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German criminal authorities are investigating Deutsche Börse’s chief executive over his purchase of shares in the exchange just weeks before it began talks with the London Stock Exchange Group about a €24bn merger.

The Frankfurt-based exchanges operator confirmed late Wednesday that the Frankfurt public prosecutor had opened an investigation into Carsten Kengeter’s purchase of the shares on December 14, 2015 as part of a company remuneration programme.

The two exchanges officially began talking in January 2016 about an all-share merger to create Europe’s largest exchanges group, which would trade more than €5.2tn in equities and have more than 3,200 companies listed on its markets. When the talks were revealed publicly in February 2016, shares in both operators rose significantly.

The share purchase programme was part of a new incentive scheme initially laid out in September 2015 and formalised in December of that year. Mr Kengeter was required to participate by the board.

“Such programme provides for an investment of the executive board members in shares of Deutsche Börse. Deutsche Börse and the chief executive fully co-operate with the public prosecutor,” the exchange said in a statement.

Prosecutors did not immediately respond to requests for comment. Mr Kengeter declined to comment.

The investigation comes as the merger faces a critical few months that will determine its fate. EU antitrust watchdogs are examining the deal for its likely impact on clearing competition in Europe and are due to make a decision by March 13. That deadline will probably be extended if, as expected, the two sides offer potential remedies to the European Commission.

LSE has offered to sell LCH SA, the Paris-based subsidiary formerly known as Clearnet, to allay concerns from Brussels antitrust officials that its tie-up with Deutsche Börse could curb competition in the European fixed income markets. It has also agreed to a €510m deal to sell LCH to Euronext, its Paris-based rival. The exchanges may also offer remedies to address concerns about competition in European fixed-income futures trading and Italian futures and options.

Clearing houses are at the forefront of moves by global regulators to bolster markets after the financial crisis. They stand between parties in a trade, managing the risk to the market if one party defaults on payment.

Competition and prudential regulators in Britain and Germany are assessing whether the UK’s decision to leave the European Union has profoundly altered the deal terms.

Shareholders have already approved the deal. At an event in London on Tuesday evening Mr Kengeter said the deal was critical as Europe faced tougher competition from other global financial centres. “Together as a united force London and Frankfurt would be much stronger,” he told the audience. The deal “was strong enough to push back against the current centrifugal effect in European politics.”

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