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ANTITRUST BEGINS A FACT-FINDING INVESTIGATION INTO TRADING SERVICES FOR FINANCIAL INSTRUMENTS AND POST-TRADING


PRESS RELEASE



PRESS RELEASE

ANTITRUST BEGINS A FACT-FINDING INVESTIGATION INTO TRADING SERVICES FOR FINANCIAL INSTRUMENTS AND POST-TRADING


It will determine whether there are barriers to entry which may increase prices for users


The Italian Competition Authority, at its meeting on 14 September 2005, approved a fact-finding investigation into trading services for financial instruments and the services needed to complete trades (so-called “post-trading”).
The investigation is intended to determine whether there are unjustified barriers to the entry of new operators and the development of innovative services which might increase competition. Furthermore, it will clarify whether the powerful market position of a number of operators in particular sectors may lead to excessive prices to users.
The Authority’s move is motivated by the characteristics of this industry, where there are very few operators and the activities are vertically integrated. Negotiation services are limited to Borsa Italiana (for shares, derivatives, bonds and retail trading in Treasury notes) and MTS (for wholesale trading in Treasury notes). Post-trading, too, is carried out by a very limited number of operators: for the clearing step, there is only Cassa di Compensazione e Garanzia for securities listed on the markets managed by Borsa Italiana while for securities traded on MTS there is also the company LCH.Clearnet (Euronext Group). For custodial and settlement services only Monte Titoli may be used. Borsa Italiana also controls the national post-trading entities, i.e. Cassa di Compensazione e Garanzia and Monte Titoli.
The investigation launched by the Competition Authority is to be seen in the context of considerations within the EU on how best to open up to competition activities which have traditionally been carried on by national monopolies (by increasing the number of businesses in the sector). It must also be remembered that Directive 2004/39/EC (which must be acted upon by May 2006) aims, amongst other things, to promote competition among the various trading systems. The same Directive prohibits any restrictive obligation in the trading of securities listed on regulated exchanges.


Rome, 14 September 2005