UK watchdog asks FNZ to divest GBST on competition concerns

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(Reuters) -UK's competition watchdog has provisionally found that the 2019 acquisition of investment technology firm GBST Holdings by rival FNZ raises competition concerns and has asked it to sell the business with an option to buy back certain capital markets assets.

"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," said Martin Coleman, Chair of the Competition and Markets Authority (CMA) inquiry group.

FNZ noted the CMA's report, but said it had no further comment at this stage.

An in-depth investigation into the deal was launched in April last year and the CMA initially decided to block the merger in November.

FNZ appealed to the Competition Appeal Tribunal in December and the CMA sought a remittal of its original decision, which required the company to sell the entire GBST business.

But after considering new representations and evidence during the remittal, the regulator said on Thursday its concerns could be addressed by requiring FNZ to sell GBST but with a right to buy back assets from GBST relating to its capital markets business.

Such assets would be restricted to those that do not affect GBST's competitiveness in the supply of retail investment platform solutions, CMA said.

(Reporting by Yadarisa Shabong and Shanima A in Bengaluru; Editing by Bernard Orr)