UK competition regulator sticks to decision on ICE/Trayport new agreement

Maria Nikolova

In the face of the remittal of the decision in March, the CMA still thinks that it is necessary to terminate the new ICE/Trayport agreement.

The regulatory hardships accompanying the deal between Trayport and Intercontinental Exchange Inc (NYSE:ICE) continue, as the UK Competition and Markets Authority (CMA) has stuck to its stance against the new agreement that was set to boost the commercial partnership between the two businesses after the acquisition of Trayport by ICE was axed by regulators in the fall of 2016.

As FinanceFeeds reported in March this year, the UK Competition Appeal Tribunal (CAT) agreed with the CMA that ICE should sell Trayport but disagreed with the CMA Report regarding the new agreement and returned the decision to the CMA for review. The UK CAT argued back then 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.”

Today, the CMA reiterated its stance with regards to the new ICE/Trayport agreement.

The competition regulator published its provisional remittal decision, which states that the new agreement represents a substantial step-change in the relations between the two companies which had historically not co-operated. The CMA also claims the agreement could risk an effective sale of the Trayport business and benefit ICE in the future while putting the new owner of Trayport at disadvantage.

Hence, the CMA has provisionally concluded that it is necessary to terminate the new agreement.

The publication of CMA’s final decision is due in late May. Before that, the regulator accepts comments to its provisional findings. Those willing to respond should do so in writing, no later than May 10, 2017.

The review process following the remittal has attracted nine submissions, including ones from ICAP and RWE Supply & Trading. There is no consensus in the comments as to whether the agreement should be allowed to proceed.

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