NASDAQ OMX Group (NDAQ)

The regulatory framework under which LSE operates and new regulatory requirements or new interpretations of existing regulatory requirements could require substantial time and resources for compliance, which could make it difficult and costly for the combined company to operate the businesses.

LSE’s subsidiary, London Stock Exchange plc, or the London Stock Exchange, as a recognized investment exchange, or RIE, is subject to extensive regulation by the UK Financial Services Authority, or the FSA. In order to obtain RIE status, a body must satisfy the recognition requirements which include the provision of proper and orderly markets, sufficiency of financial resources, safeguards for investors, monitoring and enforcement, and investigation of complaints. If an RIE fails to continue to meet such recognition requirements, or if the RIE fails to comply with any obligation to which it is subject under the Financial Services and Markets Act, then the FSA has the power to direct compliance by the RIE with such requirements and ultimately to revoke the RIE’s recognition. In addition, the London Stock Exchange must satisfy the FSA that it is properly discharging its regulatory responsibilities relating to AIM (Alternative Investment Market). The London Stock Exchange has a dedicated AIM regulation team and regularly reviews the appropriateness of its procedures in this area, both internally and with the FSA. If the FSA were to put sanctions in place or revoke the London Stock Exchange’s RIE status, it would have a material adverse effect on the combined company’s business, financial condition and operating results.

In addition, certain of the London Stock Exchange’s customers also operate in a highly regulated industry. The FSA and other regulatory authorities could impose regulatory changes that could impact the ability of the London Stock Exchange’s customers to use the London Stock Exchange or could adversely affect the London Stock Exchange. The loss of a significant number of customers or a reduction in trading activity on London Stock Exchange as a result of such changes could have a material adverse effect on the combined company’s business, financial condition and operating results.

Furthermore, if there are changes in laws or regulations (or changes in the application of current laws or regulations) so that such laws or regulations are applied to market participants and/or listed companies on an extraterritorial basis, such as the Sarbanes-Oxley Act, such changes could have a material adverse effect on the combined company’s business, financial condition and operating results.