Global exchanges - don't panic Exch-ch-ch-ch-changes (turn and face the strain). The London Stock Exchange and its Singapore counterpart are in talks about co-operation on share trading and derivatives clearing. Investors in the London Metal Exchange are due to vote on a generous £1.4bn bid from the Hong Kong Stock Exchange. So it is tempting to conclude - as David Bowie predicted back in 1971 - that another bout of exchange consolidation is looming. And that users, as well as regulators, should therefore be on their guard. Tempting, but simplistic. The universe of "trading structures" now extends well beyond the most visible exchanges. This is due to regulatory and technological developments. In the world of European equities, for example, it was estimated that less than half the trading was done on regulated markets (such as the LSE or Deutsche Börse) in 2009. Over a third was reckoned to occur over-the-counter (including via broker crossing networks) and about a 10th on new proprietary multilateral trading facilities (such as Chi-X, or Turquoise, now owned by the LSE). In general, these developments have driven down per transaction trading costs and reduced spreads - although also encouraged trade fragmentation and contentious new practices, such as high-frequency trading. And, with regulators pushing to ensure more centralised clearing in the huge OTC derivatives market, the focus is now as much on post-trade capabilities as front-end platforms. Clearly, there is a tension between the synergy benefits of consolidation - one giant, global clearing house would maximise netting opportunities for traders - and the competitive benefits of multiple trading and clearing platforms. But the trading world is not so different from other service industries in this respect. How long has the idea of one global airline been touted as a fanciful but eminently logical idea?