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Regulator issues second rebuke of FNZ-GBST merger

Deal would ‘substantially reduce competition’ and lead to ‘higher prices or poorer service’ in UK market


The UK’s Competition and Markets Authority (CMA) has completed another investigation into the merger of retail investment platform giants FNZ and GBST, following a request from the competition appeal tribunal.

The panel of independent CMA members took into consideration additional evidence and documents provided by both firms and reached the same conclusion the regulator did in 2020.

The fusion of the two platforms could “substantially reduce competition” and lead to investment platforms, and the UK consumers that use them to manage their pensions and investments, facing “higher costs and lower quality services”, the watchdog said.

The evidence analysed by the independent panel showed that FNZ and BST are “close competitors” and only a small number of other suppliers offer effective alternatives.

If FNZ’s M&A deal with GBST will go ahead, it would create the largest supplier in the market resulting in a substantial decrease in competition, the CMA concluded.


The regulator added that there are provisions that FNZ can take to avoid impacting competition in the market, such as selling GBST and then buying back a limited set of assets which would be restricted to those that do not affect GBST’s competitiveness in the retail investment platform solutions space.

Martin Coleman, chair of the CMA inquiry group, said: “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.

“The reduction of competition in the market could lead to higher prices or poorer service for retail platforms to the ultimate detriment of UK consumers who hold pensions or other investments that are managed by these platforms.”

A spokesperson for FNZ added: “FNZ notes that CMA has published its latest report as part of its ongoing review of FNZ’s acquisition of GBST, now well into its second year. We have no further comment at this stage.”

The CMA has invited views on the provisional findings and proposed remedy which will be considered by 30 April 2021.

International Adviser contacted GBST, but the firm did not provide a comment in time for publication.


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