UK Outlines ICE Enquiry Issues

UK regulator Competition and Markets Authority (CMA) on May 3 referred Intercontinental Exchange’s $650mn acquisition of Trayport, an energy trading software firm, for an in-depth investigation. The inquiry group must publish its final report by October 18 2016.   

On May 31, CMA issued an Issues Statement, which it says identifies clearly for all interested parties the key questions which the inquiry is examining.

Among other issues, it asks if there are possible mechanisms that ICE/Trayport could use to harm brokers, exchanges and clearinghouses, “each being rivals of ICE”. If the merger were permitted, CMA asks if the new entity should be obliged to make concessions to the market or customers.

Atlanta-based ICE runs exchanges in Europe used to trade oil and gas futures and derivatives and is the primary exchange-provider for the UK gas hub, Natural Balancing Point (NBP) and – through its Dutch exchange ICE-Endex – a major exchange-provider for the Dutch gas hub TTF.

The CMA inquiry group must decide whether the acquisition – completed in December 2015 – can be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services. Trayport was bought from brokerages BGC Partners and GFI.

Mark Smedley