining whether a number of investment banks may have used Markit, the leading provider of financial information in the CDS market, to foreclose the development of certain CDS trading platforms,” the regulator said. “This could have been achieved through collusion or an abuse of a possible collective dominance.”
Global regulators have sought to toughen oversight of the credit-default swap market, arguing the trades helped fuel the financial crisis. The EU’s probes add to separate antitrust investigations into whether banks colluded to manipulate benchmark lending rates, including the London interbank offered rate. The U.S. Justice Department is also probing the credit derivatives clearing, trading and information services industries.
“ISDA is confident that it has acted properly at all times and has not infringed EU competition rules,” the organization said in an e-mailed statement. “ISDA is co-operating fully with regulatory authorities.”
