London - The planned merger of the London and Frankfurt stock exchanges overcame a key hurdle on Tuesday night when Deutsche Borse`s supervisory board approved the deal.
However, four of Deutsche Borse`s 21 board members abstained, reflecting the opposition to the deal that has emerged in Frankfurt in the past week.
But the meeting took almost an hour longer than expected, as some members voiced fears about the threat posed by the merger to Frankfurt`s role as a major financial centre.
It had been preceded by calls from some board members for the vote to be postponed, pending further details of the power sharing arrangement between London and Frankfurt.
The merger is now subject to the approval of Deutsche Borse members, who will vote on the deal at their annual meeting in September. A similar vote will be held for members of the London Stock Exchange with a view to concluding the deal by the end of this year.
Under the terms of the deal, Frankfurt will operate an exchange for growth stocks and London will provide a market for Europe`s top 300 blue chip stocks.
Deutsche Borse said the new exchange, which will be called iX, would allow stocks to be traded in different currencies. But Deutsche Borse said each company would need to nominate one currency in which its shares would be denominated.
The meeting followed a decision earlier in the day by Dieter Posch, the regional economics minister, to accept assurances from Werner Seifert, Deutsche Borse`s chief executive, about the future security of Frankfurt`s role as a financial centre.
The deal also faces opposition in London, with many retail brokers and smaller companies fearing they will be disadvantaged by the move. Those UK companies that do not qualify for either of the new exchanges will remain listed on a London market. - The Times, London