EU: Euronext-NYSE Should Retain EU Rules

BRUSSELS, Belgium -- Euronext NV's exchanges should continue to operate under EU financial rules if a takeover bid from the owner of the New York Stock Exchange Group Inc. succeeds, the European Union's financial services chief said Wednesday.

EU Internal Market Commissioner Charlie McCreevy said he would be willing to work closely with U.S. authorities to sort out possible legal overspills.

"But the basic principle remains: European law will apply," he told the Europlace financial services conference in Paris, according to a text distributed by his office. "We will insist that financial trading in Europe must continue to be regulated under European law and the European regulatory system."

"In time there could be demands for greater trans-Atlantic financial integration, with potentially significant rewards for end-investors in terms of market efficiency. Let's see. We are not there today."

Regulators in the U.S. and Europe are still reviewing the NYSE Group Inc.'s $10 billion bid for Euronext. The European company _ which operates financial markets in Paris, Lisbon, Brussels and Amsterdam _ prefers the bid to a lower one from Deutsche Boerse AG.

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NYSE Chief Executive John Thain said last week that he expects to close the deal in January and shareholders should vote later this year.

He also tried to calm European fears that part of the Sarbanes-Oxley Act would "escape" into Europe, saying it did not apply to companies outside the U.S. and the NYSE did not intend to consolidate exchanges after the merger is completed.

Euronext has also been holding merger talks with Borsa Italiana amid reports that Deutsche Boerse could launch a rival bid. The German exchange has refused to confirm it is also considering an offer for Borsa Italiana but said it is talking to other bourses.

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