UK competition watchdog provisionally clears LSEG acquisition of Quantile Group
The UK Competition and Markets Authority (CMA) has provisionally cleared the anticipated acquisition by London Stock Exchange Group plc of Quantile Group Limited.
The CMA has provisionally found that the anticipated acquisition by LSEG of Quantile may not be expected to result in a substantial lessening of competition in the supply of multilateral compression of over-the-counter interest rate derivatives (OTC IRDs) in the UK as a result of input foreclosure.
The regulator notes that this is not its final decision, and it invites any interested parties to make submissions on these provisional findings by no later than 5pm on Friday 30 September 2022. Please make any response to these findings by email to LSEG_Quantile@cma.gov.uk.
LSEG is an international financial markets infrastructure and data business which holds a majority shareholding in the LCH clearing house group. A clearing house helps reduce the costs and risks of a transaction between a buyer and seller in a financial market, by standardising the steps leading up to payment.
Quantile also helps financial institutions to reduce risk in transactions, along with their overall regulatory costs, including through specific services such as multilateral compression for financial institutions dealing with derivative instruments.
Multilateral compression providers for over-the-counter interest rate derivatives depend on LCH to help build compression proposals for trades cleared at LCH. The CMA had voiced its concerns that after the acquisition of Quantile, LCH could refuse to allow third party compression providers to provide these services. LCH could also provide support to Quantile’s rivals in multilateral compression on worse terms. This could potentially lead to reduced competition in UK financial services, which is a key employer and contributor to GDP.