Sir
Why just have your cake when you can eat it too? While the rest of Europe is being pressured by Charlie McCreevy, commissioner in charge of the internal market and services, into opening stock markets and clearing houses to competition, the Swiss exchange groups are building a safe and profitable vertical "silo" just over the border out of reach of Mifid, the European Union markets and financial directive ("Swiss seek to merge securities operations", May 16).
One can hardly blame them. While Mifid and Regulation National Market System rules squeeze the profitability out of trading blue-chip equities on both sides of the Atlantic, big money is still being made when all of investors' and speculators' business can be captured in vertically-integrated exchange and clearing groups.
For the US-EU trading arena, this is no longer possible for equities; hence the wave of exchange mergers to achieve scale and lower costs for equity trading and - more importantly - to gain control of the derivative and commodity money machines.
For the rest of the world, however, the integrated exchange remains an attractive business, where tolerated by local regulators. The new group can have it both ways - a nice, profitable vertical silo for the captive investors in local products, plus a slice of the level EU playing field through its Virt-x trading and SIS clearing.
