ICE Accepts Final CMA Verdict over Forced Sale of Trayport

Intercontinental Exchange (ICE) has lost its battle to keep hold of Trayport, the energy and commodities trading platform it acquired from BGC Partners and GFI Group in 2015, after the UK Competition and Markets Authority (CMA) issued its final verdict that the exchange operator must cease its commercial agreement with the platform and sell the assets.

ICE acquired the Trayport platform in December 2015 in a deal worth $650 million, but was ordered to divest the platform in October last year by the CMA, following an investigation that concluded that market participants had a “high level of dependence” on the platform due to weak alternatives and high barriers to entry.

The CMA stated that it feared ICE would be in a position to reduce competition between itself and its rivals leading to “increased fees for execution and clearing, and worse terms offered to traders.” 

In addition, the CMA also ordered ICE to terminate an agreement between it and Trayport to put ICE’s data on Trayport trading screens. ICE appealed to the UK’s Competition Appeal Tribunal (CAT) earlier this year, which ruled in favor of the CMA and upheld the decision that ICE must sell the Trayport platform to a CMA-approved buyer.

However, the CAT did recommend that the commercial agreement between ICE and Trayport should not be removed, a verdict that the CMA has not taken on board.

“We are disappointed by the CMA’s decision that the agreement for additional connectivity between ICE and Trayport signed in May 2016 should be terminated, thereby delaying when customers can benefit from the additional Trayport connectivity and greater access to ICE markets delivered by the suspended agreement,” ICE said in a statement.

“Nonetheless, we will now complete the CMA process, terminate the agreement as instructed and move forward with the divestment of Trayport expeditiously so that Trayport’s future ownership is resolved. In the interim, Trayport will continue to be operated separately and independently as it has been throughout the process.”