Bank of Ireland's takeover of the capital markets and wealth management divisions of Davy stockbrokers has been cleared by the Competition and Consumer Protection Authority.

The authority said it had formed the view that the proposed transaction will not substantially lessen competition in any market for goods or services in the state.

In July Davy announced it was to be sold in a three part deal that could be worth over €600m for shareholders.

Bank of Ireland was to buy the bulk of the business for €440m, comprising the wealth management and capital markets divisions and associated businesses.

75% of the proceeds was to be paid as cash on completion, expected to take place next year, with the balance due to be paid two years after completion, subject to meeting a number of criteria.

Luxembourg-based investor services group IQ-EQ also bought Davy Global Fund Management while AssetCo acquired its shareholding in the UK based Rize ETF for £16.5m, or about €19m.

Bank of Ireland is also to pay for excess cash at the deal's completion, which will be largely comprised of the proceeds of the DGFM and Rize transactions of about €125m.

In a statement, Bank of Ireland said it is pleased that the CCPC has approved the Davy acquisition.

"Davy is Ireland's leading provider of wealth management and capital markets services and is highly complementary to our business," it said.

"We continue to make good progress and expect the transaction to complete in H1 2022."

Davy announced earlier this year that it was putting itself up for sale after it was fined €4.13m by the Central Bank in March for breaching market rules.

It was the biggest fine of its kind ever levied on a broker in Ireland.

Davy was also dropped as a primary dealer in Irish government bonds, leading to the closure of its bond desk after news of the breaches.

The Central Bank said a "consortium" of 16 Davy employees, including a group of senior executives, bought what are understood to have been unlisted corporate bonds from a client at an agreed price.

But the client was not made aware that the consortium was made up of Davy employees.

The 16 identified in the Central Bank probe included Davy's then chief executive, Brian McKiernan, who quit alongside its deputy chairman and head of bonds in the aftermath of the fine.

Davy is Ireland's largest wealth manager, managing over €16 billion of client assets, and a corporate broker for some of the largest firms listed on the Irish stock exchange.