UK Competition Appeal Tribunal reverses CMA decision on ICE-Trayport deal

Maria Nikolova

The Competition Appeal Tribunal said “the reasons for the CMA’s decision in this respect were too cursory and too conclusory to meet the standards of intelligibility and adequacy”.

Intercontinental Exchange Inc (NYSE:ICE), an international network of exchanges and clearing houses, formally completed its acquisition of Trayport from BGC Partners and GFI for approximately $650 million in December 2015 and subsequently got involved in a prolonged process of seeking regulatory approvals for the deal.

The biggest hit on the merger came in the fall of 2016, when the UK Competition and Markets Authority (CMA) ordered ICE to sell Trayport referring to findings that ICE could use its ownership of Trayport’s platform to curb competition between itself and its rivals which could lead to increased fees for execution and clearing, and worse terms offered to traders. The CMA also found that the merger would likely lead to a loss of competition between ICE and its rivals to launch new products, find innovative trading solutions and enter markets with new offerings.

The CMA provisionally ruled in August 2016 that the merger could result in a substantial lessening of competition (SLC), with third party submissions supported the CMA’s provisional findings and the majority agreeing that the sale of the Trayport business was the only effective remedy in response.

ICE then filed an appeal against the CMA report dated October 17, 2016 in which it found that ICE’s purchase of the entire issued share capital of Trayport Inc and GFI TP Ltd and their subsidiaries was poised to lead to a substantial lessening of competition and the Direction issued by the CMA on November 10, 2016 directing ICE and Trayport to cease implementation of an agreement between the Merging Parties dated May 11, 2016.

On Monday, March 6, 2017, the UK Competition Appeal Tribunal (CAT) ruled that the CMA Report “provided no articulation as to why the requirement to unwind the New Agreement would help ensure the effectiveness of the divestiture remedy”. It also stated that “the reasons for the CMA’s decision in this respect were too cursory and too conclusory to meet the standards of intelligibility and adequacy.”

As a result, the Tribunal quashed the Report to the degree that it required the unwinding of the New Agreement and remitted it to the CMA to reconsider whether or not to require the New Agreement to be unwound.

But the Tribunal did not quash the Direction. The CAT invites the CMA and ICE to agree a form of Order to address the position pending the remittal.

In a comment, following the judgment, ICE greeted the ruling by the CAT reversing the CMA’s decision that the agreement between ICE and Trayport should be terminated. However, ICE noted its disappointment with the CAT’s ruling on the other aspects of the appeal. The company is planning to review the CAT’s judgment and consider its options.

Read this next

Retail FX

eToro is latest platform to suspend Terra’s LUNA, Binance resumes trading

Israeli social trading network eToro has become the latest platform to suspend trading on the Terra (LUNA) cryptocurrency in light of a market-wide downturn.

Industry News

UK court allows ThinkMarkets’ “obscure” B-book claims against IS Prime

“The Judge added that “Think did need to address the concerns expressed” as its counterclaim “suffers from a lack of detail, obscurity and potential inconsistency”.

Retail FX

Brazilian Broker XP launches crypto trading to 3.5M users

XP Inc (XP.O) is set to launch a crypto trading platform, dubbed ‘XTAGE’, as Brazil’s largest broker is looking to tap into the growing interest in trading bitcoin and other digital assets.

Retail FX

easyMarkets adds MT5 as demand for platform continues to grow

easyMarkets has joined a growing group of brokers in switching over to MetaTrader 5 (MT5), becoming the latest retail platform to incorporate the platform into its live trading infrastructure.

Institutional FX

SGX’s FX volume shines in a largely lackluster April

The Singapore Exchange (SGX) notched a healthy gain in its FX and indices volumes, despite seeing a wavering performance across commodity and securities segments.

Industry News

Devexperts webinar: Attracting retail traders with fractional trading

Following the successful webinar on introducing crypto to retail investors, Devexperts is returning to host a new one about fractional trading. 

Digital Assets

Relai to launch bitcoin debit card to unlock BTC via every purchase

To attract more retail investors to the crowdfunding project, Relai has promised 0% fees on transactions on the Relai app for those who invest €5,000 or more.

Digital Assets

Amid crypto meltdown, Tether reduces corporate debts in USDT reserves

Tether, which is closely affiliated with crypto exchange Bitfinex, has drastically reduced its holdings of commercial debt in its reserves over the last six months. Instead, the stablecoin issuer allocated most of its non-fiat reserves to Treasury bills, almost doubling assets in short-term government securities.

Industry News

TrustPay launches SEPA instant payments

” Our clients will now be able to make instant transactions with the immediate settlement of funds, which makes business more effective in today’s fast world.”

<