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Aquis Exchange Aims to Disrupt Growth Markets

Alasdair Haynes, chief executive of Aquis Exchange, said the subscription-based exchange group wants to become the growth market for Europe.

This week Aquis Exchange started trading 36 of the largest Irish blue-chip stocks taking the number of markets within the subscription package to 14.

Haynes told Markets Media: “These are important stocks and shows the progress of our subscription model.”

Aquis said that it had completed coverage of Western Europe. Haynes added that the exchange may add central and eastern European stocks if there if there is customer demand.

The venue had to stop trading Swiss securities in July once the country lost its equivalence with European Union trading venues.

“We are looking for the earliest opportunity to restart trading of Swiss stocks once this is allowed by regulations,” Haynes added.

Addling listings

In July Aquis agreed to acquire NEX Exchange from CME Group. NEX Exchange is one of only four equities-focused Recognised Investment Exchanges in the UK, and a market for growth enterprises. There are currently 89 small companies on NEX’s two markets with a combined market capitalisation of approximately £1.9bn ($2.3bn), with 51 registered brokers and seven market makers.

Haynes said Aquis hopes for regulatory approval of the acquisition at the end of this month or the beginning of next month.

“Meanwhile, we have been talking to banks and brokers who want change in mid- to small-cap market, which has not changed for 40 years,” he added.

For example, some stocks trade at between 15% to 20% spreads, some do not trade for six months and there is no access for retail investors.

“It is essential to use technology for innovation so we can enhance liquidity and the price discovery mechanism,” said Haynes.

Alasdair Haynes, Aquis Exchang

Alasdair Haynes, Aquis Exchange

A new hybrid new trading model could be introduced which includes quote-driven, order-driven or auction-driven mechanisms. Aquis also wants to introduce machine readable data for its listed companies which will enable more quant research.

The acquisition of NEX gives Aquis a listing venue and allows the exchange to compete for initial public offerings. Aquis itself went public on the London Stock Exchange last year.

“We floated and had a beauty parade for banks, lawyers, accountants but not exchanges,” added Haynes. “There is an opportunity for Aquis to pitch with our own listing criteria which may be more appropriate for certain companies.”

Haynes also wants retail investors to have earlier access to the IPO process.

“We are not against investor protection but retail investors can buy shares in a new company one second after it starts trading,” he added.

The chief executive admitted that it will take time to build a new market, change the listing criteria and improve connectivity, but has ambitious targets.

“We have had positive feedback from the industry,” Haynes said. “We want to be the growth market for Europe and a competitor to Aim and Nasdaq.”