Deutsche Börse, LSE Merger Deadline Set to Be Extended

European competition watchdogs are seeking to once again extend their deadline for ruling on the Deutsche Börse takeover of London Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term Group in order to allow regulators more time to review the firms’ Clearing House Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term operations, according to a Bloomberg report.

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The proposed delay of between 5 to 10 days will give regulators the opportunity to question others in the market about any remedies offered by the companies - also known as a market test.

Just last month, Finance Magnates reported that the landmark merger between the two exchanges had again raised concerns from European Union regulators, fearing that rivals would be pushed out of the market given the scope of the newly merged entity.

Competition Concerns

The takeover, which is valued at around $12 billion, would create Europe’s dominant operator in indices, stock markets and clearing, which is the part of the deal that has raised most worries.

The Deutsche Börse deal has been pushed back by the EU's watchdogs several times from its initial deadline of 13th February. They also prevented a similar transaction in 2012 amid concerns it could shut out rivals to the clearing market.

Plans are for LSE’s swaps-clearing business to be placed under Eurex, Frankfurt’s derivatives clearinghouse. While this is seen as making derivatives trading more efficient, it could also give the companies a worrying amount of control over the market. LSE has thus made moves to sell a French clearinghouse to reassure regulators about competition issues.