The London Stock Exchange (LSE) has offered the UK Competition Commission no objections to the proposed merger between Bats Europe and Chi-X Europe, arguing that, if needed, a new player could quickly be established.
The Office of Fair Trading referred Bats' planned acquisition of its rival MTF to the commission in June, worried that such a "structural shift in the marketplace" could hit competition.
In oral evidence, the LSE and its Turquoise unit told the commission that it did not think the merger would result in increased or decreased prices.
They also argued that it is "now relatively easy to start a new MTF: the technology was ubiquitous, available, and could be installed and running within six to nine months".
"Should the merger cause any competitive concerns, then a new MTF could rapidly be established to restore competition," the commission was told.
Another MTF operator, named as 'competitor b' also offered no objection to the deal, claiming that "the merger of Bats and Chi-X would improve competition in the market by creating a stronger competitor to the LSE".
Market maker Getco backed the merger "because it felt that a merged entity would be better placed to execute efficiently a long-term business plan with utilization of Bats technology, and compete better against the incumbent exchanges."
In a written submission, the Investment Management Association claimed its members "have no strong views regarding the proposed merger and if anything are broadly in favour".
The commission is due to report back to the OFT by 2 December. You can read all the submissions and evidence on its Web site.