The UK’s Competition and Markets Authority (CMA) says it has “provisionally” found Intercontinental Exchange’s (ICE) acquisition of Trayport may give rise to competition concerns.

ICE is the largest operator of exchanges and clearing houses in the trading of European utilities. It has its own proprietary software which allows trading of energy commodity and utility derivatives on its exchanges.

Trayport’s software permits the trading of energy commodity and utility derivatives. Its software forms an integrated platform which underpins over 85% of European utilities derivatives trading.

ICE acquired Trayport in December 2015 for $650 million. The merger was called in for review by the CMA in January 2016, and on 3 May 2016 it was referred for an in-depth investigation.

A group of panel members investigating the merger say it may be expected to lead to a substantial lessening of competition (SLC).

Simon Polito, inquiry chair, says: “Given the high level of dependence of market participants on Trayport’s integrated software offering, we provisionally concluded that the merged entity would have the ability and incentive to harm ICE’s main rivals’ ability to compete effectively. This could lead to higher prices, a general worsening of terms and less innovative trading solutions offered to traders in wholesale energy markets”.

The CMA is inviting responses to its provisional findings and remedies notice, and will continue to assess all the evidence before it makes a final decision.

Also, it is today (16 August) issuing a notice of possible remedies which outlines measures the CMA could take if it still believes the merger may be expected to lead to an SLC when it makes its final decision.


Recently, the CMA unveiled its plans to make banks “work harder for customers” and ensure the “benefits of new technology are fully exploited”.

The CMA’s final report on its retail banking market investigation concludes that “older and larger banks do not have to compete hard enough for customers’ business, and smaller and newer banks find it difficult to grow”.

UPDATE 18 August 2016

ICE has issued a statement concerning the CMA’s provisional findings.

ICE says it “does not agree with the findings which do not align with ICE’s vision for continuing to operate Trayport as an open and autonomous software provider”.

It says because the findings are provisional it has an opportunity to address the CMA’s concerns and “demonstrate how they do not reflect the manner in which Trayport will operate as a subsidiary of ICE”.

ICE says Trayport “will operate as a separate, independent business within ICE and will have a dedicated senior management team”.

It goes on to say: “As is customary with a CMA phase 2 review, the list of potential remedies includes the divestment of Trayport along with alternative protective measures. We do not believe that divestment is necessary, appropriate or in the best interests of Trayport’s customers.”

ICE adds that it is committed to retaining ownership of Trayport.