The UK’s Competition and Markets Authority (CMA) has asked wealth technology provider FNZ to divest GBST, which specialises in retail investment platform solutions, over competition concerns.
FNZ, which offers integrated software and servicing solution, agreed to buy Australia-based GBST for $185.6m in July last year.
CMA blocked the merger last November saying that the deal could erode the quality of service and lead to higher prices.
The latest development follows a reassessment of the deal by the watchdog following its request to the Competition Appeal Tribunal (CAT) for a remittal of its original ‘Phase II’ decision.
After considering additional and updated evidence submitted during the remittal, the watchdog said that the merged business would be the largest supplier in the market where few other significant suppliers offer effective and competitive alternatives.
CMA inquiry group chair Martin Coleman noted: “Based on the latest evidence, we have come to the provisional conclusion that a merger of FNZ and GBST would significantly decrease competition in the retail investment platform solutions market.”
Coleman also added that the reduction of competition will lead to higher prices or poorer service for retail platforms to the ultimate detriment of UK consumers.
CMA said its current concerns could be effectively addressed by FNZ by offloading GBST but with a right to buy back GBST’s assets affiliated to its capital markets business.
These assets would be limited to those that do not affect GBST’s competitiveness in the supply of retail investment platform solutions, the regulator stated.