LSE boss slams regulation
LONDON Stock Exchange chief executive Xavier Rolet yesterday warned that uncertainties over the regulatory environment are crippling the City.
“It is almost inhumane, the level of regulatory uncertainty financial services businesses are facing today,” Rolet told City A.M., adding that getting to grips with the ever-changing regulatory landscape “goes beyond the abilities of any rational human operator”.
Rolet cautioned that the first impact of such deep-rooted uncertainty is always to stifle enterprise, a consequence he said the LSE had witnessed first hand with the growth companies listed on its Alternative Investment Market.
“The first thing affected by extreme regulatory uncertainty is that it inhibits appetite for making bets, affecting innovation,” he said. “We have seen that in our junior market very clearly.”
Rolet said regulation drives 80 per cent of the decisions made by the LSE, from the changes affecting the clearing of derivatives to the regulation of the balance sheets of its banking clients.
Rolet’s comments came as the LSE’s first quarter results showed his drive to regain the exchange’s competitive edge is finally starting to pay off. The bourse has managed to claw back market share in cash equities trading from new rivals like Chi-X and Nasdaq OMX after over a year of cost-cutting and streamlining measures. The LSE gained almost three per cent in market share of FTSE 100 cash equities trading over the first quarter, from 54.8 per cent in April to 57.4 per cent in June.
Group revenue rose by one per cent to £158.2m despite the impact of moves to improve competitiveness by reducing tariffs.