which is a London-based challenger exchange. It’s home to everyone from historic brewer Shepherd Neame to ATC music management company. CEO Alasdair Haynes explains how the company is going after AIM, why it has banned short selling, and why entrepreneurs should consider his business when they go public.
We are first and foremost a challenger stock exchange. Currently, we are targeting small to mid-sized growth companies, but we have the capacity to grow a company with a market cap of less than £ 10million to billions.
Yes. We are the only other registered investment exchange in the UK, which is regulated by the FCA in the same way as AIM and enjoys the same tax breaks and stamp duty exemptions, making AQSE a place to be. as regulated and legitimate as its larger recognized counterpart.
The exchange has come a long way since we bought it in March 2020. There have been a record 22 IPOs this year. The companies currently listed include well-known names such as Shepherd Neame alongside industry pioneers such as blockchain company KR1, luxury investor Silverwood Brands and cross-border e-commerce firm Samarkand.
Why should an entrepreneur choose you over AIM?
The key differentiator is our exchange’s deeper understanding of the needs of growing businesses.
We have separated the market – so, for example, our entry segment “Access” is formed with different rules and support for companies earlier in their development. We see it as a primary school for businesses. From there, companies move on to the ‘high school’ of the Apex market, which currently has an average market capitalization of around £ 75million, and then finally to the ‘college’ of the AQSE main market.
Another distinction between Access and Apex is the requirement for companies listed in the Apex segment to publish a growth prospectus, opening its IPOs to participation by retail investors. AQSE’s encouragement for retail investor participation has enabled online brokers such as AJ Bell, Barclays and interactive investors to connect to the exchange and offer trading in AQSE securities.
Is there a real need for Aquis?
The main LSE market now has a minimum market capitalization of £ 30million. This means that early stage growth companies must now be listed on the AIM or AQSE, showing FCA support for proportionality.
When Aquis got listed on AIM it was a big event, but I wish someone told me it would be a party going away – we never spoke directly to the exchange again. A direct relationship between the stock exchange and listed companies is a priority for AQSE, abandoning AIM’s NOMAD requirement. Since companies do not have to rely on an expensive advisor to always contact the stock exchange and the simplified listing process of the AQSE, the cost of the issue is between 25% and 50% cheaper than an IPO. AIM scholarship.
And liquidity, isn’t that a problem?
Liquidity is an area of interest for AQSE, an area that the stock market knows needs to improve. We have gone old-fashioned with our new market maker program. We made it competitive, with market makers having to maintain spreads of no more than 5%, and the most able to reduce spreads given the warrants convertible into AQSE shares. So far statistics show the impact that has been achieved, with spreads narrowing to double digits in the growing market.
You have banned short selling. It seems wrong to me. How to defend it?
The ban aims to protect SMEs and their investors. It’s not about supporting bad companies, it’s about empowering shareholders to make the decision to buy or sell. If you see a necklace in a store, you can’t decide that you don’t like it and go without it, and we believe when it comes to growing businesses the rules should be the same. The choice should be with the owners of the business to sell or keep. Not an external participant.
And what about the future?
One thing is certain, we need competition in our trade to encourage innovation and maintain London’s place as an exceptional financial center. The government appreciates this, and this fact more than anything makes me certain that the exchange has a bright future.