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Efama welcomes EC’s statement of objections to Standard & Poor’s

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The European Fund and Asset Management Association has welcomed the European Commission’s statement of objections to Standard & Poor’s with respect to its behaviour towards end users of international securities identification numbers.

The commission has taken the preliminary view that S&P is abusing its dominant position by requiring – as the sole-appointed national numbering agency for US securities – financial institutions and information service providers to pay licensing fees for the use of ISINs in their own databases.

The commission also takes the preliminary view that this behaviour amounts to unfair pricing and constitutes an infringement of Article 82 of the EC Treaty.

The initiation of proceedings against S&P originates from a complaint filed jointly by Efama, the French and German asset management associations AFG and BVI, as well as the financial institution data users associations IPUG (UK) and SIPUG (Switzerland) on 16 July 2008 against Standard & Poor’s with the European Commission.

The commission also opened proceedings against Thomson Reuters on 30 October 2009 because of its licensing practice with respect to the Reuters instrument codes. Bloomberg has reacted to the EU cases and allows for licence-free access to its identifier codes.

The commission suspects that requesting licensing fees for the use of US ISINs and certain descriptive elements attached to the ISIN as an identifier key constitutes a possible infringement of Article 82 EC. If this is confirmed, banks and asset managers that have paid licence fees in the past may, under national law, be entitled to compensation for damages in the amount of their payments to S&P.

Peter De Proft (pictured), director general of Efama, says: “We are now very confident that the complaint will succeed. We expect S&P will be required by the European Commission to cease and desist the illegal ISIN licence practice in Europe, thereby ending this long-standing dispute in favour of the European financial services industry.”

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