Intercontinental Exchange Seeks Permission to Appeal Trayport Sale Ruling

CMA highlighted that ICE’s $650 million investment in Trayport could hurt competition for wholesale European utilities trades.

Following the UK’s Competition Appeal Tribunal’s judgment, which upheld a ruling that Intercontinental Exchange must sell Trayport, the energy trading technology shop it acquired for $650 million in December 2015, ICE has requested permission from the CAT to appeal to the Court of Appeal.

The Competition Appeal Tribunal said earlier this month that it backed a ruling by the UK antitrust watchdog that the deal could curb competition in the European energy trading market. The US-headquartered group refused the British competition regulator’s ruling, saying that it is disappointed with the decision and would consider an appeal.

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Following possible ICE’s complete sale of the platform, the new buyer also will have to be approved by the CMA in order to preserve competition.

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ICE beat arch-rival CME Group to buy the broker-tech platform license more than one year ago, but the UK`s competition authority now believes a complete divestiture is the only effective remedy to the substantial lessening of competition.

Earlier in August 2016, the CMA highlighted that ICE’s $650 million investment in Trayport could hurt competition for wholesale European utilities trades, where Trayport’s software helps facilitate 85 percent of activates. It also voiced concerns about possible worse terms for traders due to higher fees for executing and clearing trades.

Other market participants such as Nasdaq, EEX, Tradition and ICAP have told CMA that they fear OTC gas and power markets could be subject to the mandatory clearing provisions that are being applied to other commodity markets. According to CMA, all the third party submissions said that the sale of the Trayport business is the only comprehensive solution to all aspects of its competition concerns. The independent group rejected alternative remedial actions, such as forcing Trayport to offer better terms to customers, concluding that it would not be effective.

In response to CMA claims, ICE expressed its disagreement with the findings as they do not align with its vision for Trayport’s business, which licenses a technology platform to serve brokers for electronic and hybrid trade execution. In addition, the Atlanta-based exchange operator said that Trayport will continue to serve its customers—energy producers and consumers, brokers, exchanges and clearing houses—with its existing technology platform as it does today. It also will ensure that all customers are “treated fairly and reasonably and are not discriminated against, including with respect to pricing, access and support.”

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