Plus Markets - formerly the Ofex stock market - unveiled plans yesterday to raise £25m as part of a bold project to create a genuine rival to the London Stock Exchange.
The capital raising - by the issue of 178.5 million new shares at 14p - was accompanied by the appointment of two former LSE directors.
They are Ian Salter, who was deputy chairman of the LSE between 1990 and 2004, and Giles Vardy, who led the introduction of the LSE's SETS electronic trading system and the creation of the junior AIM market in 1995. They will replace non-executive directors Helen Bagan and John Wedgwood.
Plus chief executive Simon Brickles said his exchange had already snatched nearly 50 per cent of the trades in stocks listed in the FTSE Fledgling index of smaller fully listed companies. The company plans to add trading in FTSE 100 stocks and FTSE 250 stocks it does not already offer. Plus, whose shares are currently listed on AIM, is also planning to join the LSE's full list within 12 months of achieving the status of a Recognised Investment Exchange. This is expected early in the new year.
Mr Brickles said his ambitious plan differed from previous attempts to rival the LSE because the method of trading shares over Plus harks back to an earlier era on the LSE when market-makers were used as middlemen in share trades. This remains a hugely popular way of trading shares with London's increasingly successful band of smaller and medium-sized stockbrokers.
Mr Brickles said: "It's not going to work for everyone but people like the system and we are going to bring it back into the big stocks at competitive prices."
Mr Brickles said he was "confident" that Plus would be able to offer best prices in stocks, which it will have to do under the European MiFID (Markets in Financial Instruments) directive that requires brokers to seek "best execution" for clients.
Unlike the LSE, Plus does not charge brokers a reporting fee for each trade, making its money through membership fees, listing fees from companies that float on its market, and the sale of data.
The directive is set to increase competition to Europe's stock exchanges, which have until now functioned as national monopolies. Seven investment banks are already planning a pan-European trading platform covering the continent's biggest stocks.
Brokers including Andy Stewart's Cenkos Securities and Winterflood Securities, owned by Close Brothers, have already backed Plus. The company also boasts Scottish Widows as a major shareholder. Plus shares finished down 1.75p at 19p.
Plus also said it had appointed Brian Taylor as chief financial officer. Cyril Theret is being promoted to business development director.Reuse content