Companies listed on the London Stock Exchange will not have to comply with Sarbanes-Oxley corporate governance rules and other US regulations, if the LSE is taken over by an American exchange, the city’s financial watchdog has said.

These reassurances were given by Sir Callum McCarthy, chairman of the Financial Services Authority, although he added that ‘theoretically’ any such takeover in the longer term could lead to the LSE being subject to overseas regulations if the market was operated from outside Britain, the Daily Telegraph reported. 

His comments follow the US Nasdaq exchange's failed 950p-a-share offer for the LSE earlier this year.

Sir Callum said US ownership could 'at the extreme involve the LSE not being subject to UK regulation.

‘If such a market were to be operated from the US it would require member firms and issuers to be registered with the SEC and subject to its oversight,' McCarthy added.