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Brazil's B3 to pay 9.4M reais fine in competition case

Brazilian stock exchange operator B3 SA – Brasil, Bolsa, Balcão reached an agreement with antitrust watchdog Cade to pay a 9.4 million reais fine over creating barriers to entry for competitors.

As part of the settlement, which gives B3 up to 60 days to pay the fine, Cade will suspend an ongoing inquiry into the matter for five years, after which the case will be archived if the company complies with certain requirements, B3 said in a statement.

The regulator determined that the company will have to comply with certain obligations over the next five years to help competitors start rival exchanges. Contracts signed between B3 and its rivals should last at least three years, while B3 should also allow companies to test its clearing and settlement platforms, Cade said.

The case was launched in 2016 when local exchange operator ATS Brasil and Americas Clearing System claimed that B3 was creating barriers to the entry of competitors. ATS was set up to operate in the Brazilian stock exchange market but faced several obstacles, including a lack of access to technology and distribution channels, according to Cade.

B3 benefits from a near monopoly on all trading, clearing and settlement services for most shares traded in Brazil.

The company's second-quarter 2018 net income jumped more than 300% from a year earlier to 724.4 million reais due in large part to record-high trading volumes. The result marked B3's best quarter ever in terms of revenues and EBITDA.

As of Oct. 3, US$1 was equivalent to 3.86 Brazilian reais.