SO IS BRITAIN PLC BEING SOLD DOWN THE RIVER? the Americans Are Coming for the Stock Exchange, but City Insiders Say That It Should Not Be Protected

The Evening Standard (London, England), December 12, 2006 | Go to article overview

SO IS BRITAIN PLC BEING SOLD DOWN THE RIVER? the Americans Are Coming for the Stock Exchange, but City Insiders Say That It Should Not Be Protected


Byline: JONATHAN PRYNN

IT is, arguably, the last significant City of London institution with the Union Flag still fluttering over its ramparts.

One by one, great broking houses and merchant banks of the Square Mile have fallen to America, Japan and the Continent, leaving the Stock Exchange as a lonely, British-owned survivor from what has been called the era of "gentlemanly capitalism".

Now, having seen off successive waves of foreign takeover bids, the Stock Exchange appears destined to fall to America's Nasdaq exchange.

As Treasury minister Ed Balls made clear in an interview with the Evening Standard yesterday, it will go with the Government's blessing after more than 300 years of British ownership.

But does it matter for the millions of investors around the world who use London for their share dealings and for the wider British economy?

Critics such as Mayor Ken Livingstone warn that the takeover could have very serious implications for London's position as the world's pre-eminent international finance centre.

In a letter to the Office of Fair Trading, Mr Livingstone says the proposed takeover risks the traditionally free wheeling City

being throttled by US-style regulation and warns that investment in the Stock Exchange could be curtailed.

However, most senior business commentators contacted by the Standard said the deal should go ahead.

Former CBI chief Sir Digby Jones said Britain would be seen as hypocritical if it preached free markets to the rest of the world and then pulled up the protectionist drawbridge when one its own key assets was under threat.

Many agreed that there should be no restrictions on ownership, although Kelvin MacKenzie, former editor of The Sun and now chairman of marketing group Media Square, said companies from countries with tight takeover restrictions of their own such as France should be kept out.

But with the Government giving the green light, it is up to the market to decide.

Sir Digby Jones, senior adviser to Deloitte and former head of the CBI On the Stock Exchange: "The LSE should be allowed to be sold to Nasdaq.

We can hardly be the greatest free trading nation on earth, look down on protectionist France and America and then not practice what we preach."

On foreign takeovers: "There should not be any limits to takeovers of UK companies by foreigners."

Oliver Hemsley, chief executive of stockbroker Numis Corporation On the Stock Exchange: "I am a complete capitalist. I am not concerned as to who owns the Stock Exchange. If investors do not like what happens they are more likely to form their own exchange."

On foreign takeovers: "I don't believe in regulation of any sort.

Governments aren't going to allow domination of key services by a single player but they can rely on competition law to make sure there are alternatives."

Stephen Lansdown, chairman of private client fund management group Hargreaves Lansdown.

On the Stock Exchange: "I have no fears or worries over foreign ownership of the Stock Exchange. …

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