A decades-old partnership between Deutsche Börse and
Nasdaq has drawn fresh scrutiny from Brussels. The European Commission has
launched an antitrust investigation into possible collusion between the two
stock exchange operators over Nordic derivatives, alleging the firms may have
restricted competition through a 1999 cooperation agreement, the Financial Times reported.
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The probe, announced on Thursday, sent Deutsche Börse
shares down as much as 7.3% before recovering part of the loss. By early
afternoon, the stock was still down around 4% in Frankfurt. Nasdaq shares
slipped 0.3% in pre-market trading in New York.
Commission Concerned About Market Collusion
The European Commission said it suspects Deutsche
Börse and Nasdaq may have coordinated to avoid competing in the listing,
trading, and clearing of certain derivatives.
Regulators are also examining
whether the firms shared sensitive commercial information or allocated demand
between them. The investigation follows unannounced inspections
conducted at both exchange groups in September 2024.
The focus of the probe is a 1999 cooperation agreement
between Eurex, Deutsche Börse’s derivatives arm, and the Finnish derivatives
exchange HEX, which later became part of Nasdaq. Under the arrangement, Eurex
handled the trading of the most liquid derivatives, while HEX marketed Eurex
products and memberships in the Nordic and Baltic regions.
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Deutsche Börse said the partnership had been intended
to “deepen liquidity” and “create efficiencies” in the Nordic market,
describing it as a pro-competitive initiative that benefited investors.
The
company added that the agreement had been public and reviewed by the European
Commission at the time. The cooperation ended in 2023. Nasdaq echoed that stance, saying the agreement had
been lawful and transparent.
Potential Fines and Financial Impact
While the European Commission can impose fines of up
to 10% of a company’s global revenue, which would amount to around €600 million
for Deutsche Börse, analysts believe the financial risk is limited.
Citibank analysts estimated that the 1999 Eurex-HEX
cooperation generated about €5 million annually for Eurex, suggesting any
potential penalty would likely be modest relative to Deutsche Börse’s overall
business.
Deutsche Börse operates the Frankfurt Stock Exchange
and Eurex, Europe’s largest derivatives marketplace. Nasdaq, which absorbed HEX
through a series of mergers in the 2000s, remains one of the world’s biggest
exchange operators.
This article was written by Jared Kirui at www.financemagnates.com.
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