Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels,  20.7.2021  
C(2021 ) 5583 final   
PUBLIC VERSION  
 
IHS Markit Ltd  
4th floor Ropemaker Place  
25 Ropemaker Street  
London EC2Y 9LY  
UK  
 
CME Group Inc . 
20 South Wacker Drive  
Chicago, Illinois 60606  
USA  
Subject : Case M. 10158  – IHS MARKIT/CME GROUP/JV  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the ’Merger Regulation ’). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ( ‘TFEU ’) has intro duced certain changes, such as the 
replacement of  ‘Community ’ by ‘Union ’ and ‘common market ’ by ‘internal market ’. The terminology 
of the TFEU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).  
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2  
Contents  
1. THE PARTIES  ................................ ................................ ................................ ............  5 
2. THE CONCENTRATION  ................................ ................................ ..........................  5 
3. UNION DIMENSION  ................................ ................................ ................................ . 6 
4. MARKET DEFINITION  ................................ ................................ ............................  6 
4.1. Overview of Parties’ activities  ................................ ................................ ..........  6 
4.2. Over -the-counter ‘OTC’ derivatives  ................................ ................................ . 7 
4.3. Derivatives trading services  ................................ ................................ ..............  8 
4.3.1.  Introduction and Parties’ services  ................................ .......................  8 
4.3.2.  Relevant product market definition  ................................ .....................  9 
4.3.3.  Relevant geographic market definition  ................................ .............  12 
4.4. Derivatives clearing  ................................ ................................ .........................  13 
4.4.1.  Introduction and Parties’ services  ................................ .....................  13 
4.4.2.  Relevant product market definition  ................................ ...................  13 
4.4.3.  Relevant geographic market definition  ................................ .............  15 
4.5. Trade processing services  ................................ ................................ ................  15 
4.5.1.  Introduction and  Parties’ services  ................................ .....................  15 
4.5.2.  Relevant product market definition  ................................ ...................  16 
4.6. Prime broker (PB) give -up management  ................................ .........................  21 
4.6.1.  Introduction and Parties’ services  ................................ .....................  21 
4.6.2.  Relevant product market definition  ................................ ...................  22 
4.6.3.  Relevant geographic market definition  ................................ .............  25 
4.7. NOE messaging services  ................................ ................................ .................  25 
4.7.1.  Introduction and Parties’ services  ................................ .....................  25 
4.7.2.  Relevant product market definition  ................................ ...................  26 
4.7.3.  Relevant geographic market definition  ................................ .............  32 
4.8. CCP connectivity  ................................ ................................ .............................  33 
4.8.1.  Introduction and Parties’ services  ................................ .....................  33 
4.8.2.  Relevant product  market definition  ................................ ...................  33 
4.8.3.  Relevant geographic market definition  ................................ .............  36 
4.9. Credit limit management for OTC derivatives  ................................ ................  37 
4.9.1.  Introduction and Parties’ services  ................................ .....................  37 
4.9.2.  Relevant product market definition  ................................ ...................  37 
 
 
3 4.9.3.  Relevant geographic market definition  ................................ .............  39 
4.10.  Trade confirmation  ................................ ................................ ..........................  40 
4.10.1.  Introduction and Parties’ services  ................................ .....................  40 
4.10.2.  Relevant product market definition  ................................ ...................  40 
4.10.3.  Relevant geographic market definition  ................................ .............  42 
4.11.  Trade optimization ................................ ................................ ...........................  42 
4.11.1.  Introduction and Parties’ services  ................................ .....................  42 
4.11.2.  Relevant product market definition  ................................ ...................  44 
4.11.3.  Relevant geographic market definition  ................................ .............  47 
4.12.  RED codes  ................................ ................................ ................................ ....... 48 
4.12.1.  Introduction and the Parties’ services  ................................ ................  48 
4.12.2.  Relevant product market definition  ................................ ...................  48 
4.12.3.  Relevant geographic market definition  ................................ .............  49 
5. COMPETITIVE ASSESSME NT ................................ ................................ ..............  50 
5.1. Analytical framework  ................................ ................................ ......................  50 
5.1.1.  Horizontal non -coordinated effects  ................................ ...................  50 
5.1.2.  Non-horizontal non -coordinated effects  ................................ ............  51 
5.2. Overview of affected markets  ................................ ................................ .........  51 
5.3. FX and IRD CCP connectivity services worldwide  ................................ ........  52 
5.3.1.  Notifyin g Parties’ view  ................................ ................................ ...... 54 
5.3.2.  Commission’s assessment  ................................ ................................ . 55 
5.3.3.  Conclusion  ................................ ................................ .........................  60 
5.4. FX NOE messaging services worldwide  ................................ .........................  60 
5.4.1.  Notifying Parties’ view  ................................ ................................ ...... 62 
5.4.2.  Commission’s assessment  ................................ ................................ . 63 
5.4.3.  Conclusion  ................................ ................................ .........................  67 
5.5. FX PB give -up messaging services worldwide  ................................ ...............  67 
5.5.1.  Notifying Parties’ view  ................................ ................................ ...... 68 
5.5.2.  Commission’s assessment  ................................ ................................ . 68 
5.5.3.  Conclusion  ................................ ................................ .........................  69 
5.6. CCP connectivity in FX and IRD worldwide (upstream) and clearing 
services in FX and IRD worldwide and in the EEA (downstream)  ................  69 
5.6.1.  Notifying Parties’ view  ................................ ................................ ...... 71 
5.6.2.  Commission’s assessment  ................................ ................................ . 72 
5.6.3.  Conclusion  ................................ ................................ .........................  76 
5.7. OTC FX trading services  ................................ ................................ .................  77 
 
 
4 5.7.1.  Customer foreclosure of FX trading services worldwide or EEA -
wide (upstream) -  FX CCP connectivity services worldwide 
(downstream)  ................................ ................................ .....................  77 
5.7.2.  Assessment of co ncerns with respect to commercially sensitive 
data ................................ ................................ ................................ .... 81 
5.8. Trade optimization services  ................................ ................................ .............  83 
5.8.1.  Input foreclosure of RED codes worldwide (upstream) – portfolio 
compression/portfolio reconciliation/margin management for CDS 
worldwide (downstream)  ................................ ................................ ... 87 
5.8.2.  Customer foreclosure of portfolio compression, portfolio 
reconciliation, margin management and basis risk mitigation 
services for IRDs, CDS and equity derivatives worldwide 
(upstream) – trade confirmation services for IRDs, CDS and 
equity derivatives or o verall worldwide (downstream)  .....................  91 
5.8.3.  Input foreclosure of trade confirmation services for IRDs or 
overall worldwide (upstream) – portfolio reconciliation and 
margin management services for IRDs worldwide (downstream)  .... 98 
5.9. Conglomerate effects  ................................ ................................ .....................  101 
5.9.1. Notifying Parties’ view  ................................ ................................ .... 102 
5.9.2.  Commission’s assessment  ................................ ...............................  103 
5.9.3.  Conclusion  ................................ ................................ .......................  106 
6. CONCLUSION  ................................ ................................ ................................ ....... 107 
 
  
 
 
5 Dear Sir or Madam,  
(1) On 15 June 2021 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which IHS Markit 
Ltd. (‘ IHSM ’, UK) and CME Group Inc. (‘ CME ’, USA) will contribute IHSM’s 
over-the-counter ( ‘OTC ’) derivatives and foreign exchange ( ‘FX’) trade processing 
business (MarkitSERV) and CME’s trade processing and optimization businesses 
(Traiana, TriOptima, Reset) to a joint venture called Parthe non Ltd (‘J V’, UK), 
which they will jointly control (IHSM and CME are referred  to hereinafter as the 
‘Notifying Parties’ and IHSM, CME and the JV are referred to hereinafter as the 
‘Parties’).3 The creation of the JV and the contribution of the aforementioned 
businesses is referred to as the ‘Transaction’.  
1. THE PARTIES  
(2) IHSM  is an int ernational provider of information, analytics, expertise, and solutions 
to major industries, financial markets, and governments globally. IHSM provides 
pricing and reference data, financial indices, security identifiers, valuation and 
trading services, and  data feeds/data management solutions.  
(3) CME  is a US based global risk management firm. CME owns and operates several 
exchanges (Chicago Mercantile Exchange, Chicago Board of Trade (CBOT), New 
York Mercantile Exchange (NYMEX) and the Commodity Exchange (COME X)) and 
provides other trading and clearing services across a range of asset classes, including 
commodities, equity indices, foreign currency (FX) products4, interest rate 
derivatives (IRDs)5 and cryptocurrencies.  
(4) The JV  will be active in trade processing and trade/portfolio optimization services in 
a number of asset classes.  
2. THE CONCENTRATION  
(5) On 12 January 2021 IHSM and CME signed a Transaction Agreement pursuant to 
which IHSM will transfer the shares of the entities carrying out the MarkitSERV 
                                                 
3  Publication in the Official Journal of the European Union No C 244, 22.6.2021 , p. 22. 
4  FX products are derivative or so -called “spot” contracts: FX derivatives refer to contracts, whose 
payoff depends on the foreign exchange rate(s) of two (or more) currencies over time. FX  derivatives 
can be used for a number of reasons, e.g., to provide exposure or hedge against risk with respect to 
changes in exchange rates over time, or for investment purposes. The most common FX derivatives are 
swaps, forwards, non -deliverable forwards (‘NDFs’), futures and options. FX spot contracts are not 
derivative contracts, but contracts between two parties to buy one currency against selling another 
currency at an agreed price for settlement on the ‘spot’ date (usually within two days from when th e 
trade is initiated).  
5  Interest -rate derivatives, or ‘IRDs’, are contracts used to speculate on or hedge against a movement in 
interest rates, for instance by transforming a floating or variable interest -rate exposure to a fixed 
interest rate exposure o r vice versa, depending on the respective trader’s position/risk to be insured.  
 
 
6 businesses6 and CME will transfer the shares of the Traiana, TriOptima and Reset 
businesses7 to the JV.  
(6) Pursuant to the Transaction Agreement, IHSM, through its indirectly wholly owned 
subsidiary IHS Equity, will hold 50% of the shares of the JV and CME, through its  
wholly owned subsidiary CME NEX, will hold 50% of the shares of the JV. Pursuant 
to the Shareholders Agreement that the Notifying Parties will execute upon closing, 
IHSM and CME will have the right to appoint an equal number of Directors to the 
Board . A quorum requires at least one CME and one IHSM director to be present. All 
board matters will be determined by simple majority, including approval for the 
budget, business plan and management team. Accordingly, the positive consent of 
CME and IHSM is require d to approval all strategic matters; therefore, the JV will be 
jointly controlled by IHSM and CME.  
(7) The JV would perform all the functions of an autonomous economic entity on a 
lasting basis. The JV would have sufficient own staff, financial resources and 
dedicated management for its operation and for the management of its business 
interests. Furthermore, the JV would consist of pre -existing businesses and it would 
not be limited to exercising a specific function for its parents. It would have an 
independent  market presence and would not have significant sale or purchase 
relationships with its parents. Finally, the JV would be set up for an indefinite period 
and thus intended to operate on a lasting basis. Therefore, the JV would be a full -
functional joint ve nture.  
(8) The Transaction thus constitutes a concentration within the meaning of Articles 
3(1)(b) and 3(4) of the Merger Regulation.  
3. UNION  DIMENSION  
(9) The undertakings concerned have a combined aggregate world -wide turnover of more 
than EUR 5 000 million8. Each  of them has a  Union -wide turnover in excess of EUR 
250 million, but they do not achieve more than two -thirds of their aggregate Union-
wide turnover within one and the same Member State. The Transaction  therefore has 
a Union dimension  pursuant to Article 1 (2) of the Merger Regulation .  
4. MARKET DEFINITION  
4.1. Overview of Parties’ activities  
(10) The contributed businesses to the JV provide trade processing services and trade 
optimization services.  
                                                 
6  US Parthenon Holdings LLC, Option Computers Limited, MarkitSERV Limited, MarkitSERV LLC,   
RCP Trade Solutions Limited, MarkitSERV FX Limited, IHSM U.S. Newco, and MSERV Ind ia 
Services Private Limited.  
7  TriOptima AB, Reset Private Limited, Traiana, Inc, Traiana Technologies Limited, Traiana Limited, 
TriOptima UK Limited, TriOptima Asia Pacific Pte. Limited, TriOptima Japan K.K., TriOptima North 
America LLC.  
8  Turnover calc ulated in accordance with Article 5 of the Merger Regulation . 
 
 
7 (11) IHSM contributes MarkitSERV to the JV . MarkitSERV provides trade proce ssing 
services in relation to OTC derivatives , namely credit default swaps9 (‘CDS ’), equity 
derivatives10, IRDs, as well as FX spot and derivatives, with a focus on IRDs and 
CDS . Its core service sends and receives details of executed trades to (i) the trading 
parties; (ii) the execution venue, if any; (iii) the central counterparty (‘CCP ’); and 
(iv) the trade repository.  
(12) CME contributes Traiana, TriOptima and Reset  to the JV . Traiana is a market 
infrastructure technology provider that offers pre -trade risk monitoring and 
automated post -trade processing  services . TriOptima consists of three core services: 
compression, portfolio reconciliation and margin optimi zation.  Reset is a mu ltilateral 
basis risk mitigation service based on interbank offered rates ( IBOR s) for interest 
rates, FX non-deliverable forwards (‘NDFs ’), FX options and inflation derivatives.  
(13) The below overview shows the activities of the businesses across different ser vices:  
Table 1: The OTC trade processing and reconciliation services provided by the 
JV 
Source: Form CO, Table 6.1 . 
4.2. Over -the-counter ‘ OTC ’ derivatives  
(14) Derivatives are financial products (including options, futures and swaps) designed to 
transfer various types of economic risk s between the parties to a trade. They do not 
transfer ownership of underlying financial assets but derive their value from such 
assets. Financial derivatives enable a transfer of risk between two counterp arties 
without needing to invest in the underlying financial assets. There are different types 
of financial derivatives based on the underlying asset class, such as equity 
derivatives, CDS , FX derivatives, and  IRDs.  
                                                 
9  A credit default swap (CDS) is used to transfer credit risk deriving from a bond. It can be either used by 
holders of a bond to ensure against default risk or by investors not holding the bon d to speculate.  
10  An equity derivative is a financial instrument whose value is based on m ovements of an equity 
instrument . For example, a stock option is an equity derivative, because its value is based on the price 
movements of the underlying stock.  

 
 
8 (15) In broad terms, derivatives may either be traded OTC or on an exchange (i.e. 
exchange -traded -derivatives (‘ ETDs ’). In 2019, OTC derivatives accounted for 92% 
of the outstanding notional amount of the EU derivatives market, with ETDs 
accounting for the remaining 8%.   
(16) Exchange trading (as opposed  to OTC trading) means that the agreement to trade 
securities or derivatives takes place on an exchange  or ‘regulated market ’11, which is 
subject to different regulation and supervision than OTC trading (venues). While 
trading on exchange is normally anonym ous, i.e. the trading parties do not know the 
identity of their counterparty, OTC trading is generally more “relationship -based” 
and counterparties know who they are trading with, (though trading protocols 
ensuring anonymity do exist, e.g. on dealer -to-dealer venues). The reason for this is, 
that financial instruments traded on exchange are standardized and fungible, while 
OTC traded products are bespoke (e.g. derivatives) or not standardized (e.g. bonds).   
(17) In OTC trading, counterparties need to negotiate a nd agree on the price and other 
terms of the trade. This often takes place on a regulated trading venue (such as a 
Multilateral Trading Facility ( ‘MTF ’) or organised trading facility ( ‘OTF ’), or a 
regulated venue in another jurisdiction); alternatively, th e OTC trades are negotiated 
bilaterally between the counterparties to the trade.  
(18) Most OTC derivatives are traded on a bilateral basis (i.e. the contract is between two 
parties, the dealer trader and the buyside trader (so -called ‘dealer -to-client ’ or ‘D2C ’) 
or a dealer trader and another dealer trader (so -called ‘dealer -to-dealer’  or ‘D2D’ ).  
(19) Given that the Transaction does not lead to any horizontal or vertical links relating to 
exchange trading or exchange -traded products, the Commission does not further  
assess the market for exchange trading.  
4.3. Derivative s trading  services  
4.3.1.  Introduction and Parties’ services  
(20) CME owns and operates several exchanges (Chicago Mercantile Exchange , Chicago 
Board of Trade, New York Mercantile Exchange  and the  Commodity Exchange) and 
an electronic trading venue for derivative products across all asset classes (called 
CME Globex), an electronic trading venue for fixed income cash products ( called 
BrokerTec) and an FX trading platform (called EBS).  
(21) IHSM does not operate any trading venues  and does not offer any services with 
respect to exchange traded products. There are no vertical relationships between 
CME’s Futures & Options trading and clearing offering (CME Globex) and 
MarkitSERV.12 The only  trading service leading to a vertical relationship with the JV 
                                                 
11  According to Art. 4(1)(21) of Directive 2014/65/EU of the European Parliament and of the Council of 
15 May 2014 on markets in financial instruments, OJ L 173, 12.6.2014, page 349 (‘MiFID II’ ), a 
regulated market “ means a multilateral system operated and/or  managed by a market operator, which 
brings together or facilitates the bringing together of multiple third -party buying and selling interests 
in financial instruments – in the system and in accordance with its non -discretionary rules – in a way 
that resul ts in a contract, in respect of the financial instruments admitted to trading under its rules 
and/or systems, and which is authorised and functions regularly and in accordance with Title III of 
[Mifid II] ”. 
12  Notifying Parties’ response to RFI 16.  
 
 
9 (FX NOE messaging and  FX CCP connectivity) is the offering of CME’s FX trading 
venue EBS.  EBS offers trading of FX spot contracts as well as FX derivatives (non-
deliverable forwards , forwards and FX swaps).  
4.3.2.  Relevant product market  definition  
4.3.2.1.  Commission ’s previous decisions  
(22) In past decisions, the Commission considered that the provision of trading services 
for derivative contracts can be distinguished based on underlying asset classes, 
executio n environment, types of contracts  and c urrency pairs .13  
(23) First , regarding the type of underlying variable or asset, the Commission considered 
that trading services for derivatives can be categorised into trading services for equity 
derivatives (single stock or index based), IRDs, currency deriva tives, commodity 
derivatives, credit derivatives, and FX  derivatives.14  
(24) Second , the Commission previously identified separate relevant product markets for 
the provision of trading services for derivatives  on exchanges (i.e. exchange -traded 
derivatives  or ‘ETD s’) and the trading of derivatives over -the-counter (i.e. ‘OTC ’ 
derivatives) in view, in particular, of their different characteristics15 and different 
applicable legal framework.16  
(25) Third , the Commission previously segmented the provision of trading serv ices for 
derivatives according to the types of contracts and considered that trading services 
for swaps17 are part of a distinct product market from trading services for options18 
and futures/forwards,19 although it left open  whether trading services for futu res and 
for options comprise separate markets as well.20  
                                                 
13 Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraph 727 and Commission decision of 24 June 2013 in Case M.6873 - ICE/NYSE 
Euronext , paragraph 69.  
14 Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraphs 728 -731. 
15 Exchange -traded IRDs are standardised products, mainly futures and option, while the OTC trading of 
IRDs consist of contracts, mainly swaps and forward rate agreements, with bespoke terms.  
16 Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraphs 732 -737. See also case COMP/M.6166 - DBAG / NYSE Euronext , paragraphs 255ff 
and 367.  
17 A swap is an agreement between two counterparties to exch ange a sequence of cash flows over a period 
of time. These cash flows could for example be tied to the value of fixed or floating interest rates (IRS) 
or to the value of foreign currencies (FX swaps).  
18 An option is a contract between two counterparties un der which one counterparty (the option buyer) 
acquires the right (against the payment of a premium), but not the obligation, to buy from, or sell to, the 
other counterparty (the option seller) a specific amount of the underlying asset at a specific "strike  
price" on or before a specified date.  
19 A future/forward is a contract between two counterparties under which one party, the seller, agrees to 
sell to the other counterparty (the buyer) a specified amount of the underlying asset (or its cash 
equivalent) a t a specified future date at a price agreed at the time of the conclusion of the contract. The 
difference between a future and forward is that futures are traded on organised exchanges whereas 
forwards are privately negotiated.  
20 Commission decision of 1 F ebruary 2012 in Case M.6166 – Deutsche Börse/NYSE Euronext , paragraph 
443 and Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock 
Exchange Group, paragraph 743.  
 
 
10 (26) Fourth , the Commission ha s previously considered potential segmentations by 
currency pair, but ultimately left open the product market definition.21  
4.3.2.2.  Notifying Parties’ view  
(27) The Notifying Parties agree  that separate markets should be defined  by reference to 
execution method (ETD versus OTC). In addition, the Notifying Parties are of the 
view that it is not appropriate to segment the market with respect to FX spot and 
derivative products since compe titors and customers in this space are the same.  
4.3.2.3.  Commission’s assessment  
(28) With respect to the distinction by asset class, the Commission’s market investigation 
did not provide any evidence that would justify departing from the approach followed 
in previous decisions. For the purposes of this decision, therefore, the Commission 
identifies separate derivative trading services markets based on asset class. The only 
relevant asset class for derivatives trading services markets in this case is FX. CME 
does not offer derivative trading services in equity derivatives, IRDs or CDS . Hence , 
derivative trading services in relation to other asset classes than FX are not relevant 
in the context of the Transaction and are not assessed further in this decision . 
(29) The Commission further investigated distinctions by executio n environment (ETD 
versus  OTC), trading channel (electronic versus bilateral/voice execution) and types 
of contracts  or currencies.  
(30) With respect to the distinction between  ETD and OTC  execution methods, the 
Commission’s market investigation did not provide any  evidence that would justify 
departing from the approach followed in previous decisions. For the purposes of this 
decision, therefore, the Commission identifies separate markets based on execution 
method (i.e. ETD versus OTC) . MarkitSERV is not present in, nor does it provide 
any services for , ETD s. Hence, ETD -based markets are not relevant in the context of 
the Transaction and are not assessed further in this decision . 
(31) As detailed below,  in the context of FX trading services,  the Commission 
investigated whether separate markets should be defined as between: (i) FX spot and 
FX derivative trading services ; (ii) electronic a nd bilateral trading  (also referred to as 
“voice”) ; (iii) anonymous (dealer -to-dealer) and disclosed (dealer -to-client) trading 
services ; and (i v) different types of contracts .  
(32) All FX trading venue competitors responding  to the Commission’s investigation 
provide trading services for FX spot and FX derivatives22, suggesting that no 
distinction  is warranted at this level  from a supply -side perspect ive. However,  the 
question whether FX spot and FX derivatives constitute separate markets can be left 
open for the purposes of this decision, as a conclusion on this issue does not affect 
the outcome of the Commission’s assessment in the present case.  
(33) Regar ding a distinction by trading channel , based on the replies to the market 
investigation, most FX trading venue competitors (60%) consider that separate 
market s exist for  electronic FX trading services on the one hand, and  bilateral/voice 
                                                 
21  Commission decision of 24 June 2013 in Case M.6873 - ICE/NYSE Euronext , paragraph 69.  
22  Reply to question 5 of Questionnaire 5.  
 
 
11 FX trading  services on the other .23 One competitor states:  “(…) While the market 
continues to become more electronic, the rate of adoption has slowed substantially, 
suggesting that some form of voice trading will continue to be the preferred execution 
method for a se gment of the client market. Those customers are effectively not in 
scope for electronic FX trading venues/services.”24  
(34) Other respondents consider that an overall market exists covering both  electronic FX 
trading services and bilateral/voice FX trading serv ices, since market participants 
regularly trade in both ways, electronically and via voice, depending on the trade. 
Respondents also indicated that preferences are also dependent on particular products 
or currencies. For example, non -standardized products and “non -G10 currencies” 
tend to be traded via voice.25  
(35) The Commission considers that the question whether electronic FX trading services 
and bilateral/voice FX trading services constitute separate markets can be left open 
for the purposes of this decision , as a conclusion on this issue does not affect the 
outcome of the Commission’s assessment in the present case . 
(36) The Commission considered further whether “anonymous” versus “disclosed” FX 
trading constitute separate markets . Anonymous trading (also referre d to as dealer -to-
dealer trading) refers to trading protocols that keep the identity of the trading 
counterparty confidential before the trade. Disclosed trading (also referred to as 
dealer -to-client trading) means that trading counterparties on the respec tive platform 
know who they are trading with. One competitor noted that “there is generally no 
requirement for particular clients to use one over the other, therefore clients can 
(and some do) use both anonymous and disclosed liquidity sources. Therefore, these 
two types of trading venue do compete for business.”26  
(37) The Commission considers , however,  that the question of whether “anonymous” and 
“disclosed” FX trading constitute separate markets can be left open for the purposes 
of this decision, as a conclus ion on this issue does not affect the outcome of the 
Commission’s assessment in the present case .  
(38) The market investigation provided some evidence that  it might be appropriate to 
define  separate markets by type of contract or currency  (see recital (34). Some 
customers consider these  distinctions  to be relevant in relation to the question via 
which channel to trade . For example, FX trading venue  competitors mention 
specifically non -deliverable forwards, forwards, swaps and options when asked about 
which trading services they offer.27 This suggests that the mentioned products may be 
relevant distinctions in their service offering. One competitor me ntions: “Clients can 
access liquidity in more than 300 currency pairs for FX spot and up to 70 currency 
pairs for FX derivatives.”28 This indicates that the coverage of certain currency pairs 
may be a distinguishing factor in the offer of FX trading service s. 
                                                 
23  Reply to question 4 of Questionnaire 5.  
24  Reply to question 4.1 of Questionnaire 5.  
25  Reply to question 4.1 of Questionnaire 5.  
26  Minutes of a call with a market participant on 24 May  2021, 14:00 CET.  
27  Reply to question 5.2 of Questionnaire 5.  
28  Reply to question 5.2 of Questionnaire 5.  
 
 
12 (39) The Commission considers that the question whether different types of contracts and 
currencies in FX trading constitute separate markets can be left open for the purposes 
of this decision, as a conclusion on this issue does not affect the outcome of the  
Commission’s assessment in the present case.  
4.3.2.4.  Conclusion  
(40) In view of the above, the Commission con siders  that separate FX trading services 
markets exist for exchange traded and OTC traded FX products. Possible further 
distinctions may exist with respect to  (i) trading channel ( electronic, voice/bilateral),  
(ii) pre-trade transparency (anonymous or disclosed trading) , and (iii) by type of 
contract  and currency . However , concerning these additional possible distinctions,  
the relevant product market definition  can be left open as the Transaction does not 
give rise to serious  doubts as to its compatibility with the internal market  even on the 
narrowest plausible market . 
4.3.3.  Relevant geographic market definition  
4.3.3.1.  Commission’s previous decisions  
(41) The Commission has prev iously considered the relevant geographic market definition 
for derivative trading markets, in particular exchange traded European interest rate, 
equity index and single stock options and futures29, as well as for OTC FX trading 
services.  The relevant geogr aphic market de finitions in those instances were  
considered to be EEA -wide or global.  
4.3.3.2.  Notifying Parties’ view  
(42) The Notifying Parties did not provide an y explicit view s on the relevant geographic 
market for the supply of OTC FX trading services , or the potentially narrower 
markets, but provided market shares of EBS and its competitors in a global market.   
4.3.3.3.  Commission’s assessment  
(43) Responses to the market investigation varied regarding the question of the geographic 
level of competition . Nevertheless , a majority of competitors indicate that they offer 
FX trading services to customers at a worldwide level, sets fees for FX trading at a 
worldwide level and consider that their competitors are active at a worldwide level.30 
The competitors who responded in clude those  operat ing some of  the biggest 
electronic FX trading venues globally31 and hence cover a large proportion of global 
FX trading. Approximately  30% of FX trading takes place bilaterally and not on 
electronic trading venues and hence in this part of  the market, it cannot be excluded 
that market participants could have a more regional focus. From a demand -side 
perspective, the market investigation in a previous case revealed that the majority of 
customers trade OTC FX products on worldwide venues.32 
                                                 
29  Commission decision of 1 February 2012 in Case M.6166 – Deutsche Börse/NYSE Euronext , 
paragraphs 450, 460 and 462.  
30  Reply to question 6 of Ques tionnaire 5.  
31  Reply to question 8 of Questionnaire 5.  
32  Commission decision of 13 January 2021 in case M.9564 – London Stock Exchange/Refinitiv , para 219, 
to be published . 
 
 
13 (44) Regarding a plausible EEA -wide market, the Commission notes that less than [5-
10]% of EBS' trading volumes (and less than [0-5]% of EBS' revenues) are accounted 
for by EEA customers.33 Hence, the Commission considers that the question 
regarding the geographic  scope of the market for OTC FX trading services can be left 
open for the purposes of this decision, as a conclusion on this issue does not affect 
the outcome of the Commission’s assessment in the present case.  
4.3.3.4.  Conclusion  
(45) In view of the above, the Commiss ion considers , in line with previous decisions , that 
the relevant geographic market for OTC FX trading  and potential narrower markets  is 
likely global  and at least EEA -wide . However, the exact geographic market definition 
(i.e. EEA -wide or global) can be left open for the purposes of this decision, as a 
conclusion on this issue does not affect the outcome of the Commission’s assessment 
in the present case . 
4.4. Derivative s clearing  
4.4.1.  Introduction and Parties’ services  
(46) Clearing refers to all activities occurring between the time of trading (i.e. when a 
trade has been agreed between the buyer and the seller) and the moment in which 
commitments are fulfilled, or “settled” (i.e. the seller has delivered the rights to the 
financial asset to the buyer and the buyer has  paid the agreed amount to the seller). 
The main function of clearing is to insure each party to a trade against non -fulfilment 
of the commitments agreed to by the other party. This is commonly referred to as 
insuring “counterparty risk”.  Where the clearin g service is performed centrally by a 
third party, this third party is referred to as the central counterparty (“CCP”) or 
clearing house. In addition to its principal function of managing counterparty risk, the 
CCP can also perform other ancillary activiti es such as the registration and 
verification of the trade and its counterparties and the transmission of the details of 
the trade to the relevant settlement body .34  
(47) CME offers clearing and settlement services across asset classes for exchange -traded 
and OT C derivatives through its clearinghouse, CME Clearing . 
4.4.2.  Relevant product market definition  
4.4.2.1.  Commission’s previous decisions  
(48) The Commission has previously considered  separate product markets for the clearing 
of derivatives by underlying asset class (e.g. IRDs ), execution environment 
(exchange -traded and OTC), type of customer and type of contract (defining swaps as 
separate from futures and options, while leaving open whether future s and options or 
separate currencies constitute separate markets in terms of cl earing).35  
                                                 
33  Form CO, footnote 174.  
34  Commission decision of 29 March 2017 in Case M.7995 – Deutsche Börse/London Stock Exchange 
Group , paragraph 34.  
35  Commission decision of 1 February 2012 in Case M.6166 - Deutsche Börse/NYSE Euronext , paragraph 
444 and Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock 
Exchange Group , paragraph 748, 750.  
 
 
14 4.4.2.2.  Notifying Parties’ view  
(49) The Notifying Part ies submit that OTC and ETD derivatives clearing are separate 
relevant product markets . The Notifying Part ies submit that it may be appropriate to 
further distinguish between  relevant product market s for derivatives clearing services 
by asset class because the underlying financial instruments are used by different 
customer bases for different purposes. They argue that this is also supported by the 
supply -side focus of CCPs. In particular, they point to the fact that CME’s market 
position varies considerably by asset class (c. [5-10]% for OTC IRD clearing 
worldwide, less than [0-5]% for OTC FX clearing worldwide) and the fact it is no 
longer active in some asset classes (e.g. CDS ). Moreover, certain CCPs  are split by 
asset class . For example, LCH Swap Clear specialises in clearing swaps, LCH Forex 
Clear specialises in clearing FX, and ICE Clear Credit specialises in clearing credit.36 
4.4.2.3.  Commission’s assessment  
(50) The results of the  market investigation did not provide any indication that it would be 
appropriate to depart from the Commission’s previous assessment of derivatives 
clearing markets.37 In relation to whether clearing services for different asset classes 
should be within the same or separate product mar kets, the market investigation 
indicated that there is limited supply -side substitutability for clearing services across 
different asset classes. Respondents indicated that expanding into new clearing 
services requires significant investment and a long tim e period to implement the 
relevant technology solutions, obtain regulatory approvals and build a client base.38  
4.4.2.4.  Conclusion  
(51) In view of the above, the Commission concludes , in line with its previous decisional 
practice , that there are separate product market s for the clearing of  derivatives by 
underlying asset class . The Commission also considers , in line with its previous 
decisional practice , that there are separate product markets for the clearing of 
derivatives by  execution environment, type of customer and type of contract . 
However, for the purposes of this decision , the distinction by type of customer and 
contract does not appear relevant. The Transaction gives rise to a vertical link 
between MarkitSERV’s OTC FX and IRD CCP connectivity service (upstream) and 
CME’s OTC FX and IRD clearing services (downstream). MarkitSERV’s service is 
provided without any differentiation across all customer and contract types, and the 
market investigation did not give rise to any suggestion that the impact of the 
Transaction or dynamics of this vertical link would differ by customer and contract 
types . Therefore , the Commission’s assessment focuses on the relevant markets for 
OTC FX clearing and OTC IRD clearing services without fu rther distinguishing 
between custome r or contract types.  
                                                 
36  Notifying Parties’ response to RFI 4 paragraphs 10.2 and 10.3.  
37  Replies to questions 5.1 and 6 of Questionnaire  2.  
38  Replies to question 5.1 of Questionnaire 2.  
 
 
15 4.4.3.  Relevant geographic market definition  
4.4.3.1.  Commission’s previous decisions  
(52) The Commission has previously considered the relevant market for clearing services 
(for OTC traded interest rate derivatives) to be at least EEA -wide in scope. I n 
particular, the Commission noted that third country CCPs often have a different 
geographic focus and not all customers in the EEA consider them as viable 
alternatives to which they could switch within a short time.39  
4.4.3.2.  Notif ying Parties’ view  
(53) The Notifying Parties did not provide an y explicit view s on the relevant geographic 
market for the supply of clearing  services, but provided market shares on the basis of 
a global market. The Notifying Parties confirmed that these market  shares (which  are 
less than 10% on any plausible basis at worldwide level) would be even lower on an 
EEA -wide market.40 
4.4.3.3.  Commission’s assessment  
(54) The market investigation indicated  that most CCPs provide clearing services at the 
worldwide level41 and none of the responses to the Commission’s market 
investigation indicated that it would be appropriate to depart from the Commission’s 
previous assessment of the relevant geographic market for clearing services as at 
least EEA -wide.  
4.4.3.4.  Conclusion  
(55) In view of the above, the Commission considers , in line with previous decisions , that 
the relevant geographic market for clearing services  is at least EEA -wide . However, 
the exact geographic market definition (i.e. EEA -wide or global) can be left open for 
the purp oses of this decision, as a conclusion on this issue does not affect the 
outcome of the Commission’s assessment in the present case . 
4.5. Trade processing  services  
4.5.1.  Introduction and Parties’ services  
(56) Once the terms of a trade are agreed, the trade is submitted for post trade processing 
by the execution/trading venue, or by the parties themselves, if traded off -venue. This 
includes the transmission of messages between different parties to the trade, 
affirmation/confirmation of the trade, and sending the trade to the relevant CCP  (if 
applicable) and reporting it to the relevant trade repositories/regulatory bodies (as 
applicable).  
(57) MarkitSERV provides trade processing services in relation to OTC derivative s 
covering the following asset classes: CDS , equities, OTC  FX products  and IRD, with 
a focus on IRD and CDS . Its core service sends and receives details of executed 
                                                 
39  Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraph s 765-768. 
40  Notifying Parties’ response  to RFI 17, paragraph 2.1.  
41  Replies to question 7 of Questionnaire 2.  
 
