Vote will not affect merger of exchanges

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Europe’s biggest financial exchanges said on Friday their proposed merger is effectively bullet-proofed against a British vote on European Union membership.

London Stock Exchange and Deutsche Boerse have set up a committee to advise on the implications of the UK’s June 23 ‘Brexit’ vote, but said their politically sensitive merger proposal would prosper regardless.

“(It) would be well positioned to serve global customers irrespective of the outcome of the vote... the outcome of the referendum would not be a condition of the potential merger,” they said in a statement, despite warning a vote by Britons to leave would put the EU’s Capital Markets Union project at risk.

A deal would combine the LSE’s share-trading operation with the derivatives trading of Deutsche Boerse’s Eurex in a group worth almost $30bn. It would propel the companies to a similar scale as US exchange ICE, which has taken a huge slice of the European derivatives markets.

If Britons were to vote to leave the EU, then even if trading volumes in stocks and other instruments moved out of London the likely beneficiary would be Frankfurt, giving a combination of the exchanges an effective hedge.

Tuesday’s friendly deal between LSE and Deutsche Boerse follows two failed attempts to join forces in the past 16 years.