Shares in the London Stock Exchange fell more than five per cent after the competition watchdog announced a probe into rival takeover approaches for the group.
The Office of Fair Trading said it was referring the proposals of German stock exchange Deutsche Boerse and pan-European exchange Euronext to the Competition Commission.
The referral follows a review it has carried out over the last two months focused on whether the potential takeovers would substantially reduce competition in the financial-services market.
Shares in the LSE fell 24p to 450p shortly after the OFT's announcement.
OFT Chairman John Vickers said competition between exchanges in Europe had been episodic and that it needed to be investigated whether either merger would lessen future competition in equity trading in the UK.
The LSE said it had no immediate comment on the OFT's decision to refer the two takeover plans to the Competition Commission.
LSE shares closed at 4521/4p down 213/4p.