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Energy trading software merger faces in-depth UK investigation

Staff writer |
Intercontinental Exchange’s completed acquisition of Trayport faces being referred for an in-depth investigation by the CMA.

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Intercontinental Exchange (ICE) is a global operator of exchanges and clearinghouses. It has its own proprietary software which facilitates trading of energy commodity and utility derivatives on its exchanges.

Trayport is a provider of software which facilitates the trading of energy commodity and utility derivatives. Trayport’s Trading Gateway, configured with its desktop screen Joule, enables trading across multiple energy and commodity markets on a single screen, and it is the most widely used price discovery and trade initiation tool for the trading of many types of European and UK energy derivative products.

The CMA is concerned that ICE could use its ownership of Trayport’s software to raise prices and/or reduce the quality of its service to rival exchanges, brokers and clearinghouses in order to divert its rivals’ trades to ICE’s exchange and clearinghouse and/or to protect its market position from increased competition.

The merger will therefore be referred for an in-depth phase 2 investigation by an independent group of CMA panel members unless ICE is able to offer undertakings which address the competition concerns.

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