The Federal Trade Commission (FTC) has taken action against the proposed merger between Intercontinental Exchange, Inc. (ICE), a major operator of global exchanges and clearing houses and Black Knight, Inc., a mortgage loan technology provider. The FTC has requested a temporary restraining order (TRO) and preliminary injunction (PI) to halt the acquisition , which could mean less innovation and higher fees in the industry.

FTC Blocks a $13.1 Billion Deal

In a recent move, the FTC asked a federal court to issue a TRO and PI to prevent ICE from acquiring Black Knight until the FTC's administrative challenge to the deal was completed. Both ICE and Black Knight have agreed to the TRO.

While ICE primarily functions as an exchange operator, it maintains a division called ICE Mortgage Technology, which offers automated solutions for the real estate industry and directly competes with publicly traded Black Knight. The FTC's primary concern is that a merger between these two entities could result in a monopoly dominating the market, potentially imposing unfavorable terms on end customers.

The TRO and PI, if granted, would effectively stop the proposed merger, allowing the FTC to proceed with an administrative trial. This trial originates from a complaint filed by the FTC on 9 March 2023, which claims that the $13.1 billion merger would lead to higher costs, reduced innovation, and limited choices for lenders seeking tools necessary for generating and servicing mortgages.

The outcome of the FTC's actions could significantly impact the mortgage industry. If the merger is blocked, it may prevent the formation of a dominant player in the mortgage loan technology market, preserving competition and potentially benefiting lenders and consumers alike.

ICE Hits Record Volumes

Recently, the major global exchanges and clearing house operator reported a surge in trading volume, reaching new records and expanding its global network.

Trading volume in Euribor futures and options reached a 10-year high with 49.5 million contracts traded in March 2023. Euribor, the reference rate used by banks in the eurozone for short-term euro-denominated loans in the interbank market, is part of ICE's liquid European interest rate futures and options market. The record-breaking month saw an average daily volume (ADV) of 1.75 million contracts.

Additionally, ICE's overall trading activities in futures and options hit a new high on 13 March, with 14.45 million contracts traded, surpassing a peak record set three years ago during the onset of the COVID-19 pandemic. On top of that, the statement from ICE revealed that the financial futures and options portfolio reached a record 10 million contracts traded on 13 March, which is the highest level since 29 May 2018.

Furthermore, ICE's global reach is expanding, with the announcement of new access centers in Tokyo, Hong Kong, and Shanghai, as part of its Global Network expansion in the Asia-Pacific (APAC) region. This move follows significant investments in the APAC region and brings its managed services offering in line with other major financial centers operating in Europe and the United States.