The events under investigation concern clearing and settlement for registered shares, which have taken a growing importance in Germany since 1997. The Commission says there is evidence that Clearstream refused Euroclear Bank access to the settlement platform for registered shares in Germany for more than two years.

The Commission argues there was no justification for the delay and that "Clearstream's behaviour had the effect of limiting cross-border trade in such securities, while Clearstream was at the same time establishing a competing cross-border operation".

The accusation of discrimination also extends to pricing, with the Commission citing higher transaction fees paid by Euroclear until January 2002 for services granted at a lower cost to non-German national CSDs.

"In the Commission's view, there is no justification for the difference in treatment," states the Commission. "Among other factors, the transaction volumes and the level of automation are higher for Euroclear than for national central security depositories."

The preliminary findings form part of the Commission's ongoing enquiry into cross-border clearing and settlement within the internal market. They have been welcomed by rival markets who oppose the tight vertical integration between the clearing agency and parent exchange Deutsche Bourse.

Phil Bruce, head of corporate strategy at the London Stock Exchange, says: "A single European financial market, with fair and open competition between exchanges and other market providers, will not be deliverable unless anti competitive practices are eliminated. Vertical silos are likely to be more prone to this behaviour than others."

Clearstream has two months to defend itself against the charges. If it fails it could face a fine of up to 10% of its worldwide turnover.