UK-based exchange operator PLUS Markets is winding down its retail trade reporting service due to lack of revenues. Instead, the company will concentrate on PLUS-TS, its recently-launched trading technology outsourcing business, said chief executive Cyril Théret.
From as early as January 2012, the exchange operator will withdraw its trade reporting offering, which PLUS revealed had not generated any direct revenues.
PLUS set up the service after a long and costly legal fight with the London Stock Exchange (LSE) over access to AIM – the exchange's small- and mid-cap board. In September 2008, PLUS issued proceedings in the UK High Court against the LSE, challenging a rule preventing PLUS-Europe members that were also members of the LSE from executing AIM trades on a non-LSE market. After the settlement of a legal battle reportedly costing £2.8 million in June 2009, PLUS eventually earned the right to report trades in AIM shares.
But Théret – who took the PLUS helm from Simon Brickles last year – insisted the £2.8 billion had not been money spent in vain.
“We still retain the right to trade in AIM securities. We are not destroying that value, just monetising it,” said Théret, who insisted the intellectual property and rights won in the feud would stay in-house and be ”transported' into PLUS-TS. “The move also frees up resources that will help us cost-effectively maintain our technology,” he said.
Théret said PLUS-TS was designed to respond to the commercial needs of brokers, banks, high-frequency traders and other organisations which wanted to set up their own liquidity without going through the “headaches and costs” of regulation and compliance.
“If a broker wants to operate a multilateral trading facility or a bank wants to set up its own dark pool, we can do it for them,” he said.
News of PLUS's retail trade reporting service closure came as the company revealed a pre-tax loss of £1.45 million for the first six months of 2011, narrowing from £2.54 million in the same period last year.
Revenues were down to £1.46 million from £1.53 million on administrative expenses of £2.91 million, down from £4.03 million.
“The first six months of 2011 have seen continuing rapid progress towards our stated objective of creating the next-generation stock exchange by responding to new commercial and regulatory needs,” said Théret. “The group now operates three core businesses: PLUS Stock Exchange (PLUS-SX) providing IPO and execution services, PLUS Derivatives Exchange responding to changes in the OTC derivatives markets, and PLUS-TS, a fully managed trading services company.”