ICAP would buy MTS if up for sale: CEO

By Lisa Jucca

LONDON (Reuters) - Inter-dealer broker ICAP (IAP.L) is still eyeing bond trading platform MTS and believes it could offer customers and issuers a better deal if allowed to buy it, ICAP's chief executive told Reuters on Tuesday.

A purchase of MTS, owned by the London Stock Exchange (LSE.L) via Borsa Italiana, would allow ICAP -- the world's largest inter-dealer broker -- to enter Italy's large bond trading market, which ICAP considers heavily protected.

"MTS is not for sale but we would be interested if it were," ICAP Chief Executive Michael Spencer told a Reuters Finance Summit in London.

"We would be able to do the job much better if we were given the opportunity to buy that, we'd give the customers a better deal and do a better job also for the issuers."

ICAP has long wanted to acquire MTS but the current owner is not showing any willingness to sell.

Spencer called the LSE's ownership of MTS "anachronistic" and said it did not fit into the stock exchange's business model.

Anyone willing to trade Italian government bonds must respect domestic laws regulating this type of business, which Spencer said were too stringent.

"It's outrageous protectionism. ICAP is the largest broker and we can't offer services in Italian government debt," said Spencer.

"The Italian government has designed rules that make it impossible for anyone to trade Italian government bonds except MTS," he added.

Italy's government debt agency late last month gave her backing to MTS but said the country was open to using other dealing venues as well.

"Only MTS have said they will be compliant with several rules about transparency, commitment to regulations and so on that are under the framework of a regulated market so if others would have to come they would be accepted," said Maria Cannata, director general of Public Debt, Italy.

Philippe Rakotovao, deputy CEO at MTS, told Reuters in an interview in May that ICAP's allegation of MTS monopolizing trading in European cash bonds was "completely wrong" and denied MTS held a "privileged" position in the market.

The European Union Commission said earlier this year it would gather information to evaluate whether MTS's share of the market amounts to anti-competitive practices.

MTS is controlled by holding MBE, which is in turn solely controlled by Borsa Italiana after the Italian stock exchange exercised an option to buy out former partner Euronext

ENXT.PA.

The London Stock Exchange acquired Borsa Italiana earlier this year through a friendly share offer.