With a merger between Deutsche Börse and the 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 financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges.
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 financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges.
Read this Term (LSE) still on track to take place in July, not everyone has embraced the agreement – with no shortage of critics to the landmark merger, many have questioned the plausibility of such an aggregated operation, leading Portugal to call for antitrust actions against the agreement.
How Did We Get Here?
Over the past few months, the merger between Deutsche Börse and LSE has hit a number of speed bumps and in some cases snags, such as the convulsive fallout of the Brexit
Brexit
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum.
In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.
The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019.
Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter.
While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal.
Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time.
Brexit Creating Ongoing Issues in with Europe
While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner.
Terms of this trade agreement must be met by January 1st, 2021.
Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020.
Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U.
This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy.
For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent.
The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe.
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum.
In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.
The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019.
Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter.
While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal.
Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time.
Brexit Creating Ongoing Issues in with Europe
While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner.
Terms of this trade agreement must be met by January 1st, 2021.
Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020.
Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U.
This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy.
For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent.
The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe.
Read this Term referendum in the end of June, which would have ramifications on the valuation of the merger.
Despite this, the merger has still steamed forward, now reaching a new hurdle, this time warning of antitrust repercussions, as well as an entity that was capable of sequestering access to alternative forms of finance. As such, Portugal has pushed Europe's antitrust chief to prevent the $30 billion merger.
Earlier this week, Deutsche Börse announced that it lowered the LSE merger threshold required for acceptances under the Exchange Offer Acceptance Condition from 75% to 60%. Overall, the acceptance period of the Exchange Offer was given an extension of two weeks and will now expire on July 26, 2016. The lowering of the minimum acceptance threshold is in line with the German securities acquisition and takeover act.
The decision was reflective of feedback from a number of institutional index funds that are only technically capable of tendering their Deutsche Börse shares after the minimum acceptance threshold has been reached and once the untendered shares are replaced by the tendered shares in the respective index – index funds represent up to 15% of Deutsche Börse shares.
The merger would negatively impact the functioning of the capital market
According to Portugal's Finance Minister Mario Centeno, in a letter to Competition Commissioner Margrethe Vestager: "The merger would negatively impact the functioning of the capital market. Such a concentration of trading and trade-related services poses a clear threat to competition. It also endangers the viability of several European stock exchanges.”
Portugal is not the first country to voice such opinions towards the merger – to date, France and Belgium have both expressed their dissatisfaction with the merger, who ultimately serve as vessels strategically suited to push for such actions, given their position in continental affairs. For its part, Portuguese opposition to the merger likely focuses on its own market access through Euronext, of which the Lisbon Stock Exchange is a constituent part.
Portugal has been pursuing a more extant role for its equity markets, which have in recent months heated up. Though the wounds of the 2010-13 debt crisis are still fresh, regardless of the opposition, such fears or concerns are likely to go unanswered barring some fresh development.
With a merger between Deutsche Börse and the 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 financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges.
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 financial market and some of the most visible entities in the entire industry. Nearly every developed country boasts a domestic stock exchange, with many varying in importance and size.The largest stock exchanges in the world as of May 2020 include the New York Stock Exchange (NYSE), NASDAQ, Tokyo Stock Exchange, Hong Kong Stock Exchange, London Stock Exchange, EURONEXT, and Shenzen Stock Exchange. What Functions Do Stock Exchanges Perform?Stock exchanges have a variety of utility within the modern financial system. As its name suggests, a stock exchange is often the most important component of a stock market.Another crucial element of stock exchanges is the prevalence of initial public offerings (IPOs) of company stocks and bonds to investors. This is performed in both the primary market and subsequent trading the secondary market.Not any company or entity can be included on a stock exchange. To be able to trade a security on a certain exchange requires the listing of specific securities. Trading on an exchange is restricted to certified brokers who are members of the exchange. The traditional image of crowded trading floors has waned in recent years to include other various other trading venues.This includes electronic communication networks, alternative trading systems and "dark pools" which have ultimately seen the migration of trading activity away from traditional stock exchanges.
