London standards to govern iX, Davies predicts

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The Independent Online

Sir Howard Davies, chairman of the Financial Services Authority, said yesterday that he expects to see tougher London standards prevail in trading on the new merged Anglo-German iX stock exchange.

Sir Howard Davies, chairman of the Financial Services Authority, said yesterday that he expects to see tougher London standards prevail in trading on the new merged Anglo-German iX stock exchange.

Sir Howard said he expected to make a statement on the common regulatory framework "well before" the London Stock Exchange's 297 members vote on the deal on 14 September.

Speaking at the City regulator's first annual meeting, Sir Howard said working groups had been established between the FSA and the two German regulators involved in market regulation, and were making good progress.

Yesterday's statement will go some way towards answering brokers and lobby groups who have expressed concern about how regulation of the merged exchanges will work in practice. The two pan-European markets to be established following the merger will have companies listed in London and Frankfurt, and eventually Milan, Madrid and other European centres, trading side by side.

The results of the work, which will be published within a "short number of weeks", should form the basis for a common set of rules covering areas such as jurisdiction, insider trading, market transparency, and disclosure of price sensitive information.

Sir Howard said investors were keen the highest standards prevailed. For example, in the UK 90 per cent of trades have to be reported to the market within three minutes. In Germany, the regulator does not require disclosure to the market of trades done outside the order book, as long as it is aware of the them and can check for suspicious trades.

"We're keen on our transparency rules," he said. "That is not to say that there will be no compromise at all in this area but, in general, the market pressure is for high standards of transparency on the London-type model."

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