Small investors in the London Stock Exchange account for around 12 percent of its shares. When their stockbrokers asked for talks with Nasdaq on the regulatory implications of its bid for the LSE, they were rebuffed.

Angela Knight, head of the Association of Private Client Investment Managers whose members act for thousands of these investors approached Nasdaq chief Robert Griefeld who was in London to meet with major shareholders. She got short shrift. It was too early for talks, APCIMS was told.

Knight is demanding that that the LSE obtains “absolute guarantees” that the US Securities and Exchange Commission will not intervene in British LSE-listed companies if Nasdaq were to win the bid battle. The weighty regulatory regime put in place after the Enron and Worldcom fiascos might well apply not only to the exchange but to all listed companies as well.

Since the success of London as a worldwide financial centre is based on a light regulatory touch, this would be a disaster for the whole City of London.

However, the law would have to be changed in Washington, and that could take years.