CMA refers acquisition by FNZ of GBST Holdings for phase 2 investigation

Maria Nikolova

The decision is made about a week after the competition watchdog said the deal sparked competition concerns in the provision of retail investment platform solutions in the UK.

The UK Competition and Markets Authority (CMA) today announces that it has decided to refer the completed acquisition by FNZ of GBST Holdings Limited for a phase 2 investigation.

The decision is announced about a week after the regulator said the deal raised competition concerns in the provision of retail investment platform solutions in the UK.

FNZ purchased GBST in November 2019. Both companies have a significant presence in the UK. They are two of the leading suppliers of solutions involving software and/or servicing to retail investment platforms in the UK.

After completing its initial Phase 1 investigation, the CMA concluded that FNZ and GBST are close competitors in what is a concentrated market with few other significant suppliers. Smaller or less well-established firms find it difficult to enter or scale up because of the risks and reluctance of customers to change suppliers.

As part of its investigation, the CMA carried out extensive market testing and looked at evidence from a number of third-party stakeholders including investment platforms, external consultants, competitors and industry bodies. It also examined the companies’ internal documents and assessed the extent of competition in recent tenders in this sector.

Pursuant to section 73A(1) of the Act, the acquirer had until April 6, 2020 to offer an undertaking to the CMA that might be accepted by the CMA under section 73(2) of the Enterprise Act 2004 (the Act). On April 6, 2020 the acquirer informed the regulator that it would not be offering any undertakings. The CMA has therefore decided to refer the deal for a phase 2 investigation.

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