London Stock Exchange asked to delay iX merger vote

Click to follow
The Independent Online

The London Stock Exchange (LSE) faced mounting pressure on two fronts yesterday over its proposed merger with Deutsche Börse, with the emergence of an influential brokers' caucus demanding more information on the tie-up, combined with a renewed call from smaller listed companies for the vote to be delayed.

The London Stock Exchange (LSE) faced mounting pressure on two fronts yesterday over its proposed merger with Deutsche Börse, with the emergence of an influential brokers' caucus demanding more information on the tie-up, combined with a renewed call from smaller listed companies for the vote to be delayed.

The Smaller Companies Markets Committee, headed by Brian Winterflood, chairman of Winterflood Securities, yesterday submitted a letter to the LSE asking for clarification on 28 points about the merger.

These include questions on the regulatory framework for the merged exchange, known as iX; the resources that iX would devote to promoting smaller-company markets, and clearing and settlement operations. The Winterflood-led grouping includes Collins Stewart, Peel Hunt, Beeson Gregory, Seymour Pierce, Shaw Capital, Teather & Greenwood and others.

Its questions echo concerns from the Association of Private Client Investment Managers and Stockbrokers (Apcims) - of which Mr Winterflood is an associate member - about the pace and structure of the "merger of equals" with Deutsche Börse.

Both the LSE and its Frankfurt rival vote on the deal on 14 September. Recent polls have suggested that the LSE may not win the support of the 75 per cent of members its needs to go ahead with the merger.

A spokesman for the LSE could not confirm that the Winterflood missive had been received but said there was no question of the vote being delayed. LSE officials said that many of the calls for information have either already been answered, or fall outside their areas of responsibility and they are therefore unable to answer them. In a separate announcement, the LSE named the members of what it termed the Senior Market Group, which it says will channel independent customer views to the iX board.

The group will be chaired by Hector Sants, chairman of DLJ International Securities and a member of the LSE board, while Dr Stephan Schuster, Deutsche Bank's managing director and head of policy issues, will act as deputy chairman. A number of other bodies will be set up under Mr Sants' panel to represent groups of individuals, such as private client brokers and institutional investors, and to tackle contentious issues such as technology and admission to trading. Despite the LSE's moves, John Pierce, chief executive of the Quoted Companies Alliance renewed calls for a delay to the vote. The QCA represents companies outside the FTSE 350. Mr Pierce is due to meet with Don Cruickshank, chairman of the LSE, next week to run through his concerns.

Comments