The European Commission acceptedcommitments offered separately by the International Swaps and DerivativesAssociation Inc. and information service provider Markit to address competitionconcerns relating to the licensing of intellectual property needed to offertrading services on the market for credit default swaps.
The competition concerns relatedto the so-called final price, which is used to value CDS if there is a default,and to the licensing of specific CDS indexes. The EC said ISDA's and Markit's commitmentswill make it easier to trade CDS on exchanges while improving transparency,benefiting investors such as mutual funds, pension funds and insurers.
In July 2013, the EC raisedconcerns that ISDA, Markit and some of its member investment banks EU antitrust rules byrefusing to license the final price and Markit's CDX and iTraxx indexes forexchange trading, among others. The commission antitrust proceedings againstall 13 investment banks involved in its CDS investigation in December 2015.
The commitments will apply for 10years, during which independent trustees will monitor ISDA and Markit'scompliance. Both sets of commitments are subject to third-party arbitration incase of dispute.
Markit a merger with IHS Inc. on July12, with the merged firm operating as IHS Markit Ltd.