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Stock exchange mergers would create huge integration projects

The proposed mergers of the London Stock Exchange and the Toronto Stock Exchange as well as the New York Stock Exchange (NYSE) and Deutsche Borse could create massive integration projects with huge IT savings.

The London Stock Exchange, which has stated its target of being a top five global exchange, is in advanced talks with TMX about a merger.

Germany's Deutsche Borse and the NYSE are also in talks about a merger.

The London Stock Exchange, which already has the Milan, Johannesberg and Oslo exchanges on its trading platform, is about to go live on its new trading system, known as MillenniumIT. It plans to go live on Monday (14 February).

Bob McDowall, analyst at Aite, says that it will take a couple of years for any of these potential mergers to realise the IT benefits.

He added that the fact that the MillenniumIT technology is not yet up and running on the London Stock Exchange there could be risks. "MillenniumIT is as yet an unproven technology on the London Stock Exchange. I presume this will be the core technology so this must be a risk they are evaluating."

He also raised the question of whether a deal between the Deutsche Borse and NYSE would have to be looked at by regulators in Europe because of its scale.


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