German watchdog against London HQ for Boerse-LSE

FRANKFURT, June 28 (Reuters) - The head of German financial market regulator Bafin on Tuesday came out against London as the main base for a merged group combining London Stock Exchange (Other OTC: LDNXF - news) and Deutsche Boerse (LSE: 0H3T.L - news) .

"It (Other OTC: ITGL - news) is hard to imagine that the most important exchange venue in the euro zone would be steered from a location outside the EU," Felix Hufeld told a press briefing on the margins of a conference on financial technology.

Bafin answers to Germany's Finance Ministry. Although it cannot veto the deal, its opinion is influential.

Asked about euro-denominated trading in London after Britain's departure from the European Union, Hufeld said such trading should move to the EU and that it could take place in Frankfurt.

"I would see this as a significant political goal to think about steps to encourage this. It cannot be politically smart for a significant amount or a majority of euro-denominated trading ... to take place outside the European Union." (Reporting by Jonathan Gould; Editing by John O'Donnell)