Lord Hollick and Mr Wall go back a long way to Lord Hollick’s days as a budding TV mogul. Their leverage in deciding the outcome is almost as great as the shareholders and, in many cases, they are one and the same thing. A lot of hot money has flowed into LSE shares over the past month, giving the speculators their say in the matter too We don’t yet know who’s going to come out on top. Mr Levin seems a good enough choice, having cut his teeth as finance director and later chief operating officer at Euromoney before ending up atSymbian, the mobile phone software house. The debate is set to run and run.UBM goes for LevinTrouble at United Business Media, where an outsider, David Levin, has been selected to succeed Clive Hollick as chief executive in preference to the internal front runner, Malcolm Wall. Only one thing can safely be said; there will be no early resolution. This isn’t what Frankfurt has in mind at all, nor is it the way things are likely to work out.

Euronext would make a more equal partnership, but it lacks the financial firepower to act as white knight. Of course this doesn’t necessarily matter if a Euronext merger is what customers want to see happen. Without them, the justification for the takeover premium falls away.Any thoughts the LSE might have of ending up in the driving seat is therefore just wishful thinking. How acceptable that would be to Frankfurt, which still harbours vague ambitions of being a rival European financial centre to the City, remains to be seen. Yet one thing that is not negotiable is a sale or spinning off of Deutsche B?’s clearing and settlement functions. These are the big cash generators for Deutsche B?; they are the financial powerhouse that give Mr Seifert the ability to pay a big cash premium for the LSE.

Last summer, Werner Seifert, chief executive of Deutsche B?, matched the tariff reductions put through for trading by the LSE and Euronext, but at the same time increased his settlement charges to compensate. Talk about shooting yourself in the foot.Yet I doubt customers feel quite as passionate about it as the LSE does. Provided their interests are protected and the charging structures are transparent, they may not worry too much. Mr Seifert promises present contracts for settlement and clearing will be honoured.

The carrot of more LSE tariff reductions is offered to try to bring customers on side.Mr Seifert would frankly much prefer to live in London than Frankfurt and, if he could, he would offer the further carrot of basing the combined operation in the City rather than Germany. The others have struggled to maintain revenue in the cash market for equities.Since the exchange cannot overtly argue this line itself with regulators, it must rely on its customers to do so on its behalf On the face of it, they have good reason. I think [my leaving the industry] is extremely unlikely to be in the best interests of all parties.”BC Asset Management, a small player in the split-cap sector, was also ejected from the talks. The remaining 20 firms are set to complete their settlement as soon as today, with an agreed compensation package of about £200m.The individuals that the FSA is pursuing have been split into three categories. The majority of those in the FSA’s most serious category have agreed to stop working in the industry. A second group of individuals have agreed to accept private warnings which will go on their record. Mr Smith made no personal financial gain and maintains that he was unaware of his friend’s actions.Andrew Procter, the FSA’s head of enforcement, said: “We have previously taken action against those who misuse relevant information for personal gain; however, this action demonstrates that we view equally seriously the activities of those who pass on that information.

As a result, he said, all of them had had the opportunity to sell out of the funds at a profit.The FSA is believed to have asked Mr Reid to leave the industry. While he would not confirm or deny whether this was the case, he said: “Even if they did ask me to do that, you could understand that it would be pretty difficult for BFS – because myself and the small team that run it are an integral part of BFS.”I feel committed to see it through one way or another. I would do whatever I thought was in the best interests of the company and myself. But if someone asks you to repay your salary of two or three years ago, you might find that quite hard, because you would have spent it.”I feel sympathy for anyone who lost any money, and we have done everything we can do to ensure that our funds have performed as well as they could.” He added that he did not believe any of BFS’s funds were bought by private investors after the sector’s troubles had begun. “There were a very large number of years when we put money into the company, so when it started making profits, we got dividends back out of it.”If we had known what was coming round the corner, maybe there are lots of things we would have done differently. We are in a difficult position because the groups that are settling and threw us out, threw us out for commercial reasons, but we are still an ongoing group in the sector.”Mr Reid said he could understand that investors may feel aggrieved by the fact that he had paid himself so well while the sector was in decline, but added that the generous payments had stopped by the time the FSA’s investigation began “Obviously, ours is a private company,” he continued. The firms are being led by John Duffield’s New Star Asset Management.BFS now faces a potential battle against the regulator in the Financial Services & Markets Tribunal, unless Mr Reid, agrees to demands that he pay up more money and quit the industry.In his first interview since the FSA’s split-cap investigation began, Mr Reid maintained that he had made the best possible offer, admitting he was frustrated by the decision of the other groups to eject him from the talks.”What we offered to pay, as a percentage of our balance sheet, was probably higher than anyone else,” he said “We are very supportive of the settlement.