Does Clara Furse want to merge her old firm with her new?

Ongoing discussions about how the LSE and the London Financial Futures and Options Exchange (Liffe) could share technology going forward could be a precursor to a merger, according to the Sunday Telegraph.

The reported talks come soon after LSE's chief executive Clara Furse announced the listing of the exchange's shares in July.

During the announcement, Ms Furse said the exchange is keen to cut costs by forming technology links and partnerships.

When asked whether this could include a deal with Liffe, Ms Furse declined to elaborate.

Competitive strategy

Speculation of a deal between Liffe and the LSE has been rife ever since Ms Furse was hired as the stock exchange's new boss in January.

Ms Furse was a Liffe board member for nine years and held the position as deputy chairman until 1999.

At the time of her appointment to the LSE, a potential link-up between the stock exchange and Liffe was seen as a likely competitive strategy.

Such a deal could help counter the onslaught from Deutsche B�rse and Euronext, the merger between the bourses in Paris, Belgium and the Netherlands, which both deal in both equities and derivatives.

A deal with Liffe would enable the LSE to add derivatives dealing to its capabilities.