 
16 trades to : (i) the trading parties; (ii) the execution venue, if any; (iii) the CCP ; and 
(iv) the trade repository.  
(58) CME is active in trade processing services through Traiana. Traiana is a market 
infrastructure technology provider that offers credit limit monitoring  and automated 
post-trade processing services for FX, equities and exchange trade d derivatives.  
Credit limit monitoring is a service provided to prime brokers, executing brokers and 
buy-side clients and consists in credit checks to ensure that the counterparty of a 
trade has sufficient credit to enter into a transaction (see Section 4.9 for more details).  
4.5.2.  Relevant product market definition  
4.5.2.1.  Commission’s previous decisions  
(59) The Commission has not previously considered trade processi ng services directly.  In 
past decisions, the Commission has considered that the provision of trading services 
for derivative contracts can be distinguished based on underlying asset classes, 
execution environment, and types of contracts  (see Section  4.3.2  above) .42  
4.5.2.2.  Notifying Parties’ view  
(60) According to the Notifying Parties, t rade processing services are separate markets 
based on the following criteria : (a) asset class, e.g. IRDs , equity  derivatives  or FX  
derivatives ; (b) type of trade, i.e. bilateral or prime broker (also known as ‘tri-party ’); 
and (c) service type, e.g. notice of execution messaging or CCP connectivity.  The 
Notifying Parties support their views on the basis of the following elements:  
(61) Distinction by a sset class . The most common underlying assets for derivatives are 
interest rates, credit (e.g. debt or fixed -income instruments), currencies (FX), 
commoditie s, and equities. Trade processing software and services for different asset 
classes are likely to constitute separate markets, because the functionality and the 
regulatory requirements vary between asset classes. There is no demand -side 
substitutability be cause customers require trade processing services specific to the 
asset class they are trading and t he individuals responsible for different asset classes 
within an organisation also typically vary. There is also limited supply -side 
substitutability, since  to expand into a new asset class it would be necessary to invest 
in new systems and to recruit individuals with the requisite knowledge of the new 
products and workflows, as well as to build relationships with new individuals at 
customer organisations.  
(62) Distinction by t rade type . Buy-side firms trade with multiple firms directly and can 
either manage their transactions with those firms throughout the life of the trades (i.e. 
on a bilateral basis) or they can use a prime broker. Prime brokerage services 
comp rise a bundle of services provided by a bank (such as BNP, Citibank, Deutsche 
Bank, HSBC, JP Morgan, Morgan Stanley and UBS) to hedge funds, asset managers, 
small banks and other clients. Prime brokerage services allow  a wide variety of 
smaller clients to trade with dealers while maintaining a credit relationship, placing 
collateral and settling with a single entity (the prime broker). In practice, the prime 
broker steps in to enter two offsetting trades: one with the client and one with the 
                                                 
42 Commission decision of 29 March 2 017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraph 727.  
 
 
17 executing broke r. In this way, the prime broker takes over the trade and effectively 
becomes the guarantor of the buy -side client for the trade. Typically, prime broker 
customers choose this structure as they  do not have the credit required to engage in 
bilateral trades.  Thus, the vast majority of prime broker customers using trade 
processing services would not consider bilateral trades (and related trade processing 
services) to be a substitute for them. Prime brokerage is most prevalent in FX 
markets. As the prime broker  sits between the two executing parties, these trades are 
often referred to as "tri -party" , and the suite of trade processing services that are 
involved in supporting prime brokerage trades are different from those involved in a 
bilateral trade.  
(63) Distinctio n by s ervice type . Trade processing services can also be distinguished by 
the service type (i.e. services relating to different stages of the trade life cycle) 
including:  (i) credit risk management (pre - and post -trade) (ii) notice of execution 
(NOE) messa ging,  and (iii) CCP connectivity . There is no demand -side 
substitutability because  customers use these services for different purposes , e.g. 
messaging services involve the transmission of messages from a 
broker/venue/liquidity provider to clients who have just executed a trade to feed their 
internal risk management systems . This service cannot be substituted with another 
trade processing service like CCP connectivity, which consist in sending details of 
trades executed on a trading venue or bilaterally to C CPs for clearing.  There is also 
limited supply -side substitutability as different services require different input and 
technical connections to different market participants. In addition, different trade 
processing services are typically procured by diffe rent divisions, desks and 
individuals within the same organisation, making it necessary to build new 
relationships in order to expand into new service types.  
4.5.2.3.  Commission’s assessment  
(64) Whil e the Commission has not previously considered trade processing services 
directl y, the results of the  market investigation indicate that trade processing service 
markets are separate markets in similar ways to trading services (e.g. by asset class),  
as proposed by the Notifying Parties.   
(65) Regarding a  distinction  by ass et class , a customer explains that “ different products 
have different requirements and different system integrations ”.43 Even though 
customers do not necessarily source different trade processing services from the same 
provider, 44% say they do procure some  products together, but only within the same 
asset class.44 Customers often seem to be organi sed internally by asset class. One 
customer states: “ Within each asset class we try to align the negotiation of products / 
contracts .”45 One market participant notes : “(…)customers themselves operate in 
very different ways across asset classes and procure products separately (e.g. the FX 
trading desk of a major bank will not align with the fixed income desk).”46 
(66) On the supply side, there would seem to be some substitut ability across asset classes. 
For example, one market participant states: “ From a supply side perspective, the 
                                                 
43  Reply to question 6 of Questionnaire  3. 
44  Reply to question 7 of Questionnaire 3.  
45  Reply to question 7.1.3 of Questionnaire 3.  
46  Minutes of a call with a market participant on 7 May 2021, 14:30 CET.  
 
 
18 technical requirements to offer services are the same/similar across asset classes. ”47 
However , generally suppliers start providing trade processing services by focusing  on 
one asset class at first. For example, “ Traiana started in FX and has expanded to 
cover other asset classes ” notes one customer.48 One market participant observes that 
“[FX] is much simpler as an asset class than fixed income. Fixed income is even 
more complex because different types of fixed income instruments trade in different 
ways, and trade differently in Europe/US/Japan. Therefore would not be easy to 
expand from FX to fixed income, as it requires a lot of work.” 49 
(67) One competitor notes: “For asset class, there are differences in requirements in 
terms of trade source, trade matching and enrichment criteria and potential 
workflows. For FX specifically, trade source could be from risk manag ement systems 
or trading platforms which tend to be asset class specific. The matching and 
enrichment requirements for FX also vary from other derivatives and those of equity 
or fixed income along with different market standards and governing regulations.”50 
(68) Also, some market participants  contacted during pre -notification , considered that 
they do  not compete with the Parties because their services , while equivalent to the 
Parties’,  related to a different asset class, in which the Parties were not active.51  
(69) Based on the above, the Commission considers that trade processing services for 
different asset classes constitute  separate markets.  
(70) As regards a distinction  by trade type (bilateral, tri -party) , a customer who is active 
as a prime broker as well as an executing broker notes: “ We run bilateral and PB at 
arms length as they have different requirements .”52 Several customers answering the 
market investigation answered in a similar fashion , e.g. “ Segregation required 
between Prime and Franchise activity .”53 A competitor in this space confirms this 
view: “Often there are information barriers and physical separation between the PB 
and other desks within sell -side participants.”54 These quotes from both customers 
and competitors indicate that customers distinguish in their operations between 
bilateral and tri -party FX trading, if they do both, and tend to keep these operations 
separate.  
(71) Equally, from a supply -side perspective, competitors in other related trade processing 
services markets underline the different pur poses and focus of the  Parties’ services, 
particularly in terms of trade type. One market participant exemplifies the view of the 
majority by noting that they  “do not see much overlap nor complementarity between 
Traiana and Markitserv, the former being PB focused and the latter being sell -side 
market making focused.”55 Responses from  competitors also support the Notifying 
Parties ’ view  that MarkitSERV and Traiana serve different customer groups and 
                                                 
47  Minutes of a call with a market participant on 7 May 2021, 14:30 CET.  
48  Reply to question 8.1 of Questionnaire 3.  
49  Minutes of a call with a market participant on 7 May 2021, 14:30 CET.  
50  Written response to ques tions from a competitor, 5 May 2021.  
51  Minutes of a call with a market participant on 7 May 2021, 14:30 CET and Minutes of a call with a 
market participant on 15 May 2021, 18:00 CET.  
52  Reply to question 6 of Questionnaire 3.  
53  Reply to question 6 of Que stionnaire 3.  
54  Minutes of a call with a market participant on 11 May 2021, 16:00 CET.  
55  Minutes of a call with a market participant on 11 May 2021, 16:00 CET.  
 
 
19 types of transactions56, and that services generally differ for bilateral and tri -party 
transactions.  
(72) Based on the above, the Commission considers that trade processing services for 
different trade types constitute separate markets.  
(73) With respect to a  distinction  by service type , on t he demand side, the results of the 
market investigation indicate that customers do not consider trade processing services 
to be  substitutable: “ We utilise different services for different needs.”57 Some 
customers consider that links/connectivity between ser vices lead them to procure 
from the same provider: “From a pricing and technology integration perspective it 
often makes sense to procure products from the same supplier – particularly from a 
connectivity perspective.”58 The majority of customers  (77%) purc hase some 
products together59, though the possibility to purchase services together does not 
seem to be a major factor in the decision from whom to procure.60 One customer 
states: “ We consider each component individually based on our needs, weighed with 
conv enience of using same provider. ”61  
(74) One competitor notes that the market is “segmented based on the service type 
required by the client, for example there are different dynamics between products 
that provide for the monitoring of trades in front office (suc h as credit limit checking) 
compared with products that control trades that are received for middle and back 
offices. There could be thus a distinction between purely ‘technical’ services and 
more ‘value added’ business services.”62  
(75) Both customers and comp etitors seem to view different trade processing services 
separately, though there may be certain product combinations that are purchased  
together. For example, when asked which services customers procure together, many 
answer that they buy several products  from each Party.63 However, no clear pattern 
emerges from the answers as to which combinations are more prevalent than others. 
Also, most respondents state that they negotiate the procurement of different products 
separately, noting that “ these services are typically procured separately ” and they are 
“separate contracts ”.64  
(76) From a supply -side perspective, there may  be a certain level of substitutability of 
general capabilities  across services, as evidenced by the fact that Traiana is active in 
several tra de processing services . However, the landscape of providers is fragmented 
and diverse.65 Since trade processing services are ancillary to the trading and clearing 
of trades, the market participants active in these services are in some cases also 
trading ven ues (e.g. FX trading venues provide NOE messaging as part of trading 
services) or CCPs themselves , or other ancillary services providers (providers of 
order management systems or risk management systems) . However, the providers of 
                                                 
56  Form CO, paragraphs 394ff.  
57  Reply to question 6 of Questionnaire 3.  
58  Reply to question 7.1.2 of Questionnaire 3.  
59  Reply to question 7 of Questionnaire 3.  
60  Replies to questions 10 and 13 of Questionnaire 3 with respect to FX NOE messaging services.  
61  Reply to question 6 of Questionnaire 3.  
62  Minutes of a call with a competitor on 12 May  2021, 11:00 CET.  
63  Reply to question 7.1.1 of Questionnaire 3.  
64  Reply to question 11.1.3 of Questionnaire 1.  
65  Form CO, paragraph 442ff regarding an overview of competitors in trade processing markets.  
 
 
20 order management systems or risk management systems do not seem to compete 
closely with the Parties for most services as evidenced by responses to the market 
investigation.66 In any case, offering a new service from the perspective of an already 
active provider of trade processing services is not necessarily an easy undertaking. 
For example, a market participant notes with respect to IHSM: “(…) in 2013 -4, 
Markit attempted to enter the credit limit checking space, but today (…) is not aware 
of any significant competition to Traiana.”67  
(77) In summary, the ans wers from market participants  indicate that while customers may 
buy several trade processing products from the same supplier, the decisions are made 
independently for each particular service , based , first and foremost , on service 
quality.68 The least important criterion when choosing  trade processing service  
providers was whether the provider also offered other related services.69 Competitors 
agreed that separate trade processing services markets exist by service type.70 
Considering that customers procure these services separately and competitors offer 
them standalone, the Commission considers that trade processing services are 
separate product markets by service type.  
(78) In addition, a distinction  by type of customer  is conce ivable regarding some trade 
processing services. One competitor states: “Competitors may also vary based on 
target market as the requirements for the likes of asset managers, hedge funds and 
banks significantly differ based on functionality specifics. For example, some buy 
side clients may require support for master/sleeve account structures which would 
not be as applicable to banks.”71  
(79) The Commission considers , in line with its previous decisional practice in related 
markets (e.g. derivatives clearing, see  Section  4.4.2 ), that it is possible that  there may 
be separate product markets for trade processing services by  type of custome r. 
However, for the purposes of this case, the distinction by type of customer does not 
appear relevant. The Transacti on gives rise to a horizontal overlap  in FX NOE 
messaging services and FX PB give -up management services, as well as a vertical 
relationship  between CME’s OTC  FX trading services (upstream) and MarkitSERV’s 
OTC FX CCP connectivity service (downstream). All those service s are provided 
without any differentiation a cross customer types, and the market investigation did 
not give rise to any suggestion that the impa ct of the Transaction or dynamics of 
these relationships would differ by customer types. T herefore , the Commission’s 
assessment focuses on the relevant markets for FX NOE messaging, FX PB give -up 
management, OTC FX CCP connectivity services and OTC FX trad ing services 
without further distinguishing between customer types.  
4.5.2.4.  Conclusion  
(80) In view of the above, the Commission con siders  that trade processing services consist 
of separate markets  (i) by asset class, (ii) by trade  type (bilateral, tri -party)  and (iii) 
by service type (at least into  NOE messaging, PB give -up management , CCP 
                                                 
66  Replies to question 15 and 28 of Questionnaire  3. 
67  Minutes of a call with a market participant on 11 May 2021, 16:00 CET.  
68  Replies to questions 10 and 24 of Questionnaire 3.  
69  Replies to questions 10 and 24 of Questionnaire 3.  
70  Written response of a competitor, 5 May 2021, call with a competito r on 12 May 2021, 11:00 CET.  
71  Written response of a competitor, 5 May 2021.  
 
 
21 connectivity ). A separate market by customer type may exist though a conclusion on 
this distinction is not necessary as it is not relevant in the markets affected by the 
Transaction . 
(81) The relevant distinct trade processing servi ces markets in which the Parties overlap 
horizontally or vertically (JV with the parent or within the JV) are covered in 
Sections  4.6 to 4.10, namely FX PB give -up management, FX NOE messaging , CCP 
connectivity , credit l imit management for OTC derivatives and trade confirmation .  
4.6. Prime broker ( PB) give-up management  
4.6.1.  Introduction and Parties’ services  
(82) When a prime brokerage trade is agreed between the two trading parties (the buy -side 
trader and the executing broker), they submit a message via a PB give -up 
management services provider’s “message interface” and a prime broker can then 
agree to step in, with the parties being notified through the message interface. The 
prime broker then enters into two offsetting trades: one between its client (the buy -
side trader) and the prime broker; and one between the executing broker and the 
prime broker. The client, prime broker and executing broker must communicate with 
each other  throughout this process. PB give -up messaging services facilitate this 
trilateral communication, including confirmation that a broker has agreed to step in 
between the parties, allocations and confirmations. The below Figure  provide s a 
graphic visualization of the process  to which P B give-up management services relate . 
Figure 1: Illustration of prime broker give -up process  
 
Source: Form CO, Table 6.3.  
(83) Traiana is active in PB give -up management services for FX , equity,  IRD and 
exchange -traded derivatives  trade s across several asset classes  (though not for FX) .72 
PB give -up management services comprise the following sub -services: PB give -up 
messaging services, processing give -up agreements, tri -party documentation 
management, credit limit management and aggregati on. 
                                                 
72  Notifying Parties’ response to question 3 in RFI 18.  

 
 
22 (84) MarkitSERV provides a sub -set of PB give -up management services for a very small 
volume of FX prime brokerage trades for a limited number of customers. Concretely, 
MarkitSERV has […] customers who use FX NOE messaging services for both 
bilateral and prime broker trades. In addition  […], a small number of customers use 
MarkitSERV’s TradeSTP service for FX PB give-up messaging.  MarkitSERV does 
not provide any other FX PB give -up management services mentioned in the 
previous recital .  
4.6.2.  Relevant product ma rket definition  
4.6.2.1.  Commission’s previous decisions  
(85) The Commission has not previously considered the prime broker (PB) give -up 
management services market . However, the Commission has considered the related 
market of trading services for derivative contracts and considered in past decisions 
that the market can be distinguished  based on underlying asset classes, execution 
environment, and types of contracts.73  
4.6.2.2.  Notifying Parties’ view  
(86) The Notifying Parties’ views with respect to the general distinguishing criter ia in 
trade processing services markets (by asset class and trade type) applies also to PB 
give-up management services  (see Section  4.5.2 ).  
(87) The Notifying Parties note that FX is the only asset class with a significant volume of 
prime  broker trades. In addition , on the demand side, different divisions, desks and 
individuals are responsible for services by asset class in customers’ organi sations .  
(88) The Notifying Parties consider that FX PB give -up management services constitute 
one relevant product market which should not be further distinguished  by service 
type. Traiana offers different, distinguishable FX PB -give-up management services 
that are all available to be purchased individually. Some customers purchase only one 
service, while others purchase several. However, the Notifying Parties submit that it 
is not necessary to conclude on whether FX PB give -up management services should 
be further distinguished  by service type, as it does not affect the competitive 
assessment.   
4.6.2.3.  Commission’s assessment  
(89) The results of the market investigation indicate that it is appropriate to consider PB 
give-up management services as a separate product market from ot her trade 
processing services. Furthermore, the market investigation supports the conclusion 
that there are separate PB give -up management services markets by asset class and 
trade type.  
(90) Regarding distinctions based on type of contract and execution envir onment , there 
may be separate markets with respect to PB give -up management services in other 
asset classes or trade types. However, in the present case, affected markets only arise 
                                                 
73 Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraph 727.  
 
 
23 with respect to FX PB give -up management, and within FX a further separati on by 
type of contract or execution environment is not relevant.   
(91) Regarding distinctions by service type or trading channel , the market definition can 
be left open as no serious doubts as to the Transaction ’s compatibility with the 
internal market  arise regardless of whether a broader market (including all FX PB 
give-up management services, i.e FX PB give -up messaging services, processing 
give-up agreements, tri -party documentation management, credit limit management 
and aggregation for trades execu ted electronically and bilaterally/via voice ) or 
separate markets are assessed . The below sets out in more detail the Commission’s 
considerations.  
(92) In terms of a distinction  on an asset class basis , the majority of respondents to the 
market investigation co nsidered  that, from  a demand -side perspective,  a distinction 
between PB give -up management services  by asset class is relevant.74 The 
respondents refer in particular to FX as a relevant asset class. This may be related to 
the fact that FX is the only asset class with significant volumes of prime broker 
trades.75  
(93) From a supply -side perspective, the question does not arise in a meaningful way, as 
no other asset class except FX has significant v olume of primer b roker  trades.76 The 
Commission considers that the P B give -up management services market is separated 
by asset class. Hence, the Commission considers for the purpose s of this decision, 
that FX PB give -up management services constitute a separate market.  
(94) In terms of execution environment , the distinction of whether a trade is executed on 
exchange or OTC is not relevant for the markets in the present case, as FX PB trades 
are all executed OTC and not on exchanges.77 Hence, a distinction by execution 
environment is not relevant for the assessm ent of the overlap the Transaction leads to 
in FX PB give -up management services. This distinction is therefore not further 
assessed for the purpose s of this decision.  
(95) In terms of type of contract , FX PB give -up management services do not provide for 
any d istinction by type of contract. The market investigation did not reveal any such 
distinction as being relevant in FX PB give -up management services. Traiana and its 
competitors provide FX PB give -up management services for all contract types for 
FX and no distinction is mad e with respect to the services by type of contract.78 
Hence, a distinction by type of contract is not relevant for the assessment of the 
overlap the Transaction leads to in FX PB give -up management services. This 
distinction is therefore n ot further assessed for the purpose s of this decision.  
(96) In terms of a distinction by service type  within FX PB give -up management services, 
the Commission notes that such a distinction may exist , given that products are 
                                                 
74  Reply to question 6 of Questionnaire 3.  
75  Form CO, paragraph 433 and Notifying Parties’ response to RFI 13, question 1.  
76  Based on a November 2020 ISDA report, the overall OTC equity swaps market is approximately 5% of 
the overall OTC FX market (based on  notional outstanding), with OTC equity swaps being the only 
other asset class in which prime brokerage exists to a meaningful extent according to the Notifying 
Parties, see Key-Trends -in-the-Size-and-Composition -of-OTC -Derivatives -Markets -in-the-First-Half-
of-2020.pdf (isda.org)  and reply to question 1 in RFI 13.  
77  Notifying Parties’ response to question 2 in RFI 18.  
78  Notifying Parties’ response to question 4 in RFI 18.  
 
 
24 available standalone and in combinati on, and customers seem to buy one or several 
products depending on their needs and hence, there seems to be no “fixed bundle” 
constituting FX PB give -up management services.79 The majority of Traiana’s 
customers buy the FX PB give -up messaging service ( […] clients of FX PB give -up 
management services overall) , indicating the importance of this service within FX PB 
give-up management services.   
(97) In the market investigation, the Commission asked whether customers considered 
that they could use other service typ es to replace their current FX PB give -up 
management provider. Responses were mixed with a minority answering “yes” and a 
majority answering “it depends” or “no”. When asked to explain, the general tenor 
was that certain parts of FX PB give -up management c an be replaced by in -house 
self-supply or other providers while other parts, like the messaging service, rely on 
the “network” which only Traiana currently seems to provide.80  
(98) In addition, evidence available to the Commission suggests that entry in the mar ket 
of FX PB give -up management is not easy in the sense that suppliers in adjacent 
markets are not able to switch quickly to provide FX PB give -up management 
services and market them in the short term.81 This is supported  by the fact that 
MarkitSERV entered the market 10 years ago but has not gained significant traction, 
even though it already competed in adjacent trade processing services markets.  
(99) While a distinction by service type cannot be excluded based on the evidenc e 
available, a conclusion on this point is not relevant, as the competitive assessment 
would not change based on a narrower market definition distinguishing FX PB give -
up management services further.  
(100)  In terms of trading channel , prime brokers use Traiana’s  FX PB give -up messaging 
services regardless of how a trade was executed (electronically or bilaterally), so 
from a demand -side perspective , customers do not distinguish between those 
channels when purchasing this service.82 
4.6.2.4.  Conclusion  
(101)  Based on the results of the market investigation and the evidence available to it, the 
Commission considers that PB give -up management services are a separate relevant 
product market from other trade processing services  and that it is appropriate to 
distinguish the market for PB give -up management services by asset class and trade 
type.  
(102)  While separate markets based on the execution environment and types of contracts 
may exist with respect to other asset classes, these distinctions are not relevant for the 
present case, as the Parties’ activities only present a link with respect to FX . In FX  
PB give -up management services , these distinctions are not relevant .  
                                                 
79  Form CO, paragraph 438 a), reply to question 7.1.1 of Questionnaire 3.  
80  Reply to question 23 of Questionnaire 3.  
81  Commission Notice on the definition of relevant market for the purposes of Com munity competition 
law (97/C 372/03), para. 20.  
82  Notifying Parties’ response to question 9 in RFI 19.  
 
 
25 (103)  Potentially narrower separate markets by service type and trading channel within FX 
PB give -up management may exist, tho ugh these can be left open,  as the Transaction 
does not give rise to serious doubts as to its compatibility with the internal market  
irrespective of such a distinction . Concretely, the Transaction leads to a horizontal 
overlap in FX PB give -up messaging se rvices (see Section  5.5) and possible 
conglomerate effects with respect to FX PB give -up management  services (see 
Section  5.9), the assessment of which does not change depending on the above 
further plausible distinction.  
4.6.3.  Relevant geographic market definition  
4.6.3.1.  Commission’s previous decisions  
(104)  The Commission has not previously considered the relevant geographic mark et 
definition for FX PB give -up management services. However, relevant geographic 
market definitions in related markets like derivative trading and clearing have 
generally been at least EEA -wide or global.83  
4.6.3.2.  Notifying Parties’ view  
(105)  The Notifying Parties submit that the relevant geographic market for the supply of 
trade processing services is global, given that the Parties and their competitors 
provide their services to customers across the world. The Notifying Parties did not 
submit a specific view with respect to FX PB give -up management services.  
4.6.3.3.  Commission’s assessment  
(106)  The Commission asked customers of FX PB give -up management services in the 
market investigation whether  they compare offers of service providers at worldwide, 
EEA, n ation al or other geographic level  and whether the same suppliers are active on 
these level s. In both cases, customers answered practically unanimously that they 
compared offers at worldwide level and that suppliers are active world wide.84  
(107)  Suppliers of FX PB give -up management offer their services to customers worldwide  
and there are no physical barriers to the provision of services .  
4.6.3.4.  Conclusion  
(108)  In light of the foregoing , for the purposes of this decision, the Commission considers 
the geographic market of F X PB give -up management services to be worldwide.  
4.7. NOE messaging services  
4.7.1.  Introduction and Parties’ services  
(109)  Notice of execution ( ‘NOE ’) messaging services involve sending NOEs from brokers 
or venues to customers to feed customers internal risk management systems. A notice 
of execution message is an electronic message sent by brokers or liquidity providers 
                                                 
83  Commission decision of 1 February 2012 in Case M.6166 – Deutsche Börse/NYSE Euronext , 
paragraphs 450, 460 and 462.  
84  Replies to question 14 and 27 of Questionnaire  3. 
 
 
26 to their clients to notify them of the fact that a trade has been executed and of the 
terms of that trade . It enables counterparties to check the terms o f the trade and (for 
bilateral trades) to enter it in their risk management system . MarkitSERV provides 
bilateral NOE messaging services for trades in several asset classes (credit, equities, 
FX and interest rate derivatives). Traiana provides bilateral NO E messaging in FX, 
cash equities and exchange traded derivatives. Hence, a horizontal overlap arises in  
bilateral  FX NOE messaging services.  In addition, MarkitSERV and Traiana  provide 
tri-party NOE messaging services. While for Traiana this service is an integral part of 
its PB give -up management services offering, M arkitSERV is only active as a 
marginal player in tri -party FX NOE messaging.  
4.7.2.  Relevant product market definition  
4.7.2.1.  Commission’s previous decisions  
(110)  The Commission has not previously considered the NOE messaging services market . 
However, the Commission has considered the related market of trading services for 
derivative contracts and considered in past decisions that the market can be 
segmented  based on underlying asset classes, execution environment , and types of 
contracts.85  
4.7.2.2.  Notifying Parties’ view  
(111)  The Notifying Parties’ views with respect to the general segmentation in trade 
processing services markets (by asset class and trade type ) applies also to NOE 
messaging services (see chapter 4.5.2.2).  
(112)  The Notifying Parties consider that FX NOE messaging services can be distinguished  
by trade type (bilateral, tri -party). While the Notifying Parties agree that there is 
some supply -side substitutability between bilateral FX NOE messaging and tri-party 
FX PB give-up messaging from a technical perspective , they consider that  there are 
other barriers that make it difficult to expand from being a provider of FX NOE 
messaging services to FX PB give -up messaging and vice versa. A provider would 
have to build new wo rkflows and new relationships with individuals in customers’ 
organizations, since different divisions in customers’ organizations handle FX NOE 
messaging and FX PB give -up messaging.  
(113)  The Notifying Parties do not consider that there are separate  market s for FX NOE 
messaging by type of contract  (e.g. non -deliverable forward s, options, etc.). 
According to the Notifying Parties , there is supply -side substitution, as NOE 
messaging is substantially the same across different types of derivatives with only 
limited differences in the data fields.86 However, there is no demand -side substitution 
between different types of contracts .  
(114)  Regarding independent provision versus a captive  provision  of FX NOE messaging 
services, the Notifying Parties consider  this not to be  a plausible distinction. The 
Notifying Part ies conside r that suppliers  that provide FX NOE messaging services in 
an ancillary capacity (captive providers) compete with suppliers  that provide FX 
                                                 
85 Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraph 727.  
86  Notifying Parties’ response to question 4 in RFI 13.  
 
 
27 NOE messaging services as their core service and without bein g vertically integrated  
(independent providers) . These other providers are for example risk management 
system providers (Murex, OpenLink, Finastra), post -trade messaging vendors such as 
Refinitiv or Broadridge or trading platforms like EBS, Refinitiv Match ing, Hotspot 
(CBOE), FX all and Currenex.  While the Notifying Parties recognise that there are 
some trading venues that only provide FX NOE messaging in relation to trades 
executed on their venue, there is competition with respect to FX NOE messaging 
even for those trades. Third party providers (such as Refinitiv and MarkitSERV) are 
commonly used for FX NOE messaging services and hence, trades on these venues 
cannot be considered captive.  
4.7.2.3.  Commission’s assessment  
(115)  The results of the market  investigation indicate that it is appropriate to consider NOE 
messaging services as a separate product market from other trade processing services . 
Furthermore, the market investigation supports the conclusion  that there are separate 
NOE messaging markets  by asset class and trade type .  
(116)  Regarding distinctions based on type of contract  and execution environment , it is 
possible that  there may be separate markets with respect to NOE messaging services 
in other  asset classes or trade types. However, in the pre sent case, affected markets 
only arise with respect to FX NOE messaging, and within FX a further separation by 
type of contract or execution environment is not relevant.  
(117)  Regarding  distinctions based on trading channel (electronic or bilateral/voice 
executi on) and  independent versus captive provision of services , the market 
definition can be left open as no serious doubts as to the Transaction’s compatibility 
with the internal market  arise regardless of whether a broader market (including both) 
or separate m arkets are concerned.  The below sets out in more detail the 
Commission’s considerations.  
(118)  Regarding a distinction by asset class , the Commission ’s market investigation 
provided no evidence that NOE messaging services are contracted across asset 
classes. Respondents procure trade processing  services together, where it makes 
technical and commercial sense, though a majority indicates that this is of ten the case 
within the same asset class.87 Clients of trade processing services are organized 
internally by asset class and often source these services accordingly. One customer 
explains: “This is negotiated at the FX business level.”88 
(119)  From a supply -side perspective , there may be some substitutability  across asset 
classes . However, it would not seem to be the case that suppliers are easily able to 
switch their messaging product to other asset classes89, as this requires connections to 
different venues and b rokers (which operate segmented by asset class too).  Hence, 
separate markets  by asset class seem to be plausible.  
(120)  With respect to the trade type , there is some supply -side substitutability in NOE 
messaging services across bilateral and tri -party trade flow s, as evidenced by the fact 
                                                 
87  Reply to question 7 of Questionnaire 3.  
88  Reply to question 7 .1.3 of Questionnaire 3.  
89  Commission Notice on the definition of relevant market for the purposes of Community competition 
law (97/C 372/03), para. 20.  
 
 
28 that MarkitSERV  and Traiana  offer both types of messaging services. However, the 
mere presence of the Parties in the respective market s alone does not indicate that the 
messaging market is one market across bilateral and tri -party messaging services. 
From a demand -side perspective, customers do not consider Traiana and 
MarkitSERV as potential substitutes in FX NOE messaging.90 One customer notes: 
“The FXPB business does not procure FX NOE messaging services from 
MarkitSERV. The FX  Options business procures FX NOE messaging services from 
MarkitSERV .”91 While MarkitSERV is considered a competitor to Traiana  in FX 
NOE messaging92, the closer competitor to Traiana’s offering (which is broader than 
messaging) is considered to be a recent entrant, Cobalt.93  
(121)  Asked whether customers consider it important that their FX NOE messaging 
provider is also able to provide other messaging services ( FX PB give -up messaging 
services) , answers are mixed.94 One customer that is active as a prime broker and  as 
an executing broker (and hence has bilateral and tri -party trade flows) comments: 
“We do not consider there to be obvious efficiencies to be gained across these types 
of messaging products.”95 Another customer in the same situation mentioned the 
followi ng: “As we are a PB we require access to NOE messages, Traiana is the 
largest provider and therefore it is critical we can access as a PB and EB.”96 A third 
customer mentions: “Harmony  [Traiana’s trade processing services suite]  is not 
used in the bilateral  FX space, where SWIFT and CLS are the main providers.”97  
(122)  While there seems to be some supply -side substitutability between bilateral and tri -
party messaging  services, the majority of responding  market participants do not 
consider the Parties’ activities to be substitutable.98 This is not surprising as 
messaging services are only a part of the suite of products that are included in PB 
give-up management  services. When asked about competitors in FX PB give -up 
management services that provide these services a s a core offering, the only two 
companies consistently mentioned are Traiana and Cobalt, not MarkitSERV.99 
(123)  The Parties provide , and some customers use , the messaging  services of one Party for 
both bilateral and tri -party messaging (see recital (109) ). However, given that only 
very few customers use the services of the  Parties interchangeably indicates that for 
the large majority of customers they do not  seem to be alternatives or there is no 
perceived benefit in sourcing the services from the same provider. Another aspect to 
consider is that bilateral NOE messages are sent from brokers or venues to customers 
“pre-risk”, i.e. before the trade is entered i nto the customers risk management 
systems. The messages therefore need to be sent in real time to be of use for 
customers. PB give -up management services are, however, provided “post -risk”, i.e. 
                                                 
90  Reply to question 20 of Questionnaire 3.  
91  Reply to question 20 of Questionnaire 3.  
92  Reply to question 17 of Questionnaire 3.  
93  Reply to question 30 of Questionnaire 3.  
94  Reply to question 13 of Questionnaire 3.  
95  Reply to question 13.1 of Questionnaire 3.  
96  Reply to question 13.1 of Questionnaire 3.  
97  Minutes of a call with a market participa nt on 4 May 2021, 11:00 CET.  
98  Reply to question 30 of Questionnaire 3. 
99  Reply to question 31 of Questionnaire 3.  
 
 
29 after the trade is entered into the customers risk management  system. For this use 
case, the speed does not matter as much as it does for “pre -risk” messages.100 
(124)  In conclusion, there seem to be different views on whether there is a benefit in 
procuring bilateral and tri -party FX NOE messaging services from the same or  
different providers , depending on the customer’s business activities. However, even 
where customers are active as a prime broker and an executing broker, this does not 
necessarily mean they source related trade processing services from the same 
provider ( see quote s in recital s (120)  and (121) ).   
(125)  In terms of execution environment  (exchange -traded versus OTC execution), the 
distinction between  whether a trade is executed on exchange or OTC is not relevant 
for the markets in the pres ent case, as the Parties  only offer trade processing services 
in the affected markets for OTC derivatives.101 Hence, this distinction is not further 
assessed for the purpose s of this decision.  
(126)  In terms of type of contract , FX NOE messaging services do not p rovide for any 
distinction by type of contract.102 The market investigation did not reveal any such 
distinction as being relevant in FX NOE messaging  services. NOE messaging is 
substantially the same across different types of derivatives with only limited 
differences in the data fields. MarkitSERV, for example, charges the same fee for 
NOE messaging irrespective of the type of derivative. While some types of contracts 
may require several NOE messages for different “legs” of the contract (and therefore, 
they a re more expensive from a NOE messaging cost perspective than others), this is 
unlikely to be a meaningful distinguishing factor for either demand or supply side, 
given that the overall cost of NOE messaging services compared to other trading 
costs is very small.103 The Commission therefore considers that there is no need to 
conclude on such a distinction as this is not relevant for the purposes of the present 
decision.  
(127)  As regards a distinction by trading channel  (electronic versus bilateral/voice 
execution ), trades are submitted to the NOE messaging provider either by the 
electronic trading venue when the trade is executed electronically, or by the parties to 
the trade themselves , when the trade is executed bilaterally , e.g. by phone . In FX 
markets in particu lar, the majority of trading has moved to electronic venues in recent 
years, though ca. 30% of trading volume is still executed bilaterally/via voice.104 
Most electronic FX trading venue competitors were of the opinion that the market is 
split into electroni c FX trading and bilateral/voice trading.105 However, this may be 
different from a demand -side perspective. In any case, there is no need to conclude 
on whether there are separate FX NOE messaging services markets for trades 
executed on electronic venues or bilaterally/via voice, as the distinction would not 
change the Commission’s assessment in the present case.  
                                                 
100  Form CO, paragraph 700.  
101  Notifying Parties’ response to question 3 in  RFI 19:  While Traiana provides a limited amount of FX 
NOE messaging for ETD s, there is no overlap with MarkitSERV (as MarkitSERV does not currently  
process trades in relation to the same  assets).  
102  Notifying Parties’ response to question 4 in  RFI 19.  
103  Notifying Parties’ response to RFI 15.  
104  https://www.euromoney.com/Media/documents/euromoney/pdf/FX -2019 -Results -Presentation.pdf , 
slide 5, accessed on 11 July.  
105  Reply to question 4 of Questionnaire 5.  
 
