A new web-based investment research exchange launches this week in London with the aim of facilitating improved research procurement between brokers and fund management groups. It may also increase liquidity among small-cap. stocks listed on the LSE’s Alternative Investment Market (AIM).
Accuracy Quotient’s (AQ) Research Exchange (AQREX) will initially cater for small and mid-cap. investment research, but equally could be be extended to large-cap. stocks if the idea is successful.
A fully “live date” is expected for mid April 2007 after a month of trials, according to Mr William Russell-Smith, AQ’s commercial director. REX is the outcome of meetings with approximately twenty fund managers and thirty brokers in the city over the past five months. Overall response to REX appears to be positive, according to Russell-Smith.
The new web-based marketplace will seek to address concerns of three constituents. Smaller companies complain of insufficient research coverage, while brokers are dissatisfied with the lack of revenues on the small caps they cover and poor trading liquidity. Fund managers, on the other hand, say the research that does exist is low quality and does not meet their needs.
Users of AQREX will be able to view prices of separate transactions for up to eight different categories of research prior to negotiation.