About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Go West, Old Exchange!

Subscribe to our newsletter

Following the EU’s block of the London Stock Exchange merger with Deutsche Boerse, LSE could consider North American suitors with lower regulatory hurdles

By: Jim Northey, Principal Services Consultant, Itiviti

Coming as no surprise on the same day as the letter invoking Article 50 to separate the UK from the European Union, the EU on March 29 blocked the all but forgone merger between the London Stock Exchange Group and Deutsche Boerse.

The proposed merger was an unwieldy deal from the start. There were considerable questions regarding how the two companies with highly distinct operations, technological implementations, and cultures could be merged together to provide economies of scale and synergies required by shareholders. In many ways, the deal became the ultimate tale of bad timing. Due to the tsunamis of MiFID II deadlines, Brexit, and the election of Donald Trump, a deal often categorised by industry pundits as an act of desperation, came to a halt in Brussels.

Both the European Securities and Markets Authority (ESMA) and the Financial Conduct Authority (FCA) in the UK are holding to their statement that Brexit will have no impact on the applicability of MiFID II nor its January 3, 2018 effective date. One has to wonder if the political negotiations that will go on for two years will undermine the mandate behind MiFID II and the unity presented by ESMA and the FCA. One would expect that the threat (or opportunity) of regulatory arbitrage will be employed during the Brexit negotiations. The Deutsche Boerse will be relatively immune to this wrangling.

However, the LSE Group, in the presence of disparate, and possibly even conflicting regulatory regimes in the future, may be faced with excessive costs of multiple regulatory regimes. One wonders if the LSE may look west for a US or Canadian suitor, in light of the CBOE-BATS merger. One would think that after the successful digestion of the NYSE and Interactive Data Corporation (IDC) that the Intercontinental Exchange (ICE) would be a leading candidate yet again. One gets the idea that the courtship of the LSE will continue as it has for nearly 20 years. With President Trump, Brexit, and a resolute EU, regulatory arbitrage opportunities will be the area to watch.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Hearing from the Experts: AI Governance Best Practices

The rapid spread of artificial intelligence in the financial industry presents data teams with novel challenges. AI’s ability to harvest and utilize vast amounts of data has raised concerns about the privacy and security of sensitive proprietary data and the ethical and legal use of external information. Robust data governance frameworks provide the guardrails needed...

BLOG

Past, Present, and Future of AI and Machine Learning in Trading and Investment Management

On this episode of FinTech Focus TV recorded at A-Team Group’s Buy AND Build Summit, Toby Babb of Harrington Starr sits down with David Marcos, Founder and Managing Partner at Quantoro Technologies, to explore how AI agents are redefining trading, portfolio management, and the investor experience. From simplifying complex investment strategies to the rise of...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Regulatory Data Handbook 2025 – Thirteenth Edition

Welcome to the thirteenth edition of A-Team Group’s Regulatory Data Handbook, a unique and practical guide to capital markets regulation, regulatory change, and the data and data management requirements of compliance across Europe, the UK, US and Asia-Pacific. This year’s edition lands at a moment of accelerating regulatory divergence and intensifying data focused supervision. Inside,...