 
30 (128)  In addition, the Commission considered whether the re could be separate  FX NOE 
messaging services market s based on an  independent provision of servic es 
(“independent ”) versus a vertically integrated provision of services  (“captive”) . This 
is a plausible  distinction  given that trading venues and brokers (as well as other 
providers ), offer messaging services as an ancillary part of their 
trading /intermed iation  services , i.e. they provide trade messaging for the trades 
executed on their venues/through their intermediation . However, for example 
MarkitSERV also processes trades executed on various third party trading platforms, 
which may have their own captive messaging services that they provide to their 
clients.  
(129)  First , the line between independent and captive providers is somewhat blurred. While 
MarkitSERV and Traiana’s messaging services  are considered independent of any 
trading venue106, some FX trading venue  providers also provide NOE messaging 
services  to third party venues . In particular, Refinitiv, which operates an FX trading 
platform and is according to the Notifying Parties the larg est provider of FX NOE 
messaging services, is active as an independent provider  to third party venues , in that 
its customers can use messaging services for trades executed on the Refinitiv trade 
platform or on other, third party trade platforms.  
(130)  Second,  one competitor is of the view that customers prefer a provider that connects 
to several venues for efficiency reasons: “The benefit of using IHSM or Traiana’s 
service, as opposed to a drop copy from a trading venue for example, is operational 
efficiency – clients do not need to use multiple different messaging systems across 
their trading platforms and so can avoid the development time and effort needed to 
make their systems work with different platform’s messaging services.”107 However,  
this contrasts with oth er evidence available to the Commission. T he market 
investigation  indicated that in most cases customers consider independent and captive 
providers’ services to be substitutable. Historically, switching is not common among 
customers,108 which one customer ex plained was because “[ w]hile it is not difficult to 
change provider…, there would need to be a good reason to justify the cost and time 
involved ”, noting that its current providers’ offering has worked well and so it has not 
had reason to consider changing.109 However, customers’ replies to the market 
investigation suggested that should a need to switch arise, captive providers (which 
can be trading venues, brokers or risk management system providers) would be an 
alternative to independent ones. Even though it could be argued that captive 
providers only ever provide a partial replacement for an independent provider that 
connects to several venues, it is conceivable that those providers would be able to 
develop a wider solution  (like Refinitiv) . In part icular , large customers could sponsor 
such entry as has been demonstrated in past cases110. In any case, a  large majority of 
customers (70%) indicated that they would be able to fully or at least partially replace 
                                                 
106  Despite the fact Traiana’s parent company CME also owns FX trading venue EBS.  
107  Minutes of a call with a competitor on 24 July at 14:00 CET.  
108  Reply to question 22 of Questionnaire 3.  
109  Minutes of a call with a market participant on 28 April 2021 at 10:00 CET.  
110  For example, recent entrant Cobalt in FX PB give -up management services is supported by several of 
Traiana’s main customers in an effort to introduce more competition in that market.  
 
 
31 the FX NOE messaging service they currently procure with an alternative service .111 
One customer notes: “We could direct connect to platforms .”112 
(131)  The ability to switch by customers is further confirmed by win -loss analyses of both 
Parties’ FX NOE messaging services between 2016 and 2021. During the las t 5 
years, MarkitSERV lost […] clients, […] of which replaced MarkitSERV’s services 
with an in -house solution and […] of which changed to a competitor.113 The 
Commission notes that in this context an ‘in -house solution’ likely refers to a solution 
whereby th e customer switches to the messaging services offered by trading venues 
(i.e. the customer conducts internal development so as to build a solution that enables 
it to effectively use these services of trading venues). Traiana’s bilateral FX NOE 
messaging se rvice lost […] clients during the same time, […] of which no longer 
needed the service, […] of which built in -house connectivity and […] of which 
possibly moved to a competitor (no names known), while […] provided no reason.114  
(132)  Third,  the market investigation revealed that c ustomers consider captive  providers to 
have similar competitive strength in the market for FX NOE messaging115 as the 
main independent suppliers ( MarkitSERV, Traiana and Refinitiv ). The fact that 
several captive providers are con sidered to have similar competitive strength as the 
main independent suppliers further indicates that customers consider these providers 
to offer substitutable  services.  In addition, some captive providers, like credit 
monitoring vendors and order manageme nt system providers (as well as FX 
aggregators) market connectivity to multiple trading venues for the purpose  of 
execution and can and do provide multi -venue NOE messaging to their clients.116 
(133)  Fourth , certain providers have a “hybrid” model. Both  Traiana an d Refinitiv  act as 
“independent” provider , i.e. offering services to competing trading venues, but also 
as a “captive” provider,  given that they both own (or their respective parent company 
also owns) FX trading venues (Traiana’s parent CME owns FX trading  venue EBS 
and Refinitiv owns FX all and Matching, two FX trading venues). Furthermore , an 
independent provider  like MarkitSERV provides FX NOE messaging services to a 
number of customers trading on  Refinitiv’s venues, even though Refinitiv has its own 
FX NOE messaging service , further illustrating MarkitSERV and Refinitiv’s 
products would be substitutable . 
(134)  In summary, the market investigation confirms that customers generally consider that 
the FX NO E messaging services provided by independent and captive providers 
would be substitutable to a large extent, with captive providers being considered 
possible substitutes  of independent providers. Furthermore, most “independent” 
providers including Trai ana are not actually independent in the sense that they are 
owned by parents that also own FX trading venues. In any case, the Commission 
considers that a conclusion on the question whether there are separate markets for 
independent provision of FX NOE messagi ng services and captive provision of FX 
NOE messaging services (including a narrower definition of captive provision of FX 
                                                 
111  Reply to question 9 of Questionnaire 3.  
112  Reply to que stion 9.1 of Questionnaire 3.  
113  Notifying Parties’ response to RFI 10, Annex 145.  
114  Notifying Parties’ response to RFI 10, Annex 146.  
115  Reply to question 15 of Questionnaire 3. Specifically, Broadridge, SmartTrade, Fluent Trade 
Technologies, Murex and CBOE FX.  
116  Notifying Parties’ response to question 7 in RFI 19.  
 
 
32 NOE messaging services for each venue) or one market including both is not 
necessary, as the Transaction does not give rise to seriou s doubts as to its 
compatibility with the internal market  on the basis of  either market definition.  
4.7.2.4.  Conclusion  
(135)  Based on the results of the market investigation and  the evidence available to it, the 
Commission considers that NOE messaging services are a sep arate relevant product 
market from other trade processing services, and that it is appropriate to distinguish 
the market for NOE messaging services by asset class and trade type . A further 
distinction  by type of contract  and execution environment is not re levant in the 
present case, where overlaps exist only with respect to FX NOE messaging. The 
conclusion on whether electronic vs. bilateral/voice execution channels and 
independent versus captive service provision are separate markets can be left open, as 
the Transaction does not give rise to serious doubts  as to its compatibility with the 
internal market  irrespective of such a distinction . Concretely, the Transaction leads to 
a horizontal overlap with respect to bilateral FX NOE messaging (see Section  5.4), 
the assessment of which does not change depending on the above further plausible 
distinction s. 
4.7.3.  Relevant geographic market definition  
4.7.3.1.  Commission’s previous decisions  
(136)  The Commission has not previously considered the relevant geographic market 
definition for bilateral FX NOE messaging services. However, relevant geographic 
market definitions in related markets like derivative trading and clearing have 
generally been at least EEA -wide or global.117  
4.7.3.2.  Notifying Parties’ view  
(137)  The Notifying Parties submit that the relevant geographic market for the supply of 
trade processing services , including bilateral FX NOE messaging services,  is global, 
given that the Parti es and their competitors provide their services to customers across 
the world.  
4.7.3.3.  Commission’s assessment  
(138)  The Commission asked customers of  bilateral  FX NOE messaging services in the 
market investigation whether  they compare offers of service providers at worldwide, 
EEA, national or any other geographic level and whether the same suppliers are 
active on th ese level s. In both cases, customers answered practically unanimously 
that they compared offers at worldwide level and that suppliers are active 
worldw ide.118  
                                                 
117  Commission decision of 1 February 2012 in Case M.6166 – Deutsche Börse/NYSE Euronext , 
paragraphs 450, 460 and 462.  
118  Replies to question 14 of Questionnaire 3.  
 
 
33 (139)  Competitors in this space did not mention any geographically narrower basis on 
which they compete.119 
4.7.3.4.  Conclusion  
(140)  Therefore, for the purposes of this decision, the Commission considers the 
geographic market of bilateral FX NOE messaging services  to be worldwide.  
4.8. CCP connectivity  
4.8.1.  Introduction and Parties’ services  
(141)  CCP connectivity services consist in sending details of trades executed on a venue or 
bilaterally to a central counterparty  (‘CCP ’) for clearing. CCP connectivity services 
are also refe rred to as ‘middleware ’ and are closely linked to derivatives trading 
services (as it can be a source of trades to be sent to clearing) and clearing services 
(the destination of the trade).  
(142)  MarkitSERV provides CCP connectivity for CDS , FX and IRDs .  
(143)  Traia na is mainly  active in the provision of CCP connectivity in the equities asset 
class, which represents the vast majority ( [80-90]%) of its CCP connectivity 
revenues. Traiana is also active , to a much lesser extent,  in the FX and IRD asset 
class es for CCP c onnectivity.120 
4.8.2.  Relevant product market definition  
4.8.2.1.  Commission’s previous decisions  
(144)  The Commission has not previously considered the relevant product market for CCP 
connectivity services. However, the Commission has considered the related market of 
trading services for derivative contracts and considered in past decisions that the re 
are separate relevant product markets based on the underlying asset classes, 
execution environment, and types of contracts.121 Similarly, the Commission has 
previously asse ssed the relevant product market for the clearing of derivatives, and 
considered separate product markets for the clearing of derivatives by underlying 
asset class, execution environment, type of customer and type of contract.122 
4.8.2.2.  Notifying Parties’ view  
(145)  The Notifying Parties’ views with respect to the general approach to market 
definition in trade processing services markets ( namely that there are separate 
                                                 
119  Minutes of calls with competitors on 24 June 2021, 14:00 CET, 11 May 2021, 16:00 CET and 12 May 
2021, 11:00 CET.  
120  For completeness, the Notifying Parties indicated that Traiana also provides certain, limited 
connectivity services in the IRD and CDS asset classes. However, it submits that these services serve a 
different function from, and are not substitutable with, CCP connectivity services, as explained in 
Section  5.3 below. 
121 Commission decision of 29 March 2017 in Case M.7995 - Deutsche Börse/London Stock Exchange 
Group , paragraph 727.  
122 Commission decision of 1 February 2012 in Case M.6166 - Deutsche Börse/NYSE Euronext , paragraph 
444 and Commission decision of 29 Marc h 2017 in Case M.7995 - Deutsche Börse/London Stock 
Exchange Group , paragraph 748, 750.  
 
 
34 product markets by asset class and trade type , see Section 4.5.2 ) apply  also to CCP 
connectivity services , although the Notifying Parties  did not detail why they 
considered this would be the case .  
(146)  The Notifying Part ies further submit that there is limi ted supply -side substitutability 
between the different asset classes for CCP connectivity. This is due to the different 
functionality and impact of regulatory requirements for trade processing services 
(such as CCP connectivity) in different asset classes,  and the fact that in customer 
organisations different divisions, desks and individuals are responsible for procuring 
trade processing services, such as CCP connectivity. Therefore, the Notifying Part ies 
submit that expanding a CCP connectivity service fro m one asset class to another 
would require investment in new systems, knowledge of new products and 
workflows, and to build new client relationships.123 
4.8.2.3.  Commission’s assessment  
(147)  The results of the market investigation indicate that it is appropriate to consider CCP 
connectivity a s a separate product market from other  trade processing services  and 
are consistent with the Notifying Parties’ submissions that there is limited supply -
side substitutability between different asset classes .  
(148)  First, while most cu stomers of CCP connectivity indicated that they do buy some 
other trade processing products from their CCP connectivity provider, the majority of 
customers also confirmed that these products are negotiated and procured separately  
(i.e. as part of separate procurement processes) .124 Customers noted that trade 
processing services are “ distinct per services and asset class ” and explained that CCP 
connectivity serves a distinct purpose and so is procured for a different reason than 
other services.125 
(149)  Second, custom ers indicated  that it is not important to procure CCP connectivity 
services together from the same company from which customers receive other trade 
processing services.126 Ultimately, customers explained that their choice of CCP 
connectivity provider (and tr ade processing provider more generally) is primarily 
driven by their particular needs for the specific service  in question , as the decision of 
which supplier to procure from is “ reviewed based on business requirements, product 
offering, commercial terms an d vendor risk on a case by case basis ”.127 There can, 
however, be some operational efficiencies to procuring products from one supplier, 
as this reduces complexity.  
(150)  Third, regarding  the appropriateness of defining narrower  CCP connectivity service  
markets on  the basis of asset class , customers responding to the investigation 
indicated that this distinction reflects how they procure CCP connectivity (and trade 
processing more generally).128 Moreover, the competitive landscape varies 
considerably across the diffe rent asset class segments of CCP connectivity (for 
instance, MarkitSERV holds a market share [90-100]% in relation to FX, whereas its 
                                                 
123  Notifying Parties’ response  to RFI 4, paragraph 2.5 -2.6. 
124  Replies to questions 11.1.1 -11.1.3 and 11.2 of Questionnaire 1.  
125   Replies to question 11.2 of Questionn aire 1. 
126  Replies to question 12.2 of Questionnaire 1.  
127  Replies to question 11.1 of Questionnaire 1.  
128  Replies to question 11.2 of Questionnaire  1. 
 
 
35 market share is only [5-10]% for CDS  CCP connectivity and it is not active in 
relation to equities ). Certain  customers exp lained that CCP connectivity “ service 
providers do not provide all services across all asset classes ”, which  indicates that 
supply -side substitutability is limited.129 
(151)  A CCP  suggested that there might be a distinction between “platform -agnostic”  CCP 
connectivity services, such as those of MarkitSERV and Traiana, as opposed to the 
“direct” service provided by trading venues that offer customers the ability to send 
their trades to clearing  without the need for a middleware provider .130 However, the 
results of the  market investigation suggest that customers consider CCP connectivity 
provided by trading venues to compete with MarkitSERV/Traiana’s CCP 
connectivity businesses , a view that was shared by a number of CCP s.131 Indeed, 
several customers indicate d that trading venues are close competitors in certain asset 
segments (such as CDS  and IRD in particular),132 and that it is possible to switch 
from their current (MarkitSERV or Traiana) CCP connectivity offering to a direct 
CCP connectivity service provided  by trading venues (noting, however, that “ there is 
only a limited number of trading venues  offering direct clearing connectivity 
services ”).133 In light of this, a separate product market for platform -agnostic CCP 
connectivity services does not appear appro priate.  
(152)  Fourth, there are indications that it would be appropriate to define a separate product 
market for CCP connectivity with respect to the execution environment, i.e. provided 
in respect of OTC derivatives (as opposed to exchange traded derivatives). The CCP 
connectivity service is the ‘middleware’ service that sends OTC trades intended to be 
cleared that have been executed on a venue or  bilaterally to a CCP for clearing. With 
respect to this distinction, the Commission notes that the European Securiti es and 
Markets Authority authorizes CCPs based on the distinction of whether they clear 
ETDs and/or OTC derivatives.134 
(153)  The Commission has in  previous cases found that there are separate relevant product 
markets for OTC derivatives trading and OTC derivatives clearing.135 MarkitSERV 
only provides CCP connectivity services for OTC trades and does not provide such 
services for exchange traded deriv atives. The Transaction only gives rise to 
horizontal overlaps or vertical links in relation to OTC CCP connectivity and so the 
question  of whether there are separate OTC CCP connectivity and ETD CCP 
connectivity markets  can be left open as the Transacti on would not give rise to 
serious doubts  as to its compatibility with the internal market  even on a wider market 
also including CCP connectivity for exchange traded derivatives.  
(154)  Finally, as regards type of trade, the results of the  market investigation were 
inconclusive as to  whether it would be appropriate to define  market s for CCP 
connectivity on the basis of  bilateral and trilateral trades. In any event, t he 
Commission notes that MarkitSERV exclusively provides CCP connectivity services 
                                                 
129  Replies to question 11.1 of Questionnaire  1. 
130  Minutes of a call with a market participant on 12 May  2021 at 11:00 CET.  
131  Replies to question 13 of Questionnaire  1 and to questions 14.2 and 15 of Questionnaire 2.  
132  Replies to question 20 of Questionnaire 1.  
133  Replies to question 24 of Questionnaire 1.  
134  List of Central Counterparties authorised to of fer services and activities in the Union, last updated 4 
January 2021: https://www.esma.europa.eu/sites/default/files/library/ccps authorised under emir.p df 
135  See cases referred to in footnote 122. 
 
 
36 for bilateral servi ces, whereas Traiana mainly focuses on trilateral (prime broker) 
trades. In view of the finding that the re are separate relevant product market s for CCP 
connectivity services by asset class, MarkitSERV and Traiana only overlap in 
relation to bilateral CCP connectivity services for FX  and IRD .136 For FX and IRD , 
the Transaction does not give rise to serious doubts as to its compatibility with the 
internal market  regardless of whether  or not Traiana’s trilateral (prime broker) CCP 
connectivity services are considered to be part of the relevant product market . 
Accordingly,  the question of whether narrower CCP connectivity market s should be 
defined based on trade type can be left open.  
4.8.2.4.  Conclusion  
(155)  In light of the foregoing , the Commission considers that CCP connectivity services 
are a separate relevant product market from other trade processing services, and that 
it is appropriate to  define separate relevant product markets for CCP connect ivity 
services by asset class. It can be left open whether a narrower product market 
delineated  by type of trade or only for OTC traded derivatives would be appropriate, 
as a conclusion on this issue does not affect the outcome of the Commission’s 
assessme nt in the present case.  
(156)  Accordingly, the Commission will assess the horizontal overlap between the 
businesses contributed to the JV in FX CCP connectivity  and IRD CCP connectivity . 
It will also assess the vertical link s between CME’s clearing services and  the JV’s FX 
CCP connectivity and IRD CCP connectivity services  and CME’s OTC FX trading 
services and the JV’s FX CCP connectivity services . In each case, the Commission’s 
assessment will focus on OTC CCP connectivity, given that MarkitSERV’s CCP 
connectiv ity service is only offered for OTC derivatives and so the relevant 
horizontal and vertical links only arise in relation to OTC derivatives.  
4.8.3.  Relevant geographic market definition  
4.8.3.1.  Commission’s previous decisions  
(157)  The Commission has not previously considered the relevant geographic market 
definition for markets concerning CCP connectivity services. However, relevant 
geographic market definitions in related markets such as derivative trading and 
clearing have generally been considered as being at least EEA -wide  or global.137  
4.8.3.2.  Notifying Parties’ view  
(158)  The Notifying Parties submit that the relevant geographic market for the supply of 
trade processing services is global, given that the Parties and their competitors 
provide their services to customers across the world.138 The Notifying Parties did not 
submit a specific view with respect to CCP connectivity services, but provided 
market share estimates on a worldwide basis.  
                                                 
136  Form CO, paragraph 414 and Figure 6.6.  
137  Commission decision of 1 February 2012 in Case M.6166 – Deutsche Börse/NYSE Euronext , 
paragraphs 450, 460 and 462.  
138  Form CO, paragraph 384.  
 
 
37 4.8.3.3.  Commission’s assessment  
(159)  The results of the  market investigation indicate  that the relevant geographi c market 
for CCP connectivity is likely worldwide. When asked to indicate the main factors 
for choosing a CCP connectivity provider, customers did not indicate that location 
was an important element for them.139 Rather, the vast majority of customers 
confirm ed that their CCP connectivity services are purchased by comparing offers 
from providers worldwide.140 Moreover, the Parties are active worldwide without 
differentiating their CCP connectivity services by geography. The market 
investigation did not indicate any other reasons to consider that a narrower 
geographic market definition would be appropriate.  
4.8.3.4.  Conclusion  
(160)  Based on the results of the market investigation, the Commission considers that the 
relevant geographic market for CCP connectivity services is worl dwide.  
4.9. Credit limit  management  for OTC derivatives  
4.9.1.  Introduction and Parties’ services  
(161)  Credit limit management and checking services are services provided to executing 
brokers, prime brokers and buy -side clients with the aim of managing credit risk by 
monit oring clients’ exposure and use of their available credit limits. These services 
are part of the wider market of PB give -up management services.   
(162)  Credit limit management services consist of credit checks pre -trade (to ensure that 
the counterparty has suffi cient credit to enter into a transaction) and post -trade (so 
that executing and prime brokers can monitor and manage how much credit they have 
extended to their buy -side counterparties). Traiana provides OTC pre - and post -trade 
credit limit checking and ma nagement services (“credit limit management  for OTC 
derivatives”) for IRD, CDS and FX trades  through its LimitHub and ClientHub 
products .141 While some brokers have in -house solutions  for credit limit management 
for OTC derivatives, Traiana is the only third party provider worldwide of credit 
limit management for OTC derivatives . 
4.9.2.  Relevant product market definition  
4.9.2.1.  Commission’s previous decisions  
(163)  The Commission has not previously considered the relevant product market 
definition for credit limit managemen t for OTC derivatives . 
4.9.2.2.  Notifying Parties’ view  
(164)  The Notifying  Parties submit that the question of market definition in the market for 
credit limit management for OTC derivatives can be left open as no serious doubts as 
                                                 
139  Replies to question 14.1 of Questionnaire 1.  
140  Replies to question 15 of Questionnaire  1. 
141  Traiana provides post -trade credit services for OTC FX trades and pre-trade credit services primarily 
for OTC CDS and IRD trades, see Notifying Parties’ response to question 1 in RFI 19.  
 
 
 
38 to the Transaction’s compatibility wit h the internal market  arise irrespective of how 
the market is defined. However, in their submissions, the Notifying Parties have 
considered th at the relevant market for the provision of credit limit management for 
OTC derivatives would include only third p arty services, and would include both pre- 
and post -trade limit management and limit checking services.142  
4.9.2.3.  Commission’s assessment  
(165)  While t he Commission has not previously considered credit limit management 
services  directl y, the results of the market investigation indicate that trade processing 
service markets may be distinguished by asset class, trade type and service type (see 
Section  4.5.2 ), as proposed by the Notifying Parties. Credit limit management 
services could be a separate product market (being a separate service type within  PB 
give-up management services  markets).  
(166)  Within a plausible separate market for credi t limit management services, a further 
distinction by asset class and provision by third party services only is considered 
below.  
(167)  Regarding a distinction by asset class , customers responded in the market 
investigation that they consider trade processing se rvices (including credit limit 
management services) for different asset classes as separate markets.143 From a 
supply -side perspective, there may be some substitutability across asset classes. 
However, it would not seem to be the case that suppliers are easi ly able to switch and 
supply their trade processing services for other asset classes144, as this requires 
connections to different market participants (which generally operate segmented by 
asset class too). Hence, separate markets by asset class seem to be p lausible. 
However, whether separate markets by asset class exist for credit limit management 
services can be left open, as the Transaction does not give rise to serious doubts  as to 
its compatibility with the internal market  irrespective of such a distinct ion. 
(168)  Regarding a separate plausible market for the provision of third party  credit limit 
management services , the market investigation did not examine this particular 
distinction. However, Traiana is the only third party supplier of credit limit 
management  services globally, and for trades for which no credit limit management 
is provided by Traiana, the trading parties are managing this bilaterally. As the 
Transaction would not give rise to serious doubts as to its compatibility with the 
internal market  on the narrowest plausible basis (where Traiana ’s market share would 
be 100% for third party  credit limit management services in the asset classes in which 
it is active, namely IRD, CDS and FX ), this question can be left open as it would not 
affect the out come of the Commission’s assessment . 
(169)  Regarding a plausible distinction between pre- and post -trade  credit limit 
management services, the Commission notes that the Parties themselves distinguish 
between pre - and post -trade in their submission .145 However, a d escription of the 
                                                 
142  Notifying Parties’ response  to RFI 5, paragraphs 3.8ff.  
143  Reply to question 6 of Questionnaire 3.  
144  Commission Notice on the definition of relevant market for the purposes of Community competition 
law (97/C 372/03), para. 20.  
145  Form CO, paragraph 112.  
 
 
39 services146 would suggest that whoever procures pre -trade credit limit management 
services would generally also be interested in post -trade credit limit management 
services. Hence, it is likely that , within the same asset class,  pre- and po st-trade 
services are not separate markets when considering the market for credit limit 
management services.  However, whether separate markets by pre - and post -trade 
provision of credit limit management services exist can be left open, as the 
Transaction d oes not give rise to serious doubts  as to its compatibility with the 
internal market  irrespective of such a distinction . 
4.9.2.4.  Conclusion  
(170)  Based on the results of the market investigation and the evidence available to it, the 
Commission considers that credit limi t management services are a separate relevant 
product market from other trade processing services . It is possible that it  may be  
appropriate to distinguish the market for credit limit management services by asset 
class , pre- and post -trade provision and third party provision onl y. The conclusion on 
whether these constitute separate markets can be left open  however , as the 
Transaction does not give rise to serious doubts  as to its compatibility with the 
internal market  irrespective of such a distinction .  
4.9.3.  Relevant geographic market definition  
4.9.3.1.  Commission’s previous decisions  
(171)  The Commission has not previously considered the relevant geographic market 
definition for credit limit management for OTC derivatives.  
4.9.3.2.  Notifying Parties’ view  
(172)  The Notifying  Parties subm it that the relevant geographic market for the supply of 
credit limit management services is global  without providing reasons for this view .147 
4.9.3.3.  Commission’s assessment  
(173)  The Commission notes that Traiana’s credit limit management for OTC derivatives 
services a re used by […] CCPs, […] regulated venues and more than […] end clients 
worldwide.148 The product is the same worldwide. During t he market investigation  
customers indicated  that they  compare offers of trade processing service providers in 
general on a worldwide  basis and that the  suppliers are the same on worldwide and 
narrower bases .149 The results of the market investigation  did not indicate that the 
                                                 
146  “Credit risk management services are provided at two main points in the OTC trading lifecycle: (a) 
pre-trade, credit checks a re carried out to check that counterparties' credit limits have not been 
exceeded; and (b) post -trade, prime and executing brokers use credit risk management services to 
monitor and actively manage how much credit they have extended to their buy -side clien ts and across 
trading venues, and to establish, monitor, amend and terminate the legal documentation required. In 
addition, "kill switches" enable credit providers to disable clients from executing trades in real time .” 
See Form CO, paragraph 112.  
147  Notif ying Parties’ response  to RFI 5, paragraphs 3.8ff.  
148  https://www.cmegroup.com/services/files/traiana -credit -risk-services.pdf  last accessed on 5 July 2021.  
 
 
 
40 situation would be any different w ith regard to credit limit management services 
specifically.  
4.9.3.4.  Conclusion  
(174)  In light of the foregoing , for the purposes of this decision , the Commission considers 
the geographic scope of the market for credit limit  management for OTC derivatives 
to be worldwid e. In any event, given that Traiana is the only third party provider of 
credit limit management for OTC derivatives  globally , the competitive assessment 
would not change even on a narrower geographic market definition.  
4.10. Trade confirmation  
4.10.1.  Introduction and P arties’ services  
(175)  Trade c onfirmations  are a service provided to buy -side clients and brokers in 
conjunction with the trade allocations service150 to confirm that each individual trade 
allocation has been booked by the executing broker/prime broker in their re spective 
internal systems. The trade confirmation provider compares the allocations specified 
by the client against the messages sent by the counterparty executing broker/prime 
broker indicating how the trade allocation has been booked. Once the provider i s 
satisfied that these match, b oth the client and the executing broker/prime broker  
receive notification of the confirmation.  
(176)  MarkitSERV is the only third party provider of confirmation services in relation to 
OTC IRD, CDS and equity derivative trades, but does not provide confirmation 
services in relation to FX or commodities trades. Any trades not confirmed by 
MarkitSERV are confirmed directly between the trading parties.151 Traiana does not 
provide trade confirmation services.  
4.10.2.  Relevant product market d efinition  
4.10.2.1.  Commission’s previous decisions  
(177)  The Commission has not previously considered the relevant product market for trade 
confirmations.  
4.10.2.2.  Notifying Parties’ view  
(178)  The Notifying  Parties submit that the question of market definition for trade 
confirmation services can be left open as no serious  doubts as to the Transaction’s 
compatibility with the internal market  arise irrespective of how the market is defined. 
However, the Notifying Parties have assessed separate relevant product markets for 
trade confirmations  delineated by asset type .152  
                                                 
150  Once a  trade has been executed bilaterally between two counterparties or via a tri -party relationship, the 
client can provide allocation details to the executing broker or prime broker on how the trade should be 
split amongst the client’s accounts or funds.  
151  Notifying Parties’ response to RFI 9, paragraph 7.3.  
152  Notifying Parties’ response to RFI 9, paragraphs 7.1ff.  
 
 
41 4.10.2.3.  Commission’s assessment  
(179)  In line with the general finding outlined above that different trade processing services 
are different product markets, t he market investigation  indicated that trade 
confirmat ions are a separate product market . In particular, the responses of certain 
suppliers suggested that they consider trade confirmation to be a separate service153 
and customers  noted that trade confirmations are offered as a separate product.154 
While customers do sometimes procure trade confirmations from the same supplier 
as other services  they receive , such as CCP connectivity, they indicated that it is 
generally not important for them to procure these services from the same source.155  
(180)  Regardin g potential separate markets by asset class , there are indications that it is 
appropriate to consider this a separate product market. Some respondents to the 
market investigation indicated that they only procure MarkitSERV’s confirmation 
service in certain  asset classes (even though they are active in, and procure other 
trade processing services from MarkitSERV in, other asset classes).156 Moreover, 
MarkitSERV’s trade confirmation service is only active in certain asset classes 
(IRDs, CDS and equity derivativ es, but not FX or commodities trades).  However, as 
the Transaction does not give rise to serious doubts as to its compatibility with the 
internal market on the narrowest plausible basis (i.e. if there were separate product 
markets by asset class, noting th at MarkitSERV’s share would be lower on an overall 
market for trade confirmations given that it is not active in several asset classes), it is 
not necessary to reach a conclusion on this question.  
(181)  Regarding the question of whether it is appropriate to def ine a separate product 
market for the third party provision of trade confirmation services (as opposed to 
self-supply), the market investigation did not provide any evidence to reach a 
conclusion on this. However, MarkitSERV is the only third party supplie r of trade 
confirmation services, and all trades that are not confirmed by MarkitSERV are 
confirmed directly between the trading parties.157 As the Transaction would not give 
rise to serious doubts as to its compatibility with the internal market on the narr owest 
plausible basis (where MarkitSERV’s market share would be 100% for third party 
supply in particular asset classes), this question can be left open as it would not affect 
the outcome of the Commission’s assessment .  
4.10.2.4.  Conclusion  
(182)  In light of the foregoin g, for the purposes of this decision, the Commission considers 
the relevant product market is the provision of trade confirmations. It can be left open 
whether there would be a separate relevant product market by asset class  (which in 
this case would be re levant only for the IRD, CDS and equity derivatives asset 
classes)  or for third party provision of trade confirmations, as a conclusion on this 
issue does not affect the outcome of the Commission’s assessment in the present 
case. The Commission’s assessmen t of the risk of foreclosure in Section  5.8 will 
focus on the narrowest plausible market definition in view of the fact that 
MarkitSERV is only active  in certain asset classes and is the only provider of third 
                                                 
153  Replies to questions 6.1 and 7.1 of Questionnaire 4.  
154  Replies to question 18 of Questionnaire 6.  
155  Replies to question 12 and 12.2 of Que stionnaire 1.  
156  Replies to question 13 of Questionnaire 1.  
157  Response to RFI 9, paragraph 7.3.  
 
 
42 party trade confirmations (and that on a wider market MarkitSERV’s market share 
would be lower).  
4.10.3.  Relevant geographic market definition  
4.10.3.1.  Commission’s previous decisions  
(183)  The Commission has not previously considered the relevant geographic market for 
trade confirmations.  
4.10.3.2.  Notifying Parties’ view  
(184)  The Notifying Parties submit that the relevant geographic market for this potential 
product market is global , although the Notifying  Parties did not detail why this would 
be the case .158 
4.10.3.3.  Commission’s assessment  
(185)  The market investigation  indicated that the relevant geographic market is worldwide. 
On the supply -side, there is only one provider of third party trade confirmations 
(MarkitSERV) , which is active at worldwide level  in all of the asset classes where it 
is present and does not alter its product offering depending on the place where they 
are supplied . On the demand -side, the customers who indicated that they procure 
MarkitSERV’s trad e confirmation  services are global banks, including some which 
are headquartered in the EEA and others with headquarters outside of the EEA (for 
example, the US). When describing  their procurement practices, none of the 
respondents suggested  that their pra ctices  regarding trade confirmation services  
would vary  in different geographies  (regardless of asset class).159  
4.10.3.4.  Conclusion  
(186)  Therefore, for the purposes of this decision, the Commission considers the 
geographic market of the market of trade confirmations to be worldwide , both for the 
overall market and if narrower markets by asset class or for third party provision 
were defined .  
4.11. Trade optimization  
4.11.1.  Introduction and Parties’ services  
(187)  ‘Trade optimization’ refers to a broad range of services provided throughout the 
trading lifecycle (from the pre -trade stage through to after settlement) that aim to help 
customers more effectively manage their risk and optimise their trading portfolios . 
TriOptima and Reset provide  a number of trade optimization products, as set out 
below.  
(188)  Portfolio compression  is the process through which market participants reduce 
notional amounts outstanding and line items at a CCP  by replacing (netting) multiple 
offsetting derivative contracts w ith fewer transactions of the same net risk . 
                                                 
158  Notifying Parties’ response  to RFI 9, paragraphs 7.1ff.  
159  Replies to question 12 -12.2 of Questionnaire 1.  
 
 
43 Compression services can be multilateral (i.e. involving multiple parties in a single 
compression run), bilateral (through which two parties compress their portfolios) or 
unilateral (where a single client compre sses its cleared positions). This process is 
important for regulatory capital requirements, which are driven by a market 
participant 's gross notional outstanding exposure.  TriOptima is active worldwide in 
the provision of portfolio compression through its triReduce service, which provides 
portfolio compression services across the IRD, FX and CDS asset classes. This 
product is described in more detail in Section 5.8. 
(189)  Portfolio reconciliation  is the process of comparing two counterparties' position 
records of bilateral OTC trades as at a given business date to ensure that the two 
organisations have one consistent record for a defined portfolio (or group o f 
portfolios). It is a means of ensuring that counter parties' books and records remain 
synchronised and that the effects of trade events, such as novations, amendments and 
other activities, are accurately captured. Portfolio reconciliation is a regulatory 
requirement in a number of jurisdictions (including the EU).  TriOptima  is active 
worldwide in the provision of portfolio reconciliation through its triResolve service, 
which provides portfolio reconciliation for OTC derivatives across all five asset 
classe s (IRD, FX, CDS, equity derivatives and commodities) . This product is 
described in more detail in Section 5.8. 
(190)  Margin management  (also referred to as margin optimization, collateral management) 
consists of managing and optimising the use of securities or other assets provided as 
collateral. CCPs  perform a da ily mark -to-market valuation160 of cleared trades and 
impose margin requirements on trade participants. Alternatively, for uncleared 
bilaterally managed trades, the two counterparties make ‘margin calls’ to each other 
based on the mark -to-market valuation  of their trades  as per the pre -agreed terms . 
Margin is collateral that the holder of a financial instrument has to deposit with a 
counterparty (e.g. a broker, exchange, custody service provider or CSD) to cover 
some or all of the credit risk the holder poses for the counterparty. It generally 
consi sts of initial margin, the amount of collateral required by the CCP  or trade 
counterparty  to initiate a position, and maintenance  or variation  margin, the minimum 
amount of collateral that must be maintained at the CCP  (or sent to the counterparty, 
in case  of uncleared bilateral trades) . Participants must monitor these margin 
requirements and process payments to and from the CCP /counterparty . Margin 
management services encompass the selection of collateral, matching of transaction 
details, valuation and saf ekeeping of the securities held as collateral and their 
monitoring, as well as optimi zation , substitution, settlement, and custody services.  
TriOptima  is active worldwide in the provision of margin management services 
across all five asset classes  (IRD, FX , CDS, equity derivatives and commodities) , 
through a number of products . These products are described in more detail in Section 
5.8. 
(191)  Portfolio rebal ancing  is the general term for the process of buying or selling assets  or 
trading derivatives  to maintain an original or desired level of risk  in a portfolio . 
Portfolio rebalancing can be multilateral (facilitating offsetting trades between 
                                                 
160  Mark -to-market accounting refers to an accounting method aimed to determine the ‘fair value’ of an 
asset based on the current market price for that asset or similar ones (in contrast with some other 
methodologies that look at the past transaction value of assets without taking into account subs equent 
changes in market conditions).  
 