Read this Term (LSE) still on track to take place in July, not everyone has embraced the agreement – with no shortage of critics to the landmark merger, many have questioned the plausibility of such an aggregated operation, leading Portugal to call for antitrust actions against the agreement.
How Did We Get Here?
Over the past few months, the merger between Deutsche Börse and LSE has hit a number of speed bumps and in some cases snags, such as the convulsive fallout of the Brexit
Brexit
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum.
In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.
The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019.
Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter.
While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal.
Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time.
Brexit Creating Ongoing Issues in with Europe
While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner.
Terms of this trade agreement must be met by January 1st, 2021.
Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020.
Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U.
This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy.
For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent.
The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe.
Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum.
In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.
The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019.
Active Prime Minister Boris Johnson was elected Prime Minister the following month, who was well-known as a headstrong Brexit supporter.
While the United Kingdom was predicted to leave exit the EU by October 31st, 2019, the U.K. Parliament sought out a deadline extension that delayed voting on the new deal.
Following Boris Johnson’s reelection, Brexit occurred on January 31st, 2020 at 11 pm Greenwich Mean Time.
Brexit Creating Ongoing Issues in with Europe
While the United Kingdom is in a transition period following its departure from the EU, the U.K. is negotiating its complete trade relationship with the EU, which is the United Kingdom’s largest trade partner.
Terms of this trade agreement must be met by January 1st, 2021.
Should terms of this trade agreement take longer than the projected resolution date of January 1st, 2021 then the U.K. must acquire an extension no later than June 1st, 2020.
Failure to do so will result in the U.K. is subject to tariff and host rule changes exercised by the E.U.
This situation is referred to as the “no-deal” Brexit and should this occur the consequences could result in a significant fallout of the U.K. economy.
For the past few years, many banks and lenders operating previously in the UK had been given passporting rights to the European continent.
The lingering uncertainty caused by Brexit resulted in many of these lenders relocating their European headquarters within continental Europe.
Read this Term referendum in the end of June, which would have ramifications on the valuation of the merger.
Despite this, the merger has still steamed forward, now reaching a new hurdle, this time warning of antitrust repercussions, as well as an entity that was capable of sequestering access to alternative forms of finance. As such, Portugal has pushed Europe's antitrust chief to prevent the $30 billion merger.
Earlier this week, Deutsche Börse announced that it lowered the LSE merger threshold required for acceptances under the Exchange Offer Acceptance Condition from 75% to 60%. Overall, the acceptance period of the Exchange Offer was given an extension of two weeks and will now expire on July 26, 2016. The lowering of the minimum acceptance threshold is in line with the German securities acquisition and takeover act.
The decision was reflective of feedback from a number of institutional index funds that are only technically capable of tendering their Deutsche Börse shares after the minimum acceptance threshold has been reached and once the untendered shares are replaced by the tendered shares in the respective index – index funds represent up to 15% of Deutsche Börse shares.
The merger would negatively impact the functioning of the capital market
According to Portugal's Finance Minister Mario Centeno, in a letter to Competition Commissioner Margrethe Vestager: "The merger would negatively impact the functioning of the capital market. Such a concentration of trading and trade-related services poses a clear threat to competition. It also endangers the viability of several European stock exchanges.”
Portugal is not the first country to voice such opinions towards the merger – to date, France and Belgium have both expressed their dissatisfaction with the merger, who ultimately serve as vessels strategically suited to push for such actions, given their position in continental affairs. For its part, Portuguese opposition to the merger likely focuses on its own market access through Euronext, of which the Lisbon Stock Exchange is a constituent part.
Portugal has been pursuing a more extant role for its equity markets, which have in recent months heated up. Though the wounds of the 2010-13 debt crisis are still fresh, regardless of the opposition, such fears or concerns are likely to go unanswered barring some fresh development.
