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Nasdaq and Deutsche Börse have been raided by EU officials investigating whether the exchange groups may have been involved in antitrust violations related to financial derivatives.
Late on Monday, the European Commission said it had carried out unannounced inspections at the offices of companies in two countries within the bloc for potential anti-competitive practices.
The EU’s executive arm is focused on financial derivatives, which are contracts that track the price of an underlying asset, such as a bond, equity or interest rate.
“We confirm the EU Commission’s investigation and we are fully co-operating,” Deutsche Börse said in a statement on Tuesday.
“We are aware of an investigation initiated by the European Commission involving the derivatives market,” Nasdaq said in a statement to the Financial Times, adding that the company “is committed to fully co-operate with the European Commission and support the relevant authorities with the investigation”.
The EU said the raids were aimed at determining whether the companies had broken EU law by engaging in “restrictive business practices”. The commission declined to comment when asked by the Financial Times on the identity of the companies targeted.
A person close to Deutsche Börse said the EU was looking at a “very limited area of the financial derivatives business” and that the company’s lawyers had decided there was “no need” to make provisions for potential fines.
EU investigators said the raids did not necessarily mean that the companies were engaged in anti-competitive practices and set no specific deadline to end the probe.
“The duration of the investigation depends on a number of factors, including the complexity of each case, the extent to which the companies concerned co-operate with the commission and the exercise of their rights of defence,” the commission said on Monday.
Nasdaq’s US parent is one of the world’s biggest stock exchange groups and the company’s EU stock exchanges include the main markets of Sweden, Denmark and Finland. It also offers trading and clearing of equity, fixed income and commodity derivatives.
Deutsche Börse is the largest exchange group in the EU by market value, running the Frankfurt Stock Exchange and Eurex — the region’s biggest derivatives trading venue.
Eurex trades equity, commodity, debt and currency derivatives, and more than 154mn contracts were traded on the Eschborn-based exchange last month, according to the company’s data.
Deutsche Börse also owns a 75 per cent stake in the European Energy Exchange, which is based in Leipzig and allows investors to trade power, gas and other commodities derivatives.
Last year, Swedish authorities investigated Nasdaq Stockholm, looking into whether the exchange failed to report insider trading.
Financial services is not the only sector that has been under scrutiny from Brussels regulators. In July 2021, the EU fined BMW and Volkswagen €875mn for colluding to prevent the deployment of clean emissions technology.
https://www.ft.com/content/5c090e7c-49b1-4747-98e6-d6478ff9217b
