In reaction to press speculation over the consequences of the merger between the European exchanges London Stock Exchange Group and Deutsche Borse, LSEG published an official statement to clarify some of those issues, notably the ones raised followed the independent study by Prof. Dr. Dirk Schiereck, Chair of Corporate Finance at Technische Universität Darmstadt.
Schiereck’s study, commissioned by Deutsche Borse and entitled “Why the merger between Deutsche Borse and London Stock Exchange Group will strengthen Frankfurt as a financial centre”, said that the merger could“substantially increase the current quality of regulation” and that London could see a “large number of financial and supervisory institutions” relocating to Frankfurt.
From then on, the press has been insisting on the case of potential relocation of LSEG to Frankfurt, even asking outgoing US CFTC (Commodity Futures Trading Commission) chairman Timothy Massad’s opinion on such issues.
In an attempt to calm stakeholders and policy makers, LSEG explained in its statement that the possibility of relocation of its business to Frankfurt “is not contemplated and any statements suggesting otherwise are inaccurate and misguided.”
“As was stated in the LSEG Scheme of Arrangement Circular dated 1 June 2016, LSEG and Deutsche Börse are committed to maintaining the strengths and capabilities of their respective operations in London and Frankfurt. Further, the existing regulatory framework of all regulated entities will remain unchanged and, in particular, there is no intention to move the locations of Eurex or Clearstream from Frankfurt, LCH from London and the US, Monte Titoli from Milan or CC&G from Rome following completion”, said the press release.
London Stock Exchange Group CEO Xavier Rolet has recently explained to UK lawmakers that moving euro-clearing out of London has the potential for systemic repercussions.