If you are familiar with the CDS market, you are well aware of how much influence Markit has. The tiny firm owned by top dealers--including JPMorgan Chase, Goldman Sachs, Citigroup, Deutsche Bank, Bank of America and Morgan Stanley--had developed and licensed the only derivatives pricing benchmarks for CDS that matter, such as the ABX, the corporate credit CDX and iTraxx Europe.

The Justice Department is conducting an anti-trust probe, seeking to determine if its "shareholders received advantages as owners and providers of prices and trading patterns for credit-default swaps," reports Bloomberg. One expert told the news service: "The fact that they control Markit and it provides information about the prices of credit-default swaps and they've benefited from this for many years without any challenge or investigation was outrageous." Of course you could easily ask the same questions about other dealer-owned execution and clearing venues, of which there are several. This is arcane stuff. We'll just have to wait and see what comes of this. 

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