 
44 multiple clients), or unilateral (speci fic to each client's portfolio), and may target 
different types of risk (e.g. fixing risk or basis  risk for interest rates, strike risk for 
options, etc.)  Risk mitigation services are supplied by third parties to assist 
compan ies in portfolio rebalancing.  More specifically, one form of portfolio 
rebalancing is basis risk mitigation . Basis risk refers to the risk of loss arising from 
the difference between the economic or legal terms of two derivative transactions that 
are inten ded to hedge each other. Basis risk mitigation services provide customers 
with a way to reduce basis risk. The only type of portfolio rebalancing service in 
which the  Parties are active is basis risk mitigation, in which Reset is a basis risk 
mitigation pr oduct for IRD and FX derivatives. In view of the fact that basis risk 
mitigation is the only relevant portfolio rebalancing service involved in the 
Transaction, and so the Transaction would not give rise to serious doubts as to its 
compatibility with the i nternal market even if a broader product market including 
other portfolio rebalancing products were considered relevant, the Commission’s 
assessment below will be limited basis risk mitigation.  
4.11.2.  Relevant product market definition  
4.11.2.1.  Commission’s previous decisions  
(192)  The Commission has not previously considered the relevant product market for 
portfolio compression, portfolio reconciliation, margin management or basis risk 
mitigation . 
4.11.2.2.  Notifying Parties’ view  
(193)  The Notifying Parties submit that the question of the market definition in trade 
optimization services can be left open as no serious  doubts as to the Transaction’s 
compatibility with the internal market  arise irrespective of how the market is defined. 
With respect to  portfolio compression the Notifying Par ties argue that there are 
various compression tools customers can use and estimate that out of the total 
portfolio compression market, CCPs cover approximately 60 -70% of the overall 
portfolio compression activity with the remaining 30 -40% covered by third party 
providers such as triReduce.161 
(194)  However, the Notifying Parties have considered a distinction within trade 
optimization by type of services, as well as by asset classes. More specifically, the 
Notifying Parties defined plausible markets  as the (i) provision of portfolio 
compression services for OTC derivatives  by third party providers (non -CCPs) , (ii) 
the provision of portfolio reconciliation services for OTC derivative trades, (iii) the 
provision of margin management services for OTC derivatives, and (iv) the provision 
of basis risk mitigation services for OTC interest rate derivatives.  
4.11.2.3.  Commission’s assessment  
(195)  As detailed below, t he Commission investigated whether  trade optimization services 
(i) are separate product markets from other trade process ing services, and /or (ii) are 
separate product markets (a) by service type , (b) by asset class  and/or (c) by type of 
provider, i.e. between services provided by CCPs or by independent third parties . 
                                                 
161  Notifying Parties’ response  to RFI 7, paragraph 3.2.  
 
 
45 (196)  First , according to all responding competitors, the maj ority of customers buy trade 
optimization services separate ly from other trade processing products  (indicating that 
it would not be appropriate to consider these trade optimization services as falling 
within the same relevant product market as one or more trade processing products) .162 
Moreover, very few trade optimization  suppliers offer additional trade processing 
services .163 Most customers also consider trade optimization services to be separate 
from other trade processing services.164 One customer summarizes, “[trade 
processing and trade optimization have] separate vendors with separate pricing. 
Trade processing is core to business, optimization allows for cost saves (nice to 
have). ”165 As such, and in line with the conclusions for the ot her trade processing 
services, the Commission concludes that trade optimization services are not part of 
the same market as other trade processing services.  
(197)  Second , the market investigation indicated that there are separate relevant product 
markets for eac h different trade optimization service (namely, portfolio compression, 
portfolio reconciliation, margin management, basis risk mitigation. T here appears to 
be limited demand -side substitutability across these trade optimization services. In 
fact, most cust omers consider that these different trade optimization services should 
constitute  separate  markets166 and t he majority of customers say they purchase the 
various trade optimization services separately.167 Indeed, the vast majority of 
suppliers agree that these  optimization services should be considered separate 
product markets. They confirm that while most customers purchase several trade 
optimization services  from the same suppliers , the end users and functions at the 
customers may be different (e.g. front office users for  compression services  vs. back 
office users for reconciliation services ).168 This is confirmed by a customer, “Some of 
the services are purchased from the same supplier but they are individual purchasing 
decisions , with separate fee schedules for supporting activities in different parts of 
the bank . [we are] generally able to purchase services from different providers and 
mix-and-match the services that we purchase from different providers ”169 There also 
appears to b e limited supply -side substitutability; the same suppliers are not always 
active across all services. This is confirmed by a customer, “We see different 
providers across the optimisation, compression and reconciliation spaces .”170  
(198)  Third , the market investig ation indicated that it is appropriate to consider separate 
relevant product markets by asset class for the aforementioned products (portfolio 
compression, margin management, portfolio reconciliation, basis risk mitigation).  
From the supply -side, i t is te chnically difficult to provide these services across asset 
classes due to the nature of the financial instruments; they can only be applied to a 
portfolio of the same asset class ( IRDs, FX, CDS ). The limitations to supply -side 
substitution are illustrate d by the fact that TriOptima and Reset are not active across 
all asset classes for all services; for example, they are only active in some asset 
classes for portfolio compression (IRD, FX, CDS, equity derivatives) and basis risk 
                                                 
162  Reply to question 4 of Questionnaire  4. 
163  Reply to question 6 of Questionnaire  4. 
164  Reply to question 7 of Questionnaire 6.  
165  Reply to question 7.1 of Questionnaire 6.  
166  Reply to question 7 of Questionnaire 6.  
167  Reply to question 4 of Questionnaire  6. 
168  Reply to question 7 of Questionnaire 4.  
169  Replies to question 4.2.1 of Questionnaire 6. 
170  Replies to question 7.1 of Questionnaire  6. 
 
 
46 mitigation (IRD, FX).  Moreo ver, their offering s are in some cases differentiated 
across asset classes, as can be seen in how TriOptima positions its offering. For 
example, it offers and advertises separate portfolio compression products for each of 
IRD, FX and CDS .171 There are also d ifferences as to the competitive landscape 
across asset classes, as TriOptima and Reset’s  market share can vary between asset 
classes (for example, in portfolio compression TriOptima is […] for CDS but has a 
[50-60]% market share in FX; likewise in basis r isk mitigation Reset’s market share 
is [40-50]% in FX but up to [60-70]% in IRD), reflecting the different competitive 
focus, strengths and presence of rival suppliers . Most suppliers responding to the 
market investigation confirmed that they were not acti ve in each asset class and that 
the extent of their presence in each class varies .172 From the demand -side, customers 
also indicate that these services should be considered separate product markets by 
asset class, explaining that these portfolio optimization  services are “segregated per 
asset class as different optimisation requirements/opportunities ”173 and “ Vendors  
[are] selected on the strength of performance & cost effectiveness in each individual 
asset class per service .”174 Another customer adds that  “[e]ach 
optimisation/compression service uses different forms of processing dependent on 
asset class and type of optimisation. For example, for Rates cleared compression we 
do not use MarkitWire, for uncleared we do. For Rates Optimisation, we use 
MarkitWire, for FX we do not. ”175  
(199)  Fourth , the Commission also considered  whether the aforementioned trade 
optimization services ( portfolio compression , margin management, portfolio 
reconciliation, basis risk mitigation)  supplied by CCPs compete in the same relevant 
product market as third party trade optimization providers . The market investigation 
indicated that customers and competitors consider that TriOptima and Reset’s closest 
competitors are other third party provides and that CCPs are not close competitors to 
them.176 However, the results of the market investigation did not provide sufficient 
information to conclude  whether CCPs would fall outside of the relevant product 
market entirely. In any event, in a wider market that includes the services provided 
by CCPs , TriOptima and Reset’s  market share would be lower, and so this question 
can be left open given that the Transaction would not give rise to serious doubts  as to 
its compatibility with the internal market  even on the narrowest plausible basis.   
4.11.2.4.  Conclusion  
(200)  In view of the above, the Commission concludes that trade optimization services 
should not be considered to be within the same product market as trade processing 
services. More specifically, t he Commission conclude s that there are separate product 
market s for  portfolio compress ion, margin management, portfolio reconciliation and 
basis risk management  services – in each case, these product markets are split by 
asset class. The question of whether there would be separate product markets for the 
supply of the afor ementioned services by third party providers (as opposed to supply 
by CCPs) can be left open, as TriOptima and Reset  are only active as third party 
                                                 
171  https://www.cmegroup.com/services/trioptima/trireduce -portfolio -compression.html#overview   
172  Replies to question 5 of Questionnaire  6. 
173  Reply to  question 7.1 of Questionnaire  6. 
174  Reply to question 7.1 of Questionnaire 6.  
175  Reply to question 7.1 of Questionnaire 6.  
176  Replies to questions 10 -13 of Questionnaire 4 and 9 -12 of Questionnaire  6. 
 
 
47 provider s and the Transaction would not give rise to serious doubts as to its 
compatibility with the intern al market on either basis.  
4.11.3.  Relevant geographic market definition  
4.11.3.1.  Commission’s previous decisions  
(201)  The Commission has not previously considered the relevant geographic market for 
portfolio compression, portfolio reconciliation, margin management or basis ris k 
mitigation . 
4.11.3.2.  Notifying Parties’ view  
(202)  The Notifying Parties submit that the relevant geographic market for each of these 
potential markets is global , although the Notifying Parties did not detail why they 
considered this would be the case . 
4.11.3.3.  Commission’s ass essment  
(203)  The results of the market investigation indicate that it would be appropriate to 
consider the relevant geographic market for portfolio compression, portfolio 
reconciliation, margin management and basis risk mitigation to be worldwide (across 
all as set classes and regardless of whether CCP services are considered part of the 
relevant product market).  
(204)  On the supply -side, the main providers of each of these trade optimization services 
are active globally. All suppliers who responded to the market inve stigation stated 
that they offer these trade optimization services to customers at the worldwide level . 
They indicated further  that their competitors are active on the worldwide level, and 
that fees for their trade optimization services are set at the worl dwide level. One 
supplier summarizes, “ [a]ll clients trade with counterparties from multiple 
geographic regions and so a multilateral optimisation services needs to build a 
network of clients from all relevant regions. ”177 On the demand -side, the majority of 
customers indicated that they purchase trade optimization services at the worldwide 
level and all confirmed that suppliers are active at the worldwide level.178 Neither 
suppliers nor customers indicated any reasons to consider th at these elements would 
vary by asset class or if the market were also to include CCPs providing these 
services.  
4.11.3.4.  Conclusion  
(205)  On the basis of the market investigation results and for the reasons detailed above , 
the Commission concludes  that the geographic ma rket for portfolio compression, 
portfolio reconciliation, margin management and basis risk mitigation is global, 
regardless of asset class or whether CCPs are considered to be part of the relevant 
product market.   
                                                 
177  Replies to questions 9 and 9.1 of Questionnaire  4. 
178  Replies to questions 8 and 8.1 of Questionnaire 6.  
 
 
48 4.12. RED codes  
4.12.1.  Introduction and the Parties’ services  
(206)  An identifier (or security identifier, if referring to equities and bonds in particular) is 
an alphanumeric code, which can be used to identify a specific financial instrument, 
entity or obligation . Within financial information, identifiers may be  considered a 
type of reference data as they are used to identify or retrieve certain information 
about a financial instrument.  
(207)  IHSM is active in this area via its RED codes, which are relevant only for the credit 
derivative asset class. A Reference Entity  Data ( ‘RED ’) identifier is used in a CDS 
context to confirm the relationship between a reference entity and a reference 
obligation, each of which is assigned a unique (RED) code. RED codes are therefore 
principally used to support pre - and post -trade cert ainty on credit derivative markets. 
They are used to confirm the relationship between a reference entity and a credit 
derivative, as well as corporate actions, CDS succession events and credit events.179 
4.12.2.  Relevant product market definition  
4.12.2.1.  Commission’s previo us decisions  
(208)  In Thomson Corporation/Reuters Group ,180 the Commission did not definitively 
conclude on the relevant product market for security identifiers (referred to as 
“instrument codes” in that decision) , however, it assessed separate plausible relevant 
product markets for each security identifier . The decision  assessed  codes provided by 
data vendors like Reuters’ RICs for purposes of identification within the vendors’ 
own systems and industry -wide codes provided on a stand -alone basis like SEDOLs, 
ISINs and FIGIs.  
(209)  In Standard & Poor’s ,181 the Commission considered securi ty identifiers (in that case 
the relevant identifier being ISINs) as serving different purposes from other financial 
information, and particularly being used to identify a security rather than to monitor 
the markets or evaluate an investment opportunity, a nd found their distribution 
distinct from the distribution of other financial information.  In that case, the 
Commission considered ISINs to be a separate market from other identifiers and 
distinguished further by nationality (‘US ISINs ’), first-hand distri bution versus 
redistribution, and distribution method (data feed, manual “look up” service).  
4.12.2.2.  Notifying Parties’ view  
(210)  The Notifying Parties submit that there are a range of alternative identifier systems 
available as potential substitutes for RED codes, whi ch include both self -supply and 
the use of legal entity identifiers ( ‘LEIs ’) and bond International Security Identifier 
Numbers (‘ ISIN s’) to identify entities and reference obligations. Although the 
existence of alternative identifier systems indicates tha t definition of a wider market 
may be appropriate, at its narrowest a plausible market could comprise the supply of 
RED codes alone, in which IHSM would be the sole supplier. The Notifying Parties 
                                                 
179  Form CO, paragraph 544.  
180  Commission decision of 19 February 2008 in Case M.4726, Thomson/Reuters , paragraph 71.  
181  Commission decision of 15 November 2011 in Case COMP/39.592, paragraphs 19 -21. 
 
 
49 submit that the question of market definition can be left o pen as no serious doubts as 
to the Transaction’s compatibility with the internal market  arise irrespective of how 
the market is defined.182  
4.12.2.3.  Commission’s assessment  
(211)  The market investigation  results indicate that RED codes likely are a separate market. 
When a sked whether competitors use RED codes as an input, answers are mixed 
between the options “Yes, we use RED codes in our business and they are essential” 
and “No we don’t use RED codes in our business”. However, no competitor chose 
the option “Yes we use RE D codes in our business but they are not essential (e.g. we 
have alternative solutions)”.183 The market investigation  did not provide sufficient 
evidence to reach a conclusion  regarding whether RED codes constitute  a separate 
product market, or  could have substitutes , leading to a wider market definition .  
4.12.2.4.  Conclusion  
(212)  In any event, the product market definition in relation to RED codes, and in particular 
whether RED codes form a distinct market or are part of a larger market comprising 
other identifiers such  as LEIs  paired with ISINs  can be left open as the Transaction 
does not give rise to serious doubts as to its compatibility with the internal market 
even on the narrowest plausible basis . 
4.12.3.  Relevant geographic market definition  
4.12.3.1.  Commission’s previous decision s 
(213)  In Thomson Corporation/Reuters Group ,184 the Commission considered the 
geographic scope of instrument codes to be at least EEA -wide and probably global.  
(214)  In Standard & Poor’s ,185 the Commission considered the market  for first -hand 
electronic distribution and  licensing of US ISINs (records and numbers) via data 
feeds to be global for the purposes of that decision.  
4.12.3.2.  Notifying Parties’ view  
(215)  The Notifying Parties submit that the relevant geographic market for RED codes is 
worldwide  without providing a reason .186 
4.12.3.3.  Commission’s assessment  
4.12.3.4.  The market investigation indicated that the relevant geographic market is likely to 
be worldwide. On the supply -side, there is only one provider of RED codes 
(IHSM), which is active at worldwide level and does not alter its product offering 
depending on the place of supply . On the demand -side, the customers who indicated 
that they procure RED codes are companies that are active on a global level. When 
                                                 
182  Notifying Parties’ response to RFI 5, paragraphs 3.1 -3.5. 
183  Reply to question 18 of Questionnaire 4.  
184  Commission decision of 19 February 2008 in Case M.4726, Thomson/Reuters , paragraph 106.  
185  Commission decision of 15 November 2011 in Case COMP/39.592,  paragraph 22.  
186  Notifying Parties’ response to RFI 5, paragraph 3.5.  
 
 
50 describing at which level they offer their services (which use RED codes as an 
input) and compete, the respondents suggested that their activities took place on a 
worldwide level.187  
4.12.3.5.  Conclusion  
(216)  Thus, the Commission considers the geographic market of the  market of RED codes 
to be worldwide  for the purpose of this decision . The geographic m arket definition in 
a wider market comprising other identifiers that would be able to substitute RED 
codes, would likely also be global given that market participants using these kinds of 
identifiers as an input are active on a global basis.  
5. COMPETITIVE ASSESSMENT  
5.1. Analytical framework  
(217)  Under Article 2(2) and (3) of the Merger Regulation, the Commission must assess 
whether a proposed concentration would significantly impede effective competition 
in the internal market or in a substantial part of it.  
(218)  In this  respect, a concentration may entail horizontal and/or non -horizontal (namely, 
vertical or conglomerate) effects. Horizontal effects are those deriving from a 
concentration where the undertakings concerned are actual or potential competitors of 
each other in one or more of the relevant markets concerned. Vertical effects are 
those deriving from a concentration where the undertakings concerned are active on 
different or multiple levels of the supply chain. Conglomerate effects are those 
deriving from a conce ntration where the undertakings concerned are in a relationship 
which is neither horizontal nor vertical, but are active on closely related markets. A 
concentration may involve all three types of effects. In such a case, the Commission 
will appraise horizo ntal and non -horizontal effects in accordance with the guidance 
set out in the relevant notices, that is to say the Horizontal Merger Guidelines188 and 
the Non -Horizontal Merger Guidelines.189  
5.1.1.  Horizontal non -coordinated effects  
(219)  The Horizontal Merger Guideline s list a number of factors which may influence 
whether or not significant horizontal non -coordinated effects are likely to result from  
a concentration, such as the large market shares of the firms, the fact that the firms 
are close competitors, the limited  possibilities for customers to switch suppliers, or 
the fact that the concentration  would eliminate an important competitive force.  Not 
all of these factors need to be present to make significant non -coordinated effects 
likely and it is not an exhaustive list. Finally, the Horizontal Merger Guidelines 
describe a number of factors, which could counteract the harmful effects of the 
concentration  on competition, including the likelihood of countervailing buyer 
power, the entry of new competitors on the market , and efficiencies.  
                                                 
187  Reply to question 9 of Questionnaire 4.  
188  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Hor izontal Merger Guidelines"), OJ C31, 5.2.2004, paragraph 
5. 
189  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Non -Horizontal Merger Guidelines"), OJ C265, 18.10.20 08. 
 
 
51 5.1.2.  Non-horizontal non -coordinated effects  
(220)  A concentration between companies which operate at different levels of the supply 
chain may significantly impede effective competition if it gives rise to foreclosure.190 
Foreclosure occurs where act ual or potential competitors' access to supplies or 
markets is hampered or eliminated as a result of the concentration, thereby reducing 
those companies' ability and/or incentive to compete. Such foreclosure may 
discourage entry or expansion of competitors  or encourage their exit.  
(221)  The Non -Horizontal Merger Guidelines distinguish between two forms of 
foreclosure. Input foreclosure occurs where the concentration is likely to raise the 
costs of downstream competitors by restricting their access to an importan t input . 
Customer foreclosure occurs where the concentration is likely to foreclose upstream 
competitors by restricting their access to a sufficient customer base .  
(222)  In assessing the likelihood of an anticompetitive input/customer foreclosure scenario, 
the Commission examines, first, whether the merged entity would have, post -merger, 
the ability  to substantially foreclose access to inputs/customer base, second, whether  
it would have the incentive  to do so, and third, whether a foreclosure strategy would 
have a significant detrimental impact  on competition downstream/upstream.  
5.2. Overview of affected markets  
(223)  The Transaction leads to horizontally affected markets  in:  
(a) FX and IRD CCP connectivity services  worldwide  (Section  5.3),   
(b) FX NOE messaging  services worldwide  (Section  5.4), and  
(c) FX PB give -up messaging services worldwide ( Section  5.5).  
(224)  In addition, the following vertically  affected markets  arise between the JV and the 
parents  ((a) to ( c)) or between the activities contributed to the JV (( d)): 
(a) FX and IRD CCP connectivity services worldwide (upstream)  on the one 
hand, and  OTC FX and IRD  clearing services  worldwide or in the EEA 
(downstream)  on the other hand  – Section 5.6;  
(b) OTC FX trading services  worldwide or in the EEA  (upstream)  on the one 
hand,  and FX CCP connectivity services worldwide or in the EEA 
(downstream)  on the other hand  – Section 5.7.1 ;  
(c) RED identifiers for CDS worldwide (upstream) on the one hand, and  certain 
trade optimization services worldwide, namely: portfolio compression for 
CDS, portfolio reconciliation for CDS and margin management for CDS 
worldwide  (downstream)191 on the other hand  – Section 5.8.1 ; and  
                                                 
190  Non-Horizontal Merger Guidelines, paragraphs 17 -18. 
191  For completeness there is no vertical link with basis risk mitigation services, as CME is not active CDS  
(and RED identifiers are only used in relation to CDS ). There is also a vertical overlap between 
IHSM’s RED codes upstream and Traiana’s credit risk management services downstream. Traiana 
LimitHub uses RED codes as part of its limit management and limit checking functions for CDS trades, 
 
 
 
52 (d) Trade optimization services , namely portfolio compression for IRD and CDS, 
portfolio reconciliation for IRD, CDS and equity derivatives, margin 
management for IRD , CDS and equity derivatives, and basis risk mitigation 
for IRD worldwide  on the one hand, and trade confirmation  services for IRD, 
CDS , and equity derivatives worldwide  on the other hand  (there is a vertical 
relationship in both directions)  – Sections 5.8.2  and 5.8.3 .  
(225)  All markets assessed in the following Sections  are considered global for t he purpose s 
of this decision  (for those markets where possible narrower geographic markets are 
plausible, an assessment carried out on that basis would not alter the Commission’s 
conclusions) . 
(226)  Each of these horizontally affected markets and vertically affe cted links are assessed 
in turn below. The Commission also considers for completeness the risk that the JV 
may seek to foreclose rival providers by bundling certain of its services together.  See 
Section 5.9. 
5.3. FX and IRD CCP c onnectivity services  worldwide192 
(227)  MarkitSERV provides CCP connectivity for CDS , FX and IRD trades  worldwide . 
Globally, i t is the market leader in FX and IRDs, processing the vast majority of 
trades in these CCP connectivity markets, whereas it has a much smaller offering in 
relation to CDS .  
(228)  Traiana is  mainly active in the worldwide provision of CCP connectivity in equities , 
which represents the vast majority ([80-90]%) of its CCP connectivity revenues. 
Traiana is also active , albeit to a much lesser extent,  in FX and IRD CCP 
connectivity  worldwide . 
(229)  Table 2 below sets out the Notifying Parties’ estimates of the JV’s and their main 
competitors’ market shares in the supply of CCP connectivity services, on the basis 
of the number of trades processed. In line with the relevant market definition outlined 
in Section  4.8 above, the market shares are presented separately for each asset class  
on a global basis .  
                                                                                                                                                        
enabling it to manage limits by rejecting and approving groups of CDS trades which share similar 
characteristics or specific individual CDS trades. The same reasons regarding lack of ability and 
incentive as presented in Section 5.8.1  apply to this vertical overlap. In any case, as each Party already 
has 100% in both the putative upstream and downstream markets, the Transaction  will not create a 
significant impediment to effective competition in either market.  
192  The Commission’s assessment will focus on OTC CCP connectivity, given that MarkitSERV’s CCP 
connectivity service is only offered for OTC derivatives and so the Transact ion would not give rise to 
serious doubts as to its compatibility with the internal market even if exchange traded derivatives were 
considered part of the relevant product market, as (i) the Parties’ market shares would be lower on each 
of these segments o n such a wider market, and (ii) the relevant vertical link only arises in relation to 
OTC CCP connectivity (with trading and clearing services). References in the competitive assessment 
to CCP connectivity are to OTC CCP connectivity.  
 
 
53 Table 2: CCP connectivity market shares by asset class based on the number of 
trades processed, 2019193 
Asset 
class  MarkitSERV 
(# of trades)  MarkitSERV 
(%) Traiana 
(# of 
trades)  Traiana 
(%) Main competitors 
(%) 
CDS  […] [5-10]% n.a. n.a. ICE Link        (90-
95%)  
Trading venues  (0-
5%) 
FX […] [90-100]% […] [0-5]% Bloomberg         (0-
5%) 
FX Connect       (0-
5%) 
IRD […] [80-90]% […] [0-5]% Tradeweb         (5 -
10%)  
Bloomberg       (5-
10%)  
LCH                   (0-
5%) 
Equities  n.a. n.a. […] 100%  No other providers 
identi fied194 
Source: Form CO, Tables 6.9 -6.11, paragraph 517  and RFI 19 Table 12.1 . Notifying Parties’ best 
estimates based on DTCC TIW data, LCH SwapClear volume data.  
(230)  The Notifying Parties submit that the JV only gives rise to a horizontal overlap in the 
provision o f FX CCP connectivity services. However, the Notifying Parties explain 
that Traiana has some limited connectivity activities in IRD, which would give rise to 
a horizontally affected market if they were considered to overlap with MarkitSERV’s 
service. The Notifying Parties argue that this should not be considered a horizontal 
overlap as Traiana does not offer a true CCP connectivity service , for the reasons 
described in recital  (237)  below . For completeness, the Commission also investigated 
this plausible overlap, as described below.195 
                                                 
193  In terms of a pot ential narrower product market by trade type, MarkitSERV exclusively provides CCP 
connectivity for bilateral trades whereas Traiana focuses on trilateral trades. MarkitSERV  and 
Traiana’s market shares would not be materially different from those presented in Table 2 if a separate, 
narrower product market were defined for CCP connectivity delineating by type of trade (RFI 17, 
Notifying Parties’ response to question 1). In light of this, and the assessment conducted below, the 
Commission considers that the Transaction would not give rise to serious doubts as to its compatibility 
with the internal market even on such a narrower market definition.  
194  The Notify ing Parties explain that they are not aware of any other vendor offering CCP connectivity for 
equities in the same way that Traiana processes the cash leg of equity swap trades. Form CO, paragraph 
517. 
195  Traiana is also active in the CDS asset class. The Notifying Part ies consider that Traiana’s service does 
not compete with MarkitSERV in the CDS asset class, as their services are fundamentally different. 
Traiana’s service is only used to process and perform client limit checking of voice trades after  a trade 
has been submitted to a CCP for clearing. In contrast, the primary aim of MarkitSERV’s CCP 
connectivity service is the submission of trades to clearing. As such, the Notifying party submits that 
Traiana’s service is not a substitute for MarkitSERV’s of fering. In any event, even if Traiana’s service 
were considered a form of CCP connectivity, the Parties’ combined market shares would  be less than 
[20-30]% for CDS worldwide and so the Transaction would not give rise to serious doubts as to its 
compatibili ty with the internal market.  
 
 
54 5.3.1.  Notifying Parties’ view  
FX 
(231)  The Notifying Parties submit that the Transaction does not give rise to horizontal 
non-coordinated effects in relation to the supply of CCP connectivity in the FX asset 
class, for the following reasons.  
(232)  First, the Notifying Parties argue that Traiana’s FX CCP connectivity service is 
negligible. In total, Traiana sends fewer than […] FX trades to CCPs each year, ou t 
of a total of more than 1.35 million FX trades which are sent to CCPs each year. This 
represents a market share of less than [0-5]%.196  
(233)  Second, the Notifying Parties point out that Traiana’s CCP connectivity offering in 
FX is limited to two services, and argues that these do not compete with 
MarkitSERV:  
(a) The first service consists of  sending a very small volume of non -deliverable 
forwards from […] to MarkitSERV, for matching prior to being sent  on to 
clearing. Traiana itself does not submit trades directly to the CCP – it is 
MarkitSERV which provides this connectivity. Therefore, the Notifying 
Parties consider that this aspect of Traiana’s service does not compete with 
MarkitSERV to provide CCP connectivity to clients.197 
(b) The second service consists of  sending  a very small volume of deliverable FX 
forwards and swaps to the Hong Kong Exchange (‘HKEX ’) (only). Traiana 
sends fewer than […] FX trades to HKEX each year. This implies that 
Traiana is not a competitor to MarkitSERV, given the former’s negligible 
scope .198 
(234)  Third , the Notifying Parties  argue  that MarkitSERV and Traiana’s FX CCP 
connectivity services are differentiated, as they are focused on different types of 
trade s. MarkitSERV provides CCP connectivity for bilateral FX trades. In contrast, 
Traiana’s FX CCP connectivity service primarily relates to trilateral trades. Notably, 
Traiana’s service consists of acting as a clearing broker , i.e. sending prime brokerage 
trades to CCPs, with the aim of ensuring the smooth functioning of the clearing 
process for the client . This service is not provided by MarkitSERV as part of its FX 
CCP connectivity service, so the Parties are not close competitors.199 
(235)  Fourth, the Notifying Part ies submit that the JV would face competition from a range 
of competitors, including in particular trading venues who enable customers to send 
their trades directly to clearing without the intermediation of a middleware provider 
(such as MarkitSERV).  
IRD  
(236)  In relation to the IRD asset class, the Notifying Parties consider that the Transaction 
does not give rise to a horizontal overlap, and argue that even if it did the Transaction 
                                                 
196  Form CO, paragraph 430(b).  
197  Form CO, paragraphs 489 and 491(b).  
198  Form CO, paragraph 430(b).  
199  Form CO, paragraph 429.  
 
 
55 would not give rise to serious doubts  as to its compatibility with the interna l market  
for the following reasons.   
(237)  First, the Notifying Parties argue that Traiana’s service does not compete with 
MarkitSERV in IRDs, as their services are fundamentally different. MarkitSERV’s 
CCP connectivity service provides clients with the ability to send their executed 
trades (of various types) to a CCP. In contrast, in the IRD asset class, Traiana’s 
service only relates to the submission of bunched order allocations to clearing. 
Bunched orders are a specific type of trading arrangement used in cir cumstances 
where an asset manager does not yet know to which funds a block trade will be 
allocated when the trade is made. This very limited use implies that Traiana’s service 
is not able to compete for the vast majority of MarkitSERV’s business in IRD CCP  
connectivity ( [0-5]% of MarkitSERV’s business is for bunched order allocations).200 
(238)  Second , the Notifying Part ies argue that , even if it is considered that there is a 
horizontal overlap,  Traiana is a negligible player in CCP connectivity in IRDs, 
generating  revenues of less than […] annually (which represents Traiana’s revenues 
in both IRDs and CDS) . Traiana’s IRD CCP connectivity service is currently only 
provided to […].201 It only processes around […] trades out of a total market of 6.25 
million trades, giving it a market share of just [0-5]%.202 
5.3.2.  Commission’s assessment  
FX 
(239)  The provision of FX CCP connectivity is a horizontally affected market on the basis 
that MarkitSERV has a market share of [90-100]% and Traiana brings an increment 
of [0-5]%. Traiana’s activities in the provision of CCP connectivity are limited, as it 
only directly submits […] to one CCP (HKEX) each year, out of a total market of 
1.35 million trades.  The Commission investigated the Noti fying Parties’  market share 
estimates to verify whether they are accurate. According to well -established case law, 
very large market shares of 50% or more may in themselves be evidence of the 
existence of a dominant position;203 in view of MarkitSERV’s very high market share 
a dominant position can therefore be presumed.  
(240)  In this regard , the market investigation indicated that the Notifying Part ies’ market 
share estimates and views on competitors are credible for FX. Customers and 
competitors confirmed that Ma rkitSERV is the clear market leader for CCP 
connectivity in FX.204 CCPs  strongly consider MarkitSERV to be an important 
source of FX trades for them, whereas generally this is not true of Traiana, with one 
explaining: “ [w]e do not currently consider Traiana to be an important partner ”.205 
                                                 
200  Form CO, paragraph 430(c)(i). RFI 14 question 4.1.  
201  Form CO, paragraph 430(c) . 
202  Commission computation based on data in RFI 9 Table 12.1.  
203  Case T -221/95, Endemol , para. 234 and Case T -102/96, Gencor , para. 205. See also Horizontal Merger 
Guidelines, para. 17.  
204  Replies to questions 13 and 20 of Questionnaire 1 and to question 15 of Questionna ire 2.  
205  Replies to questions 14.2 and 14.3 of Questionnaire 1.  
 
 
56 This was also reflected in the data submitted by CCPs regarding the source of FX 
trades sent to them for clearing.206  
(241)  Moreover , the market investigation indicated  that MarkitSERV’s FX CCP 
connectivity offering faces competition from trading venues, which provide 
customers with the ability to send trades executed on their venue directly to clearing. 
Customers considered that such direct connectivity providers can be  an alternative to 
MarkitSERV.207 A number of CCPs supported this view, highlighting that “ trading 
venues, such as Bloomberg, offer the choice to submitting trades directly to the 
CCPs ”.208 Customers and competitors identified alternative providers of CCP 
conn ectivity in FX as includ ing Bloomberg, FX All, Clearvision and direct 
connectivity from other trading venues.209 
(242)  Therefore, the market investigation did not give any reason to doubt MarkitSERV’s 
market share estimates, according to which MarkitSERV would hold a dominant 
position through its market share of [90-100]% in FX, and Traiana’s share would be 
minimal  ([0-5]%). 
(243)  Notwithstanding MarkitSERV’s high market shares, the Commission considers that 
the Transaction is unlikely to give rise to serious doubts as t o its compatibility with 
the internal market for CCP connectivity in the FX asset class, as it would not result 
in a strengthening of MarkitSERV’s dominant position, for the following reasons.  
(244)  First, the market investigation supported the Notifying Parties ’ argument that there is 
considerable doubt as to whether Traiana’s service competes with MarkitSERV at all  
– indicating that the Transaction would not lead to a strengthening of MarkitSERV’s 
dominant position . The vast majority of MarkitSERV’s FX customer s indicated that 
it was either not possible for them to replace MarkitSERV with Traiana  or at best 
unclear whether they could do so . Traiana offers a niche service in respect of a small 
number of trades where it acts as a clearing broker (a service which M arkitSERV 
does not provide as part of its CCP connectivity offering).210 One customer indicated 
that it did not consider MarkitSERV and Traiana to be alternatives, and explained 
that Traiana “ offer[s] a unique service which is not interchangeable with anothe r 
provider. ”211 A customer of MarkitSERV explained that it considers there is a “ lack 
of availability of alternative offerings”  to MarkitSERV, and did not consider Traiana 
to be an alternative that it could switch to.212 No customers responding to the market 
investigation indicated that they have switched between MarkitSERV and Traiana in 
the last three years.213 
(245)  As well as there being uncertainties as to whether Traiana provides the same type of 
service to that of MarkitSERV, customers indicated that Traiana la cks the necessary 
critical mass for it to be an effective competitor .214 Dealer and broker banks 
                                                 
206  Replies to question 14 of Questionnaire 1.  
207  Replies to questions 24 and 20 of Questionnaire 1.  
208  Replies to questions 14.2 and 15 of Questionnaire 1  
209  Replies to questions 13 and 20 o f Questionnaire 1 and to question 15 of Questionnaire 2.  
210  Reply to RFI 19 paragraph 11.1.  
211  Replies to question 19 of Questionnaire 1.  
212  Replies to questions 23 and 23.1 of Questionnaire 1.  
213  Replies to question 25 of Questionnaire 1.  
214  Replies to q uestion 23.2 of Questionnaire 1.  
 
