Regional Exchanges

[grabber]

I know this has been brought up before but not by me! I am just looking for some feedback from traders on what your feelings are towards the setting up of Regional Exchanges. The Idea being to drive investment in the SME market and to increase the number of people investing in shares nationally, the atraction would be investing in small local comapnies.

I have thick skin so flame away but it is a serious question.:whistling

cheers

 

[shadowninja]

The idea has merit. The timing might be poor. I like the idea of investing locally because you may know people who work in said company.

 

[ns1000]

Agree that in theory it's a good idea - basically it will facilitate business angels investing in smaller companies. However, in practice I can't see how the costs involved will not render it a non-starter. Mopst of the companies quoted will by default be sub-AIM, worth say under ten million. Are they going to have the infrastructure in place to produce a prospectus and follow propoer reporting requirements? Another point, the liquidity of these stocks will be non-existent, with the exchanges functioning primarily as a venue to IPO rather than providing a secondary market. I can't really see how this will benefit an investor. Retail clients will likely not have the inclination to invest in the IPO and with no secondary market how will they invest? Can't really see how a local exchange will make raising funds easier.

 

[grabber]

Agree that in theory it's a good idea - basically it will facilitate business angels investing in smaller companies. However, in practice I can't see how the costs involved will not render it a non-starter. Mopst of the companies quoted will by default be sub-AIM, worth say under ten million. Are they going to have the infrastructure in place to produce a prospectus and follow propoer reporting requirements? Another point, the liquidity of these stocks will be non-existent, with the exchanges functioning primarily as a venue to IPO rather than providing a secondary market. I can't really see how this will benefit an investor. Retail clients will likely not have the inclination to invest in the IPO and with no secondary market how will they invest? Can't really see how a local exchange will make raising funds easier.

This could of course be built in to the rules of the exchange, by licencing the right to audit for it with a fixed charge scale it would allow SME's to raise capital without the "London" overhead.

As for Retail Clients a period of education would be necessary, but that does not preclude the fact that more and more people are comfortable with the idea of online trading in particular.Both my Mother and GF's mother ar in their 70's and both actively follow their investments online.

Also! If the tax regime was adjusted to make investment in local enterprise tax efficient, would this not give some impetus to the Idea?