Personal Finance: `The Merger Is Being Driven by the Big American Investment Banks'
Willcock, John, The Independent (London, England)
IF YOU'RE one of the growing army of private investors in the UK, you might have felt a little let down by this week's information memorandum on the proposed merger between the London and Frankfurt stock exchanges.
It seems a peculiarly cruel twist of fate that, just as direct investing in shares is finally taking off in this country, along comes something which may make the process more difficult and more expensive.
I say "may" because there was little information in the memo to say how the proposed iX exchange will treat the private investor. It is still unclear whether dealing will become more or less expensive, whether private investors will have to worry about which currencies stocks will be quoted and traded in, and whether paper share certificates will survive in this brave new world.
The document was aimed at the Stock Exchange's members, not its customers. Even so, the sheer opacity of the document was depressing. Just to give you a flavour, when it got onto the important question of how share trades will be settled under the new iX exchange, the memo said: "Achieving the medium-term goal of a consolidated settlement infrastructure will require close co- ordination between iX-international exchanges, central securities depositories and customers."
The sad fact is the merger is being driven by the big American investment banks that dominate the world markets these days. While their aim is to drive down dealing and settlement costs for big institutions, what it means for the private investor is largely irrelevant. This is ironic since it was in the US that the idea of popular shareholding was born.
It is hard to identify a champion for the private investor. The London Stock Exchange doesn't handle share dealing and settlement any more, so it can avoid the blame for any changes.
There are specific worries, for instance, over currencies. …
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Publication information: Article title: Personal Finance: `The Merger Is Being Driven by the Big American Investment Banks'. Contributors: Willcock, John - Author. Newspaper title: The Independent (London, England). Publication date: July 22, 2000. Page number: 2. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.
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