Select Committee on European Union Minutes of Evidence

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.

June 2000

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