 
57 explained that the key factor driving the choice of CCP connectivity provider is the 
preference of the trading counterparty.215 Given that Traiana only submits […] FX 
trades to clearing (at one CCP), it was generally not considered realistic to switch to 
Traiana.  Moreover, the vast majority of customers considered that, even if Traiana 
does provide the service they need, it is challenging or even impossible to switc h 
CCP connectivity provider  from MarkitSERV to Traiana , noting that this would be 
time consuming and costly.216 Accordingly, it is unclear if pre -Transaction Traiana 
could be considered as a  credible alternative to MarkitSERV.  
(246)  Second, the market investigatio n supported the Notifying Parties’ claim that Traiana 
is not a particularly close competitor and so it is unlikely that  the Transaction would 
strengthen MarkitSERV’s dominant position . The majority of customers did not 
identify Traiana as a close competito r of MarkitSERV, and no customers considered 
that MarkitSERV competes closely with Traiana.217 Customers explained that this is 
because while both MarkitSERV  and Traiana  are active in CCP connectivity (more 
generally), “ Traiana and MarkitSERV serve different  asset classes”.218 The fact that 
the MarkitSERV and Traiana do not compete closely is also reflected by how they 
are used by customers in practice. The Commission notes that virtually all of 
MarkitSERV’s FX trades ( […]) were sent to LCH for clearing, with t he remainder 
being sent to CME. MarkitSERV did not send any trades to HKEX. In contrast, 
Traiana submitted […] FX trades to LCH and Trai ana’s only activity was to submit 
[…] FX trades each year to the HKEX.219 As such, customers use Traiana and 
MarkitSERV fo r different purposes.  
(247)  Third , the addition of Traiana to MarkitSERV does not strengthen MarkitSERV’s 
dominant position, because Traiana has in recent history been, is currently , and will 
continue to be , a negligible player in the FX CCP connectivity market. Traiana is not 
a new entrant nor a disruptive market participant, and it does not constitute an 
important competitive constraint on MarkitSERV. MarkitSERV has been active in 
FX CCP connectivity since 2010 , and has consistently been the market leader (only 
in recent years has its position started to be eroded through increased use of direct 
connectivity from trading venues, in particular). Traiana has also been active in the 
provision of FX CCP connecti vity since 2011 . Yet despite being active on the market 
for ten years, Traiana has not grown into a constraint on MarkitSERV, as it holds a 
market share of just [0-5]% ([…]), is not seen as a close competitor  and no 
MarkitSERV customers responding to the m arket investigation indicated that they 
switched to Traiana in the last three years . This reflects the different focus of the  
Parties and negligible presence of Traiana in this market.  
(248)  Traiana is expected to remain a marginal player in the coming years. While the 
market investigation showed that the progressive phase -in of the Uncleared Margin 
Rules220 is expected to lead to more FX trades being sent to clearing in the next three 
                                                 
215  Replies to question 14 of Questionnaire 1.  
216  Replies to question 23 of Questionnaire 1.  
217  Replies to question 20 of Questionnaire 1.  
218  Replies to question 23.2 of Questionnaire 1.  
219  Form CO, Table 2.3.  
220  Regulation No 684/2012 of the European Parliament and of the Council of 4 July 2012 on OTC 
derivatives, central counterparties and trade repositories , as amended and further detailed in 
Commission Delegated Regulation (EU) 2016/2251 of 4 October 2016 suppl ementing Regulation (EU) 
No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties 
 
 
 
58 years,221 the impact of this would most likely be negligible for Traiana’s busin ess. 
The Notifying Parties explained that […] of Traiana’s customers are expected to be 
affected by the next phase of the Uncleared Margin Rules, and that […].222 As such, 
Traiana is currently , and is expected to remain , a negligible player in this market th at 
does not exercise a constraint on MarkitSERV.  
(249)  Finally, the vast majority of customers that expressed a view considered that the 
Transaction would have a neutral impact on the market for FX CCP connectivity.223 
This is driven by Traiana’s negligible presen ce in FX CCP connectivity and the 
differentiation between the Parties’ offering. For example, o ne customer explained 
that: “ Markit products aren’t direct competitors with Traiana given they dominate 
separate asset classes ”. Some others pointed to the fact that the  Parties’ services are 
more complementary  than competing. 224 Likewise, the majority of clearinghouses 
expected a neutral impact.225  
(250)  For completeness, even if the market were segmented between bilateral and prime 
broker trades, the Commission’s assess ment would remain unchanged. Even on the 
narrower segment of FX CCP connectivity for bilateral trades (the only segment on 
which the Parties overlap), MarkitSERV would remain the largest supplier whereas 
Traiana would be an insignificant player and not a c lose competitor, with 
considerable doubt as to whether it even competes with MarkitSERV at all (given 
that customers do not consider switching to Traiana to be credible, as outlined 
above).  
(251)  In light of the above and all of the evidence available to it, the  Commission 
concludes that the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market  for the market for CCP connectivity in the FX 
asset class , as the Transaction does not strengthen  MarkitSERV’s dominant positio n 
in this market due to  Traiana’s negligible presence and the fact that it essentially does 
not compete with MarkitSERV .  
IRD 
(252)  The provision of IRD CCP connectivity is a horizontally affected market on the basis 
that MarkitSERV has a market share of [80-90]% and Traiana brings an increment of 
[0-5]%.226 Traiana’s activities in the area of IRD CCP connectivity are limited, as 
they relate to just […] trades each year, out of a total market of around 6.25 million 
trades. The Commission investigated the Notifying Parties’ market share estimates to 
verify whether they are accurate.  According to well -established case law, very large 
market shares of 50% or more may in themselves be evidence of the existence of a 
                                                                                                                                                        
and trade repositories with regard to regulatory technical standards for risk -mitigation techniques for 
OTC derivative contracts n ot cleared by a central counterparty, as amended .  
221  Replies to question 22 of Questionnaire 1 and question 12 of Questionnaire 2.  
222  Form CO, paragraph 430.  
223  Replies to question 31 of Questionnaire 1.  
224  Replies to questions 30 and 31 of Questionnaire  1. 
225  Replies to question 23.1 of Questionnaire  2.  
226  Commission computation based on data in RFI 19 Table 21.1.  
 
 
59 dominant position;227 in view of MarkitSERV’s very high m arket share a dominant 
position can therefore be presumed.  
(253)  In this regard , the market investigation indicated that the Notifying Part ies’ market 
share estimates are credible  in the IRD asset class. C ustomers confirmed that 
MarkitSERV is the largest CCP con nectivity provider, and that TradeWeb and 
Bloomberg compete with it.  In addition, customers also suggested that trading venues 
compete in the IRD asset class: “ [t]he competitors for MarkitWire (for IRDS) are 
venues offering direct clearing capability ”.228 In contrast, Traiana was not considered 
to be a meaningful  competitor.229 The market investigation did not give any reason to 
doubt the Notifying Parties’ market share estimates, according to which MarkitSERV 
would hold a dominant position with a market share of [80-90]% in IRD CCP 
connectivity  and Traiana’s share would be minimal, at [0-5]%. 
(254)  First, the market investigation supported the Notifying Parties’ argument that there is 
considerable doubt as to whether Traiana’s service competes with Mar kitSERV at all  
– indicating that the Transaction would not strengthen MarkitSERV’s position . The 
vast majority of MarkitSERV’s IRD customers indicated that it was either not 
possible for them to replace MarkitSERV with Traiana or at best unclear whether 
they could do so . Only one IRD customer of MarkitSERV indicated that it might 
consider replacing the IRD CCP connectivity it gets from MarkitSERV  with a service 
from Traiana .230 However, that customer also indicated that it expects that it could 
only substitut e the services “ to a limited extent ”, that it would need to evaluate 
Traiana’s service first (its responses suggested that it was not  familiar with Traiana’s 
specific offering in this asset class) and that it would be challenging to switch 
between these pr oviders.231 Moreover, given that Traiana’s IRD CCP connectivity 
offering solely relates to the submission of bunched order allocations, it appears 
unlikely that Traiana could in practice replace this customer’s current use of 
MarkitSERV.  No customers respond ing to the market investigation indicated that 
they have switched between MarkitSERV and Traiana in the last three years .232 
(255)  Second, the market investigation supported  the Notifying Parties’ claims that Traiana 
is not a close competitor to MarkitSERV in the IRD asset classes, and so the 
Transaction would not strengthen MarkitSERV’s dominant position . When asked to 
identify the closest competitors to MarkitSERV’s offering, no customers identified 
Traiana as a close competitor in IRD. Likewise, no customers identified that 
MarkitSERV would be a close competitor to Traiana.233 Customers explained that 
this is because while both Parties are active in CCP connectivity (more generally), 
“Traiana and MarkitSERV serve different asset classes”234 Indeed, most customers 
appeared unaware that Traiana had a CCP connectivity offering in relation to IRD.235 
This is likely explained by the very significant level of differentiation between 
                                                 
227  Case T -221/95, Endemol , para. 234 and Case T -102/96, Gencor , para. 205. See also Horizontal Merger 
Guidelines, para. 17.  
228  Replies to que stions 13 and 20 of Questionnaire 1.  
229  Replies to questions 13 and 20 of Questionnaire 1.  
230  Replies to question 23.1 of Questionnaire 1.  
231  Replies to questions 23.1, 13.3 and 23.  
232  Replies to question 25 of Questionnaire 1.  
233  Replies to question 20 of  Questionnaire 1.  
234  Replies to question 23.2 of Questionnaire 1.  
235  Replies to question 13.3 of Questionnaire 1.  
 
 
60 MarkitSERV and Traiana’s offering. On the one hand, MarkitSERV’s core 
functionality is to s ubmit trades to CCPs for clearing. On the other hand, Traiana’s 
service is limited to the submission of bunched order allocations to clearing, which 
represents [0-5]% of MarkitSERV’s business is for bunched order allocations. This 
means that Traiana does n ot compete for [90-100]% of MarkitSERV’s business. 
Indeed, o ne competitor explained that Traiana was not focused on providing CCP 
connectivity in IRD, rather “ a smaller part of their business is to allocate parts of 
bunched orders (block trades) to the tar get clients of individual transactions ”,236 
supporting the Notifying Parties’ claims that Traiana’s service has a fundamentally 
different purpose and focus from that of MarkitSERV’s CCP connectivity service.  
(256)  Third , the Notifying Parties’ own internal documen ts indicate that Traiana does not 
compete with MarkitSERV in the IRD asset class.237  
(257)  Finally, the vast majority of customers that expressed a view considered that the 
Transaction would have a neutral impact on the market for IRD CCP connectivity.238 
This is d riven by Traiana’s negligible presence in IRD CCP connectivity and the 
differentiation between the Parties’ offering. For example, one customer explained 
that: “ Markit products aren’t direct competitors with Traiana given they dominate 
separate asset class es”. Some others pointed to the fact that the  Parties’ services are 
more complementary  than competing.239 Likewise, the majority of clearinghouses 
expected a neutral impact.240  
(258)  For completeness, even if the market were segmented between bilateral and prime 
broker trades, the Commission’s assessment would remain unchanged. Even on the 
narrower segments of IRD CCP connectivity for bilateral trades or for prime broker 
trades, the Tr ansaction would not strengthen MarkitSERV’s market position for the 
abovementioned reasons (in particular, as customers do not consider switching 
between them to be credible, as outlined above).  
5.3.3.  Conclusion  
(259)  In light of the above and all of the evidence avai lable to it, the Commission 
concludes that the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market  with respect to the market for CCP 
connectivity in the IRD asset class , as the Transaction does not strengthen  
MarkitSERV’s dominant position in this market due to  Traiana’s negligible presence 
and the fact that it essentially does not compete with MarkitSERV .  
5.4. FX NOE m essaging services  worldwide  
(260)  The Commission concluded above that the NOE messaging market is a sep arate 
market that is global and  further distinguished by asset class and trade type (bilateral, 
tri-party). The only asset class in which the Parties activities overlap horizontally 
with respect to NOE messaging is FX. The Parties activities further overla p in both 
                                                 
236  Replies to question 15.3 of Questionnaire 2.  
237  For example, Form CO Annex 5.4(ii) document 005 “IHS Markit – Overview”, slide 24.  
238  Repli es to question 31 of Questionnaire 1.  
239  Replies to questions 30 and 31 of Questionnaire 1.  
240  Replies to question 23.1 of Questionnaire 2.  
 
 
61 bilateral and tri -party NOE messaging, i.e. FX PB give -up messaging , which are 
considered separate markets and are assessed in turn below.  
(261)  The Commission assesses the impact on bilateral FX NOE messaging despite the 
market not being affected at first sight (see combined market share in Table 3 of [5-
10]%), because the market shares provided by the Notifying Parties do not seem to 
reflect the po sition of the Parties accurately when considering plausible narrower 
markets, as indicated by the results of the  market investigation.  
(262)  The Notifying Parties’ estimates of IHSM’s and Traiana’s market shares in the global 
market for bilateral FX NOE messaging services in terms of average number of trade 
messages per day for 2019 are shown below  in Table 3. Number of trades is 
consider ed a more meani ngful measure than value given that FX NOE messaging 
services are charged on a per trade basis or as a subscription.  
Table 3: Global b ilateral FX NOE messaging services in 2019  
  # of trades  % of trades  
MarkitSERV  […]  [5-10]% 
Traiana  […]  [0-5]% 
Combined  […] [5-10]% 
Refinitiv   [40-50]%  
Trading platforms (incl. EBS, Refinitiv Matching, 
Hotspot, FX All, Currenex)   [20-30]%  
Aggregators/OMS providers (incl. FlexTrade, 
SmartTrade, Charles River, Broadridge, ION)   [10-20]%  
Risk Management Systems (incl. Murex, Openlink, 
Finastra)   [0-10]%  
Total  6 000 000 100%  
Source: The Notifying Parties ’ best estimates based on BIS OTC Derivatives Data; Bank of England 
Foreign exchange and OTC derivatives markets turnover survey; and Euromoney Foreign Exchange 
Survey. Note: The market size is estimated based on the BIS 2019 daily average notional value of FX 
trades divided by the average size of a trade (as reported by the Bank of England). Competitor market 
shares have been sourced fr om management estimates.   
(263)  The Notifying Parties’ estimates of the Parties’ market  shares in an alternative market 
that does not distinguish by trade type and includes bilateral FX NOE messaging 
services and FX PB give -up messaging services, is shown below in Table 4.  
Table 4: Global FX NOE messaging services in 2019  
 # of 
trades  % of trades  
MarkitSERV  […]  [5-10]% 
Traiana  […]  [5-10]% 
Combined  […] [10-20]% 
Total  6 400 000 100%  
Source: The Notifying Parties’ best estimates based on BIS OTC Derivatives Data; Bank of England 
Foreign exchange and OTC derivatives markets turnover survey; and Euromoney Foreign Exchange 
Survey.  
(264)  Beyond that, the Notifying Parties were not able to provide market share estimat es 
for the following narrower plausible distinct markets identified: (i) independent 
 
 
62 provision of bilateral FX NOE messaging services (as opposed to a wider market 
comprising independent and captive provision)241 and (ii) bilateral FX NO E 
messaging services provided for electronic FX trades (as opposed to a wider market 
comprising electronic and bilateral/voice trading).242 However, the Notifying Parties 
consider that market shares of Traiana and MarkitSERV in bilateral FX NOE 
messaging for electronic trades on ly would not differ significantly from their market 
shares in the broader market comprising FX NOE messaging for electronically and 
bilaterally executed trades.243 
(265)  Bilateral NOE messaging involves sending NOEs from brokers, venues and dealer 
banks to custome rs, and in some cases the return acknowledgement of these 
messages, that take place "pre -risk", i.e. prior to the trade entering the customer's risk 
management system. MarkitSERV provides bilateral NOE messaging services across 
a number of asset classes (C DS, equities, FX and IRDs), while Traiana provides this 
service for FX only (in addition to Traiana’s tri -party messaging services which it 
provides for FX, equities, interest rate derivatives and equity derivatives). Hence, the 
Commission assesses below t he horizontal overlap with respect to bilateral FX NOE 
messaging and plausible narrower markets.  
5.4.1.  Notifying Parties’  view 
(266)  First,  regarding bilateral FX NOE messaging, the Parties are not competing for the 
same customers. Most of Traiana's bilateral NOE mess aging customers are buy -side 
clients trading predominantly on a tri -party basis. Some of these clients, having 
adopted Traiana's messaging service in connection with tri -party (i.e. prime 
brokerage) services, requested that Traiana also act as the conduit for their bilateral 
post-trade notifications arising from the same dealer relationships. Therefore, 
Traiana's client base for bilateral services is predominantly buy -side customers as 
opposed to the large dealer bank clients served by MarkitSERV. According  to the 
Notifying Parties, customers with significant bilateral trade volume would not chose 
Traiana as their provider of FX NOE messaging services.  
(267)  Second , the market for bilateral FX NOE messaging is highly competitive with 
several types of providers act ive in addition to the independent providers, namely 
MarkitSERV, Traiana and Refinitiv.  Other providers are risk systems such as Murex, 
OpenLink, Finastra (which provides the Summit and Sophis products); post trade 
messaging vendors such as Broadridge; int egration specialists/consultants such as 
Accenture and Infosys; and trading platforms, like EBS, Refinitiv Matching  and FX 
all, Cboe/Hotspot,  and Currenex.   
(268)  Third , as evidenced by recent terminations of contracts, and in addition to other types 
of provider s, self -supply is a competitive constraint for the Parties in bilateral FX 
NOE messaging.  
(269)  Fourth, the Parties’ customers are large, powerful financial institutions, hedge funds, 
asset managers and corporations that have significant buyer power and are abl e to 
sponsor entry, whenever they are not content with a service offering.  
                                                 
241  Notifying Parties’ response to question 1 in RFI 14.  
242  Notifying Parties’ response to question 5 in RFI 19.  
243  Notifying Parties’ response to question 5 in RFI 19.  
 
 
63 5.4.2.  Commission’s assessment  
(270)  In bilateral FX NOE messaging services, the  Parties’ combined market share is [5-
10]% according to the Notifying Parties .244 The increment from the Transaction is 
small. The Notifying Parties estimate the increment from Traiana is only [0-5]% for 
the provision of bilateral FX NOE messaging. In a market segmented by independent 
versus captive provision of FX NOE messaging service s, MarkitSERV’s market 
share would likely be significantly higher than estimated by the Notifying Parties.245 
However, the increment brought about by the Transaction through Traiana is still 
very small and independent provision of FX NOE messaging services f aces 
competition from captive providers  as well as self -supply .  
(271)  This means that the Transaction likely does not change the market structure 
significantly given that Traiana is a negligible competitor.  The Commission ’s 
considerations are set out below in d etail.  
(272)  First , the market investigation confirmed that customers do not generally believe that 
MarkitSERV’s and Traiana’s bilateral FX NOE messaging services compete 
closely,246 Traiana being the main provider of tri -party FX messaging services , i.e. 
FX PB gi ve-up messaging,  and competing more closely with recent entrant Cobalt.247 
It is likely that these responses from market participants would be similar for 
plausible narrower markets (independent provision, provision for electronic vs. 
bilateral/voice execute d trades) given that no respondents highlighted in their free 
text responses that these distinctions have a bearing on their response.248 
(273)  Several respondents confirm the Notifying Parties’ view that Traiana’s and 
MarkitSERV’s services are targeted at differe nt customers. Several customers state 
that they are not familiar with the respective other Parties’ services, as they only use 
MarkitSERV or only use Traiana.249 One customer  notes that they “[do] not consider 
Traiana and MarkitSERV to be close competitors.”250  
(274)  This is further confirmed by a win -loss analysis of material contracts of both Parties’ 
FX NOE messaging services between 2016 and 2021. During the last 5 years, 
MarkitSERV lost […] significant clients,  […] of which replaced MarkitSERV’s 
services with a n in-house solutio n and […] of which change d to a competitor. 
However, the  competitor to whom customers switched was never Traiana ,251 
supporting the argument that the Parties are not particularly close competitors in 
bilateral FX NOE messaging.  
                                                 
244  Even if a general FX NOE messaging market (including tri -party messaging) was considered, the 
Notifying Parties’ combined market share would increase to only [10 -20]%, because the market for 
bilateral  messaging is significantly larger than the market for trilateral messaging. Traiana has a  market 
share of [80 -90]% in the market of FX PB give -up management services (which include tri -party FX 
NOE messaging services), leading to the higher combined mark et share in the broader market of 
bilateral and tri -party FX NOE messaging services.  
245  Responses  by a competitor to  RFIs on 29 and 30 June 2021.  
246  Replies to questions 17 -21 of Questionnaire 3. 
247  Reply to question 9.1 of Questionnaire 3.  
248  Replies to questions 17 -21 of Questionnaire 3. 
249  Reply to question 15.1 of Questionnaire 3.  
250  Minutes of a call with a customer on 28 April 2021, 10:00 CET.  
251  Notifying Parties’ response to RFI 10, Annex 145.  
 
 
64 (275)  Traiana’s b ilateral FX NOE messaging service los t […] clients during the same  time, 
[…] of which no longer needed the service , […] of which built in -house connectivity  
and […] of which possibly moved to a competitor (no names known) , while the 
remaining […] provided no reason.  No customers are known to have switched to 
MarkitSERV .252 This confirms that the  Parties are not close competitors in bilateral 
FX NOE messaging.  
(276)  In addition, t he Commission notes that Traiana’s bilateral FX NOE messaging 
services seem  to be ancil lary to its tri -party offering […]. The same seems to be true 
vice versa where MarkitSERV is predominantly catering to customers requiring 
bilateral FX NOE messaging and only provides very limited tri -party FX NOE 
messaging – so limited, that many customers do not even seem to be aware of its 
offering ; for example one customers states: “No, Markitserv does not have a prime 
services offering that we are aware of.”253 
(277)  Furthermore , and with respect to the competitive closeness of the  Parties , customers 
consider captive providers to have similar co mpetitive strength in the market for FX 
NOE messaging254 as the main “independent ” suppliers (MarkitSERV, Traiana and 
Refinitiv) . The fact that several captive providers are considered to have similar 
competitive strength as the main “independent ” suppliers further indicates that 
customers consider these providers to offer competing services.  One customers 
states: “MarkitSERV and Cobalt are competitors to Traiana’s FX NOE service, in 
addition to any proprietary FX NOE delivery service that any firm develops a nd 
supports.”255 The constraint on the JV from captive providers is supported by the fact 
that customers consider that switching to captive providers is possible.256  
(278)  Moreover, some captive suppliers also provide an  independent offering (such as 
Refinitiv), meaning that they are well placed to expand and constrain the JV and that 
the line between captive and independent providers is blurred .257 As to the question 
whether captive providers compete between themselves for FX NOE messaging 
services, the market investigation did not explicitly examine this. However, it is 
likely that the competitive constraint posed by other captive providers in respect of 
their FX NOE messaging offering is lower than that of an independent p rovider. 
However, the fact  that captive providers are offering FX NOE messaging for their 
own trading venue  suggests that they have the general technical knowledge to apply 
this to other trading venues.  
(279)  Another element that constrains independent provider s of FX NOE messaging 
services is self-supply . This  seems to be an option, as several respondents mention 
this. F or example, asked wh y customers procure several trade processing services 
from the same provider, one answers: “Convenience until we can build an in -house 
substitution.”258 In addition, the above mentioned win -loss analysis confirms that in -
house solutions are a common replacement for customers cancelling either 
                                                 
252  Notifying Parties’ response to RFI 10, An nex 146.  
253  Reply to question 21 of Questionnaire 3.  
254  Reply to question 15 of Questionnaire 3. Specifically, Broadridge, SmartTrade, Fluent Trade 
Technologies, Murex and CBOE FX.  
255  Reply to question 17 of Questionnaire 3.  
256  As outlined in recitals (130)  and (131) . 
257  See recital (129) . 
258  Reply to question 7.1.2 of Questionnaire 3.  
 
 
65 MarkitSERV’s or Traiana’s bilateral FX NOE messaging service.  In fact, though not 
expli citly investigated, it is likely that customers switching to an in -house solution 
are building this solution using direct trading venue/risk management system 
providers’ or other aggregators/order management system providers’ messaging 
services as inputs. This indicates that while independent NOE messaging providers 
may not be the closest competitors to  captive providers, those captive providers do 
exert a competitive constraint on independent NOE messaging providers.  
(280)  Fifth , in its p re-notification outreach , the Commission talked to a number of 
customers about their bargaining power  vis-à-vis the Parties . One customer 
“considers that it has bargaining power as a customer against Traiana. In 
particular, this is apparent through the fact that [the customer] ca n and does create 
direct connections with major clients and counterparties.”259 Another customer  
“understands that it would have some bargaining power as a customer against the 
Parties, given the multiple touchpoints of [the customer] globally with each of the 
Parties.”260 
(281)  Sixth , customers of the Parties seem to indeed be able to sponsor entry as evidenced 
by recent examples in the trade processing markets, e.g. Access Fintech sponsored by 
J.P. Morgan, Citi, Goldman Sachs and Deutsche Bank, and Cobalt, which i s 
sponsored by Citi and Singapore Exchange (as well as IHSM itself, […]). 
(282)  Seventh , in terms of impact, customers of trade processing services in general and FX 
NOE messaging and FX PB give -up management services in particular, have a 
positive or neutral vi ew on the Transaction.261 Several customers echo views of the 
Notifying Parties regarding the rationale of the Transaction , i.e. that the combination 
of MarkitSERV and Traiana could lead to efficiencies in a fragmented trade 
processing services landscape. One customer explicitly mentions the possible trade -
off between competition and efficiencies: “Negative impacts from a competition 
perspective may be offset by increased investment in the service.”262 
(283)  Significant competitor s of the  Parties in bilateral FX NOE messaging did not raise 
any concerns and noted that although their services compete, they also worked 
together in an open way (i.e. connect to each other) given the “utility like nature” of 
FX NOE messaging services.263 Furthermore, they stated that they are  “particularly 
focused on FX for legacy reasons (…) and likely a stronger competitor in FX post -
trade services than MarkitSERV  (…).”264  
(284)  Eighth,  calls with customers as well as internal documents highlight that in particular 
MarkitSERV’s services require investment to remain competitive.265 For example, 
one customer notes that “IHSM had been attempting to sell Markitwire for some 
                                                 
259  Minutes of a call with a customer on 28 April 2021, 10:00 CET.  
260  Minutes of a call with a customer on 4 May 2021, 11:00 CET.  
261  Replies to questions 36 -38 of Questionnaire 3.  
262  Reply to question 36.1 of Questionnaire 3.  
263  Minutes of a call with a competitor on 12 May 2021, 11:00 CET.  
264  Minutes of a call with a competitor on 12 May 2021, 11:00 CET.  
265  Minutes of a call with a customer on 4 May 2021, 11:00 CET and internal document of IHSM titled 
“Project Parthenon Opportunity overview”, slide 20.  
 
 
66 time; even though it is a profitable business, the technology is old and in its current 
state has likely already past its peak val ue.”266  
(285)  Ninth, the concern voiced by one FX trading venue competitor that the “combination 
of ISHM and Traiana’s NOE services may lead to price increases for clients, and so 
less appetite for clients to trade on [the competitor’s FX trading venue]”267, does n ot 
seem plausible. Customers of FX trading venues do not chose their trading venue 
based on the prices of trade processing providers , but rather based on a trading 
venues’  liquidity, which is normally also the first criterion based on which FX 
trading venu es advertise their services.268 The Notifying Parties provided an example 
of a typical relationship between the costs associated with an FX trade that is 
processed using MarkitSERV’s FX NOE messaging: “For a mid -size regional bank, 
the Parties estimate the p ost trade processing cost (third party costs and 
infrastructure costs but not including the cost of staff to support post trade 
processing) of an average FX trade to be approximately $6.50, of which, 
approximately $0.02 would normally be attributed to NOE messaging. Execution 
costs for the same trade could reasonably be expected to be between $300 and $600 
per trade for Spot transactions, with significantly higher costs per trade for Forward 
and Swap transactions.”269 Hence, the costs of FX NOE messaging serv ices 
represent a fraction of other trade processing services costs and are even less 
important when considering other trading costs (e.g. charged by the trading venue). It 
seems therefore unrealistic to assume customers would be discouraged from trading 
on a certain FX trading venue, because of higher costs for FX NOE messaging 
services.  
(286)  On balance, the Commission concludes that the  Parties do not seem to be  close 
competitors in bilateral FX NOE messaging  and there are sufficient alternatives 
available to market participants . Even in a hypothetical narrower market only 
including independent providers of bilateral FX NOE messaging services , potential 
competition from captive providers would pose a sufficient competitive constraint  in 
addition to market participants’ ability to self -supply or sponsor entry . The share of 
independent provision of FX NOE messaging services compared to all FX trades in 
2019 was below 10%.270 This indicates that the vast majority of exe cuted FX trades 
are not captured by the independent providers  of FX NOE messaging services .  
(287)  With respect to a narrower market of FX NOE messaging for electronically executed 
FX trades separate from a market for FX NOE messaging for bilaterally/voice 
execu ted trades, the Commission observes that MarkitSERV and Traiana provide 
services for both types , as does their main competitor Refinitiv .271 The proportion of 
bilaterally/voice executed trades in FX is ca. 30%, so the smaller part of the overall 
FX trading m arket. MarkitSERV’s market share in an “electronic only” FX NOE 
                                                 
266  Minutes of a call with a customer on 4 May 2021, 11:00 CET.  
267  Minutes of a call with a competitor on 24 May 2021, 14:00 CET.  
268  E.g. “ EBS Market provides  orderly, executable and genuine liquidity across all major and emerging market 
currencies.” See  https://www.cmegroup.com/trading/market -tech-and-data-service s/ebs/platforms html , accessed 
on 12 July 2021.  
269  Notifying Parties’ response to question 1 in RFI 15.  
270  Case team calculations based on Form CO, Annex 144 and responses by a competitor to  RFIs on 29 
and 30 June 2021.  
271  Notifying Parties’ response to qu estions 5 and 6 in RFI 19.  
 
 
67 messaging market would be [5-10]% (in 2019), while Traiana’s would be [0-5]%272, 
and hence the market would not be affected.   
5.4.3.  Conclusion  
(288)  Based on the above considerations and the evidence availa ble to the C ommission, the 
Transaction does not give rise to serious doubts as to its compatibility with the 
internal market as a result of a horizontal effects in the market for bilateral FX NOE 
messaging services , or separate narrower markets distinguish ing by independent 
versus captive provision of FX NOE messaging services or FX NOE messaging 
services for electronically executed FX trades or bilateral/voice FX trades .  
5.5. FX PB give -up messaging services  worldwide  
(289)  A horizontal overlap arises in the plausib le narrower market of FX PB give -up 
messaging  services, which is a service type of FX PB give -up management  services 
(see Section  4.6.2 ). In the global market of FX PB give -up messaging services, 
Traiana has a market share of [80-90]% and MarkitSERV a market share of [0-5]% 
in 2019.273  
Table 5: Global FX  PB give -up messaging services  
  # of 
trades  % of 
trades  
MarkitSERV  […] [0-5]% 
Traiana  […] [80-90]% 
Combined  […] [80-
90]% 
Trading platforms (incl. EBS, Refinitiv 
Matching, Hotspot, FX All, Currenex)   [10-15]%  
Others (incl. Access FinTech, Cobalt, 
TransFICC)   [0-5]% 
Total  400.000  100%  
Source: BIS OTC Derivatives Data. Note: Traiana's market share is based on its share of the BIS 
2019 daily average notional value of FX PB trades. This value market share is used to estimate the 
market size in terms of number of trades (this assumes Traian a's market share in terms of value of PB 
trades is equal to its market share in terms of number of PB trades) which is used to estimate 
MarkitSERV's market share (BIS does not report data on the volume or average value of PB trades). 
Competitor market shar es have been sourced from management estimates.  
(290)  Traiana provides FX PB give -up management services, of which FX PB give -up 
messaging services are a separate service type that is available standalone as well as 
in combination with other FX PB give -up manag ement services.  
(291)  MarkitSERV does not provide FX PB give -up management services, but provides FX 
PB give -up messaging in relation to a very small volume of FX prime brokerage 
                                                 
272  Case team calculations based on Form CO, Annex 144, under the conservative assumption that all 
trades processed in terms of FX NOE messaging by MarkitSERV  and Traiana are for electronically 
executed trades.  
273  Form CO, Annex 105. The Notifying Parties are unable to provide market shares for plausible narrower 
separate markets, e.g. FX PB give -up messaging services for electronically executed trades, see 
Notifying Parties response to question 10 in RFI 19.  
 
 
68 trades for a very limited number of customers. Hence, the Commission assesses 
below the horizontal overlap with respect to FX PB give -up messaging  services.  
5.5.1.  Notifying Parties’  view 
(292)  First,  the Notifying Parties consider that they effectively do not compete in the 
market for FX PB give -up messaging services, given that MarkitSERV only pro vides 
FX PB give -up messaging services for a very small number o f customers, mostly as 
part of legacy arrangements and only marginal revenues result from this activity.  
(293)  Second , the Notifying Parties note that Traiana is the leading  competitor in FX PB 
give-up management services (including FX PB give -up messaging services) and 
faces competitive pressure mainly from FX trading venues who are also able to 
directly connect to prime brokers.  
(294)  Third , the Notifying Parties note that they are facing considerable b argaining power 
from their main customers, as evidenced by the fact that the top 10 customers of each 
Party account for [large proportion]  of their revenue. Those customers are able to 
move significant business and/or may move to self -supply.  
5.5.2.  Commission’s assessment  
(295)  The Commission assesses below the impact of the Transaction on the market of FX 
PB give -up messaging services, a plausible narrower separate market by service type 
in FX PB give -up management services.  
(296)  In the FX PB give -up messaging  service mar ket, Traiana is the dominant player  with 
a market share of [80-90]% according to the Notifying Parties . MarkitSERV provides 
FX PB give -up messaging services for [0-5]% of the number of trades for which 
Traiana provides FX PB give -up messaging services. Con cretely, MarkitSERV offers 
this service to a very limited number of customers in the following instances:  
(i) MarkitSERV provides FX PB give -up messaging to […] customers who use its 
bilateral FX NOE messaging service as well. The Notifying Parties claim that  
MarkitSERV only provides “pre -risk messaging”274 to these customers and not 
the full spectrum of FX PB give -up messaging that Traiana provides, which is a 
“post -risk”275 service.  However, the Commission understands that while “post -
risk” messaging services may not be able to replace “pre -risk” messaging due to 
the latter’s  higher latency, this higher latency means that “pre-risk” messaging 
would seem to be able to replace “post -risk” messaging. Hence, in respect of 
these customers, MarkitSERV would seem to provide a fully comparable 
offering in terms of FX PB give -up messaging services to Traiana’s.  
                                                 
274  “Pre-risk” means that messages are sent after trade execution for the purpose of updating a customers’ 
risk management system. Customers usually have internal limits as to the type and amount of risk they 
can incur in their trading activities and the risk ma nagement system keeps track of this. Hence, a real -
time update of this system is important. […].  
275  “Post -risk” means that messages are sent after trade execution but for a different purpose than updating 
a customers’ risk management system. “Post -risk” me ssages are used to reconcile trades in a 
customers’ middle/back -office, but do not influence whether or not new trades are executed (which 
happens in the front -office). As such latency can be slower and Traiana’s service has a latency of ca. 
[…] ms.  
 
