UK regulator finds ION’s purchase of Broadway Technology raises competition concerns

Maria Nikolova

The Competition and Markets Authority has concerns relating to the supply of fixed income securities electronic trading systems.

Less than a month after the UK Competition and Markets Authority (CMA) announced the start of its investigation into the acquisition of Broadway Technology by ION Investments, the regulator has unveiled its findings.

The CMA today said it found that ION’s completed purchase of Broadway Technology raises competition concerns in the supply of electronic trading systems.

Both companies provide specialist trading systems to financial organisations, such as banks, that allows the trading of foreign exchange (FX) and fixed income securities (FI) such as government bonds.

The CMA has concerns relating to the supply of FI electronic trading systems. Based on evidence from the companies’ own documents and feedback received from their customers, the CMA considers that ION is by far the largest supplier of these systems and Broadway is one of only two significant competitors.

The CMA’s initial Phase 1 investigation has found that the deal could therefore leave customers facing a significantly reduced choice of supplier with the potential for higher prices or more onerous terms and conditions on their services.

Joel Bamford, CMA Senior Director, said:

“We’ve examined a wide range of evidence during this investigation, and numerous customers have raised serious concerns. We consider ION to already be the largest provider of these products and they’re buying one of their closest competitors. We are therefore concerned that this merger could damage competition in a market which is critical to trading activities in the UK, leaving the merging companies’ customers with a worse deal.”

ION must now address the CMA’s concerns within five working days. If the company is unable to do so, the deal will be referred for an in-depth Phase 2 investigation.

In February 2020, ION announced a recapitalization of provider of high-performance capital markets solutions Broadway Technology, in which ION acquired a controlling stake alongside Long Ridge Equity Partners and the Broadway founders.

Read this next

Institutional FX

Fiserv secures major payment institution licence in Singapore

Brookfield-based financial services technology provider Fiserv Inc has obtained nod for a Major Payment Institution license in Singapore.

Institutional FX

Finalto expands NDFs line-up with Taiwanese dollar

Finalto announced today that it has expanded its non-deliverable forwards (NDFs) offering with the addition of Taiwan’s dollar to its trading platform.

Opinion

It’s time for FX to Harness Crypto’s Potential

Jonathan Cumberlidge, FX Sales Director for BVNK, makes the case for cryptocurrencies in improving the efficiency and flexibility of foreign exchange trading.

Digital Assets

Owner of OptionMint, OptionKing, and OptionQueen gets 30 months in prison

A US federal judge has sentenced Ohio resident Jared Davis, who was found guilty for his participation in a multi-million fraud scheme carried out by Israeli-run binary options websites.

Executive Moves

iS Prime co-founders Raj Sitlani and Jonathan Brewer leave, but “business as usual”

“For our clients and teams at iS Prime, iS Risk and iS Prime Hong Kong, it is business as usual. We will be increasing our investment in our technology and staff, putting our clients first as we drive the business forwards to maintain our market leadership position.”

Digital Assets

Germany-focused DekaBank taps METACO for digital asset custody offering

“Digital assets are a critical part of the future, a radical new way for how assets will be represented, from currencies to real estate.”

Technology

Eventus launches AML solution for TradFi and digital asset space

“Firms operating in traditional financial markets and digital assets alike are facing greater challenges than ever to protect themselves from those presenting a risk to their businesses and reputations, along with their standing with government regulators.”

Industry News

Qomply launches direct-to-FCA trade report solution that bypasses ARM

“Certainly, for back-reporting large volumes of data, QomplyDirect removes extra ARM fees by offering the flexibility of sending reports directly to the FCA via a firm’s own infrastructure.”

Executive Moves

BNP Paribas AM appoints Geoff Dailey as Deputy Head of US Equities

“Geoff has more than 20 years’ experience in the industry and as a key, senior member of the team with a strong investment pedigree and leadership profile, he is the natural successor for Pam.”

<