Research paid for by the German exchange claimed the deal, being probed by the European Commission, would enable Frankfurt to win billions of pounds of derivatives trading from London.
The study said Deutsche Borse “has a good chance of winning significant long-term market share in interest rate and currency trading and relocating trading from London to Frankfurt if the market participants in London are given unrestricted access to superior trading platforms in Frankfurt”.
Noting Frankfurt’s luring of bond trading from London two decades ago it added: “There is a history of derivatives trading shifting from London to Frankfurt. Although no significant trading in listed derivatives takes place in London, there is a large market for interest rate risk and currency risk.”
But the LSE, led by chief executive Xavier Rolet, insisted there are no plans to move the operations of its LCH clearing business from London.
It said: “Such action is not contemplated and any statements suggesting otherwise are inaccurate and misguided.
“LSE and Deutsche Borse are committed to maintaining the strengths and capabilities of their respective operations in London and Frankfurt.
“The existing regulatory framework of all regulated entities will remain unchanged and there is no intention to move the locations of Eurex or Clearstream from Frankfurt, LCH from London and the US, Monte Titoli from Milan or CC&G from Rome.”
The LSE has agreed to sell its French clearing for £432million to allay regulatory concerns over its tie-up with Deutsche, aimed at creating a European powerhouse to compete with US and Asian exchanges.
The Commission’s review was extended to early March.