Standard & Poor's (S&P) has agreed to cut the prices it charges for the distribution of International Securities Identification Numbers, following a two-year probe by the European Commission into allegations of abusive pricing and monopoly practices.
The Commission opened a formal investigation into S&P in January 2009 following complaints by financial groups over the fees charged by the agency's Cusip Global Services arm for US securities identifiers.
Under the new regime S&P says it will charge a maximum price of $15,000 per year to vendors wishing to redistribute codes in Europe and to financial institutions sourcing direct. It will also abolish all charges to users that source Isins indirectly from information service providers.
The Commission is asking interested parties to comment on the commitments before making them binding on S&P.
Joaquín Almunia Commission vice president in charge of competition policy, says: "We will market test the commitments received and make them legally binding on S&P if satisfied with the results. The deal promises to significantly reduce the cost of using US Isins. Freer and cheaper flow of essential financial information will improve the efficiency of our financial markets to the benefit of consumers."
Almunia says he now intends to turn his sights on Thomson Reuters, the subject of a similar investigation into the fees charged for its proprietary Reuters Instrument Codes.
"Customers of Thomson Reuters cannot cross reference [RICs] with identifiers of other vendors to retrieve data from them. That makes switching to an alternative data feed vendor costly and difficult," says Almunia. "We are concerned that the practice could amount to an abuse of dominant position. I take this opportunity to encourage the company to work with us for a speedy resolution of the case."