Thursday, June 15, 2006

Doubts over regulatory reach in exchange mergers

Could the burdens of Sarbanes-Oxley's regulatory requirements take hold across the Atlantic?

Financial Times reports that UK's Financial Services Authority has noted that US securities regulation could possibly extend its reach into the UK market, given certain circumstances that might arise out of US ownership of the London Stock Exchange.

These worries over "regulatory creep" were originally voiced when the exchange merger deals were gearing up; see "Exchange Fever" post.

NYSE chief John Thain is still pushing for the Euronext-NYSE merger, saying that it would boost Paris' standing as a regional financial center. He went on to add that the deal would create a "world champion", invoking (and enlarging) the currently favored notion of strategically aligned business entities. From NEWS.com.au:

"An NYSE-Euronext marriage would give birth to a world champion, and that would not be the case in the scenario of a Euronext-Deutsche Boerse merger."