Aquis Exchange: The challenger stock market looking to shake-up the City


quis is a challenger stock market based in London. It is home to everyone from historic brewer Shepherd Neame to music management company ATC. CEO Alasdair Haynes talks about how the company is taking on AIM, why it has banned short selling, and why entrepreneurs should consider his business when going public.

What is Aquis?

First and foremost, we are a challenger stock exchange. Currently we are targeting growth companies of the small-to-medium variety but have the ability to take a business from a sub-£10 million market capitalisation all the way into the billions.

So, like the AIM market.

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 benefits from the same tax breaks and stamp duty exemptions, making AQSE every bit as regulated and legitimate a venue as its more widely recognised counterpart.

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The stock exchange has come a long way since we bought it in March 2020. There have been a record 22 IPOs this year. Companies currently listed include well-known names such as Shepherd Neame alongside industry trailblazers such as blockchain company KR1, luxury investor Silverwood Brands and cross-border ecommerce business Samarkand.

Why should an entrepreneur choose you over AIM?

The key differentiator is our exchange’s deeper understanding of the needs of growth companies.

We have segregated the market — so, for example, our entry segment ‘Access’ is formed with different rules and support for businesses earlier on in their development. We think of it as a primary school for companies. From there, companies move on to the ‘secondary school’ of the Apex market, which currently has an average market cap of approximately £75m, and then ultimately onto the ‘university’ of the AQSE main market.

Another distinction between Access and Apex is the requirement for companies listing on the Apex segment to publish a Growth Prospectus, opening up its IPOs to retail investor participation. AQSE’s encouragement of retail investor participation has resulted in online brokers such as AJ Bell, Barclays, and interactive investor connecting to the exchange and offering trading in AQSE securities.

Is there a genuine need for Aquis?

The LSE main market now has a minimum market cap of £30m. This means earlier-stage growth companies now have to list on either AIM or AQSE, showing the FCA’s support of proportionality.

When Aquis listed on AIM it was a great event, but I wish someone had told me it would be a going away party – we never spoke to the exchange directly again. A direct relationship between the exchange and listed companies is a focus for AQSE, ditching AIM’s NOMAD requirement. With companies not having to rely on an expensive advisor to always contact the exchange and AQSE’s streamlined listing process, the cost of flotation is between 25% and 50% cheaper than an AIM IPO.

What about liquidity, isn’t that a problem?

Liquidity is an area of focus for AQSE, one the exchange knows it needs to improve. We have gone old-fashioned with our new market maker scheme. We’ve made it competitive, with the market makers having to keep spreads no wider than 5%, and those most adept at narrowing spreads given warrants convertible into AQSE equity. So far, the stats show the impact that has been made, with spreads narrowing by double-digits across the Growth Market.

You have banned short-selling. That just sounds wrong to me. How do you defend it?

The ban is to protect SMEs and their investors. It’s not about supporting bad companies, it’s about allowing shareholders to make the decision about buying or selling. If you see a necklace in a shop, you can’t decide that you don’t like it and go short on it, and we believe where it comes to growth companies the rules should be the same. The choice should belong to the people that own the company whether to sell or hold. Not an external participant.

And what about the future?

One thing is certain, we need competition in our exchanges to encourage innovation and keep London’s place as an outstanding financial centre. The Government appreciates that, and that fact more than anything makes me certain the exchange has a bright future.