Joachim Faber, chairman of the supervisory board of Deutsche Boerse AG, holds a speech at the New Year reception of the German stock market in Eschborn near Frankfurt, Germany, January 16, 2017. REUTERS/Kai Pfaffenbach
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European Union regulators told Deutsche Boerse AG and London Stock Exchange Group PLC that their $12 billion deal to create the region's dominant exchange operator combines two direct rivals that may eliminate clearing services competitors, according to two people who've seen the EU's statement of objections. It's the first time the EU has said it views so-called "bundle-to-bundle" clearing services as a market, countering the companies' argument that they don't compete head to head.Deutsche Boerse, LSE and the European Commission declined to comment. The exchange operators haven't yet formally made a concession offer to the EU and may do so in the coming weeks.The EU also sees issues with the repo market.Deutsche Boerse and LSE said last month that the EU's objections were fewer than a long list of potential problems they'd identified earlier. A statement of objections lists all the EU's possible reasons to veto a deal. ECB President Mario Draghi told an EU lawmaker that the ECB should maintain oversight of U.K.'s clearing business even after Britain leaves the EU, touching on an issue that became a battleground after the June referendum.
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