Private client brokers oppose LSE takeover

Stockbrokers serving private clients yesterday expressed deep concern about a takeover of the London Stock Exchange by Deutsche Börse or Euronext and lobbied for formal representation for small investors on the main board of a combined business.

Stockbrokers serving private clients yesterday expressed deep concern about a takeover of the London Stock Exchange by Deutsche Börse or Euronext and lobbied for formal representation for small investors on the main board of a combined business.

The move came as Clara Furse, the chief executive of the LSE, prepared to meet her opposite numbers at Deutsche Börse and Euronextthis week.

Redmayne-Bentley Stockbrokers, one of the UK's leading private-client stockbrokers, said it was "very concerned" that the needs of its clients and those of hundreds of thousands of private investors should be given a high priority in the discussions.

In an open letter to Ms Furse, Keith Loudon, at Redmayne-Bentley, said: "The LSE was founded by a group of brokers representing small investors and the tradition of direct share ownership by private investors survives strongly to this day in the UK. But, with cross-border trading of shares in multinational corporations leading to the internationalisation of stock exchanges, that tradition is in danger of being squeezed out."

He said a merged business should give seats to representatives of smaller investors on the main operating board; have a requirement to serve the interests of small investors written into the articles of association; and ensure that any future trading platform provides private investors with the same services and rights as those enjoyed by the major financial institutions.

Separately, it emerged yesterday that Euronext and the broker ICAP are among potential bidders for MTS, the European bond exchange. Any deal to buy MTS, which had sales of just €60m last year, is not expected to hamper Euronext's chances of winning the three-century old London bourse.