A survey undertaken by Aquis Stock Exchange (AQSE) and ShareSoc has shown that individual investors do not feel they have good, equal access to growth stocks.
Key findings of the survey1
· 55% of individual investors polled feel they don’t have, or aren’t sure they have, good access to growth companies
· Around 50% of respondents commented that they do not believe that they have enough access to IPOs and fundraises
· Individual investors are frustrated about the privileged access afforded to institutional investors, often at discounted prices
· Over 80% of respondents feel individual investors should be able to trade shares in any public company they choose, irrespective of the exchange it is on
Opportunities for the individual investor on AQSE
The survey showed that most individual investors are not taking up the trading opportunities available on AQSE. AQSE is a home to growth companies and is dedicated to providing better access to SME stocks for individual investors.
On the Apex segment of AQSE growth market:
– Individual investors are able to immediately participate in IPOs as a growth prospectus is required
– Short selling is prohibited (aside from Market Makers)
– Spreads are all within 5% – the result of its previously announced innovative Market Maker scheme.
AQSE is regulated by the FCA. Companies listed on AQSE are supported by established corporate advisers, with Canaccord, Liberum, Peel Hunt, Shore Capital, Stifel and Winterflood Securities all publicly supporting AQSE’s Market Maker scheme.
AQSE is home to established high-profile names such as Shepherd Neame, Chapel Down, and Arbuthnot Banking, as well as companies at all stages of their growth journey including Samarkand Group and KR1. The average market cap of an Apex stock is approximately £78m.
Brokers that currently offer direct electronic trading in AQSE include Barclays Smart Invest, Jarvis and The Share Centre. Talks are taking place to extend coverage with AJ Bell, Hargreaves Lansdown, Interactive Investor and IG Capital.
ShareSoc support for equal access
ShareSoc believes that regulatory and access issues for individual investors also have consequences for the issuing companies and for the UK economy as a whole. These include:
• Liquidity spreads, costs and ratings on UK exchanges compare unfavourably with their US equivalents, which discourages many companies from seeking listings in the UK market
• Lack of individual investor access to IPOs and fundraises starves companies of essential growth capital at reasonable cost
These problems could be significantly ameliorated by making it easier and simpler for individual investors to access IPOs and fundraises and to trade shares in all public companies and on all exchanges.
Alasdair Haynes, CEO of Aquis Exchange, said:
“At AQSE, we aim to provide greater and better access to individual investors. Unfortunately, many investors are yet to benefit from AQSE’s offering and our provisions for individual investors, including the access to companies from the IPO stage on the Apex segment of our growth market.
By providing more information about the benefits of AQSE I hope that more individual investors will choose to make the most of what it has to offer as we see more brokers giving them equal access through direct electronic trading.”
Mike Dennis, Director of ShareSoc, added:
“Many UK investors are frustrated by the restricted access they have to small-cap growth companies; they find it difficult to obtain reliable, quality information to assist their decisions and are often excluded from IPOs and fundraises. It is pleasing, therefore, to hear that mainstream brokers are working towards making it possible for individual investors to access shares in many small cap growth companies. This will benefit individual investors, issuing companies, and the UK economy.”
1The survey was completed by over 450 of ShareSoc’s 7,000 members, in January 2021. Half of the respondents have a significant proportion (>20%) of their portfolios in small caps and two thirds of those with significant small cap portfolios define themselves as experienced investors
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