EU Launches Antitrust Investigation into Deutsche Boerse and Nasdaq
The European Commission has initiated a formal antitrust investigation targeting Deutsche Boerse AG and Nasdaq Inc. The inquiry focuses on whether these financial giants engaged in non-competitive agreements that influenced the listing, trading, or clearing of derivatives across European markets.
Market Reaction
News of the probe unsettled investors immediately. Deutsche Boerse’s shares dropped more than 7%, their sharpest decline in nearly two years, while Nasdaq's shares also fell slightly in U.S. pre-market trading. This decline highlights increasing concern over Europe's expanding regulatory scrutiny of major financial institutions.
Background of the Investigation
The investigation centers on a cooperation agreement from 1999 between Eurex, Deutsche Boerse’s derivatives unit, and HEX, a Finnish exchange which eventually became part of Nasdaq. Regulators suspect this long-standing deal may have facilitated coordination or division of trading activities, possibly violating EU competition laws.
Responses from Deutsche Boerse and Nasdaq
- Nasdaq denied any misconduct, stating the agreement was “transparent and cleared by Brussels at the time.”
- Deutsche Boerse characterized the deal as a step to improve liquidity and efficiency in Nordic markets.
- Both firms have committed to fully cooperate with EU investigators.
Regulatory Actions Prior to the Probe
The investigation follows unannounced raids on the European offices of both exchanges last year, signaling that regulators have been gathering evidence and preparing their case for an extended period.
“The European Commission has opened a formal antitrust investigation into Deutsche Boerse AG and Nasdaq Inc., probing whether the two financial giants struck non-competitive agreements that distorted how derivatives are listed, traded, or cleared across European markets.”
“The probe follows unannounced raids on both exchanges’ European offices last year – a clear signal that regulators have been preparing the case for months.”
Author's summary: The EU is investigating Deutsche Boerse and Nasdaq for potentially anti-competitive agreements, reflecting Europe's intensifying regulatory efforts on key financial players.