Oil Concerns Cause CMA to Refer ICAP Deal with Tullett Prebon to Phase 2
- UK's CMA refers Tullett Prebon deal with ICAP to phase 2 over oil product.
According to two respective regulatory filings just made in parallel with the London Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin (LSE) by ICAP and Tullett Prebon PLC, regarding their proposed transaction related to ICAP’s global hybrid voice broking and information business that Tullett Prebon will acquire, the status of the transaction has been referred for a phase 2 investigation by the Competition and Markets Authority (CMA) in the United Kingdom.
Finance Magnates has reported on many stages of this transaction which aims to become a significant addition to Tullett Prebon's operations as it intends to acquire the hybrid voice broker and information business from ICAP, which is subject to regulatory approvals including from the CMA.
The new world of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone , fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.
19 of 20 products cleared
The news arises from the CMA’s announcement today that it is deepening its investigation into the proposed deal, while it noted that from the nearly 20 overlapping product categories, which include Spot FX, Equity Derivatives, Interest Rate Swaps, and other related asset classes, only one product – oil - was found to be of potential concern for the CMA with regard to competition.
The CMA’s concerns following its phase 1 review are limited to the overlap in voice/hybrid broking of oil products where approximately £228 million in annual industry-wide revenues in Europe, the Middle East and Africa are generated
ICAP notes that it is confident that clearance will be obtained from the CMA and together with Tullett Prebon it is in the process of obtaining the necessary remaining regulatory and competition approvals from relevant authorities, as explained it its filing. Tullett Prebon added in its update that it intends to explore how best to satisfy the CMA's concerns, while it considers that the acquisition is on track to close in 2016.
Deal considered on track to close
Commenting in an official statement, Andrea Coscelli, CMA Executive Director of Markets and Mergers, and a decision-maker in the phase 1 investigation, said regarding the update: “In the context of declining voice/hybrid broker revenues over the last few years as a result of regulatory changes, the CMA did not find significant competition concerns in relation to 19 of the 20 overlap product categories for voice/hybrid broking services.”
Mrs. Coscelli added: “ The CMA’s concerns following its phase 1 review are limited to the overlap in voice/hybrid broking of oil products where approximately £228 million in annual industry-wide revenues in Europe, the Middle East and Africa are generated. In this area, the parties have a strong market position, there is more limited competition from brokers and other electronic platforms, and the CMA has heard a number of third party concerns. Given the potential for this merger to adversely affect customers for voice/hybrid broking of oil products, we think the acquisition warrants an in-depth investigation unless Tullett and ICAP can offer suitable undertakings to address the CMA’s concerns.”
In terms of what's next for ICAP if the deal closes, the company said it is preparing to rebrand itself as NEX as it consolidates its remaining business under ICAP NewCo, as highlighted by Finance Magnates in the middle of last month.
According to two respective regulatory filings just made in parallel with the London Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin (LSE) by ICAP and Tullett Prebon PLC, regarding their proposed transaction related to ICAP’s global hybrid voice broking and information business that Tullett Prebon will acquire, the status of the transaction has been referred for a phase 2 investigation by the Competition and Markets Authority (CMA) in the United Kingdom.
Finance Magnates has reported on many stages of this transaction which aims to become a significant addition to Tullett Prebon's operations as it intends to acquire the hybrid voice broker and information business from ICAP, which is subject to regulatory approvals including from the CMA.
The new world of Online Trading Online Trading Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone Online trading represents the trading of fiat currencies, digital currencies, commodities, stocks and indices, where traders and investors intend to make a profit, via the purchase or sale of the aforementioned products. This is done through an electronic network, made accessible by brokers in the form of an online trading platform or hub.Online trading continues to see a rapid growth year on year, due to a number of reasons. Firstly, the number of brokers offering their services, with more mone , fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.
19 of 20 products cleared
The news arises from the CMA’s announcement today that it is deepening its investigation into the proposed deal, while it noted that from the nearly 20 overlapping product categories, which include Spot FX, Equity Derivatives, Interest Rate Swaps, and other related asset classes, only one product – oil - was found to be of potential concern for the CMA with regard to competition.
The CMA’s concerns following its phase 1 review are limited to the overlap in voice/hybrid broking of oil products where approximately £228 million in annual industry-wide revenues in Europe, the Middle East and Africa are generated
ICAP notes that it is confident that clearance will be obtained from the CMA and together with Tullett Prebon it is in the process of obtaining the necessary remaining regulatory and competition approvals from relevant authorities, as explained it its filing. Tullett Prebon added in its update that it intends to explore how best to satisfy the CMA's concerns, while it considers that the acquisition is on track to close in 2016.
Deal considered on track to close
Commenting in an official statement, Andrea Coscelli, CMA Executive Director of Markets and Mergers, and a decision-maker in the phase 1 investigation, said regarding the update: “In the context of declining voice/hybrid broker revenues over the last few years as a result of regulatory changes, the CMA did not find significant competition concerns in relation to 19 of the 20 overlap product categories for voice/hybrid broking services.”
Mrs. Coscelli added: “ The CMA’s concerns following its phase 1 review are limited to the overlap in voice/hybrid broking of oil products where approximately £228 million in annual industry-wide revenues in Europe, the Middle East and Africa are generated. In this area, the parties have a strong market position, there is more limited competition from brokers and other electronic platforms, and the CMA has heard a number of third party concerns. Given the potential for this merger to adversely affect customers for voice/hybrid broking of oil products, we think the acquisition warrants an in-depth investigation unless Tullett and ICAP can offer suitable undertakings to address the CMA’s concerns.”
In terms of what's next for ICAP if the deal closes, the company said it is preparing to rebrand itself as NEX as it consolidates its remaining business under ICAP NewCo, as highlighted by Finance Magnates in the middle of last month.