The London Stock Exchange is to move its back office activities from the London Clearing House (LCH) to Germany's Eurex Clearing, according to the Financial Times.
The FT says the move is still waiting for full board approval but the members of the LSE looking at the matter have decided to make the switch.
According to the report the move will reopen the possibility of a merger between the London and Frankfurt exchanges, a plan rejected by LSE shareholders three years ago.
Eurex Clearing, a subsidiary of Deutsche Börse, is said to have proposed clearing costs that are 40% cheaper than the LSE's existing arrangements with LCH.
The paper says the move has been prompted by a planned merger between LCH and Clearnet. LSE fears Euronext, Clearnet's parent company, would have excessive influence on the merged operation.