Inter-dealer broker ICAP has launched a new listing venue for small- and medium-seized enterprises (SME) after buying and rebranding PLUS Markets' stock exchange earlier this year.
ICAP Securities & Derivatives Exchange (ISDX) will list SMEs seeking access to equity capital to finance their business, and six companies have already presented to investors at ICAP’s London office as part of the venue launch.
Market makers Peel Hunt and Shore Capital will make markets in ISDX’s major stocks to maintain liquidity provision on the venue and ensure it operates as a primary and secondary market. A new admissions framework will be launched by the venue next year with the aim of creating common standards for companies joining ISDX.
CEO Seth Johnson claims the exchange will give companies seeking to list a clear route to market. “Investors will gain access to exciting growth opportunities and with market markets committed to providing liquidity, they will be able to trade these shares with confidence,” Johnson said, adding that the market making certainty of the venue was a particular strong point for traders.
“As an experienced markets operator, ICAP has the right skills and knowledge to make this the venue of choice for SMEs seeking equity capital,” said Johnson, a twenty-year veteran of ICAP, who joined its electronic markets in November 2011 and co-heads the firm’s fixed income electronic trading platform, BrokerTec, in addition to leading the ISDX venue.
Ian Chicken, who originally joined ICAP in 2000, returns after an 18-month spell at NYSE Euronext, has already taken the reigns as COO of the venue, and will also work across the BrokerTec platform.
Earlier this year, ICAP bought PLUS’ wholly-owned cash equities recognised investment exchange (RIE) on a cash-free, debt-free basis for a nominal cash amount of £1, and experts believe ICAP will use it as a hedge against impending over-the-counter (OTC) derivatives reform.
Although no formal statements have been issued, ICAP is expected to launch a listed derivatives venue to capitalise on expected reforms under Europe-wide EMIR regulation, which will see the central clearing of OTC derivatives, in a bid to send more trading activity on exchange.
This is the second announcement in a week of a new SME venue, with NYSE Euronext-backed Entrepreneurial Exchange announcing a possible launch date before June next year.
The pan-European venue is designed to facilitate capital raising by smaller companies away from venues dominated by blue-chip listings would operate according to NYSE Euronext’s federated model in all countries the exchange operator has a market, which comprises France, Belgium, the Netherlands and Portugal.
The London Stock Exchange is also believed to weighing up a variety of options to improve equity raising opportunities for SMEs.