 
69 (ii) MarkitSERV provides FX PB give -up messaging to […] customers as part of 
legacy agre ements with an annual revenue of […] (MarkitSERV’s total revenue 
in 2020 from FX -related trade processing services was […]276). 
(297)  The market investigation supports the view of the Notifying Parties that they do not 
compete in FX PB give -up messaging services or any narrower separate markets (FX 
PB give -up messaging services for electronically executed FX trades and FX PB 
give-up messaging services for bilaterally/voice executed FX trades).  While a 
connection to electronic trading venues is relevant since ca. 70 % of FX trading 
volume currently  takes place electronically, t he Commission notes that customers 
regularly trade via both trading channels and require FX PB give -up messaging 
services regardless of the trading channel. As such, Traiana’s and MarkitSERV’s 
market share on narrower separate markets by trading channel are therefore expected 
to be similar as in a broader market  and competitive dynamics are unlikely to be 
fundamentally different in any of these plausible narrower separate markets .277 
(298)  When asked to identify  Traiana’s closest competitors in FX PB give -up management 
services, customer’s  responses were limited to:  “Cobalt” or “no -one”.278 
MarkitSERV is mentioned as a provider of FX PB give -up management services “in 
an ancillary capacity”.279 The Commission  considers that t his supports the Notifying 
Parties’ view that Traiana and MarkitSERV do not compete closely in the FX PB 
give-up messaging services market (or any plausible narrower separate markets).   
(299)  In terms of impact, t he majority of respondents expect a neutral or positive impact of 
the Transaction  on FX NOE messaging/FX PB give -up management services 
markets.280 One customer explains: “Currently Traiana has a very high market usage 
and we do not see the expected transact ions impacting the rest of the market 
competition.”281 The Commission notes that MarkitSERV’s incremental market share 
is [0-5]% and hence unlikely to be able to change the market structure as a result of 
the Transaction.  
5.5.3.  Conclusion  
(300)  In light of the above and  all of the evidence available to it, the Commission 
concludes that the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market  with respect to FX PB give -up messaging 
services , as the Transaction does not strength en Traiana’s dominant position in th is 
market due to  MarkitSERV’s negligible presence and the fact that it essentially does 
not compete with Traiana.  
5.6. CCP connectivity in FX and IRD worldwide  (upstream) and clearing services 
in FX and IRD worldwide and in the EEA (downstream)  
(301)  CCP connectivity services of the type provided by MarkitSERV and certain trading 
venues allow customers to send trades executed on a venue or bilaterally to CCPs for 
                                                 
276  Notifying Parties’ response to question 5 in RFI 6.  
277  Notifying Parties’ response to question 5 in RFI 19.  
278  Replies to question 30 of Questionnaire 3. 
279  Replies to question 32 of Questionnaire 3. 
280  Replies to questions 37 and 38 of Questionnaire 3. 
281  Reply to question 38.1 of Questionnaire 3.  
 
 
70 clearing. MarkitSERV’s CCP connectivity service is a n important source of trades 
for some CCPs in the FX and IRD asset classes. The Transaction , therefore,  gives 
rise to a vertical link between MarkitSERV’s CCP connectivity service in FX and 
IRD (upstream) and CME’s clearing service in these asset classes ( downstream).  
(302)  Upstream, MarkitSERV is the leading provider of CCP connectivity worldwide in the 
FX ( [90-100]% market share) and IRD ([80-90]%) asset classes.282 As described in 
Section 5.3 above, MarkitSERV faces competition from trading venues, which 
provide customers with the ability to send trades directly to CCPs  (without the 
intermediation of any middleware provider, such as MarkitSERV). Its main 
competitors in the FX and IRD asset classes are Bloomberg, FX Connect  
(TradeNexus)  and TradeWeb.  
(303)  Downstream, MarkitSERV provides connectivity services to CME’s clearing service 
(‘CME Clearing ’) in the FX and IRD asset classes ( while MarkitSERV is also active  
in CDS, CME Clearing does not offer clearing in the CDS  asset class).283 The 
Notifying Part ies estimate that CME Clearing is a negligible player in the provision 
of OTC FX clearing services worldwide ( [0-5]% market share) and is a very small 
player in relation to OTC IRD clearing services worldwide ( [5-10]% market 
share).284 These market shares would be even lower on an EEA -wide market.285 The 
Notifying Parties  identif y that LCH is by far the largest provider in  both asset classes  
worldwide and in the EEA , noting that in IRD,  JSCC, HKEX, ASX, Eurex and BME 
are also active.286 This reflects the Commission’s findings in previous market 
investigations, in which it confirmed that in IRD clearing, in 2019 LCH had a mark et 
share of 90 -100%, CME’s market share was 0-5% and Eurex and others each 
represent ed 0-5%.287 Likewise, the Commission found that in the EEA LCH’s market 
share in FX was 90 -100%, with Eurex holding a market share of 0 -5%.288  
(304)  The Commission assesses below th e risk that the JV would seek to engage in input 
foreclosure of CCP connectivity in FX or IRD with a view to foreclosing rival CCPs. 
In view of the similar dynamics in these two asset classes, the Commission’s 
assessment is presented together for these ass et classes, with relevant differences in 
the analysis noted where appropriate. Likewise, in view of the similar dynamics in 
the relevant clearing markets worldwide and in the EEA, the Commission’s 
assessment is conducted globally (as CME’s market shares wo uld only be lower at 
EEA level). The Commission assesses below both a total foreclosure strategy 
(whereby MarkitSERV would cease providing customers with the ability to connect 
                                                 
282  In terms of a potential narrower product market by trade type, MarkitSERV exclusively provides CCP 
connectivity for bilateral trades. Its market shares would not be materially different from those 
presented in th is recital if a separate, narrower product market were defined for CCP connectivity 
delineating by type of trade (RFI 17, Notifying Parties’ response to question 1). In light of this, and the 
assessment conducted below, the Commission considers that for th e markets of CCP connectivity in FX 
and IRD worldwide for bilateral or for tri -party trades the Transaction would not give rise to serious 
doubts as to its compatibility with the internal market  even on such a narrower market definition.  
283  Form CO, paragraph 107.  
284  Form CO, paragraph 597(b).  
285  Notifying Parties’ response  to RFI 17, paragraph 2.1.  
286  Form CO paragraphs 613ff, Notifying Parties’ response to RFI5 paragraph 3.17.  
287  Commission decision in Case M.9564 London Stock Exchange Group/ Refinit iv Business  of 13.1.2021, 
table 43 (publication pending). Market share estimates on the basis of the notional cleared volumes of 
clearing of OTC interest rate derivatives.  
288  Ibid., table 64.  
 
 
71 to certain CCPs) and a partial foreclosure strategy (which could involve chargi ng 
higher prices to some CCPs or degrading the technical connectivity to some CCPs, 
for instance by reducing the speed or reliability with which trades are sent to 
clearing).  
(305)  For completeness, the  Commission notes that the  Transaction is unlikely to give rise 
to a risk of customer foreclosure given that CME’s market shares in the 
(downstream) market for derivatives clearing services by asset class would not 
exceed [10-20]%. 
5.6.1.  Notifying Parties’ view  
(306)  The Notifying Parties argue that MarkitSERV will no t be abl e to foreclose rival 
CCPs’ access to FX or IRD CCP connectivity for the following reasons.289 
(307)  First , the Notifying Parties argue that in each of these asset classes there are a 
number of other providers of CCP connectivity solutions to which customers and 
CCPs could switch. This includes Bloomberg, FX Connect  (TradeNexus) , TradeWeb 
and other trading venues, which will all be available options for customers post -
Transaction. The Notifying Part ies claim that the time and cost of switching to one of 
these rivals is very low.290 
(308)  Second, the Notifying Parties argue that customers do not base their decisions on 
which CCP to use for clearing services upon which post -trade services they are using. 
Instead, customers’ choice of CCP is driven by which CCP provides the optimal 
venue for them to clear their trades. As FX and IRD CCP connectivity only 
represents a very small proportion of the cost of trading compared to clearing costs, 
customers could not be convinced to clear trades at a particular CCP simply because 
they use MarkitSERV for CCP co nnectivity.291  
(309)  Third, any foreclosure attempt would be disciplined by customers. The Notifying 
Parties explain that the market is “ characterized by an open clearing model, where 
OTC trading venues are connected to several clearing houses, and where customer s 
indicate how and where they want their contracts to be cleared ”.292 MarkitSERV’s 
customers are large financial institutions, such as large global banks, as well as buy -
side clients such as hedge funds, asset managers and corporations. The Notifying 
Parties argue that customers have significant buyer power and would act to discipline 
the JV in the event of any foreclosure attempt.293 
(310)  As regards incentive, the Notifying Parties claim that in respect of FX or IRD trades, 
MarkitSERV will have no incentive to fore close rival CCPs’ access to CCP 
connectivity.294 They  explain that CME’s market shares are limited in clearing of FX 
and IRD trades (less than [0-5]% and [5-10]% respectively). Accordingly, it only has 
a small base of sales on which it could recoup any benef its from a foreclosure 
                                                 
289  Form CO, paragraph 530 onwards and 596 onwards.  
290  Form CO, paragraph 596(a).  
291  Form CO, paragraph 530.  
292  Form CO, paragraph 596(b).  
293  Form CO, paragraph 468.  
294  Form CO, paragraph 597.  
 
 
72 strategy.295 The Notifying Parties add that the Parent IHSM would not benefit from 
any foreclosure strategy, as it would not receive the benefit of increased sales by 
CME’s clearing service.296 
5.6.2.  Commission’s assessment  
(311)  In terms of the JV’ s ability  to foreclose rival CCPs in the clearing of FX and IRD 
asset classes through a strategy of foreclosing access to MarkitSERV’s CCP 
connectivity services, there are some reasons to consider that the JV may have such 
an ability. In particular, Markit SERV is the dominant player in FX ( [90-100]% share) 
and IRD ([80-90]% share) and is an important source of trades for some CCPs; for 
example, the Notifying Parties estimate that MarkitSERV processes more than [90-
100]% of the FX trades cleared by LCH.297 How ever, the market investigation also 
indicated several reasons to doubt that MarkitSERV would the ability to engage in a 
successful foreclosure strategy.  
(312)  First,  the market investigation supported the Notifying Parties’ claim that customers’ 
choice of CCP i s determined by factors other than their supplier of CCP connectivity 
services. Dealer and broker banks explained that (once it is established that the CCP 
offers clearing for the products they need), “ [t]he clearing to a CCP or another will 
primarily be d riven by the market liquidity and the client preference” . This highlights 
the network effects in clearing markets: the more participants clear the same products 
in the same CCP, the higher the liquidity in those products in that CCP which 
increases compres sion possibilities, reduces risk and results in lower margin 
requirements for all participants, as trades of a higher number of participants can be 
“off-set” in terms of risks. These network effects normally lead to high concentration 
of certain products c learing in particular CCPs and a low attractiveness for customers 
to clear in several CCPs or switch CCPs. 298 Other factors considered important when 
selecting a clearing provider included the margin requirements (which are also a 
result of the number of pa rticipants clearing the same products) and clearing fees at 
the CCP. In contrast, respondents considered that interoperability with CCP 
connectivity solutions for FX and IRD was much less important in their decision 
making.299 CCPs themselves agreed that factors such as product availability, clearing 
fees and reputation were more important parameters for competition between CCPs 
than interoperability with CCP connectivity solutions.  
(313)  Second, the market investigation suggested th at CME’s small size would make a 
foreclosure strategy challenging. The market investigation confirmed that CME 
Clearing is a small player in FX and IRD, facing competition from much bigger 
rivals such as LCH.300 Indeed, as the Notifying Part ies explained: “ whereas LCH 
clears an average of USD 40 -45 billion notional per day , CME’s cumulative cleared 
volume since 2017  is around [over USD 100 billion] ”.301 Customers indicated that 
CME Clearing’s small size and limited uptake  in these asset classes  is part of the 
reason why it is a less attractive option for clearing than some rivals. Customers 
                                                 
295  Form CO, paragraph 531.  
296  Form CO, paragraph 597(c).  
297  Form CO, paragraph 597.  
298  Replies to questions 7 and 10 of Questionnaire  1. 
299  Replies to question 7 of Questionnaire 1.  
300  Replies to question 5 of Questionnaire 1 and questions 8 and 9 of Questionnaire 2.  
301  Form CO, paragraph 589.  
 
 
73 explained that there would need to be significantly greater client/counterparty 
demand for and liquidity at CME Clearing before they would consider increasing 
their use of it  to clear their trades.302 Therefore, the small size and limited uptake of 
and liquidity at CME Clearing (compared with its rivals) would hinder the JV’s 
ability to convince its customers to switch to CME Clearing for FX and IRD  from 
other CCPs  simply on the  basis of access to MarkitSERV’s CCP connectivity 
products for these asset classes . 
(314)  Third, the JV’s ability to convince customers to switch to CME Clearing  for FX and 
IRD clearing services is further limited by the fact that it is difficult for customers to 
switch CCPs. The vast majority of customers considered that it was challenging, or 
even impossible, to switch between CCPs.303 As well as noting that switching would 
only be possible insofar as the new CCP offered clearing for the products required by 
the customer, they highlighted that there would be material technical challenges and 
operational risks in switching CCP. Customers again pointed to the fact that some 
CCPs lack liquidity , which constitutes  a barrier to switching.304 In line with this, the 
major ity of customers confirmed that they have not switched (all or a large part of 
their needs) from one CCP to another in the last three years.305 These barriers indicate 
that it could be a considerable challenge for MarkitSERV to convince customers to 
switch C CP for clearing FX and IRD trades simply on the basis of access to 
MarkitSERV’s CCP connectivity products for these asset classes . 
(315)  Fourth,  the JV’s ability to engage in a foreclosure strategy is limited by the likely 
strong response of customers. When aske d how they would respond if the JV stopped 
providing connectivity to third party CCPs or worsened connectivity conditions, the 
majority of customers who expressed a view explained that they would switch to an 
alternative solution.   Even if MarkitSERV is to day the dominant CCP connectivity 
provider in FX and IRD, with few strong alternatives, customers explained that 
access to alternative CCPs (in particular LCH) is crucial so “ the market would find 
alternative solutions” . One customer considered that attemp ting a foreclosure 
strategy by MarkitSERV would amount to “ abandoning a market where they are 
established ”. Another added that a total foreclosure attempt “ would promote 
competition instantly from other providers… It would limit the trade processing 
servie  to only income from CME trade flow and risk losing all other CCP activity ”.306 
This sentiment also applies to a partial foreclosure strategy, where a customer 
explained that “ the clearing volumes are generally more important than the 
middleware and we would  therefore most likely look for an alternative middleware 
service provider ”.307 Some rival CCPs also noted that customers may retaliate to 
defeat a foreclosure strategy, explaining that “ this could be a commercial challenge 
to the JV as the customers may fin d alternative solutions… this scenario is hopefully 
                                                 
302  Replies to question 6 of Questionnaire 1. For completeness, the Commission not es that it is unlikely 
that a sufficient number of customers would switch as to remove customers’ concerns regarding 
liquidity and limited uptake at CME Clearing given that LCH holds a 90 -100% market share in FX and 
IRD and that there are network effects f rom customers continuing to use the LCH as their CCP.  
303  Replies to question 8.1 of Questionnaire  1. 
304  Replies to question 8 of Questionnaire  1. 
305  Replies to question 9.1 of Questionnaire 1. Indeed, the limited examples of switching generally 
suggested that switching only tends to take place in the case of shock events such as the market exit of 
a provider or Brexit.  
306  Replies to questions 26.3 and 27.3 of Questionnaire 1.  
307  Replies to questions 26 and 27 of Questionnaire 1.  
 
 
74 unrealistic… we would expect a very strong and unanimous reaction from regulators, 
market participants, service providers, etc ”.308 
(316)  Fifth , the JV is unlikely to have the ability to engage in a successful pa rtial 
foreclosure strategy centred on raising fees to customers wishing to send  FX or IRD  
trades to third party CCPs, or raising fees to rival FX or IRD CCPs with a view to 
increasing their cost base and making their prices uncompetitive:  
(a) Regarding a strat egy to selectively discriminate fees for customers depending 
on whether they use CME Clearing or a rival CCP, such a strategy is unlikely 
to successfully foreclose rival CCPs  for FX or IRD . When customers were 
asked to identify the factors driving their ch oice of CCP connectivity 
provider, they generally placed only limited weight on fees (it was only the 
fifth most important factor on average).309 This is supported by data submitted 
by the Notifying Parties, which showed that generally the fees paid by 
custo mers are a small proportion of the cost of trading compared with clearing 
costs.310 As explained below, already pre -Transaction, it appears that clients 
are prepare d to incur higher costs so that they can clear their trades at their 
CCP of  preference, so it  is unlikely that an increase in connectivity costs 
(which form a smaller part of the overall costs of trading) would significantly 
influence their choice.  
(b) Regarding a strategy to increase fees charged by rival CCPs  for FX or IRD 
clearing , as outlined in recital  (312)  above, clearing fees were not the most 
important aspect driving a customer’s choice of CCP. This is further 
supported by the fact that a lready pre -Transaction CME Clearing does not 
charge its clients for clearing FX trades “ given its limited traction ”.311 In 
comparison, clearing costs at rival CCPs can be material.312 Despite this 
commercial strategy, CME Clearing remains a small player in FX clearing, 
with a market share of [0-5]%. Rival CCPs appear to generate significant 
margins in clearing and so may be able to absorb an attempt to increase 
fees.313 In view of the foregoing, it appears unlikely that the JV could 
successfully increase rival CC Ps’ cost base to such an extent that would 
convince MarkitSERV’s customers to switch their FX or IRD clearing to 
CME Clearing.  
(317)  In light of the foregoing, it is unlikely that  the JV would have the ability to engage in 
a successful strategy to totally or par tially foreclose rival CCPs by restricting or 
worsening access to MarkitSERV’s CCP connectivity service in FX or IRD. 
(318)  In terms of the JV’s incentive , the market investigation indicated that the JV is 
unlikely to have the incentive to use MarkitSERV’s CCP c onnectivity service to 
totally or partially foreclose rival CCPs  in clearing IRD and FX trades .  
                                                 
308  Replies to question 21 o f Questionnaire 2.  
309  Replies to question 14 of Questionnaire 1.  
310  Form CO, paragraph 532 -538. 
311  Form CO, paragraph 586.  
312  Form CO, paragraph 532 -538. 
313  Form CO, paragraph 537. For example, LCH’s 2019 accounts indicated that it earned EUR 861 million 
in revenues, had gross profits of EUR 723 million and an EBITDA of EUR 464 million. Similarly, ICE 
(albeit mainly active in the credit asset class) generated clearing fees in 2019 of US 1.1 billion.  
 
 
75 (319)  First, reducing or worsening access to third party CCPs for FX and IRD might 
undermine the attractiveness of MarkitSERV and harm its ability to attract and retain 
customer business. The vast majority of customers indicated that operational 
reliability was a “very important” factor for them in selecting their CCP connectivity 
provider; this was the most significant driver of banks’ choice, together with the 
preference of the client/counterparty. The next most important factors were indicated 
to be the reputation of the CCP connectivity provider and the speed with which trades 
are sent to clearing.314 This indicates that a foreclosure strategy by MarkitSERV 
could put at risk its ability to retain its customer base, as it would become less 
attractive to customers (which may in turn negate or reduce MarkitSERV’s ability to 
successfully foreclose rivals).  
(320)  Second,  a foreclosure strategy may also undermine the relevanc e of MarkitSERV for 
its customers and its CCP partners  for FX and IRD . Some major CCPs indicated that 
they consider that it is important from MarkitSERV’s perspective to be able to 
provide connectivity to them. For example, in IRD, one CCP explained: “ [i]f 
MarkitSERV was not able to offer their clients access to process [rates trades as our 
CCP], this could lead to clients switching to alternative platforms (e.g. 
TradeWeb/Bloomberg) ”.315 This is supported by the fact that more than 90% of the 
FX and IRD clear ing markets are represented by third parties. If MarkitSERV were 
to reduce its access to the major CCPs, and only provide effective connectivity 
services in respect of [0-5]% of FX trades and [5-10]% of IRD trades, this would put 
at risk its relevance for the overwhelming majority of customers.  
(321)  Third, the market investigation indicated  that risks outlined in recitals (319)  and 
(320)  are real, because customers would retaliate against a foreclosure strategy. 
Customers strongly considered that this retaliation risk meant that the JV would  not 
have an incentive to engage in foreclosure.316  They explained that the JV would not 
have such an incentive because this would “ jeopardize [MarkitSERV’s] market 
leadership and reputation by deterioration of service ”, “this would have a very 
negative affect on their reputation ”.317 The strategy would backfire – one customer 
explained that “ the market would find alternative solutions” , with another agreeing 
that “ many market participants would look for a new provider to enable their 
clearing flow to LCH” . One customer ex plained that a foreclosure attempt “ would 
promote competition instantly from other providers ”.318 The market investigation 
indicated that customers would switch away from MarkitSERV rather than accepting 
a worse product offering or inability to access the CC P they wish to use.319 
Customers also identified that such a strategy could be perceived as anti -competitive 
and draw regulatory scrutiny.320  
(322)  Fourth,  the JV would have only a very small base of revenues on which it could reap 
the rewards of a foreclosure stra tegy. CME Clearing represents a negligible 
proportion of FX trades sent to clearing ( [0-5]%) and a small proportion of cleared 
IRD trades ( [5-10]%). As explained above, customers face barriers in switching 
                                                 
314  Replies to question 14 of Questionnaire 1.  
315  Replies to questions 17 and 17.1 of Questionnaire 1.  
316  Replies to question 27.3 of Questionnaire  1. 
317  Replies to question 27.3 of Questionnaire 1.  
318  Replies to question 26.3 of Questionnaire 1.  
319  Replies to questions 26.3, 27 and 27.3 of Questionnaire 1.  
320  Ibid. 
 
 
76 CCPs and, in particular, to a CCP with limited liq uidity and uptake such as CME 
Clearing. It would therefore be a challenge for MarkitSERV to displace a significant 
proportion of customers to CME Clearing (while putting at risk its CCP connectivity 
revenues). The gains from a foreclosure attempt may there fore be limited.  
(323)  Fifth,  an input foreclosure strategy would require a change of business strategy for 
MarkitSERV, and pursuant to the Shareholders Agreement , IHSM’s consent is 
required for the approval of the business plan and budget of the JV.321 While a 
successful input foreclosure strategy might benefit the parent CME (which controls 
CME Clearing and so would receive all profits from increased FX or IRD clearing 
revenues), IHSM would not benefit from such a strategy since it would lose profits 
from foregon e upstream FX or IRD CCP connectivity sales by MarkitSERV, but 
without a corresponding increase in downstream profits (given that it is not active in 
clearing). Effectively, IHSM would take half of the risk and half of the losses of a 
foreclosure strategy,  and receive none of the gain if the strategy succeeds. Given that 
IHSM (IHS Markit) is synonymous with and well -known to be a parent of 
MarkitSERV, it cannot be excluded that reputational damage felt by MarkitSERV 
following the foreclosure strategy may al so impact IHSM. Therefore , it is unlikely 
that IHSM would approve any foreclosure strategy.  
(324)  In light of the foregoing, the Commission concludes that the JV would not have the 
incentive to engage in a strategy to totally or partially foreclose rival CCPs by  
restricting or worsening access to MarkitSERV’s CCP connectivity service in FX or 
IRD. 
(325)  In terms of the impact of a foreclosure strategy , given that the Commission finds that 
it is unlikely that the JV would have the ability to foreclose and that the JV do es not 
have the incentive to foreclose, there is no need to reach a conclusion on the impact 
of a potential foreclosure strategy. 322 
5.6.3.  Conclusion  
(326)  In light of the above and all of the evidence available to it, the Commission 
concludes that the Transaction does  not give rise to serious doubts as to its 
compatibility with the internal market from the risk of input  or customer  foreclosure 
with respect to FX or IRD CCP connectivity services (upstream) and CCPs  clearing 
services in these asset classes (downstream ).  
                                                 
321  Form CO, paragraph 175.  
322  For completeness, the Transaction does not give rise to serious doubts as to its compatibility with the 
internal market in relation to a concern that CME Clearing would post -Transaction have a competitive 
advantage through  access to MarkitSERV’s CCP connectivity data. First, the JV would lack the ability. 
IHSM has in place very strict policies regarding client data, such as ring -fencing raw data. 
MarkitSERV’s terms also contain confidentiality provisions and require MarkitS ERV not to use 
information other than for the purpose which it is provided ( Reply to question 11 in RFI 8).  Second, 
breaching these contractual provisions may harm MarkitSERV’s reputation with customers, as well as 
reducing rival CCPs’ willingness to work with MarkitSERV. Third, it should be recalled that CME 
Clearing’s market share is less than [0 -5]% in FX and less than [5 -10]% in rates; accordingly, the 
impact of such a strategy would likely be limited.  
 
 
77 5.7. OTC  FX trading services  
5.7.1.  Customer foreclosure of FX trading services worldwide or EEA -wide (upstream) -  
FX CCP connectivity services worldwide (downstream)  
(327)  The Commission assesses below the risk that, post -Transaction, the JV’s FX CCP 
connectivity services (downstream) could refuse trade flow from rivals of CME’s FX 
trading venue EBS (upstream) and only provide connectivity to EBS for sending 
trades to clearing.  
(328)  Upstream , the Notifying Parties estimate that E BS’s market share for FX trading 
services worldwide is [0-5]%.323 Estimates reported by the Bank of International 
Settlements indicate that EBS’s market share for FX trading services would be low 
([5-10]%), as set out in the following Figure.  
                                                 
323  The Commission also assessed possible input foreclosure concerns, i.e. the risk that, post -Transaction, 
CME’s FX trading venue EBS (upstream) could work exclusively with the JV’s FX CCP connectivity 
services or favour the JV’s FX CCP connectivity services (downstream) to the disadvantage of rival 
CCP connectivity providers worldwide. The Commission concluded that in terms of ability , EBS’s 
market share upstream ([0 -10]%) would seem to be too limited to award it sufficient market power to 
foreclose rivals do wnstream. In possible narrower separate markets upstream (electronic anonymous 
FX trading services), EBS may have a greater market share . However, in terms of incentives , with 
MarkitSERV’s market share in FX CCP connectivity downstream being [90 -100]%, the re is limited 
market share to gain through foreclosure of upstream FX trade flows from EBS. Moreover, CME as a 
parent of the JV would have limited incentives to foreclose rivals of the JV downstream, as CME 
would only receive 50% of the benefit of any incr ease in revenues downstream via stake in the JV, 
while bearing 100% of the losses  in its FX trading venue upstream (as well as facing all of the risk of 
reputational damage from such a strategy). In terms of impact , both competitors downstream 
(Bloomberg a nd State Street ) are vertically integrated with FX trading venues upstream which both 
have likely significantly higher market shares than EBS. If EBS were to foreclose its trade flow to those 
rival FX CCP connectivity providers, this would be more likely to harm EBS’s position in FX trading 
markets. Customers prefer to “shop around”  and trade on multiple venues, so if a venue tried to create a 
vertical silo and reduce access, FX traders would likely  (all else being equal) find that venues’ offering 
less attractive.  FX trading venue competitors responding to the market investigation rate the impact of 
the Transaction as mixed, with 50% expecting a negative impact (replies to question 17 of 
Questionnai re 5). However, g iven the limited ability and  incentives to engage in  exclusionary conduct, 
the Commission concludes that the Transaction is unlikely to  give rise to serious doubts as to its 
compatibility with the internal market as a result of non -horizon tal effects in the markets for FX CCP 
connectivity service s and OTC FX trading services in terms of input foreclosure . 
 
 
78 Figure 2: FX trading venues’ market shares  
 
Source: BIS quarterly review, FX trade execution: complex and highly fragmented, December 2019324 
(329)  The Notifying Parties submit that EBS’s market share remains small in each of the 
plausible narrowe r product markets envisaged in Section 4.3.2 . In particular the 
Notifying Parties estimate that : 
(a) by type of contract , EBS’s market share in the globa l OTC FX spot trading 
market is [0-5]% and in the global market for OTC FX derivative trading it is 
[0-5]%. The Notifying Parties further estimate that EBS’s market share across 
all contract types is well below [10-20]%.325 
(b) by currency , EBS’s market share ac ross all contract types is well below [10-
20]%.326 
(c) by trading channel , EBS’s market share in the global market for electronic 
OTC FX trading services is [0-5]% ([0-5]% if only considering electronic FX 
spot trading and [0-5]% if only considering electronic O TC FX derivative 
trading. In support of these estimates, according to a regular survey by 
                                                 
324  https://www.bis.org/publ/qtrpdf/r_qt1912g.htm  
325  Based on the Triennial Central Bank Survey of Foreign Exchange and Over -the-counter ( OTC) 
Derivatives Markets, last published in 2019 - Notifying Parties’ response to question 10 in RFI 14 . 
326  Ibid. 

 
 
79 Euromoney, EBS’s market share in the market of electronic multi -dealer FX 
platforms is around [5-10]%.327 
(d) for “anonymous” versus “disclosed” trading , EBS’s global market shares 
would still be well below [10-20]%.328 
(330)  At EEA level, CME’s market share would be even lower, in particular, because less 
than [5-10]% of EBS’s trading volumes (and less than [0-5]% of its revenues) are 
accounted for by EEA custom ers.329 
(331)  In view of the fact that the Notifying Party’s market share estimates remain less than 
[10-20]% under any of the above plausible product and geographic market 
definitions, and that the market investigation did not indicate any reasons why the 
risk of  input foreclosure would vary or be greater in relation to any of the plausible 
narrower product or geographic markets described above, in its assessment below the 
Commission focuses on the market shares for FX trading services worldwide.  
(332)  Downstream, as ou tlined in Section 5.3 above , MarkitSERV is the leading provider 
of CCP connectivity worldwide in the FX ( [90-100]% market share) asset class .330 
MarkitS ERV faces competition from trading venues, which provide customers with 
the ability to send trades directly to CCPs  (without the intermediation of any 
middleware provider, such as MarkitSERV). Its main competitors in the FX asset 
class are Bloomberg, Trade Nexus  and TradeWeb.   
5.7.1.1.  Notifying Parties’ view  
(333)  The Notifying Parties believe that the JV has no ability or incentives to foreclose 
rival FX trading venues. This is mainly because only […] MarkitSERV customers 
currently use the connectivity between EBS and Ma rkitSERV for sending trades to 
CCPs, which indicates that those services are not essential for trading venues.  
(334)  Furthermore, the Notifying Parties argue that the key parameter for ch oosing a 
trading venue is not the availability of certain trade processing  providers but rather 
the liquidity for trading on that venue.  
5.7.1.2.  Commission’s assessment  
(335)  With respect to the risk that, post -Transaction, the JV’s FX CCP connectivity 
services (downstream) co uld refuse trade flow from rivals of CME’s FX trading 
venue EBS, the Commission notes, first, concerning the ability to foreclose,  that 
                                                 
327  https://www.euromoney.com/Media/documents/euromoney/pdf/FX -2019 -Results -Presentation.pdf, 
slide 33 (under name NEX, the parent company, tha t CME bought in 2018), accessed on 11 July.  
328  Notifying Parties’ response to question 2 in RFI 10.  
329  Form CO, footnote 174 . 
330  In terms of a potential narrower product market by trade type, MarkitSERV exclusively provides CCP 
connectivity for bilateral t rades. Its market shares would not be materially different from those 
presented in this recital if a separate, narrower product market were defined for CCP connectivity for 
bilateral trades (i.e. delineating by type of trade; RFI 17, Notifying Parties’ res ponse  to question 1). In 
light of this, and the assessment conducted below, the Commission considers that in respect of this 
market  the Transaction would not give rise to serious doubts as to its compatibility with the internal 
market  even on such a narrow er market definition.  
 
 
80 clearing of FX trades is currently not the norm and only a very small proportion of 
FX trades are cleared.  
(336)  Apart from th at, several of EBS’s FX trading venue competitors with higher market 
shares are not currently connected to MarkitSERV.331 However, those are the FX 
trading venues that are themselves vertically integrated and own their own FX CCP 
connectivity providers.  Neve rtheless, CCP connectivity services from MarkitSERV 
do not seem to be essential as indicated by mixed responses to the question how 
important MarkitSERV is (no ne of the respondents to the market test indicated that 
CCP connectivity services from MarkitSERV  were  “very important”,  and there was 
an equal distribution of answers across “important, “somewhat important”, “not 
important” and “other”).332 Indeed, none of EBS’s competitors’ trade flow is 
currently sent for clearing via MarkitSERV . However, a number of  venues are 
currently testing this service with MarkitSERV.333  
(337)  Second , in terms of incentives, IHSM’s EBITDA margins downstream are much 
higher ([…])334 than EBS’s EBITDA margins upstream ( […])335. It is unlikely, 
therefore, that it  would be profitable for the JV to give up margin downstream (where 
margins are higher) in order to gain market shares upstream (where margins are 
lower). Apart from that, the JV is jointly controlled by both parents and it is unlikely 
that IHSM would appr ove the implementation of a foreclosure strategy that would 
decrease revenues for the JV (in which it holds a 50% stake) in order to benefit 
CME’s FX trading business (in which IHSM does not own any stake).336  
(338)  A competitor in FX trading services notes the f ollowing with respect to incentives: 
“(…) one of the joint venture parties, CME, also offers its own FX trading services 
through its FX trading business, EBS, potentially providing some incentive post 
transaction to engage in exclusionary behaviour. Howeve r, [the competitor] is not in 
a position to know how profitable such a strategy would be. [The competitor]  would 
not expect a complete cessation of connectivity to MarkitSERV because the more 
trades it processes, the more revenue it earns.”337 
(339)  Thirdly , in terms of impact, it seems unlikely that a refusal to connect to other trading 
venues than EBS would marginalize those trading venues to a significant extent. This 
is mainly because of customers’ bargaining power and preference to trade on 
multiple trading ve nues, which is precisely one of the reasons for using  a third party 
aggregator of trade flow s to send trades to CCPs.  
(340)  In this respect, one competitor indicated  that a refusal to supply connectivity services 
to rival trading venues would be challenged by c ustomers: “If the new JV intends to 
                                                 
331  For example Bloomberg and GlobalLink, State Street’s FX trading venues trading also under the names 
FX connect and Currenex).  
332  Reply to question 12 of Questionnaire 5.  
333  Notifying Parties’ response to question 11 in RFI 19.  
334  Notifying Parties’ response to question 3 in RFI 8.  
335  Notifying Parties’ response to question 4 in RFI 9.  
336  The same arguments hold for a vertical concern voiced by a FX trading venue competitor: “JV may try 
to unfairly encourage customers to use CME’s t rading platforms, including EBS, instead of rivals. For 
example, it could worsen commercial or operational conditions for other trading venues that use its 
NOE services. The impact on CBOE could then be that clients would materially reduce or stop using 
CBOE’s platforms.”  Minutes from a call with a competitor on 24 July 2021, 14:00 CET.  
337  Reply to question 16 of Questionnaire 5.  
 
