UK competition regulator makes concessions to ICE/Trayport deal concerning MiFID II

Maria Nikolova

In a Derogation to an Order issued early this year, the CMA says the Parties are permitted to conduct development discussions regarding establishing STP Link connectivity to ICE.

There has been some development concerning the deal between Trayport and Intercontinental Exchange Inc (NYSE:ICE), as the UK Competition and Markets Authority (CMA), which axed the deal in the fall of 2016, has issued a Derogation to its Final Order.

In the document, the UK regulator announces some concessions, which are made in response to MiFID II.

The CMA consents to a derogation from paragraphs 3.1.1 and 3.2.8 of the Order limited to the purpose of allowing Trayport to carry out actions which are necessary to ensure its customers will be MiFID II compliant, as of January 2018.

In the Order, the paragraphs in question state that:

  • 3.2.8 “There is no integration of the information technology of the Trayport and Intercontinental Exchange Businesses, and the software and hardware platforms of the Trayport Business shall remain essentially unchanged, except for routine changes and maintenance.”
  • 3.1.1 “ICE and Trayport Holdings Limited shall not, from the Commencement Date until Effective Divestiture, take any action which might lead to the integration of the Trayport Business with the Intercontinental Exchange Business.”

Under the Derogation to the Order, the Parties are permitted to:

a) conduct development discussions regarding establishing STP Link connectivity to ICE;

b) carry out technical work required to develop the STP Link;

c) enter into discussions regarding the terms of an agreement for the implementation of an STP Link provided that the final terms of the agreement are submitted to the CMA for approval.

The document marks the first concessions made by the CMA with regards to the deal between ICE and Trayport. The regulator has repeatedly insisted that ICE should sell Trayport. In March this year, the Competition Appeal Tribunal (CAT) agreed with the CMA on ICE having to divest Trayport. However, CAT also issued a judgment remitting consideration of the New Agreement to the CMA. According to the latest update to the case timetable, the target date for CMA’s final decision on the remitted issue is in early July this year.

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