Xavier Rolet, the chief executive of the London Stock Exchange, is staking much of his credibility on an approach for a majority stake in LCH.Clearnet.
The LSE said yesterday it was in talks with the clearing house about a potential bid. Any deal is likely to involve the LSE taking a majority stake in LCH rather than bidding for the whole of the company.
Faced with competition from Markit, a UK post-trade operator, the LSE's potential bid was estimated at more than £800m, but the exchange stressed that talks were preliminary.
The LSE said: "These discussions are at an early stage and there can be no certainty that any action or agreement will result."
Control of the London-based LCH would bring the LSE into line with rivals that already own a clearing house in their main market. Clearing houses sit between trading partners and hold cash to make sure a deal is completed if one side defaults.
The London exchange was left behind in the latest round of jostling for position when its planned merger with Canada's TMX exchange failed two months ago.
After shareholders gave him the benefit of the doubt over TMX – his first attempt at a major acquisition – Mr Rolet is staking his deal-making credentials on a second approach for LCH, which he had courted before entering serious talks with TMX.
A majority stake in LCH could help the LSE capitalise on new rules intended to stabilise the $600 trillion (£370 trillion) market for over-the-counter (OTC) derivatives. Regulators want such transactions to be recorded through clearing houses to replace opaque private one-to-one contracts.
To win control of LCH, Mr Rolet will have to persuade its target's scattered shareholders, which include NYSE Euronext with 9 per cent, the London Metal Exchange with 8 per cent, and an array of banks and brokers.