The "Merger of Equals" between the TMX Group which owns the Toronto Stock Exchagne (and others) and the London Stock Exchanges (LSX) has a difficult path to follow for approvals.

A number of factors will come into play;

• - In the wake of the fiancial crisis of 2008 and the subsequent economic downturn, regulators and politicians are leery of buying into the "bigger, more global is better" argument.  This will get much scrutiny.
• - The Federal Government, on the heels of the rejection of the BHP Billiton takeover of Saskatchewan's Potash Corp has vowed that politics won't factor in this deal - not that anyone admitted politics factored into that one
• - The exchanges operate in several provinces, all of which are very sensitive about losing high-quality jobs and losing finanical clout
• - In Toronto in particular the optics will matter - will this move Toronto's financial services sector higher up in the world, or lower down. This will be a key provincial calculation.
• - The approval rules do seem to be evolving, but the Federal Government has vowed this merger will be tested against the "existing" rules, not any new as-yet unannounced ones.
• - A common benefit of mergers, cost savings, or "synergies," may be a poor selling feature to the various regulators involved. 

Notwithstanding the regulatory approval issues, mergers have a way of not paying off for the new companies.  In this case both exchanges were each losing market share globally.  They will have a lot of work to do turn that around, which is different work than merging two companies into one.  Their road has lots of bumps ahead.

In the UK, the story is being reported as having triggered a jump in share prices for stock exchanges (bourses), and with recognition that the Canadian regulatory outcome is uncertain.

This may be the best thing for the TMX Group and the LSX, but to achieve it they have a long road ahead.