The London Stock Exchange and are increasingly confident French authorities will not try to disrupt their proposed tie-up, as doing so would derail any French attempt to make a land grab for euro clearing following Brexit, according to people close to the deal.
Blocking the Anglo-German exchange merger would scupper the sale of LCH SA, the continental arm of the clearing house LCH. Clearnet, to Euronext, leaving the French without a top-tier clearing house to process any business were it to be repatriated to the eurozone from the City of London.
The London Stock Exchange opened talks to sell its French clearing house late last year in order to smooth the passage of its £21bn merger with Deutsche Boerse through the European competition approval process.
Clearing is one of the vital but unglamorous back-office functions that are a rich source of revenues for stock exchange operators. It involves ensuring that one party to a trade receives their securities and the other their money after a trade is executed even if one side of the transaction goes bust.
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