London Exchange forms alliance with German rival

The London Stock Exchange (LSE) and the German Borse exchange have signed a deal which will see the two organisations develop a common trading system.

The move could ultimately lead to the creation of a pan-European stock market.

A joint venture company will be set up to establish common rules and regulations, and to develop a common electronic trading system, based on middleware which both exchanges share.

At the signing, Werner Seifert, CEO of the Deutsche Borse, explained the reasons behind the collaboration. "Due to the convergence of international markets and the emergence of technology as a rapid enabler of integration, we have the opportunity to create a centre of gravity through which all of Europe can benefit," he said.

A joint project group has been set up with a board of directors equally staffed by Borse and the LSE. It will set about defining the regulatory changes and implementing the IT strategy necessary to be able to trade the shares of 300 blue chip companies across both exchanges.