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EU's Almunia: Still No to NYSE-Deutsche Boerse Merger

Friday, 27 Jan 2012 | 4:58 AM ET

The European Union's Commissioner for Competition dismissed criticism that moves to block the merger between NYSE Euronext and Deutsche Boerse were indicative of a Europe-wide problem of being too difficult on regulation.

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"I am authorizing mergers every day including transatlantic mergers and mergers between European companies and companies from other continents so this is not the case.

Since February 2010 I have only said no to one merger in two years which was between two Greek companies," Joaquin Almunia said.

The European Commission wants Deutsche Boerse and the NYSE to sell either their Eurex derivatives arm or Liffe, saying that without these measures the merger would monopolize trading in derivatives in Europe, with a final decision on the merger due on February 1.

Almunia said his advice to his colleagues at the meeting would be "negative" on allowing the deal to go ahead.

Dominique Cerutti, president and deputy CEO of NYSE Euronext, told CNBC on Thursday: "we are going to continue to fight till the last minute to explain to the community and all commissioners that markets are global and that over the counter business must be taken into consideration." Almunia said that OTC derivatives – over-the-counter trades – which some have argued would have been boosted through such a link-up, could still be traded via an exchange "if possible".

"Our (EU) regulatory initiatives are encouraging OTC derivatives to be traded on an exchange if possible and we are asking them to clear through central counterparty platforms.

We want transparency in this market and we want to encourage the use of these instruments in a regulated way," Almunia added.

He said these exchange-traded derivatives would become more and more important in the long term.

"The clearing of these derivatives will become a bigger and bigger activity in our capital markets. Therefore, we need to look for competition if we don't have this all the businesses that use derivatives will suffer," Almunia said.