In a statement setting out the UK regulator's views on a possible transatlantic take-over of the LSE by Nasdaq, Callum McCarthy, chairman of the FSA comments: "Neither the FSA nor the Securities and Exchange Commission (SEC) consider that US ownership of the LSE, in and of itself, would result in US regulations, including Sarbanes-Oxley, applying to companies listed or quoted on its markets or member firms of the LSE."

Certain aspects of integration, such as the development of a common trading platform technology, would equally be relatively straightforward from a regulatory standpoint, notes McCarthy.

However, harmonisation of listing and membership would present greater regulatory issues between jurisdictions, he points out.

"Theoretically, in the longer term, a new entity might seek to achieve further benefits from rationalisation of its regulatory structure," states McCarthy. "This could at the extreme involve the LSE no longer being subject to UK regulation as an RIE (Recognised Investment Exchange). Its services might be provided from outside the UK, either from the US, another EU member state or an alternative location, through the provision of trading screens in the UK and with securities admitted to trading on the market operated from elsewhere."

Any such move would potentially have significant implications for various aspects of the wider regulatory regime.

States McCarthy: "If such a market were to be operated from the US it would require member firms and issuers to be registered with the SEC and subject to its oversight."

Stakeholders in the LSE will have to carefully weigh the costs and benefits of any transatlantic tie-up, he warns.