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Misys deal could face probe over competition

The Misys deal may face investigation by the competition authorities depen-ding on how the Office of Fair Trading defines market share.

Misys is referring the DBS deal to the OFT this week and is confident it will pass the competition regulations. But investigations by the OFT and possible further action will depend on how the OFT defines what constitutes a 25 per cent IFA market share.

Misys says it has only 13 per cent of the value of the IFA market based on productivity but it has 25 per cent of total IFAs. The OFT decides on the definition on a case-by-case basis.

Misys argues that nat-ional IFA firms such as InterAlliance have higher productivity levels than smaller firms which join networks.

It says as a measure of best practice, it is making a voluntary submission to the OFT within 48 hours but it is confident that the competition issues do not pose a problem. If the OFT bel-ieves the deal goes against competition, it will refer it to Trade and Industry Secretary Patricia Hewitt who will decide if it should be passed on to the Competi-tion Commission.

Misys insurance division chief executive Ivan Martin says: “There are a number of other big players in the market. Our members are not owned by Misys and are free to move, as customers are.”

DBS chairman Ken Davy says: “We do not compete just in the IFA sector but across the whole of the marketplace with the likes of banks, building societies and other networks.”

IFA Tenet Group chief executive Simon Hudson says: “I do not know if Misys can buy DBS without it going to the Competition Commission as I know it was looked into when they bought IFA Network.”

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