A merger of the London Stock Exchange Group and Deutsche Boerse would create a “quasi-monopolistic” stock market by “dictating” fees and harming competition, a retail investors’ lobby in Europe has said.
The European Investors Association has written to the European Union’s competition commissioner, Margrethe Vestager, saying if the $28 billion merger goes ahead it would reduce choice for users.
Vestager will rule whether the tie-up can go ahead.
“European Investors also fears smaller exchanges, such as Euronext, might experience a decline in scale and scope with associated negative implications for investors and listed companies,” the lobby group said in a statement on its website dated Aug. 4.
A combined group could “dictate” listing costs and fees, account for 65 percent of all exchange traded funds in Europe, and clear 75 percent of all European exchange traded stock option equity derivatives, it said.
It would also create a “super dominant provider” of pan-European benchmark indices, bringing together the STOXX suite from Deutsche Boerse, and FTSE and Russell indices from the London Stock Exchange Group, it said.
Companies may also prefer to list in London after Britain leaves the European Union in order to circumvent EU rules, the lobby said, stopping short of asking Vestager to block the merger.
The EU is building a capital markets union to encourage more financing for companies from markets, a project that can only succeed with appropriate levels of competition, European Investors said. (Reporting by Huw Jones; Editing by Ruth Pitchford).
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