LSE merger: trading costs could 'double'

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The Independent Online

A French takeover of the London Stock Exchange could double the cost of retail share dealing, a powerful trade body representing stockbrokers has warned.

The Association of Private Client Investment Managers and Stockbrokers (APCIMS), which counts the stockbroking arms of Barclays, HSBC, Lloyds TSB and NatWest as members, says the average cost of a share trade could rise from £15 to £30.

The future of the LSE is in the hands of the Competition Commission, which is considering whether France's Euronext can bid.

This follows the withdrawal of a takeover offer from Deutsche Börse, which led to the resignation of the company's top executives earlier this month.

In a letter to the Competition Commission, the APCIMS says any merger of the LSE runs the risk of small shareholders being "priced out" of the market.

Angela Knight, the chief executive of the APCIMS, said: "We are talking about the individual, the Mr Jones and the Mrs Smith, who would get hit if the infrastructure costs rise at the LSE. What may be a small cost to an institutional business is a large cost to an individual."

In particular, the association is worried that an LSE merger may lead to the abolition of the Retail Service Provider. This is made up of market makers that offer a dealing service to banks and smaller stockbrokers.

Meanwhile, a plan to introduce EU laws governing clearing and settlement systems is set to be endorsed by MEPs in Brussels this week.

The agreement will signal the end of an era where settlement system Euroclear and its rivals have regulated themselves.

On Tuesday, the MEPs will fine-tune a report arguing for the creation of a centralised EU regulator, according to a draft seen by The Independent on Sunday.