“I try not to break the rules, but merely to test their elasticity,” said Bill Veeck, a wheeler-dealing owner of US baseball teams. The merger and acquisition departments of most investment banks subscribe to the same philosophy, and these days their favourite rule-stretching devices are derivatives. The latest controversy – over Borse Dubai’s approach to Swedish stock exchange operator OMX – shows why regulators around the world need to update their rules on the use of derivatives during takeovers.

On August 9 Borse Dubai launched a tender for shares in OMX, which was already the target of a bid from Nasdaq. The Dubai operator used the tender to buy 4.9 per cent of OMX’s share capital outright and take options over another 22.5 per cent. There are two problems. On Thursday Sweden’s regulator ruled on the first, saying that Borse Dubai broke the law by not announcing a formal takeover offer.