Aquis Stock Exchange will reward market makers with equity to reduce spreads

Aquis Stock Exchange (AQSE) has launched an incentive program to reward top performing market makers with stocks with the aim of reducing spreads and increasing the liquidity of its market growth stocks.

Scheduled to begin in January, the program will require participating market makers providing bidirectional pricing in retail size to offer tighter spreads not exceeding 5%.

The regime will apply to 50% of the shares in the new Apex segment of the AQSE growth market, which lists companies with a larger market capitalization.

Market makers eligible for the program will be granted warrants convertible into AQSE shares. During the three-year duration of the program, the top five can collectively win up to 19.9% ​​of the AQSE shares up for grabs.

The AQSE said a number of market makers have already signed up to the program, including Canaccord Genuity, Liberum, Peel Hunt, Short Capital, Stifel and Winterflood Securities.

“This is an important development in our quest to truly transform the AQSE market into the destination of choice for issuers and investors in growing companies,” said Alasdair Haynes, Managing Director of Aquis Exchange. “Liquidity is the cornerstone of markets and programs to stimulate trade by offering tighter spreads, advanced technology and alignment of special interests will lead to a more dynamic market. “

The program was designed to increase liquidity and quotes in its recently revived market following Aquis Exchange’s £ 2.7million acquisition of NEX Exchange from US derivatives group CME this year.

It is also because market participants fear that MiFID II’s research rules have reduced the coverage and liquidity of small and mid-cap stocks across Europe.

“Following the implementation of MiFID II, some small and mid-cap listed companies have experienced a significant reduction in the liquidity of their shares, hampering their ability to attract equity investments,” said Iain Morgan, Head of Equity. execution and trading at Peel Hunt. “We are delighted to support a program that aims to improve trading in these companies, so that they can access the investment capital necessary for their future growth. “

In September, Aquis Exchange recorded its first period of profitability since launching in 2013 after recording a 42% increase in turnover in the first half of 2020. Aquis reported a profit of £ 16,000 in the first half of this year. year, against £ 623,000. loss over the same period in 2019.