EU fund managers slam S&P over Isin licensing in Switzerland

EU fund managers slam S&P over Isin licensing in Switzerland

European fund managers and market data user groups have launched a complaint with the Swiss competition authorities over alleged "illegal" Isin licensing practices by Standard & Poor's in Switzerland.

In May last year, S&P agreed to cut the prices it charges for the distribution of International Securities Identification Numbers in the EU, following a two-year probe by the European Commission into allegations of abusive pricing and monopoly practices. This was followed in November by the announcement of plans to introduce a stripped-down feed of basic data to European market participants by April 2012

The European Fund and Asset Management Association (Efama) says the new pricing scheme will save market participants approximately $100 million per annum in Isin license fees.

However, S&P has yet to extend the package to non-EU member states, creating a two-tier system.

In a statement, the fund management lobby group has called on S&P to address user complaints: "Efama deplores that S&P has failed to cooperate voluntarily with the financial services industry in the EU in the past and still does not want to address valid user concerns."

It has joined with local trade groups BVI and Cossium and the Information Providers User Group to launch a formal complaint in Switzerland with the Wettbewerbskommission competition watchdog.

"The associations are confident that the new complaint will succeed and that S&P will be required to stop the illegal Isin licensing practice in Switzerland too," says Efama.

Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 19 April, 2012, 13:26Be the first to give this comment the thumbs up 0 likes

S&P offers lower price to EU members. Switzerland is not an EU member. So, Switzerland doesn't get the lower price. QED.

While I'm neither a judge nor lawyer, plain commonsense suggests that S&P has done nothing illegal. Looks like the EU Fund Managers camp is on a 'fishing expedition', but things will quickly get interesting if, as a result of this lawsuit, one or more of the following things happen: (a) S&P countersues Switzerland for not joining EU (b) Other non-EU nations also demand the lower price (c) Switzerland changes its mind about staying out of EU. 

Bruno  Schütterle
Bruno Schütterle - B.F.Schütterle - Kilchberg 20 April, 2012, 15:38Be the first to give this comment the thumbs up 0 likes

@Ketharaman

Your are correct about the application of the EC Comp Case 39.592 ISIN decision with regard to the applicable "territory". Even as SIPUG as a Swiss non profitmaking organisation formed part of the EC complaint McGrawHill/CSB/S&P refused to include Switzerland in the territory.

(please note in the market test on Thomson Reuters RIC licensing proposal - TR included on a voluntary basis Switzerland!)

Therefore and in order to have European political territory coverage another legal antitrust case is necessary. To extend the solution to India and the rest of the Far East local court cases are necessary as CSB/S&P are mantaining their oligolipol for the non EC area. That is the commercial tactic of every monopolist in general!

It has to be mentioned that this EC decision is clearly as stated an antitrust case and S&P would have be fined if they did not agree on the deal. S&P has definitely done something illegal - namely established a monopol in the distribution channel in the applicable territory!

You may take this link

http://ec.europa.eu/competition/elojade/antitrust/

item c031 and C 031 2012/C 31/05 Summary of Commission Decision of 15 November 2011 relating to a proceeding under Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement (Case COMP/39.592 — Standard & Poor's) (notified under document C(2011) 8209) (1)

for further information.

 

In the second paragraph i must tell you as a Swiss citizen you are completely wrong with your assumptions

a) S&P cannot countersues Swizerland (being what the government or a local authority for not joining EU)?

Joining the EU is a decision by the entire voting of the Swiss National citicens as individuals and the cantons (local areas such as ZURICH, BERN etc.) Both must agree.

b) yes of course - if S&P does not give it on a voluntary basis you will need to contact your local antitrust organisation and do precisely what the Swiss do.

With the already established EC decision there is ample documentation available to support any local effort.

c) the political environment does not give currently any indication that Switzerland is intending to join the EC as full member - this is not going to happen within the next minimum 10 years.

In summary - you are mixing up political country Switzerland issues with a single antitrust case that is launched by an EFAMA complaint with the US ISIN topic against S&P that deals with improper licencing practice, improper application of ISO bilaws and amongst others also addresses non existing IP and copyrights as claimed by the US NNA.

Should you need further information please contact www.sipug.ch or the complainants directly.

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