Singapore watchdog raises concerns over LSE's US$27b Refinitiv deal

London Stock Exchange Group's LCH business is a major player in clearing Asian currencies and interest rate swaps.
London Stock Exchange Group's LCH business is a major player in clearing Asian currencies and interest rate swaps.PHOTO: REUTERS

SINGAPORE (BLOOMBERG) -- Singapore authorities added a further hurdle to London Stock Exchange Group's planned US$27 billion (S$37.7 billion) purchase of Refinitiv, ruling that the combination with the data provider will reduce competition in the foreign-exchange market and requires a more in-depth review.

The Competition and Consumer Commission of Singapore said on Thursday (July 2) that third-party feedback showed there are concerns about whether LSE's rivals in derivative clearing and index licensing will retain access to Refinitiv's WM/Reuters foreign exchange benchmarks at "fair, reasonable and non-discriminatory terms".

Singapore is the biggest foreign exchange market in Asia, and LSE's LCH business is a major player in clearing Asian currencies and interest rate swaps. The city-state's move to scrutinise the deal in depth is a blow to LSE, which is also facing a drawn-out antitrust process in Europe. Last month, European Union authorities announced a probe that will examine the combined entity's dominant position in government bond trading, data and index services.

LSE didn't immediately respond to a request for comment.

The Singapore regulator said there are six lines of business where LSE, Refinitiv or both generate revenue from local customers, including trading services, clearing, index licensing, financial information products, regulatory reporting services and information technology. The regulator said it wasn't clear whether the competition concerns could be easily resolved.

Singapore is host to 7.6 per cent of global forex trading, according to the most recent data from the Bank of International Settlements.