The European Commission has sent a Statement of Objections (SO) to S&P, which outlines the Commission's preliminary view that S&P is abusing its dominant position by requiring - as the sole-appointed National Numbering Agency (NNA) for US securities - financial institutions and information service providers (ISPs) to pay licensing fees for the use of International Securities Identification Numbers (ISINs) in their own databases. The Commission takes the preliminary view that this behaviour amounts to unfair pricing and constitutes an infringement of Article 82 EC Treaty.

ISINs are the global identifiers for securities and are governed by International Standardisation Organisation (ISO) standard 6166. They are indispensable for a number of operations that financial institutions carry out (for instance, reporting to authorities or clearing and settlement) and cannot be substituted by other identifiers for securities.

S&P is the sole-appointed NNA for US securities and therefore the only issuer and first-hand disseminator of US ISIN numbers. The Commission's preliminary conclusion is that S&P is abusing this monopoly position by enforcing the payment of licence fees for the use of US ISINs by banks and other financial services providers, as well as information service providers in the EEA.

This preliminary finding is based on a comparison with the charging policy of other NNAs that either do not charge any fees at all or, if they do, do so only on the basis of the distribution cost as opposed to usage, according to ISO principles. According to the Commission's preliminary findings, S&P does not incur any costs for the distribution of US ISINs to financial service providers because the latter do not receive the ISINs from S&P but from information service providers such as Thomson Reuters or Bloomberg.

S&P has eight weeks to reply to the SO and will then have the right to be heard in an oral hearing. If the preliminary views expressed in the SO are confirmed, the Commission may require S&P to cease the abuse and may impose a fine.

The EC opened a formal investigation into S&P in January 2009. A Statement of Objections is a formal step in EC antitrust investigations in which the Commission informs the parties concerned of the objections raised against them.

The parties can reply to the SO, setting out all facts relevant to their defence against the objections raised by the Commission. They may also request an oral hearing to present its comments on the case.

The Commission may then take a decision on whether the conduct addressed in the Statement of Objections is compatible or not with the EC Treaty's antitrust rules.