FSA pledge on exchanges merger

By THIS IS MONEY
Updated:

 

The Financial Services Authority and its German counterparts today said that they would work together on regulating the planned merger of the London and Frankfurt stock exchanges to form iX.

Sir Howard Davies, FSA chairman, said: 'Our overriding objective is to ensure that iX's proposals take full account of our requirements for market integrity, investor protection and the prevention of market abuse.

'We have been working closely with our German colleagues to draw up a regulatory plan that will ensure effective supervision of iX. There is more work to do and we will be seeking clear commitments from the iX management team as they put more flesh on their proposals.'

The three regulators - the FSA and the federal and local German authorities - have set up six working groups to deal with questions of market structure, listing and ad hoc requirements, transaction reporting and market surveillance, legal issues concerning insider trading and market abuse and corporate takeovers.

The FSA said there would be a common approach with effectively a permanent forum in place to discuss any new issues. London exchange chairman Don Cruickshank said the statement marked significant progress and it was helpful to have it ahead of the meeting to approve the tie-up on 14 September.

But Angela Knight, chief executive of Apcims which represents private client stockbrokers, said the document still begged a number of questions and was not enough to sort out the questions that worried her members.

The Centre for the Study of Financial Innovation said in a report today that iX is unlikely to improve the efficiency of European markets. The report also called on regulators to make sure the exchange does not exploit its privileged position.

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