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EU to probe control of financial data

By Amaka Abayomi, with agency report

European Union regulators, who are investigating 16 investment banks over the swaps market, will examine the “control and dissemination” of financial-market data for possible antitrust abuses.

The European Commission will investigate whether data providers are engaging in abusive behavior by “attempting to leverage privileged access to information,” Joaquin Almunia, the EU’s competition commissioner, said in a London speech.

“I also intend to discuss the legitimate scope of intellectual property rights claims on such data,” Almunia said.

Almunia is increasing the EU regulator’s scrutiny of financial markets. Last month, he announced a probe into whether 16 banks, including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM), colluded by giving data to Markit, a financial information provider.

The commission is also checking whether nine of the banks struck deals with ICE Clear Europe, a clearinghouse for derivatives, that prevent other clearinghouses from entering the market.

“The commission is ramping up antitrust enforcement in the financial services sector,” Suzanne Rab, a lawyer at King & Spalding in London, said in an e-mail

“An underlying theme is the transparency of and access to data.”

Almunia, who is set to examine Deutsche Boerse AG’s bid for NYSE Euronext, said he is opposed to “essential” market infrastructure being controlled by a small number of companies.

“We should prevent that any one entity or group controls essential infrastructure – be it a trading platform, a clearing platform or a pre-trading service – to the benefit of a restricted few,” he said.

Seeking extra operators of financial-markets infrastructure promotes “fragmentation,” Xavier Rolet, chief executive officer of the London Stock Exchange Group, said at the same event.

Almunia said that he “saw no risk” that increased competition to supply services on financial markets would threaten their stability. “Competition and stability are not at odds.”

The LSE agreed in February to buy Toronto Stock Exchange owner TMX Group Inc. in an all-share transaction value as the companies cut costs to counter lost market share.

Maple Group Acquisition Corp., which comprises four Canadian banks and five pension funds, has made a counterbid.

Nasdaq OMX Group Inc. and Intercontinental Exchange Inc. dropped their bid for NYSE Euronext after discussions with the U.S. Department of Justice made “clear” they wouldn’t secure regulatory approval.


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