The European Commission’s competition authority announced on Sept. 28 that it has decided to conduct an in-depth investigation of the proposed merger of Deutsche Boerse and London Stock Exchange Group. The competition authority has until Feb. 13 to complete its review.
The Commission said its initial review identified several areas where the proposed merger could lead to the reduction of competition, including clearing, trading, ETFs, repos and German stocks. With respect to clearing, the Commission said the combination of Eurex Clearing with LCH.Clearnet would eliminate competition in the clearing of bonds, derivatives and repos and adversely affect competing trading venues that depend on clearing services provided by LCH.Clearnet.
The two exchanges issued a statement indicating that they are exploring a potential sale of LCH.Clearnet SA, the group’s Paris-based branch, to address the concerns about competition. LCH.Clearnet SA provides clearing services for equities and derivatives listed on Euronext as well as credit default swaps, fixed income securities and repos.