E.U. Calls Vertical Silos Bad For Competition

Law360, New York (May 24, 2006, 12:00 AM EDT) -- In a step closer to reducing the costs of the European Union’s cross-border clearing and settlement network, the European Commission said in a statement on Wednesday that stock exchange “vertical silos” are restricting competition.

Vertical silos are stock exchanges that own the central counter-parties that clear their trades. The German, Spanish and Italian stock exchanges are all examples of vertical silos.

Because these exchanges have the ability to make it difficult for other competing clearing services to access the exchange’s business, as well as subsidize low...
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