The LSE sits in their Capital Markets division together with Borsa Italiana (Italian stock exchange) although it looks as if Borsa Italiana is about to get sold as part of the Refinitiv deal.
Refinitiv will boost the data and intellectual property sales that LSE gets from price information and indices. If you launch a FTSE100 Exchange Traded Fund (ETF) then you have to pay LSE a licence fee for including “FTSE100” in the name and you have to pay LSE to get price data to allow you to manage your ETF.
Data sales is a great business. If you own the price data then it is often next to impossible for somebody to replicate it. Once you have created an index, then you can sell the same data set over and over again for next to nil marginal cost. Companies like LSE end up with a near monopoly over mission critical inputs for their clients, which gives them great pricing power. Refinitiv brings more of this to LSE. The danger is that price increases of the last decade push customers to give up on paying LSE to display the FTSE100 as a performance benchmark and move to a lesser-known index like the UK100.
