The latest development in the ongoing beauty contest to become Euronext's merger partner would not result in a pan-European derivatives exchange, a source close to the matter last week told FO Week.
A working group led by Henri Lachmann, chairman of Schneider Electric, and commissioned by French business lobbying group Paris Europlace, proposed a combined European equity exchange business, based on Euronext and Deutsche Börse, built along federal lines.
Crucially, however, the proposal cast out the possibility of the respective derivatives businesses, Euronext Liffe and Eurex, also joining forces. FO Week's source said that Euronext was also keen to avoid any anticompetitive or monopolistic issues potentially thrown up by the European derivatives tie-up, which would entail over 90% of all European exchange traded derivatives contracts being offered on one exchange.
The existence of London Stock Exchange, a significant equity player with practically no derivatives presence, would prevent a similar situation...