Claims the rating agency may have abused its monopoly of financial market data

The European Commission has started legal action against Standard & Poor’s, saying the rating agency may have broken competition laws in the way in sold financial market data.

‘The Commission believes that S&P may abuse its monopoly position as the US national numbering agency by forcing financial institutions (such as banks and investment funds) to pay licensing fees for the use of US ISIN codes in their own databases,’ said the Commission in a statement.

The initiation of proceedings against S&P originates from a complaint filed by several associations representing investors (financial institutions and asset managers).

The International Securities Identification Number (ISIN) is used to provide unique identification for securities (shares, bonds, etc.) issued throughout the world.

S&P runs the CUSIP Service Bureau (CSB) on behalf of the American Bankers Association (ABA). S&P/CSB is the only US ISIN issuer and the only operator to receive first-hand information from all US securities issuers.

S&P includes all the information gathered from securities issuers in a descriptive database and charges people to use it. The alleged infringement is that S&P abuses its monopoly position by requesting fees for the use of ISINs from information security providers such as Bloomberg and Thomson Reuters as well as the end users such as banks and asset managers.

‘The opening of proceedings does not imply that the Commission has conclusive proof of an infringement but merely means that the Commission will deal with the case as a matter of priority,’ said the statement.