Thirteen banks to fight EU derivatives charges at May hearing:
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[April 08, 2014]
By Foo Yun Chee
BRUSSELS (Reuters) — Thirteen
investment banks, including Citigroup, Goldman Sachs and Deutsche
Bank, will fight EU charges of blocking exchanges' access to the
credit derivatives market at a hearing next month, three people
familiar with the matter said on Monday.
The closed-door hearing comes nine months after the European
Commission accused the banks of preventing Deutsche Boerse and the
Chicago Mercantile Exchange from entering the lucrative credit
default swaps (CDS) business between 2006 and 2009.
The hearing before Commission competition and legal officials and
their counterparts from national regulators could determine whether
the banks face hefty fines which could be as much as 10 percent of
their global turnover.
"The hearing will run from May 12 to 19," said one source, adding
that it was a provisional date set by the EU competition authority
which may change depending on circumstances.
Commission spokesman for competition policy, Antoine Colombani,
declined to comment. European Competition Commissioner Joaquin
Almunia has said he will let his successor rule on the case next
year because of its complexity.
The other banks charged by the Commission include Bank of America
Merrill Lynch, Barclays, Bear Stearns, BNP Paribas, Credit Suisse,
HSBC, JPMorgan, Morgan Stanley, RBS and UB.
The EU watchdog also cited financial data company Markit and the
International Swaps and Derivatives Association (ISDA) in its
so-called statement of objections or charge sheet sent to the group
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CDS, which are worth trillions of dollars, allow an investor to bet
on whether a company or country will default on its bonds within a
fixed period of time.
They were originally over-the-counter (OTC) or non-exchange traded
contracts, but the market is shifting to exchanges since regulatory
efforts to boost transparency began. The lack of transparency has
been a key target of regulators following the 2007-2009 crisis.
(Reporting by Foo Yun Chee; editing by Mark Potter)
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