London Stock Exchange warns on NYSE-Deutsche Boerse tie up

THE London Stock Exchange claimed yesterday that the planned tie up between its rivals, Deutsche Boerse and NYSE Euronext, would create a derivatives giant that would stifle competition in Europe.

The LSE, which had to abandon its own merger with Canada’s TMX Group last month, stepped up its opposition to its competitors’ plan.

The merger would “entrench the position both exchanges enjoy in derivatives by removing each other’s closest competitor and making new entry even harder,” it said in a briefing note.

Combining Deutsche Boerse’s derivatives house Eurex and NYSE Euronext’s Liffe would “remove the important competition that exists today and the potential for competition in the future,” it said.

The LSE wants to see indices licensed freely on competitive commercial terms and more real choice in post-trade services.

“Separation of the parties’ derivatives clearing pools will not suffice,” it warned.

It is likely to call for EU regulators to demand concessions such as selling one or both of the derivatives houses from the two exchanges before they merge.