The takeover Panel gave the stockbroker Evolution a "put up or shut up" deadline of 28 October to table a bid for its smaller rival Panmure Gordon.
Evolution said last month it was considering bidding for Panmure Gordon, one of London's smaller brokers, which has a market capitalisation of £42m and is 44 per cent-owned by Qatar's QInvest arm. Evolution shares closed up 1.8 per cent on news of the panel's ruling, while Panmure Gordon shares were unchanged.
Dealers, who declined to be named, said they believed it was quite likely Evolution would end up deciding not to bid for its smaller rival. Last month, Panmure Gordon's chairman, Edmond Warner, said that he saw "strong, independent future" for his company and added that Panmure had the backing of its Qatari investors.
Their rival broker, Cenkos Securities, also ruled itself out of making a bid for Panmure last month.