Ofex opens itself up to second market-maker and breaks monopoly

Ofex, the lightly regulated junior stock market, has opened itself up to a second market-maker in a move that breaks the historic monopoly of JP Jenkins, the jobbing firm thatcreated the market in 1995.

Teather & Greenwood, the small-cap broker, is to become a second choice of market-maker, or "specialist", for new companies listing on Ofex.

John Jenkins, chairman of both JP Jenkins and of Ofex, said yesterday T&G's application to register as a specialist was being processed, with progress being made already on some of the technical issues. Formal approval of T&G's application is expected soon.

Market-makers set share prices and guarantee that a stock can always be bought or sold. Until now, Ofex shares have had to be traded through JP Jenkins. Anne McMahon, an analyst at Seymour Pierce, said that Ofex was fulfilling a promise made at the time of its own flotation on the London Stock Exchange's growth company market, AIM, in April.

She said: "The market has been expecting a second specialist and it is seen as an important step in maintaining liquidity and efficiency on the Ofex market. This move also gives the market increased gravitas, which will hopefully attract further applications."

The JP Jenkins monopoly was a source of resentment among small investors during the dot.com boom, when the market attracted considerable interest as the home of numerous start-up ventures.

Ofex stocks will continue to have just one market-maker, limiting the amount of extra liquidity that will be provided. T&G, which is one of the most prolific market-makers in AIM stocks and fully listed small-cap shares, is expected initially to make markets only in shares of companies to which it is corporate adviser.

Jonathan Jenkins, son of John Jenkins and now chief executive of Ofex, said T&G is likely to be the first of several new specialists. Current low trading volumes do not justify having more than one specialist per stock, he said, although the situation will be reviewed in future years.