FN: LSE intensifies its fight against NYSE-Börse deal

25 July 2011

The London Stock Exchange has stepped up its lobbying efforts against the merger between NYSE Euronext and Deutsche Börse, claiming that the entity would eliminate competition in the European derivatives market and that the two companies have a record of acting against customers' best interests.

The LSE, which is attempting to break into the European listed-derivatives market and whose proposed merger with Canada’s TMX Group fell apart in June, has sent the briefing note to clients in a clear indication that the London exchange is attempting to whip up industry opposition to the deal.

The LSE’s briefing note, which summarises its submission to the Commission probe, slammed the proposed tie-up, claiming it would result in “a single provider of derivatives trading and clearing in Europe, eliminating competition”, “creating insurmountable barriers to entry for other providers” and “hurting customers and market users”.

The LSE is under enormous pressure to do a deal that will diversify and globalise its franchise amid growing competition in the global exchange market. The NYSE Euronext Deutsche Börse tie-up will dwarf the LSE, which is also threatened by the agreed tie-up between its two largest rivals in the secondary equities market, Chi-X Europe and Bats Europe.

Steven Travers, head of regulatory strategy at the LSE, said in an email statement: “We have been very clear and consistent in our view as to the damaging effects on competition that the merger will have, should it proceed. We believe it essential that the European Commission carefully review the proposed merger and ensure that full and appropriate obligations are required of Deutsche Börse and NYSE Euronext to ensure healthy competition, to protect customer choice and to prevent the undesirable leverage of market power.”

Full article

© Financial News