Supplementary memorandum by the FSA
The proposed merger between the London Stock
Exchange and Deutsche Börse, along with the other mergers
taking place among exchanges, is in part a response to investor-led
demands for access to a wider range of investment opportunities,
faster access, greater liquidity, and lower trading costs. These
mergers also provide benefits to those seeking to raise capital,
often for very similar reasons. Advances in information technology
(the growth of e-commerce) have helped to facilitate this trend.
In particular, electronic trading, with its ability to link traders
internationally, is progressively replacing traditional, floor-based
trading. Regulated in a way that underpins investor confidence,
electronic markets provide the opportunity for more effective
and cheaper deployment of global capital, to the potential benefit
of both investor and issuers.