German regulator: Merged stock exchange does not belong in London

Europe's most important stock exchange should not be based outside the European Union, Germany's financial regulator said Tuesday, criticizing merger plans by Germany's Deutsche Boerse and the London Stock Exchange (LSE) amid last week's Leave vote.

"It's hard to image the most important stock market in the euro region being steered from a location outside the European Union," said the president of the federal agency, Felix Hufeld.

"There must surely be some readjustments made there," he added while in Frankfurt for a conference on Tuesday.

Deutsche Boerse and the LSE said in March that they had agreed to the terms of an "industry-defining" merger that would create a European trading powerhouse with its legal headquarters based in London.

However, despite assurances from both companies that they were fully committed to the merger, Britain's planned exit from the bloc has given new life to criticism about the planned London headquarters.

Shareholders are expected to vote on the plans in July, and the two companies' merger deal still requires clearance from more than 20 authorities, including the EU's competition regulators and regulators in the German state of Hesse, who have the power to block the deal.

Germany's federal financial regulator no longer plays a formal role in the proceedings, though authorities are expected to pull on its expertise when seeking advice in order to make their decision.

Last update: Tue, 28/06/2016 - 17:49

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