ICE must sell Trayport energy trading platform, says UK's CMA

Intercontinental Exchange (Ice) has been told by UK regulators that it should sell its Trayport software platform less than a year after its acquisition, in order to free up competition in the market for wholesale energy trading.

The Competition and Markets Authority (CMA) said Ice's ownership of the platform, which underpins around 85% of European utility trading, could lead to fees for execution and clearing being increased and traders being offered worse terms.

The CMA also found that the merger would be likely to result in a loss of competition between Ice and its rivals to launch new products, trading solutions and enter new markets.

All third parties that made submissions to the CMA supported its provisional findings from August, with the majority agreeing that the sale of the Trayport business was the only effective remedy in response.

"Participants in this market have a high level of dependence on Trayport’s integrated software offering, alternatives are weak and barriers to entry in this market are high," said Simon Polito, chair of the inquiry.

"We found that the merged company would have the ability and incentive to use its ownership of Trayport to restrict the competitiveness of ICE’s rivals. This could lead to a range of adverse consequences for traders and venues in the vitally important wholesale energy markets including higher prices, a general worsening of terms and quality and less innovative trading solutions."

The conclusion of the inquiry was to decided that Ice will have to sell Trayport to a new owner, to be approved by the CMA, in order to preserve competition.