CMA Finds ION’s Purchase of Broadway Technology Raises Competition Concerns

The UK regulator’s concerns relate 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 revealed its findings.

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

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

The CMA stated it 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.

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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.

A wide range of evidence

“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,” Joel Bamford, CMA senior director, said.

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.

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