 
81 challenge the openly accessible market structure in terms of STP by way of making 
access difficult or impossible, it could provide their own trading venues a stronger 
position (if those are the only access points); this however may be challenged by the 
market participants who prefer multiple trading venue access.”338 
(341)  FX trading venue competitors rate the impact of the Transaction as mixed, 50% of 
informative responses believing in a neutral impact and 50% believing in a neg ative 
impact.339 However, given the limited ability and incentives to engage in customer 
foreclosure , and in view of the foregoing, equal access and fair treatment of FX 
trading venue competitors seems to be the more likely result of this Transaction.  
5.7.1.3.  Conclusion  
(342)  Based on the above considerations and the evidence available to it, the Commission 
considers that  the Transaction is unlikely to  give rise to serious doubts as to its 
compatibility with the internal market as a result of non -horizontal effects i n the 
markets for FX CCP connectivity services and OTC FX trading services, in terms of 
customer foreclosure . 
5.7.2.  Assessment of concerns  with respect to commercially sensitive data  
(343)  One competitor raised concerns with respect to data gathered by MarkitSERV in t he 
course of providing its trade processing services, which the competitor considers as 
commercially sensitive . This  data is available to MarkitSERV  as a result of its FX 
CCP connectivity and bilateral FX NOE messaging services : “(…) the joint venture 
woul d have unrivaled access to valuable data that could provide it and its parent 
with a competitive advantage.”340  
(344)  With respect to this data, t he competitor submitted  that MarkitSERV , with its unique 
position in the market connecting trading venues and CCPs  across several asset 
classes , has a unique view  that would provide CME as an operator of exchanges and 
trading venues ( and concretely EBS, the OTC FX trading venue) with an unfair 
competitive advantage. The competitor notes: “CME may be able to unfairly e xploit 
the knowledge it would gain over the needs and trends of the clients to the 
disadvantage of its competitors, including [the competitor].”341 By contrast, the 
competitor remarks with respect to its own ability to gather data:  “The data that [the 
compet itor] holds on clients is therefore limited by the services it offers, as well as 
for reasons of regulatory compliance (SEC and CFTC regulations).”342 
(345)  In addition, the competitor considers that this data also affords “a competitive edge 
when making sales to clients, as having good information on clients’ activities is 
important when competing for new business.”343 
(346)  In terms of ability  to foreclose , the Commission notes that MarkitSERV has a 
dominant position in FX CCP connectivity ( [90-100]% market share) , while  in 
                                                 
338  Reply to question 16 of Questionnaire 5.  
339  Reply to question 17 of Questionnaire 5.  
340  Reply to question 19 of Questionnaire 5. 
341  Minutes of a call with a competitor on 24 June 2021, 14:00 CET.  
342  Minutes of a call with a competitor on 24 June 2021, 14:00 CET.  
343  Minutes of a call with a competitor on 24 June 2021, 14:00 CET.  
 
 
82 bilateral FX NOE messaging, the  combined market share of the JV would be 
significantly lower and would not seem to award the JV a full market overview. In 
addition, the Commission recalls that only a small volume of FX trades are currently 
cleared, and  hence, even the very high market share MarkitSERV has in FX CCP 
connectivity is unlikely to provide it with the full market overview that would create 
a significant advantage for CME as a parent of the JV.   
(347)  Apart from that, the competitor did not provide any further detail on which data 
exactly could be used to create a significant advantage for the JV’s parent CME. 
While MarkitSERV is a strong competitor in several FX trade processing services, it 
is unclear which data could be so valuable for an FX tradi ng venue  as to provide a 
significant advantage, when MarkitSERV is currently not commercialising any data 
gathered in the course of trade processing services to any trading venue.344 
Furthermore, MarkitSERV's terms contain confidentiality provisions and requ ire 
MarkitSERV to not use information for any purpose whatsoever other than the 
purpose for which it was provided. It is credible that a breach of this obligation 
would have the potential to harm MarkitSERV’s reputation and credibility as an 
independent tr ade processing services provider.  
(348)  Based on these considerations it does not seem likely that the Transaction would 
enable the JV to foreclose competitors of one of the parents by virtue of the 
information it holds.  
(349)  In terms of incentives  to foreclose , the Commission notes that IHSM currently  has in 
place very strict policies regarding client data and internal oversight with respect to 
those policies. This includes for example ring -fencing of raw data  and strict policies 
on data use.345 
(350)  Furthermore, the Commi ssion does not find it likely that the JV will internally agree 
(and concretely that IHSM would approve) on the use of information which could 
potentially create reputational harm to the JV (and, by extension, IHSM)  to the 
benefit of only one of the JV’s p arents. CME would gain all of the profits from a 
successful foreclosure strategy, whereas IHSM would not receive any such benefit, 
only the risk of reputational damage and customer retaliation against the JV’s 
products.  
(351)  In terms of impact , the Commission c onsiders the concern with respect to 
commercially sensitive data insufficiently substantiated for two reasons: (i) no other 
market participant raised any similar concerns, and (ii) when asked for an example, 
the competitor raising the concern referred to a  possibility for MarkitSERV to have a 
complete market overview and use this to the advantage of a trading venue with 
respect to equit y derivatives, not FX products.   
(352)  With respect to the data providing the JV “a competitive edge when making sales to 
clients ”, the Commission considers that this is indeed one of the possible benefits of a 
vertical integration within a value chain, which is not per se anti -competitive. In this 
case, the v ertical integration is considered less concerning given that other 
competi tors are equally vertically integrated, e.g. State Street own s a CCP 
                                                 
344  Notifying Parties’ response  to question 11 in RFI  14. 
345  Notifying Parties’ response  to question 11 in RFI 8.  
 
 
83 connectivity service as well as owning an FX trading venue (GlobalLink) and 
Refinitiv provid es FX NOE messaging for third party venues while itself owning  FX 
trading venue s (Refinitiv Matching and FX all) .  
(353)  In any case, the Commission does not consider it likely that if data was used to 
benefit CME’s EBS (e.g. for providing leads for marketing purposes to sales teams), 
that this would have the effect of marginalizing rival F X trading venues. This is 
mainly because market participants in this market seem to use multiple trading 
venues and therefore likely would not stop using other FX trading venues eve n if 
EBS was able to acquire  market participants as new customers.  
5.7.2.1.  Conclusi on 
(354)  Based on the above considerations and the evidence available to it, the Commission  
considers that , the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market as a result of leveraging (commercially 
sensitive ) data gathered as part of the JV’s activities in FX NOE messaging and FX 
CCP connectivity and using it for the benefit of CME’s FX trading venue .  
5.8. Trade optimization services  
(355)  TriOptima  and Reset’s market shares in the relevant plausible markets for 2020  based 
on revenues are as shown below.346 As outlined in Section 4.11, there are separate 
product markets for each of portfolio compression, margin management, portfolio 
reconciliation and basis risk management, in each case split by asset class.347 
  
                                                 
346  Form CO, Annex 127. The Notifying Parties estimate that market shares were similar in 2019 and in 
2018, with TriOptima’s  market share in portfolio compression being higher in 2018.  
347  The Commission’s assessment in this Section  is on the basis of a narrower market that only includes 
third party providers (as opposed to supply by CCPs). Traiana is only active as a third party provider. 
Accordingly, its market share would be lower in a br oader market including CCPs. As a result, the 
Transaction does not give rise to serious doubts as to its compatibility with the internal market on either 
basis and it can be left open whether CCPs should be considered part of the relevant product market.  
 
 
84 Table 6: TriOptima and Reset ’s global market shares in trade optimization 
services by asset class in 2020  
Service/Asset 
class  Over all Interest 
rate 
derivatives  FX Credit 
default 
swaps  Equity 
derivatives  Commodities  
Portfolio 
Compression  
(TriOptima : 
triReduce)  [65-75]% [70-80]% [50-
60]% [90-
100]% n/a n/a 
Portfolio 
Reconciliation  
(TriOptima : 
triResolve)  [90-
100]% [90-100]% [90-
100]% [90-
100]% [90-100]% [90-100]% 
Margin 
Management  
(TriOptima : 
triBalance, 
triCalculate, 
triResolve 
Margin, 
IMEM)  [10-20]% [10-20]% [10-
20]% [10-
20]% [10-20]% [10-20]% 
Basis risk 
mitigation  
(Reset ) [60-70]% [60-70]% [40-
50]% n/a n/a n/a 
Source: Form CO, Tables 6.14 and 6.15, reply to question 3 of RFI 5,  
(356)  The Notifying Parties submit that they are not able to estimate the market shares of 
competitors in portfolio compression, portfolio reconciliation and margin 
management  (split by asset class) .348 In basis risk mitigation services, the Notifying 
Parties expect that tpMATCH  account s for at least 30% , and each of BGC and 
Dealerweb account for  up to 5% , though the Notifying Party did not provide 
estimates split by asset class .349 
(357)  TriOptima and Reset’s product offering and the competitive landscape in each of 
portfolio compression, portfolio reconciliation, margin management and basis risk 
mitigation are as follows.  
Portfolio compression  
(358)  TriOptima’s  triReduce is a web -based multilate ral compression service. triReduce 
schedules specific compression events (‘runs’) by product. Participants submit an 
existing portfolio of trades that they wish to compress together with their tolerances  
(e.g. of risk level) . triReduce calculates a  proposa l to compress the participants’ 
trades (by replacing multiple offsetting trades with a single one) which is  neutral in 
terms of the impact on market risk and which reduces overall notional exposure for 
participants within the risk tolerances they have provided. Before the compression 
proposal can become legally binding: (i) it must be accepted by all parti cipants, and 
(ii) CCPs must review and confirm that, pursuant to the compression proposal, the 
CCP is cash flow - and market risk -neutral throughout. O nce these steps are 
completed, the proposal can become legally binding and the participants can 
                                                 
348  The Notifying  Parties submit that they are not aware of any commonly accepted delineations of these 
segment s or of any third party estimates of the total size of each of these segments.  
349    Notifying Parties’ submission to Commission on 10 June 2021.  
 
 
85 implement the compression result in their respective systems .  From a trade lifecycle 
perspective, compression occurs post -execution so the relationship is cent red around 
buy-side, sell -side participants, and CCPs .350  
(359)  In portfolio compression services, according to trading optimization competitors, 
Quantile is the closest competitor of triReduce, followed by Capitalab. 
ClearCompress, Capitolis and LMRKTS are also named by a few as close 
competitors of triReduce.351 This is confirmed by customers , who generally indicated 
that Quantile was triReduce’s closest competitor and that Capitalab is also a very 
close competitor. For example, one customer identifies that triRed uce’s closest 
competitors are “ Capitallab  [sic], Quantile, Capitolis ”. Another customer specif ied 
that “Quantile services  [compete] in terms of general product offering and market 
concentration. However, other competitors emerge on bilateral space or speci fic 
asset class ”.352 Regarding the competitive landscape across the different  asset class es 
in which triReduce is active (IRD, FX, CDS) , competitors did not indicate that there 
would be any differences as to which competitors compete most closely with 
triRed uce.353 One customer considered that there are some differences in the focus of 
these providers:  “Quantile for rates, Lmrkts for FX ”. However, other than this 
respondent, customers did not indicate that there would be significant differences in 
the competiti ve landscape in  the different asset classes (with the exception that in 
CDS triReduce does not have any close  competitors as it holds a [90-100]% market 
share) .354 Therefore, the Commission concludes that for portfolio compression 
services across all asset classes, triReduce’s closest competitor is Quantile, with 
Capitalab also being a very close competitor. Other providers such as 
ClearCompress, Capitolis and LMRKTS also compete closely with triReduce, albeit 
to a lesser extent.  
Portfolio reconciliation  
(360)  TriOptima’s  triResolve is a platform which provides portfolio reconciliation services 
for OTC derivatives across all asset classes. Participants submit data on their end of 
day portfolios in a specified format, and triResolve essentially provides clients with  
the possibility to regularly check their positions to make sure they match with those 
of their counterparties. This type of portfolio reconciliation is a regulatory 
requirement in a number of jurisdictions (including Europe355). Customers of this 
service in clude the operations and risk departments of banks, which are required to 
reconcile their portfolios regularly under applicable regulations, as well as buy -side 
customers such as hedge funds, asset managers and corporates, which are required to 
carry out m onthly reconciliations.356  
(361)  In portfolio reconciliation services, according to trading optimization competitors, 
Acadia is the closest competitor of triResolve, followed by Quantile.357 According to 
customers, triResolve is the “ market standard ” and “ recognize d industry platform ”. 
                                                 
350  Form CO, paragraphs 66ff.  
351  Replies to question 11 of Questionnaire 4.  
352  Replies to question 10 of Questionnaire 6.  
353  Replies to question 11 of Questionnaire 4.  
354  Reply to question 10 of Questionnaire 6.  
355  As per Article 11.1 of Regulation (EU) No 64 8/2012 of 4 July 2012 (“EMIR”).  
356  Form CO, paragraphs 71ff.  
357  Reply to question 10 of Questionnaire 4.  
 
 
86 Customers did not consistently identify any providers as close competitors  to 
triResolve .358 Neither competitors nor customers identified any variation in this 
competitive landscape by asset class. Therefore, the Commission concludes th at for 
portfolio reconciliation services across all asset classes, triResolve is the clear market 
leader and its closest competitors are Acadia and Quantile.   
Margin management  
(362)  TriOptima  provides  margin management services through a number of margin 
manage ment products:   
(a) triBalance is an initial margin ("IM") optimi zation  service for bilateral and 
cleared exposures covering IRD, FX and Equity asset classes ;  
(b) triCalculate is an X -Value Adjustment ("xVA") and valuations analytics 
service covering all the main  OTC asset classes, which reports and validates a 
number of different "valuation adjustments" that banks must make when 
assessing the value of derivative contracts that they have entered into.  
(c) triResolve Margin calculates and reconciles the variation marg in for OTC 
bilateral trades and assists clients to optimise the margin on their positions. 
The service calculates margin calls from exposure, credit agreement and 
collateral balance data, communicates margin calls with counterparties 
electronically, and pr ovides a dashboard for managing the daily workflow and 
exceptions in the margin process ; and   
(d) Initial Margin Exposure Manager ("IMEM") calculates and reconciles 
uncleared initial margin from ISDA sensitivities data. IMEM is a service 
offered in commercial partnership with Acadia. triResolve develops and 
maintains the service while AcadiaSoft contracts with clients and hosts the 
service in their data centres.359 
(363)  In margin management services, according to trading optimization competitors, 
CloudMargin is the cl osest competitor of TriOptima , followed by Acadia and 
Cassini.360 Capitalab, Quantile and Calypso are also named by a few as close 
competitors of TriOptima.  According to customers, Quantile and Capitalab is the 
closest competitor, followed by CloudMargin and  Acadia.361 Neither competitors nor 
customers identified any variation in this competitive landscape by asset class.  
Therefore, the Commission concludes that TriOptima  faces competition from a 
number of close competitors across all asset classes for margin m anagement services.  
  
                                                 
358  Reply to question 9 of Questionnaire 6.  
359  Form CO, paragraph 73.  
360  Reply to question 12 of Questionnaire 4.  
361  Reply to question 11 of Questionnaire 6.  
 
 
87 Basis risk mitigation  
(364)  Reset is a multilateral basis risk mitigation service for IRD and FX derivatives. 
Customers submit a portfolio of trades to Reset. Reset then analyses the portfolio and 
suggests trades to reduce exposure against daily fluctuations in benchmark rates 
within risk constraints  pre-defined by the users. Reset is not a trading platform and 
does not execute the recommended trades. Trades recommended by Reset are 
executed on CME ’s trading venues  or off -venue , i.e. without  using a trading venue . 
Whether a trade is executed through a CME platform or off -venue depends on the 
customer's location and applicable regulatory requirements.  
(365)  In basis risk mitigation services, trading optimization competitors  were not aware of 
which suppliers would be close competitors to Reset.362 tpMatch was named by 
several customers as the closest competitor.363 Neither competitors nor customers 
identified any variation in this competitive landscape by asset class. The Commission 
notes that multi -sourcing appears to be prevalent also in basis risk mitigation 
services. About half of responding customers indicate that they multi -source basis 
risk mitigation services from both Reset and tpMatch.364 Therefore, the Commission 
concludes that Reset’s closest co mpetitor for basis risk mitigation across all asset 
classes is tpMatch.  
5.8.1.  Input foreclosure of RED codes  worldwide (upstream) – portfolio 
compression/portfolio reconciliation/margin management for CDS worldwide 
(downstream)  
(366)  RED codes are used as an input for some of trade optimi zation  services  provided by 
the TriOptima business  and other suppliers . RED codes are only used in the CDS 
asset class. More specifically , RED codes are used as an input for triReduce's 
portfolio compression services, concretely its  CDS  compression cycle s, and for 
triResolve’s portfolio reconciliation services in order to reconcile CDS  trades . While 
RED codes are not used by TriOptima  in margin management services, they are  used 
as an input by some of TriOptima’s  competitors in this market . RED codes are not 
used by Reset, or by its competitors in basis risk management  and so this plausible 
market will not be further assessed . 
(367)  Upstream, under  the narrowest plausible market definition, IHSM has a 100% market 
share in the supply of RED c odes worldwide . RED is directly delivered to its users 
by IHSM within a data feed alongside a user interface, as well as being distributed by 
third part y data vendors  such as Bloomberg and Refinitiv. RED is widely distributed 
across CDS market participants .365  
(368)  Downstream, the JV’s market share  would be  [90-100]% for CDS portfolio 
compression services, [90-100]% for CDS portfolio reconciliation services  and [10-
                                                 
362  Reply to question 13 of Questionnaire 4.  
363  Reply to question 12 of Questionnaire 6.  
364  Reply to question 4.3 of Questionnaire 6.  
365  Form CO, paragraphs 613ff; Notifying Parties’ response  to RFI 5 paragraph 3.17.  
 
 
88 20]% for CDS margin management service s. Its competitors in these trade 
optimization services are described at the start of this Section 5.8.366  
(369)  The Commission assess es below the risk that the JV would seek to engage  in input 
foreclosure of RED codes with a view to foreclosing rival trade optimi zation  
providers.  The risk of customer foreclosure is not assessed because depending on the 
upstream market definition either IHSM is the only provider of RED codes (and so 
there are no rivals to foreclose) or, on a wider plausible market definition including 
similar ident ifiers, the JV would account for a negligible proportion of demand for 
identifiers.367  
5.8.1.1.  Notifying Parties’ view  
(370)  The Notifying Parties argue that IHSM will have no ability or incentive to foreclose 
access to RED codes worldwide  for the following reasons.368 
(371)  First , with regard to ability, the Notifying Parties argue that  the success of the RED 
code relies on widespread market use of the identifiers (the product was built for 
wide adoption of the identifier) and withholding or restricting access would seriously  
undermine the RED offering. Indeed, IHSM already uses RED codes in its trade 
processing services but has not sought to restrict competitor access to RED codes 
pre-Transaction.  
(372)  Second , with regard to ability, the Notifying Parties note that a number of 
TriOptima's competitors in portfolio compression and portfolio reconciliation 
(including Quantile, LMRKTS, Capitalab, Duco, Vermeg, DTCC and CloudMargin) 
do not license RED codes, which shows that they would not be an essential input for 
competing in the down stream markets.  
(373)  Third , with regard to ability and incentive, the Notifying Parties argue that RED 
codes are used only in relation to OTC credit trades (CDS). TriOptima’s  2019 
worldwide portfolio compression revenues from  CDS compression were […], 
represent ing just [0-5]% of total portfolio compression revenues . Similarly, 
TriOptima’s  2019 portfolio reconciliation revenues from CDS were less than […], 
representing just [5-10]% of total portfolio reconciliation revenues.  
(374)  Fourth , with regard to incentive, cust omers choose trade optimization providers 
based on the algorithms the providers use and the types of trades they optimise and 
compress. Similarly, the Notifying Parties note with respect to portfolio 
reconciliation that customers may use different vendors to reconcile the same trade 
data set based on other characteristics, e.g. tenor of trades; as such, market shares 
may not reflect market power.369 
(375)  Fifth , with regard to incentive, the Notifying Parties argue that  IHSM would have no 
incentive to foreclose access to RED codes  due to the structure of the JV. IHSM 
                                                 
366  As there are separat e relevant product markets by asset class for these services, and as RED codes are 
only used in CDS, the Commission’s assessment is focused on the CDS asset class.  
367  The JV would represent less than [0-5]% of demand for identifiers. Notifying Parties’ res ponse to RFI 
12 question 2.  
368  Form CO, paragraph 617.  
369  Notifying Parties’ response  to RFI 7, paragraph 3.3.  
 
 
89 would lose 100% of the revenues from limiting supply of RED codes  and would only 
capture 50% of any hypothetical benefits that would accrue to the JV.  
5.8.1.2.  Commi ssion’s assessment  
(376)  The Commission assesses below IHSM ’s ability and incentive to engage in input 
foreclosure of RED codes with a view to foreclosing rival providers of CDS portfolio 
compression, CDS portfolio reconciliation and CDS margin management servic es. 
For convenience, in this Section  5.8.1.2 , the competing providers of these services 
will be referred to as “ rival CDS trade optimi zation  provider s”. 
(377)  In terms of its ability , the market investigation showed that RED codes do not appear 
to be an essential input for rival CDS trade optimization competitors. In line with the 
Notifying Parties’ submissions, only three rival CDS trade optimization competitors 
indicated that they use RED codes in their business and none of these three are 
considered the closest competitors to TriOptima  by competitors or customers  in CDS 
portfolio compression, CDS portfolio reconciliation or CDS mar gin management .370 
More specifically by asset class , the JV is already pre -Transaction the only provider 
of CDS portfolio compression and so does not have any competitors to foreclose. In 
CDS portfolio reconciliation a foreclosure strategy would be unlikely to bring about 
any significant market change given that triResolve is already considered to be the 
“market standard ” and “ recognized industry platform ” and its few close competitors 
do not use RED codes.371 Regarding CDS margin management, where TriOptima  has 
a market share of [10-20]%, it appears that it is possible for competitors to compete 
effectively without having access to RED codes. In particular, TriOptima  does not 
use RED codes as an input (and has not previously requested access to RED codes 
either ) and several major competitors, including a number identified as close 
competitors to TriOptima , do not use RED codes.  Accordingly, the JV’s ability to 
foreclose its closest competitors appears limited.  
(378)  In light of the above, the Commission considers that  it is unlikely that the JV would 
have the ability to foreclose rival CDS trade optimization providers by refusing or 
worsening their access to RED codes.  
(379)  In terms of its incentive , the JV would not stand to gain significantly from a strategy 
to foreclose rival providers of CDS portfolio compression, CDS portfolio 
reconciliation and CDS margin management services by foreclos ing their access to 
RED codes . As indicated above , not all rival CDS trade optimization providers use 
RED codes and TriOptima’s  closest competitors in CDS portfolio compression, CDS 
portfolio reconciliation and CDS margin management appear not to .372 The majority 
of customers of RED codes indicated that a foreclosure strategy could lead to 
retaliation against th e JV. More specifically , they indicated that , if faced with a 
foreclosure strategy, they would ask their customers (i.e. buy - and sell -side clients, 
who are likely also customers of IHSM, CME and the JV ) to lobby IHSM on their 
behalf  to resolve the issue. One customer noted : “RED codes are used by our 
customers as unique identifiers for credit derivatives and they will need to help us to 
get the data from IHSM .”373 Indeed, these competitors considered that the impact of 
                                                 
370  Reply to question 18 of Questionnaire 4.  
371  Reply to question 9 of Questionnaire 6.  
372  Reply to question 18 of Questionnaire 4.  
373  Reply to question 18.2 of Questionnaire 4.  
 
 
90 the Transaction is likely to be neutral  on the various market s for trade optimization 
services,374 implying that they are not concerned by a potential foreclosure of RED 
codes  (for any of the JV’s CDS trade optimization services)  due to the likely reaction 
of end -customers  or otherwise as they co nsider the JV is likely to lack the incentive 
to engage in such a strategy . 
(380)  Indeed, customers’ responses indicated that the JV would have little to gain from 
attempting an input foreclosure strategy. O nly half of responding customers indicated 
that they need RED codes to be available in the trade optimization services they use, 
and none of these indicated that they would switch trade optimization providers if 
RED codes were no longer available in the ri val trade optimization service providers 
they use; instead, they would stick to their current providers regardless .375 As such, a 
foreclosure strategy would result in reduced sales of RED codes to rival CDS trade 
optimization providers, with the JV unlikely to experience a sufficient increase in its 
sales of CDS portfolio compression, CDS portfolio reconciliation and CDS margin 
management services to offset this loss.  
(381)  In relation to this point, t he Commission notes that multi -sourcing appears to be  very 
prevalent in the procurement of certain CDS trade optimization services , such as 
CDS margin management services, because customers wish to benefit from different 
providers’ algorithms to manage and reduce their risks.376 This is summarized by one 
customer, “[O] ptimisation services are selected on ability to delivery risk reducing 
results and maximise the success of each run entered. Additionally the scope and 
products supported .”377 All responding customers indicate that they multi -source 
trade optimization service s, i.e. procure the same service from several suppliers.378 
Furthermore, customers appear to multi -source from several suppliers, not just two, 
indicating that the reason for multi -sourcing is not simply to have a back -
up/alternative but rather to benefit fr om the (differentiated) services provided by each 
supplier. Indeed, customers continue to on -board new suppliers, even where they 
already source the service in question from two or more suppliers.  
(382)  In this regard, many of TriOptima’s  services relevant for CDS  use an ‘all you can 
eat’ fee model . This means that even if a customer were to decide to abandon (or 
reduce) its multi -sourcing strategy and instead procure exclusively (or more) with 
TriOptima , the JV would not benefit from increased fees. Given that multi -sourcing 
is prevalent and so it is likely that most customers already procure from TriOptima  
and some of its rivals (i.e. there are few customers only sourcing from rivals but not 
TriOptima ), this means that such a foreclosure strategy would not resu lt in a 
significant increase in revenues for TriOptima .379  
(383)  Finally, IHSM, who supplies the RED codes and who would normally have the 
incentive to increase rather than restrict usage of RED codes380, would only obtain 
                                                 
374  Reply to question 21 of Questionnaire 4.  
375  Reply to question 15 of Questionnaire 6.  
376  Reply to question 16 of Questionnaire 6.  
377  Reply to question 16 of Questionnaire 6.  
378  Reply to question 4.3 of Questionnaire 6.  
379  Notifying Parties’ response to RFI 10, paragraph 6.  
380  Financial instrument identifiers are subject to strong network effects, because the greater the adoption 
of an identifier by market participants, the more attractive it is to other market participan ts to also use 
the same identifier when trading with counterparties for efficiency purposes.   
 
 
91 50% of the limited potential gains , while facing 100% of the losses from reduced 
RED code revenues . 
(384)  In light of the above, the Commission considers that it is unlikely that the JV would 
have the incentive to foreclose rival CDS trade optimization providers by refusing or 
worsening their access to RED codes.  
(385)  Given that the Commission does not find that IHSM would have the ability or 
incentive to foreclose, there is no need to assess the impact of a potential foreclosure. 
Nevertheless, the Commission finds that for the reasons described in recital  (377) , the 
impact of a potential foreclosure on the relevant markets for CDS portfolio 
compression, CDS portfolio reconciliation and CDS margin manageme nt would be 
limited. In particular, RED codes do not appear to be an important input for the JV’s 
closest competitors.  
5.8.1.3.  Conclusion  
(386)  Based on the above considerations and the evidence available to it, the Commission 
considers that  the Transaction is unlikely to give rise to serious doubts as to its 
compatibility with the internal market as a result of non -horizontal effects in the 
markets for RED codes worldwide  (upstream)  and CDS portfolio compression, CDS 
portfolio reconciliation and CDS margin management wo rldwide  (downstream) , in 
terms of input foreclosure.  
5.8.2.  Customer foreclosure of portfolio compression , portfolio rec onciliation, margin 
management and basis risk mitigation services for IRDs, CDS and equity 
derivatives worldwide (upstream) – trade confirmation  services for IRDs, CDS and 
equity derivatives  or overall  worldwide (downstream)  
(387)  Upstream, Section 5.8 describes TriOptima and Reset’s mark et shares and 
competitors in the provision of IRD/CDS /FX portfolio compression, 
IRD/CDS/ FX/equity derivative s portfolio reconciliation, IRD/CDS/ FX/equity 
derivative s margin management and IRD /FX basis risk mitigation services. As 
described below, the verti cal link only relates to the IRD/CDS/equity derivatives. 
Therefore, i n this Section 5.8.2 , for convenience the  aforementioned  services 
(portfolio compression, portfolio reconciliation, margin management and basis risk 
mitigation) in these three asset classes will be referred to as “IRD/CDS/equity 
derivative s trade optimization services”.  
(388)  Downstream, MarkitSERV is a third party provider of  trade confirmation services . 
MarkitSERV is the only third party provider of trade confirmation services for IRDs,  
CDS and equity derivative trades (accordingly it has a 100% market share on these 
plausible markets ). In these asset classes, any trades not confirmed by MarkitSERV 
are confirmed directly between the trading parties and do not fall under a potential 
(third party) trade confirmation market.381 MarkitSERV is not active in relation to FX 
or commodities trades; in these asset classes the main competi tors are Swift (FX, 
commodities ), Equias ( commodities ) and ICE e -confirm ( commodities ). The 
                                                 
381  Notifying Parties’ response to RFI 9, paragraph 7.3. Accordingly, on a wider market that includes also 
trades confirmed by trading parties themselves the JV wo uld have an even lower ability and incentive 
to try to engage in customer foreclosure (as many more companies engaging in trade confirmation 
would procure the upstream services).  
 
 
92 Notifying Parties are not able to estimate MarkitSERV’s market shares in a plausible 
overall market for trade confirmation services for all asset classes provided b y third 
parties, though given that such broader shares would take into account the presence 
of competitors in FX and commodities, MarkitSERV’s market share would in any 
event be lower than its shares in the IRD, CDS and equity derivatives asset classes.382 
(389)  The Transaction gives rise to a vertical link between IRD/CDS/equity derivative s 
trade optimization services and third party trade confirmation services (overall or on 
the aforementioned  asset classes ). This is because TriOptima and Reset’s 
IRD/CDS/equity d erivative  trade optimization services use MarkitSERV ’s trade 
confirmation  services as an  “output channel” for their services in the sense that trade 
terminations or new trades are sent via MarkitSERV to CCPs : 
(a) Both triBalance and triReduce , when providing p ortfolio  compression and 
margin management services,  involve  terminating existing trade s as part of 
generating a new portfolio of trades. For cleared trades, triBalance and 
triReduce generally terminate trades with the CCP directly, i.e. MarkitSERV 
does not intermediate. The CCP may then send the trade on to MarkitSERV 
for processing or not, according to the customer’s wishes. In a small number 
of cases for cleared trades, triBalance/triReduce may send the trade directly to 
MarkitSERV for termination ( […]). For uncleared trades, triBalance and 
triReduce either send the trade termination directly to MarkitSERV ([…]) or 
not at all, depending on the customer’s wishes.  
(b) Other portfolio compression and margin management providers may choose 
to send termination instructions for non -cleared trades to MarkitSERV on a 
similar basis . A method for receiving termination instructions would be 
initially agreed between the provider and MarkitSERV, […]383 […]384 […].  
(c) There are also residual trades , i.e. new t rades created as part of portfolio 
compression, which can be submitted  directly to MarkitSERV by the 
compression provider or by the customer  of the provider .385 MarkitSERV 
requires a client authorisation letter from each of the provider's clients in 
order to  process new trades or terminate old trades.386 
(d) In portfolio reconciliation, providers typically connect to MarkitSERV's 
systems via an API to allow these providers to process trades on behalf of 
their clients.  
(e) Trades recommended to clients by Reset may be passed to MarkitSERV for 
trade processing once they have been executed directly by firms or on venue. 
Other basis risk mitigation service providers have a similar relationship with 
MarkitSERV, i.e. they recommend trades to their customers. These 
recommende d and executed trades may eventually be passed on to 
MarkitSERV for trade processing but there is no direct connectivity.  
                                                 
382  Notifying Parties’ response to RFI 19 questions 13 -14. 
383  […].  
384  […].  
385  Notifying Parties’ submission to Commission on 18 June 2021.  
386  Notifying Parties’ submission to the Commission dated 18 June 2021, paragraph 4.8.  
 
 
93 (390)  Given that MarkitSERV holds a 100% market share worldwide in IRD/CDS/equity 
derivatives trade confirmation services ,387 there is a vertically affected market 
between IRD/CDS/equity derivatives trade optimization (upstream) and 
IRD/CDS/equity derivatives trade confirmation services (downstream).  
(391)  The Commission assesses below the risk that the JV may seek to engage in a 
customer foreclosure strategy to foreclose rival IRD/CDS/equity derivatives trade 
optimization providers  by refusing or worsening  their access to MarkitSERV’s 
“output channel”  of IRD/CDS/equity derivatives trade confirmation services .  
(392)  The Commission does not further assess input foreclosure, i.e. the risk that the JV 
forecloses its trade optimization services to rival trade confirmation providers, as this 
is not relevant, since MarkitSERV is the only third party provider globally of 
IRD/CDS/equity derivatives trade confirmation services and there are no rivals to 
foreclose  for these asset classes . On a broader trade confirmation market 
encompassing other asset classes, MarkitSERV would have no incentive to foreclose 
rivals. In particular, it does not compete di rectly with any rivals,388 given that the 
only third parties providing trade confirmation services are active in other asset 
classes from MarkitSERV and it is unlikely that these services are substitutable 
across asset classes from a demand -side perspective.  Therefore, the Transaction 
would not give rise to serious doubts as to its compatibility with the internal market 
in respect of input foreclosure on any plausible basis.  
5.8.2.1.  Notifying Parties’ view  
(393)  The Notifying  Parties argue that IHSM will have no ability or  incentive to foreclose 
access to MarkitSERV’s trade confirmation services  (for IRD/CDS/equity derivatives 
or overall) or otherwise favour TriOptima  or Reset  to the detriment of its 
competitors , for the following reasons.389 
(394)  First , with regard to ability, the Notifying Parties note that the majority of trades for 
which portfolio compression and margin management  services are utilised are 
cleared , and as such instructions are normally submitted to the CCP directly  rather 
than via MarkitSERV . For example, based on Quarter 1 2021 data, approximately 
93% of Euro -denominated interest rate swaps (“IRS”) , 94% of GBP -denominated 
IRS and 96% of USD -denominated  IRS (the three largest asset sub -classes that are 
subject to portfolio compression)  were  cleared. Further, t he proportion of cleared 
trades is increasing in response to regulation. Indeed , a large majority ([…]) of 
cleared trade  terminations that are sent to MarkitSERV are sent via NettingSync , 
which is a platform connecting MarkitSERV to various  CCPs , and MarkitSERV is 
unable to attribute these terminations to upstream competitors . Only a  small volume 
of terminations on cleared trades ( […] of cleared terminations) are sent to 
                                                 
387  The Notifying Parties are not able to estimate MarkitSERV’s market shares for an overall trade 
confirmation services across all asset classes (worldwide). However, there are some competitors active 
in certain asset classes where MarkitSERV is not present ( e.g. Swift in FX, Equias, ICE and Swift in 
commodities) [Notifying Parties’ reply to RFI 19, questions 13 -14]. It can therefore be assumed that 
MarkitSERV’s market share would be lower on such an overall market than for IRD, CDS or equity 
derivatives.  
388  See previous footnote.  
389  Form CO paragraph 617.  
 
