Aquis, a London-based challenger stock exchange, is located in London. Everyone can call it home, from Shepherd Neame, a historic brewer, to ATC music management company. Alasdair Haynes, CEO, discusses how the company will take on AIM and why short selling has been banned.
He also talks about why entrepreneurs should think about his business when they go public.
We are a challenger stock market. We are currently targeting small-to-medium-sized growth companies, but we have the potential to grow a business from a low £10 million capitalisation up to the billions.
Since March 2020, when we purchased it, the stock exchange has made great strides. This year, there were 22 IPOs. Listed companies include Shepherd Neame, as well as industry pioneers like KR1, Silverwood Brands, and Samarkand, a cross-border eCommerce company.
Why would an entrepreneur choose to work with you instead of AIM?
Our exchange has a deeper understanding of the needs and wants of growth companies, which is its key differentiation.
We have separated the market. For example, Access is our entry segment. Access has different rules and supports businesses as they develop. It is a school that companies attend. The company then moves on to the AQSE’s’secondary school’, with a market cap of around £75m.
Access is different from Apex in that companies must publish a Growth Prospectus before they can list on the Apex segment. This allows retail investors to participate in Apex’s IPOs. Online brokers like AJ Bell and Barclays have been established to encourage retail investor participation. They also offer to trade in AQSE securities.
Do you have a real need for Aquis?
LSE’s main market has a market cap minimum of £30m. The FCA supports proportionality, so earlier-stage growth companies must now list on AIM or AQSE.
It was an amazing event when Aquis was listed on AIM. But, I wish someone had warned me that it would be a party to remember. We never spoke with the exchange again. A direct relationship between listed companies and the exchange is a key focus of AQSE. AIM’s NOMAD requirements have been dropped. The cost of flotation can be 25% to 50% less than an AIM IPO because companies don’t have to rely on an expensive advisor who will always contact them.
How about liquidity?
Liquidity is a key area for AQSE. The exchange recognizes the need to improve it. With our new market maker program, we have gone back to basics. It’s been competitive. Market makers must keep spreads under 5%. Those who are most skilled at narrowing spreads have warrants that can be converted into AQSE equity. The statistics show that spreads have narrowed by double-digits in the Growth Market.
Short-selling has been banned. This just seems wrong to me. What are your defences?
This ban was put in place to protect investors and SMEs. It is not about supporting poor companies. It is about allowing shareholders to decide whether they want to buy or sell. You can’t buy a necklace from a shop and decide you don’t like it. We believe that the same should apply to growth companies. The company’s owners should have the final say on whether they want to sell or keep it. This includes any outside participant.
What about the future?
One thing is certain: we need competition in our markets to foster innovation and maintain London’s status as a top financial centre. That is something that the Government values, and it makes me confident that the exchange will have a bright future.
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