Markit Group, the data provider majority-owned by Wall Street’s largest banks, is under Justice Department scrutiny for potential anticompetitive practices. These range from requiring customers to buy bundled services to restricting which trades can be cleared in the $26 trillion credit-default swap market, report Bloomberg. Markit told a swaps clearinghouse customer to purchase a pricing service as a condition for granting use of its benchmark indexes, said a source. Markit is also said to have permitted use of its indexes by another clearinghouse only if every swap guaranteed by the company included a dealer, such as one of its owners. The Justice Department said July 15 it was investigating users of credit-default swaps as U.S. lawmakers seek to regulate the $592 trillion over-the-counter derivatives market. The investigation is also looking at whether London-based Markit, which provides derivative and bond data to more than 1,500 customers, sought to retain ownership of the pricing data that is created when trades are processed by a clearinghouse. JPMorgan Chase is Markit’s largest shareholder, followed by Bank of America, Royal Bank of Scotland Group, and Goldman Sachs.
Data Provider Markit Facing Credit Swap Probe
The Justice Department seeks to regulate the $592 trillion OTC derivatives market.
August 3, 2009