U.K. competition watchdog calls for ICE to divest Trayport
On Oct. 17, the U.K. Competition and Markets Authority issued a report recommending that Intercontinental Exchange fully divest Trayport, the trading platform that ICE bought from BGC last year, because of concerns about the impact on competition in wholesale energy markets.
The CMA stated that ICE could use its ownership of Trayport's platform to reduce competition between itself and its rivals, which could lead to increased fees for execution and clearing.
"Having looked at this in detail and sought views from a range of market participants, we believe that the only effective way to preserve competition is to require ICE to sell Trayport," said Simon Polito, chair of the CMA inquiry panel.
In a Nov. 1 earnings call, ICE CEO Jeffrey Sprecher said ICE would appeal the CMA's decision. Sprecher said the decision reflected a "simplistic assessment of market dynamics" and relied largely on the views of conflicted third parties.
"We're committed to continuing Trayport's operations in London," he said. "It's important for us that we pursue our right of appeal in connection with this pro-customer, pro-market transaction."