 
94 MarkitSERV directly by the compression provider and therefore MarkitSER V can 
attribute  terminations to competitors.  
(395)  As regards new trades  arising from portfolio compression or margin management 
services , of the […] trade optimi zation  competitors of TriOptima  that connect to 
MarkitSERV , new trades resulting from optimi zation services can only be identified 
for […]. For the remaining […] competitors , trades cannot be attributed to the 
competitors because the y send trades to MarkitSERV for a variety of reasons (on 
their own behalf or on behalf of their clients) other than trade optimization, and it is 
not possible to ascertain whether a particular  trade is being sent in their capacity as a 
trade optimization competitor or otherwise.   
(396)  Similarly, MarkitSERV has no ability to discriminate against other basis risk 
mitigation providers in favour of Reset as there is no requirement for trades to be 
identified as being executed for the purpose of basis risk mitigation when they are 
sent to Ma rkitSERV. […]. 
(397)  Further, MarkitSERV has no ability to foreclose other providers of trade optimization 
services as trades recommended by basis risk mitigation service providers do not 
need to be processed by MarkitSERV  before being sent to clearing. These tr ades 
could be sent by the trading venue to clearing directly or through competing trade 
processing providers (e.g. in FX, trades recommended by Reset are typically 
processed by Refinitiv).  
(398)  Second , with regard to incentive , customers choose trade optimizati on providers 
based on the algorithms the  providers  use and the types of trades they optimise and 
compress . Similarly, the Notifying Parties note with respect to portfolio 
reconciliation that customers may use different vendors to reconcile the same trade 
data set based on other characteristics, e.g. tenor of trades; as such, market shares 
may not reflect market power.390 The ability for the customer s to send trades to 
MarkitSERV’s trade confirmation service from their trade optimization provider is of 
very li mited importance when selecting a trade optimization provider compared to 
the algorithms offered and the trade types covered by the service . Accordingly, any 
decision by MarkitSERV to favour TriOptima  or Reset would have no impact on a 
customer's choice of  provider . 
(399)  Third , with regard to incentive , the Parties' business models are based on providing 
connectivity across as many elements of the trading environment as possible. 
MarkitSERV would have no incentive to favour TriOptima  or Reset as it would risk 
losing the revenue and margin across its entire trade processing business for no 
foreseeable benefit in additional TriOptima  or Reset revenues. In particular, the vast 
majority of MarkitSERV's revenue is generated from large financial institutions who 
also u se trade optimization services, and who  are able to exert significant buyer 
power when negotiating with the Parties. These customers could retaliate to any 
decision by MarkitSERV to favour TriOptima  or Reset by moving business to other 
trade processing pro viders or in -house.391 
                                                 
390  Notifying Parties ’ response  to RFI 7, paragraph 3.3.  
391  Notifying Parties’ submission to Commission on 10th June 2021.  
 
 
95 (400)  The Notifying Parties add that MarkitSERV has never in the past refused to connect 
to a new provider on request and proactively connects to new providers. For 
example: (i) MarkitSERV engaged in significant work with […], including 
supporting a new venue type even though it would be the only broker using it; and 
(ii) MarkitSERV recently connected to […] which is launching a new business model 
but is not yet live.392 
(401)  Similarly, t he Notifying Parties note that TriOptima's  business case is premised on 
the ability to connect broadly to market participants, notably trading venues, CCPs, 
and trade processors. With respect to the TriOptima services that connect to 
MarkitSERV (triReduce, triBalance) as well as Reset,  the Notifying P arties note that  
100% of the revenues generated by these services require connectivity with other 
third party providers.393 
5.8.2.2.  Commission’s assessment  
(402)  The Commission assesses below the JV’s ability and incentive to engage  in a 
customer foreclosure strategy to f oreclose rival third party IRD/CDS/equity 
derivatives trade optimization providers  (i.e. the narrowest plausible upstream 
market) .  
(403)  In terms of its ability , based on the information provided in recitals (394)  to (397) , 
the Commission takes note that , in the vast majority of cases, MarkitSERV is not 
able to identify whether a trade termination or new trade instruction that is sent to it 
by a trade optimizati on competitor is sent in that company’s capacity as a provider of 
competing trade optimization services or in another context (e.g. as a trade on its own 
behalf or on behalf of its clients). Therefore, in the vast majority of cases, 
MarkitSERV does not hav e the ability to target a nd foreclose its competitors .  
(404)  Further, the market investigation confirmed the Notifying Parties’ view  that 
connectivity with MarkitSERV ’s trade confirmation service  is not key to be ing able 
to compete effectively in the  markets fo r IRD/CDS/equity derivatives trade 
optimization services . Most providers of portfolio compression, portfolio 
reconciliation, margin management and basis risk mitigation services  do not have 
direct connectivity with MarkitSERV’s trade confirmation service for the output of 
their own trade optimization services ; rather, most competitors send trade instructions 
directly to trading venues or CCPs or only to their clients.394 Very few  send trade 
instructions via middleware providers  such as MarkitSERV . This was confirmed by 
the customers , who generally do not rely on MarkitSERV’s trade confirmation 
services  as an output channel of the trade optimization services they use ; most 
customers  request their trade optimization providers to send output s directly to their 
CCPs or middleware providers , but only one customer mentioned that they use only 
middleware  providers  such as MarkitSERV’s trade confirmation service .395  
(405)  In the same vein, cooperation with MarkitSERV (for instance to collaborate to bring 
to market new or im proved products) does not appear  key to being able to compete 
effectively in the markets for IRD/CDS/equity derivatives trade optimization.  
                                                 
392  Notifying Parties’ submission to Commission on 29th June 2021.  
393  Notifying Partie s’ submission to Commission on 29th June 2021.  
394  Reply to question 15 of Questionnaire 4.  
395  Reply to question 14 of Questionnaire 6.  
 
 
96 According to trade optimization providers , the key  to achieving effective innovation 
is cooperation with  customers, followed by CCPs.396 As such, MarkitSERV would 
likely not be able to significantly impede effective competition by hindering 
innovation in the trade optimization markets by withholding its cooperation with 
TriOptima’s  competitors.  
(406)  In light of th e above, the Commission considers that it is unlikely that the JV would 
have the ability to foreclose rival providers of IRD/CDS/equity derivatives trade 
optimization services (i.e. competitors of TriOptima and Reset in the markets of 
portfolio compression , portfolio reconciliation, margin management and basis risk 
mitigation services for IRDs, CDS and equity derivatives worldwide) by refusing or 
worsening their access to MarkitSERV’s trade confirmation services  for 
IRD/CDS/equity derivatives or overall . 
(407)  In terms of its incentive , the JV would not stand to gain significantly by foreclosure 
of MarkitSERV’s trade confirmation services  for IRD/CDS/equity derivatives or 
overall . On the customers’ side, the majority of responding customers  indicated that 
(regardl ess of asset class or optimization product) they would not switch trade 
optimization providers if MarkitSERV withdrew or deteriorated connectivity of its 
trade confirmation service with their trade optimization provider ; instead, they would 
stick to their current providers regardless .397 They indicated there are solutions to 
enable them to keep doing so. In particular, o ne customer explained the alternatives 
and the trade -off between the choice of trade optimization provider and the 
availability of MarkitSERV  connectivity of that provider, “ In FX, for example, we 
prefer to have several solutions. We have an in -house booking method which we 
could use if MarkitSERV withdrew or deteriorated the connectivity to third party 
optimisation service providers. While dir ect connectivity is preferable, we would 
leverage our in -house tools and continue to use our current service providers .”398  
(408)  This is consistent with the Commission’s finding that the choice of trade optimization 
provider depends on factors other than the availability of connectivity with 
middleware providers . As one customer summarizes, “… optimisation services are 
selected on ability to delivery risk reducing results and maximise the success of each  
[compression] run entered. Additionally the scope and pro ducts supported. 
Connectivity is only an aspect of selecting optimisation services, not an overriding 
factor. As such if changes to current infrastructures occur, the basis for changing 
provide would be predominantly based on the above [mentioned factors] .”399  
(409)  Indeed, multi -sourcing appears to be very prevalent in trade optimization services, 
and particularly in portfolio compression services and margin management services, 
because customers wish to benefit from different providers’ algorithms to manage 
and reduce their risks.400 
(410)  Moreover, most of Traiana’s trade optimization services either use an ‘all you can 
eat’ fee model or have lower fees for higher volumes. Given that multi -sourcing is 
prevalent and so it is likely that most customers already procure fro m Traiana and 
                                                 
396  Reply to question 16 of Questionnaire 4.  
397  Reply to question 16 of Questionnaire 6.  
398  Reply to question 16.1 of Questionnaire 6.  
399  Reply to question 16.1 of Questionnaire 6.  
400  Reply to question 16 of Questionnaire 6.  
 
 
97 some of its rivals, this means that the potential gains of a foreclosure strategy would 
be limited as even if a particular competitor is foreclosed, to the extent the customer 
already multi -sources from both that competitor  and TriOptima /Rese t, the latter 
would not gain significant additional fees .401   
(411)  Indeed, already pre -Transaction , TriOptima  offers  interconnectivity with Acadia, a 
direct and close competitor in margin management.402 This supports  the argument put 
forward by the Notifying Parti es that TriOptima  values wider connectivity with 
market participants, even competitors.  
(412)  In light of the above, the Commission considers that it is unlikely that the JV would 
have the incentive to foreclose rival trade optimization providers (i.e. competito rs of 
TriOptima’s and Reset in the markets of portfolio compression, portfolio 
reconciliation, margin management and basis risk mitigation services for IRDs, CDS 
and equity derivatives worldwide) by refusing or worsening their access to 
MarkitSERV’s trade confirmation services.  
(413)  Given that the Commission does not find that there would be  ability or incentive to 
foreclose, there is no need to assess the impact of a potential foreclosure. 
Nevertheless, the Commission finds that there would be the potential for  customers to 
exert significant  countervailing buyer power in case of a potential foreclosure.  
MarkitSERV's total revenues (across various services) from those customers that 
MarkitSERV is aware of that use rival portfolio compression providers amount to 
[…].403 This represents […] of MarkitSERV’s total 2019 revenues, […]. Indeed, 
MarkitSERV’s top eight customers account for more than […] of its revenues, and all 
of them use at least two other trade optimization providers.404 As such, they could 
exert signific ant pressure on the JV by threatening to switch to other trade processing 
services such as in -house solutions or sponsor entry (e.g. by increasing connectivity 
with trading venues).  The market investigation confirms this; one competitor 
explains, “ We think  it would be unlikely for MarkitSERV to withdraw or deteriorate 
connectivity to Quantile as this would not be in the best interest of our mutual 
clients. ”405 Another states, “ Since the service [of connectivity between optimization 
provider and MarkitSERV]  is primarily used by our clients for integration/ reporting 
to industry bodies, the impact would be felt highest by our mutual clients …The 
primary barrier to withdrawing such service is loss of revenue from clients …clients 
will be very unhappy and react very  strongly to such [foreclosure] behaviour ”406 
5.8.2.3.  Conclusion  
(414)  Based on the above considerations and the evidence available to it, the Commission 
considers that  the Transaction is unlikely to  give rise to serious doubts as to its 
compatibility with the internal ma rket as a result of non -horizontal effects in the 
markets for portfolio compression, portfolio reconciliation, margin management 
(upstream) and basis risk mitigation services for IRD, CDS and equity derivatives 
                                                 
401  Notifying Parties’ r esponse  to RFI 10, paragraph 6 and response to RFI 11, paragraph 4.1.  
402  https://www.cmegroup.com/services/trioptima/triresolve -portfolio -reconciliation -and-collateral -
manageme nt/im -compliance.html#features   
403  Notifying Parties’ submission to Commission on 29th June 2021, Annex 143.  
404  Form CO, Annex 83.  
405  Replies to question 19.4 of Questionnaire 4.   
406  Replies to question 19.4 of Questionnaire 4.   
 
 
98 worldwide and trade confirmation services for  IRDs, CDS and equity derivatives or 
overall worldwide (downstream), in terms of customer foreclosure.  
5.8.3.  Input foreclosure of trade confirmation  services  for IRDs or overall  worldwide 
(upstream)  – portfolio reconciliation  and margin management services for IRDs 
worldwide  (downstream)  
(415)  In addition to the foregoing, in some circumstances trade confirmation services can 
be upstream of trade optimization services, as in some limited cases MarkitSERV 
sends trade confirmations and da ta to trade optimization providers , as described 
below.  
(416)  Currently, MarkitSERV does not send trade confirmations or other trade data directly 
to TriOptima or Reset . However, MarkitSERV’s trade confirmation service s send 
non-cleared IRD trades to LCH SwapAge nt (only). MarkitSERV sends these trades 
on behalf of customers for LCH SwapAgent to provide certain trade optimization 
services, in particular portfolio reconciliation  and margin management . Given that  
TriOptima  is also active in portfolio reconciliation and margin management, there is 
a vertical link between MarkitSERV’s trade confirmation service for IRD or overall 
worldwide (upstream) and TriOptima’s  portfolio reconciliation and margin 
management service for IRD worldwide .407 
(417)  Upstream, MarkitSERV is the only third party provider of confirmation services in 
relation to IRD, CDS and equity derivative trades, and as such has 100% in the 
worldwide markets for trade confirmation of those asset classes. In these asset 
classes, any trades not confirmed by MarkitSERV are confirmed directly between the 
trading parties, and thus do not fall under the (third party) trade confirmation 
market .408 MarkitSERV does not provide confirmation services in relation to FX or 
commodities trades. On an o verall market across all asset classes, its market share is  
likely to be lower (although the Notifying Parties were not able to provide an 
estimate ).409  
(418)  Downstream, Section 5.8 describes TriOptima’s  market shares and competitors in the 
provision of IRD portfolio reconciliation and IRD margin management .  
(419)  Accordingly, the Commission considers below the risk that the JV would engage in 
input foreclosure, namely by restricting access to these trade confirmations or other 
trade data from MarkitSERV’s trade confirmation service, with a view to foreclosing 
rival downstream IRD portfolio reconciliation or margin management  providers  
worldwide . On the basis that neither T riOptima, Reset nor any of their competitors 
use MarkitSERV’s trade confirmation services as an input for their portfolio 
compression or basis risk mitigation services, these services will not be further 
discus sed in this Section.  Likewise, as the only asset class in which MarkitSERV’s 
trade confirmation service is used for portfolio reconciliation or margin management 
is IRD (by LCH SwapAgent ), only this asset class will be assessed below.  
                                                 
407  Notifying Parties’ r esponse to RFI 9, paragraph 8.4.  
408  Notifying Parties’ r esponse to RFI 9, paragraph 7.3. If the relevant market were not limited to third 
party providers but were also to include counterparties’ own trade confirmations, MarkitSERV’s 
market shares would be even  lower and (in line with the reasons set out below) its ability and incentive 
would be even lower.  
409  See footnote 387. 
 
 
99 (420)  On the basis that Mar kitSERV is the only provider of trade confirmation services in 
these asset classes and so the JV does not receive trade confirmations from any 
upstream rivals (as there are none) or indeed from MarkitSERV, the Commission 
considers the Transaction does not give rise to a risk of customer foreclosure . 
5.8.3.1.  Notifying Parties’ view  
(421)  The Notifying  Parties argue that IHSM will have no ability or incentive to foreclose  
access to MarkitSERV’s trade confirmation data as an input  to IRD portfolio 
reconciliation and margin management services, or otherwise advantage  TriOptima  
with the trade confirmation data available to MarkitSERV  for the following 
reasons.410 
(422)  First , with regard to ability , the JV’s portfolio reconciliation and margin management 
services require different data than that gathered by MarkitSERV.  TriOptima  uses a 
client's own position data across an asset class or product, in order to optimise the 
client's risk position. TriOptima  require s a customer's complete positions in an asset 
class or product class (i.e . a record of every trading position made by that customer) 
that the customer wishes to optimise. This information is held within a customer's 
risk department, and is provided directly from the customer  to TriOptima.  
(423)  In comparison, MarkitSERV holds transa ction data, which  a customer sends to 
MarkitSERV for post -trade processing, usually at the time of execution. 
MarkitSERV's data is therefore not an up to date, nor complete, record of a 
customer's positions, which cannot be used by TriOptima for portfolio reconciliation 
and margin management . In particular, MarkitSERV does not always know if a trade 
is live or has been terminated by the trading parties and not been notified to 
MarkitSERV. In addition, MarkitSERV only covers a selection of  asset classes and 
instruments, w hereas TriOptima covers a wider range of asset classes and 
instruments. As such, according to the Notifying Parties any information that 
MarkitSERV could provide to TriOptima  would be of limited value, as TriOptima ’s 
customers would still nee d to provide them with up to date position data and trades 
not covered by MarkitSERV.  
(424)  Second , with regard to ability , the Notifying Parties argue that customers generally 
do not want to run compression and optimi zation services across their entire trade 
portfolio. Instead,  customers  themselves select a subset of trades to be sent for 
compression, optimi zation  and portfolio reconciliation and margin management  
depending on their specific requirements. Therefore, even if MarkitSERV had perfect 
position data, sharing this data with TriOptima  (which react to customers’ specific 
optimization requests)  would provide no benefit to customers.  
(425)  Third , with regard to ab ility and incentive , MarkitSERV is restricted in the 
information that it can share both by its user agreements and its internal procedures. 
In particular, under MarkitSERV's client agreements, client data can only be shared 
at an aggregated, anonymised and  non-discernible basis. Such information is of no 
use for  portfolio reconciliation and margin management  purposes.  
                                                 
410  Notifying Parties’ response to RFI 9 questions 7 -8 and RFI 11 question 2.  
 
 
100 (426)  Finally , with regard to ability and incentive , the Notifying Parties note that IHSM 
previously operated a credit compression service, which  was shut down in 2016 as it 
was deemed unviable. Prior to that time, IHSM's credit compression service relied on 
customers sending it their trade positions, rather than using MarkitSERV data. 
Customers choose providers based on the algorithms they use and  types of trades 
they optimise and compress. The fact that MarkitSERV was unable to profitably 
operate a compression service, illustrates that MarkitSERV data confers no advantage  
(which would apply equally in relation to portfolio reconciliation and margi n 
management) .  
(427)  The Notifying Parties therefore consider that there are no effective use cases for 
MarkitSERV data that would give TriOptima  a competitive advantage vis -à-vis their 
competitors  and in any case MarkitSERV is restricted by its user agreements  and 
internal procedures .411 
5.8.3.2.  Commission’s assessment  
(428)  The Commission assesses below the JV’s ability and incentive to engage in input 
foreclosure, namely by restricting access to these trade confirmations or other trade 
data from MarkitSERV’s trade confirmation service, with a view to foreclosing rival 
downstream providers of IRD portfolio reconc iliation and margin management  
services .412 
(429)  In terms of its ability , the market investigation corroborated the Notifying Parties’ 
view. First, the large majority of competitors indicated that MarkitSERV is overall 
not a key data source for IRD portfolio reco nciliation and margin management 
service providers.  Most competitors source trade data as an input for their IRD 
portfolio reconciliation and margin management services directly from the clients or 
CCP s, with the emphasis on clients being the key source of  data. Only one 
competitor mentioned middleware providers  (such as MarkitSERV) as an important 
source of data for them .413   
(430)  This was confirmed by the customers;  most customers send their trade data to their 
IRD portfolio reconciliation and margin management providers directly or request 
their CCPs to do it. A minority request their middleware providers (such as 
MarkitSERV)  to do it,  and none of these customers use only this channel .414 This 
supports the Notifying Parties’ argument that MarkitS ERV’s trade confirmation data 
does not appear  essential or sufficient for the customers’ IRD portfolio reconciliation 
and margin management needs. The Commission therefore concludes that 
MarkitSERV’s trade confirmation data is not an important input for portfolio 
reconciliation and margin management services providers , meaning that the JV 
would not have  the ability to foreclose rivals in the downstream market s for IRD 
                                                 
411  Notifying Parties’ submission to Commission on 18 June 2021.  
412  The Commission conducts this assessment on the basis that LCH SwapAgent is considered to be a third 
party provider of margin management services in these asset classes. In the event that it were not 
considered to be a third party provider (on the basis that LCH more broadly has some activities as a 
CCP ), then on the narrowest plausible market definition limited only to third party providers, 
MarkitSERV does not provide trade confirmations to any third party competitors and so an input 
foreclosure strategy is implausible.  
413  Reply to question 14 of Quest ionnaire 4.  
414  Reply to question 13 of Questionnaire 6.  
 
 
101 portfolio reconciliation and margin management services (i.e. competitors of 
TriOptima  worldwide) . 
(431)  In terms of its incentive , the Commission notes that as set out above in recitals (407)  
to (411) , customers are not likely to switch  for IRD  portfolio reconciliation and 
margin management providers in case of foreclosure and customers multi -source, 
indicating that they likely are already customers of both TriOptima  and (several of) 
its rivals. The potential gains of a foreclosure strategy would be limited as to the 
extent the customer already multi -sources from both that competitor and TriOptima , 
the latter would not gain signi ficant additional fees (given that “all you can eat” fee 
models are the norm).415  
(432)  Therefore, the Commission finds that the JV would have no incentive to engage in 
foreclosure of MarkitSERV’s trade confirmations  for IRD or overall  to competitors 
or otherwise  exclusively favour TriOptima ’s portfolio reconciliation and margin 
management service using MarkitSERV’s trade data.  
(433)  Given that the Commission does not find that there would be ability or incentive to 
foreclose, there is no need to assess the impact of a  potential foreclosure. 
Nevertheless, the Commission finds that there would be the potential for customers to 
exert countervailing buyer power in case of a potential foreclosure, as described in 
recital (413) . 
5.8.3.3.  Conclusion  
(434)  Based on the above considerations and the evidence available to it, the Commission 
considers that  the Transaction is unlikely to  give rise to serious doubts as to its 
compatibility wit h the internal market as a result of non -horizontal effects in the 
markets for trade confirmation services for IRDs or overall worldwide (upstream) 
and portfolio reconciliation and margin management services for IRDs worldwide 
(downstream), in terms of inp ut foreclosure.  
5.9. Conglomerate effects  
(435)  The Commission consider s below whether the JV would be likely to bundle or tie 
together (various) combinations of its services and whether this would lead to 
anticompetitive conglomerate effects arising from  the Transaction . In particular, the 
Commission considers conglomerate effects from various combinations arising from 
the Transaction among those services for which the JV’s market share would be 30% 
or more, in particular:  (i) MarkitSERV’s trade confirmat ion services  (by asset class 
or overall) worldwide , (ii) MarkitSERV’s FX or IRD CCP connectivity services  
worldwide , (iii) TriOptima and Reset ’s trade optimization services  (i.e. portfolio 
compression, portfolio reconciliation , margin management and basis risk mitigation 
services by asset class) worldwide , (iv) Traiana’s FX PB give -up management 
services  worldwide and (v) Traiana’s credit limit management services  worldwide .416  
                                                 
415  Notifying Parties’ r esponse  to RFI 10, paragraph 6 and response to RFI 11, paragraph 4.1.  
416  The Commission did not consider in depth combinations between Traiana’s credit limit management 
service s on one side and MarkitSERV’s trade confirmation services or CCP connectivity services  on 
the other side, given all market shares in the relevant markets were 100%, and there were no indications 
of potential entrants being deterred by the JV. The Commissi on also did not consider overlaps relating 
 
 
 
102 5.9.1.  Notifying Parties’ view  
(436)  The Notifying Parties submit that the JV will have no abi lity to foreclose rivals for 
the following reasons.  
(437)  First , OTC trading services are often highly customised and differentiated between 
providers, i.e. even where two rivals provide the same service, they will often be 
targeting different segments of the market. This will make customers less willing to 
switch prov ider to purchase a bundled offering (because their current product may be 
particularly well suited to their requirements), reducing the JV’s ability to foreclose 
rivals .417 
(438)  Second, although some of the  Parties’ customers (such as banks) often purchase a 
range of services, different services are typically procured by different divisions, 
desks and individuals within the same organisation. For example, different 
individuals within a bank will be responsible for purchasing trade processing and 
portfolio compress ion services. As such , the Parties' ability to use bundling or tying  
strategies is significantly reduced as they would face the added challenge of trying to 
negotiate sales across multiple individuals.  
(439)  Third, MarkitSERV and Traiana provide services that au tomate the processing of 
OTC trades. Firms can perform m any of these services themselves, e.g. through 
direct connectivity, or other service providers that are available. Therefore, providers 
that are active in relation to other parts of the OTC trading va lue chain can process 
trades directly, and the Parties have no ability to foreclose rivals.  
(440)  The Notifying Parties submit that the JV will have no incentive  to foreclose rivals for 
the following reasons.  
(441)  First, the Parties' business models are based on prov iding open and non -
discriminatory connectivity across as many elements of the trading environment as 
possible. This will continue post Transaction as the JV’s combined service will be 
agnostic as regards the execution and clearing venues. The Parties would  have no 
incentive to limit access to their services as this would run counter to the rationale of 
the Transaction , which is focussed on providing enhanced services to customers 
across the OTC trading lifecycle.  
(442)  Second, many of the services provided by the  JV relate to markets of relatively low 
value. The JV would have no incentive to risk foregoing revenues in relatively large 
markets (e.g. trade processing) to foreclose rivals in significantly smaller markets 
(e.g. FX Retail Aggregation). As noted in the Commission's guidelines " it is unlikely 
that the merged entity would be willing to forego sales on one highly profitable 
market in order to gain market shares on another market where turnover is relatively 
small and profits are modest ". 
(443)  Third, a bundling o r tying strategy would not be profitable. This is because the OTC 
post trade processing services provided by the JV are not economic complements 
                                                                                                                                                        
to FX NOE messaging services as both MarkitSERV and Traiana are already active in this market pre -
Transaction with low market shares ([5 -10]% and [0 -5]% respectively) and do not bundle it with their 
other trade pr ocessing activities.  
417  Form CO, paragraphs 524ff.  
 
 
103 (e.g. a price increase of one service will not reduce demand for another service). 
There are also limited benef its of one -stop shopping, so this is unlikely to be a key 
driver in customers choosing between a bundled offer or purchasing individual 
services on a standalone basis. A bundled offering of OTC post trade processing 
services is therefore unlikely to be att ractive to customers unless it is offered at a 
significant discount compared to purchasing individual services. The need to offer a 
significant discount for a bundled service reduces the profits (and therefore incentive) 
of bundling as a strategy.  
(444)  Moreover, in relation to the link between the trade processing services provided by 
MarkitSERV and the clearing services provided by CME, the Notifying Parties  claim 
that their  incentives are very unlikely to be aligned. IHS M would have no incentive 
to pur sue a bundling or tying strategy with the aim of foreclosing the market for 
trading or clearing, as it would not receive any of the benefits of such a strategy.  
5.9.2.  Commission’s assessment  
(445)  First , as regards ability , the Commission notes that the JV has a 100% market share 
in the markets for trade confirmation services (MarkitSERV) and credit limit 
management services (Traiana), as well as high market shares in certain CCP 
connectivity  markets , trade optimization markets and FX PB give -up management 
services  markets. This would indicate that  the JV may have the ability to use its 
strength in these markets  to tie or bundle other products . Moreover, there appears to 
be significant overlap in the customer  bases of the various services at entity level.418  
(446)  However, the market investigation indicates  that customers do not have strong 
incentives to one -stop shop419 for various trade processing services. Almost all 
responding customers indicated that they would not stop using rivals’ products if the 
JV bundled its trade optimization services with trade confirmation services or CCP 
connectivity service s420, or its FX PB give -up management services with 
MarkitSERV’s trade processing services .421 Customers explained that they would 
assess the merits of the products available fro m the JV and its rivals  on a case -by-
case basis , and indicated that other elements beyond just pricing drive their 
preference for trade processing and optimization products.422 For example, one 
customer noted “Naturally we would assess the bundled package an d costs 
advantages - however, operational reliability is just  as important as pricing for 
us”.423 Customers confirmed that their choice of supplier is driven by product -
specific factors such as “ market coverage ”, “support level, reliability and client 
prefer ence” as well as crucially  whether business requirements are met. These are 
considered on a case -by-case basis for product procurement decisions.424 In line with 
this, customers indicated that they might consider a bundle but would not necessarily 
accept it, e.g. “[the customer]  would evaluate, to ensure sustainable economics, 
whether to accept or not a bundle offe r”, “We would have to review the contract and 
make a decision based on what was presented ”, “It depends on the products, if i need 
                                                 
418  Form CO, Annex 086 and Annex 143, Notifying Parties’ submission to Commission on 29 June 2021 . 
419  Non-horizontal Merger Guidelines, paragraph 104.  
420  Replies to question 17 of Questionnaire 6 and question 28 of Questionnaire 1. 
421  Replies to question 39 of Questionnaire 3. 
422  See previous Sections  in relation to each relevant product.  
423  Replies to question 28 of Questionnaire 1.  
424  For example, replies to questions 11.1.2 and 12.1 of Questio nnaire 1.  
 
 
104 them and if they  are complimentary to what I need ”, “if this was to be the case we 
would discuss and debate any new opportunities ”, “It would depend on the 
technology impact to changing, the productivity and the cost ” and “Our decision 
would be determined by the pricing o ffered and the alternatives available ”.425  
(447)  Finally, customers can and do multi -source across the various trade processing and 
trade optimization products. This is confirmed by a customer  who explains that , 
“Some of the services are purchased from the same s upplier but they are individual 
purchasing decisions, with separate fee schedules for supporting activities in 
different parts of the bank . [we are] generally able to purchase services from 
different providers and mix -and-match the services that we purchas e from different 
providers ”426 Therefore, notwithstanding the JV’s high market shares, customers 
would not necessarily accept the bundle and cease procuring from rival suppliers but 
would in each case consider alternative options available and choose the opt ion that 
best suits their needs.  The market investigation showed that customers’ primary 
criterion for choosing trade processing is which service best meets their needs, rather 
than whether they already procure other products from a given supplier.  
(448)  As to t he question of how important certain services are for customers and whether 
this would indicate that the JV could leverage them vis -à-vis other services , the 
Commission notes the following:  
(449)  With respect to MarkitSERV’s trade confirmation services,  these would not seem to 
be of particular importance for two reasons: (a) any trades not confirmed by 
MarkitSERV (in those asset classes where MarkitSERV is active) are confirmed 
directly between the trading parties, so in case MarkitSERV were to attempt t o use 
trade confirmation services as leverage, market participants could simply choose to 
confirm trades directly, and (b) as set out in recital (407)  other related services such 
as trade optimization services seem to be of far more importance for customers  than 
trade confirmations . 
(450)  With respect to MarkitSERV’s CCP connectivity services, while these are important 
infrastructure for many market particip ants, a number of responses to the market 
investigation indicate that (a) alternatives exist (e.g. through self -supply)427 and (b) 
the value of CCP connectivity services compared to compression services, for 
example, is considered lower by market participant s.428 This is also confirmed in 
response to the question whether customers would stick to their current trade 
optimization providers if MarkitSERV were to  deteriorate its connectivity to 
TriOptima’s rivals: the majority of relevant  respon dents to the market investigation 
indicate d that they would stick to their current trade optimization providers.429 
(451)  With respect to TriOptima  and Reset’s trade optimization services, while these are 
considered important by customers, a bundling or tying strategy would likely not lead 
to customers stopping purchases from rival trade optimization providers. The reason 
for this is that multi -sourcing appears to be very prevalent in trade optimization 
                                                 
425  Replies to question 17 and 18 of Questionnaire 6, question 39 of Questionnaire 3 and questions 28 and 
29 of Questionnaire 1. 
426  Reply to question 4.2.1 of Questionnaire 6.  
427  Replies to question 16.1 of Questionnaire 6. 
428  Replies to question 16.1 of Questionnaire 6. 
429  Replies to question 16 of Questionnaire 6. 
 
 
105 services, and particularly in portfolio compression services and margin management 
services. Customers multi -source to benefit from different providers’ algorithms to 
manage and reduce their risks. Therefore, a bundling or tying strategy would  be 
unlikely to have a significant impact on the competitive dynamics in the trade 
optimization services market.  
(452)  With respect to Traiana’s FX PB give -up management services , these are important 
for customers. However, a bundling or tying strategy would lik ely not be successful 
as the customer base is concentrated and consists of large banks which have 
bargaining power vis -à-vis Traiana (see Section  5.4.2 ). Furthermore, in this market, 
there is a recent entrant (whose entry was sponsored by large customers of Traiana) 
that is considered an alternative . 
(453)  With respect to Traiana’s credit limit management services , while Traiana is the only 
undertaking  to provide these services  globally  as a third party provider, trading 
counterparties can and do alternatively simply provide this service to each other 
bilaterally when trading.  None of the customers responding to the market 
investigation alerted the Commissi on to a bundling or tying risk with respect to credit 
limit management services and similar considerations with respect to customers’ 
bargaining power as for FX PB give -up management services (of which credit limit 
management services is a service type) ap ply. 
(454)  In light of the above, the Commission considers that it is unlikely that the JV would 
have the ability to engage in anticompetitive bundling or tying of the aforementioned 
services.  
(455)  Second , as regards incentive , the Commission notes that pre -Transacti on, customers 
do ‘mix and match’ trade processing services of the Parties with the product s of other 
companies , and it is unlikely that  the JV could compel them to change this practice 
following the Transaction.  For instance , as described in recital (409) , multi -sourcing 
appears to be very prevalent in trade optimization services, and particularly in 
portfolio compression services and margin management services, because customers 
wish to benefit from different providers’ algorithms to manage and reduce their 
risks.430 As such, bundling or tying would not be likely to lead to a significant 
reduction of sales prospects faced by single -component rivals , such as trade 
optimization providers, in the market.  
(456)  In the same vein, the JV’s rivals in the FX PB give -up management services and CCP 
connectivity services markets are primarily trading venues and CCPs themselves. As 
such, they would not be likely to lose significant sales in case of bundling by the JV, 
as their services in PB give -up management and CCP connectivity are ancillary to 
their offerings in the core markets of trading and clearing. For example, CCP 
connectivity is unlikely to be used to bund le trade processing or connectivity 
services, given that CCP connectivity is a facilitating service that customers use to 
intermediate between these two, more valuable and significant services (as indicated 
by the fact that customers would rather switch CC P connectivity provider than 
tolerate a foreclosure strategy reducing their access to CCPs).431 
                                                 
430  Reply to question 16 of Questionnaire 6.  
431  Replies to question 26 and 27 of Questionnaire 1.  
 
 
106 (457)  Indeed, neither Notifying Party currently engages in bundling among their respective 
various trade processing services, despite potential complementarity and comm on 
customers. For instance, although almost all responding trade optimization customers 
indicated that they use  portfolio compression, portfolio reconciliation and basis risk 
management  service s432, Reset and TriOptima services are sold as standalone 
product s, have separate pricing schedules, are sold under separate agreements, and 
function as standalone products. In particular, Reset is sold to individual traders and  
within TriOptima, triReduce and triBalance are sold primarily to X -Value 
Adjustment ("XVA") desks and triResolve (including triResolve Margin, triCalculate 
and IMEM) is sold to middle and back office functions. In this sense, almost all of 
the sales for these products are made on a standalone basis and there is no product 
suite offering spanning TriOptima and Reset.433 Similarly, MarkitSERV already 
provides trade processing services across multiple asset classes but has not attempted 
to bundle any of these services.434 In this regard, the Transaction would not 
significantly alter the Parties’ incentiv es as compared to the situation pre -
Transaction. The Parties’  past behaviour ,435 therefore,  indicates a lack of incentive for 
bundling these services . In addition, none of the respondents to the market 
investigation alerted the Commission to existing practic es in that respect.  
(458)  Similarly, for Traiana’s services, a customer notes with regard to  the JV’s likelihood 
to offer a forced bundling  post-Transaction , “we note that Traiana could already 
bundle their offering within FXPB and have not done so ”, and “Traiana already do 
this [commercial bundling]  as part of their contract negotiations, but we are able to 
remove unwanted or unused components from the agreement” .436  
(459)  In light of the above, the Commission considers that it is unlikely that the JV would 
have  either the ability or the incentive to engage in anticompetitive bundling or tying 
of services.  
5.9.3.  Conclusion  
(460)  In light of the above and all of the evidence available to it, the Commission 
concludes that the Transaction does not give rise to serious doubts as  to its 
compatibility with the internal market as a result of possible non -coordinated effects 
through a conglomerate bundling or tying strategy relating to the JV’s products.  
                                                 
432  Reply to question 4 of Questionnaire 6. 
433  Notifying Parties’ submission to Commission on 9 June 2021.  
434  Form CO, paragraph 569.  
435  Non-horizontal Merger Guidelines, paragraph 109.  
436  Replies  to question 39 of Questionnaire 3.  
 
 
107 6. CONCLUSION  
(461)  For the above reasons, the European Commission has decided not to op pose the 
notified operation and to declare it compatible with the internal  market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President