The London Stock Exchange’s proposed mega-merger with Deutsche Borse has become subject to growing controversy, as the British parliament prepares to debate the deal.
The merger, announced in March of last year, will see the London Stock Exchange merge with Frankfurt’s main market, the Deutsche Borse, in an ‘industry-defining’ tying up two of Europe’s biggest stock exchanges.
However, in the wake of the UK’s decision to leave the European Union criticism has grown, with many worried by the idea of the City of London being ‘locked in’ to the EU post-Brexit.
Anne Marie Morris, the Tory MP for Newton Abbot, last week wrote to prime minister Theresa May asking her to force the Bank of England to delay the merger until Brexit is complete. She said:
“The London Stock Exchange locked in the EU does not bear thinking about. It has been stated publicly that the headquarters will remain in London, with some operational capability in Frankfurt, but longer term, I do not buy it.
“It has been said that the European Commission must continue to have oversight of the London Stock Exchange. So we leave the EU and the single market only to have our stock exchange regulated in Frankfurt?”
The mounting political pressure comes just weeks after the London Stock Exchange Group announced plans to sell its 50 percent stake in the French clearing arm of LCH to Euronext in a deal worth 510 million euros.
The sale comes after the European commission raised anti-trust concerns over the proposed merger with Deutsche Borse.
In a statement, the LSE said: “The proposed sale of LCH SA would be subject to review and approval by the European commission in connection with the recommended merger of LSEG and Deutsche Borse AG which was announced on 16 March 2016. It would also be conditional on the successful closing of the merger.”
The merger between the two stock exchanges will be debated in Parliament on Tuesday at 4.30pm.