AQSE launches Market Maker Incentive Scheme
Scheme designed to narrow spreads, boost liquidity
Participants have opportunity to acquire AQSE equity
23 November 2020 – Aquis Stock Exchange Limited (AQSE), a division of exchange services company Aquis Exchange PLC, has launched an incentive scheme for market makers designed to boost liquidity and improve the functioning of the AQSE market for growth stocks.
Under the terms of the scheme, participating market makers will offer two-way prices, in retail size, for 50% of stocks in the Apex segment of the AQSE Growth Market. Spreads must be no wider than 5%. Apex is aimed at more established companies, with a larger market capitalization (£10m-£500m), a free float of at least 25%, broad retail access and ones that adhere to a recognised corporate governance code. Candidates for Apex, which is expected to begin with around 25 constituent companies, include businesses such Chapel Down Group, Shepherd Neame and Arbuthnot Banking Group. The scheme begins in January 2021 and is designed to bring more competition into the market, narrow spreads, increase liquidity and enhance the overall performance for all users.
Market makers qualifying for the scheme will be awarded warrants convertible into AQSE equity. This opportunity is open to the top five firms each year, with the best performers receiving a larger percentage. Over the three-year term of the scheme, market makers will have the opportunity to get equity up to 19.9% in AQSE.
AQSE has already attracted a number of key market makers to its scheme. Early adopters include Canaccord Genuity, Liberum, Peel Hunt, Shore Capital Ltd, Stifel and Winterflood Securities Limited.
AQSE was acquired by Aquis in March 2020. It was formerly known as NEX Exchange Ltd. It is permissioned as a Recognised Investment Exchange, which allows it to operate a regulated listings venue.
Commenting on the new scheme, Aquis Exchange and AQSE CEO Alasdair Haynes, said:
“This is an important development in our quest to really transform the AQSE marketplace into the premier destination for both issuers and investors in growth companies. Liquidity is the lifeblood of markets and schemes to boost trading by offering narrower spreads, top technology and alignment of vested interests will lead to a more buoyant marketplace.”
David Parsons, Head of Equities at Liberum, added:
“We are delighted to support Aquis as an AQSE market maker. We are proud to have acted for Aquis since their pre-IPO funding in 2016 and subsequent IPO in 2018 since when their market share in European Equities has more than doubled. The creation of AQSE will bring liquidity and capital to growth companies thus benefiting both UK Corporates and investors. We believe Aquis is uniquely placed in part of the market that is ripe for disruption and look forward to the next stage of their exciting growth.”
Iain Morgan, Head of Execution & Trading at Peel Hunt, said:
“Following the implementation of MIFID II, some small and mid-cap listed companies have experienced a significant reduction in the liquidity of their share, hindering their ability to attract equity investment. We are pleased to be supporting a scheme that seeks to improve trading in these companies, so they can access the investment capital needed for future growth.”
Nick Conyerd, Head of Market Making at Shore Capital, added:
“Supporting growth in trading by encouraging liquidity will further strengthen the UK SME sector and help attract new investors and growth businesses to public markets. We are pleased to support this AQSE initiative.”
John Owen, European COO of Stifel, said:
“AQSE is offering fresh engagement and a new approach to trading and liquidity in the small-mid cap public markets in the UK. We look forward to supporting the scheme and AQSE in its future developments.”
Matt Wilkinson, Head of AIM and Director of Winterflood Securities, added:
“Winterflood welcomes AQSE’s innovative approach to encouraging competitive pricing and liquidity provision on their platform. These are key factors in promoting new listings and ensuring the continued success of our vibrant UK SME market.”
Aquis Exchange PLC
Belinda Keheyan, Head of Marketing – 07768078110
Notes to editors:
Aquis Exchange is authorised and regulated by the UK Financial Conduct Authority and France's Autorité des Marchés Financiers to operate Multilateral Trading Facility businesses in the UK and in EU27 respectively. Aquis operates a lit order book and does not allow aggressive non-client proprietary trading, which has resulted in lower toxicity and signalling risk on Aquis than other trading venues in Europe. According to independent studies, trades on Aquis are less likely to lead to price movement than on other lit markets. Aquis uses a subscription pricing model which works by charging users according to the message traffic they generate, rather than a percentage of the value of each stock that they trade.
Aquis Stock Exchange (AQSE) is a stock market providing primary and secondary markets for equity and debt products. It is authorised as a Recognised Investment Exchange, which allows it to operate a regulated listings venue.
Aquis Technologies is the software and technology division of Aquis Exchange PLC. It creates and licenses cutting-edge, cost-effective matching engine and trade surveillance technology for banks, brokers, investment firms and exchanges.
Aquis Exchange PLC (AQX.L) is listed on the Alternative Investment Market of the LSE (AIM) market. For more information, please go to www.aquis.eu