New plan for equity trading
Ex-Nasdaq traders plan Scottish stock exchange
Scotex will be based in Edinburgh and is said to have the backing of a number of undisclosed Scottish investors.
It is not dependent on or linked to either the Brexit vote or Scottish independence. On its website, it states: “There is a very good case for Scotland having its own equity capital market irrespective of the outcome of political events.”
Scotex will be a Primary Market for Scotland-based companies, providing a market for Initial Public Offerings (IPOs or flotations) for Scottish companies. It will also act as a Secondary Market for UK Official List equities. This means that shares in London Stock Exchange companies will also be able to trade on Scotex.
It plans to transform the UK share trading landscape by slashing settlement times from three days to near instantaneous settlement.
Scotex is to launch the SCOTS-50 Index of leading Scots listed companies – that will be published real-time and without additional fees to market participants.
The Financial Conduct Authority will set a minimum amount that Scotex must set aside to fulfil regulatory capital requirements, expected to be £3 million.
Until 1973 Scotland had its own independent stock exchange, the Scottish Stock Exchange, which was created from the merger of the Edinburgh, Glasgow, Dundee and Aberdeen Stock Exchanges in 1964. It was officially merged with the London Stock Exchange in 1973. In effect it was closed down as a working entity as all operations were moved to London.
For more than 20 years there was a subsidiary offie in Glasgow and a handful of market makers. There were also tentative plans in the 1990s to base the Alternative Investment Market in Glasgow.
Other plans have been mounted to re-launch an independent stock exchange in Scotland including one by a former regional manager of the LSE.
It is envisaged that Scotex will launch in four phases.
Phase 1 is planned to launch with Secondary Market trading in all UK Official List shares in the FTSE-250 Index.
Phase 2 is planned to launch Secondary Market trading in the top 100.
Phase 3 is planned to launch Secondary Market trading in other London Main Market shares not listed in Phase 1.
Phase 4 is the planned launch of a quick settlements system