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A government that revives the city of London with a new system for trading shares in private companies was dismissed by risk capital and private equity executives and compared with a “new version” of the sick Junior Aim market.
The private intermittent Securities and Capital Exchange System (Pisces) – proposed by the previous conservative government and supported by the work chancellor Rachel Reeves – would enable investors from private companies to sell shares on regulated stock exchanges.
The London Stock Exchange Group is one of the companies that plan to do a fish trade where Shares Could be traded on a limited number of days a year.
However, investors have questioned how much demand there would be for the system and added that the bosses of rapidly growing companies would be reluctant to decide because they would lose control of who has participation in their business .
“I just don’t see who will use it,” said a partner of a top company in risk capital. “It is a courageous solution to a problem that is far more complex than the protagonists are to be understood.”
Hussein Kanji, who founded Hoxton Ventures, said: “What problem does that solve?” The new system would be problematic for risk capital companies, since trading with shares on private stock exchanges to their portfolio companies, which would probably be “low and possibly volatile”, would add a price listed.
The Ministry of Finance said that fish would quickly grow growing companies to support themselves in Great Britain and to act as a “intermediate level” in order to finally list the publicity of London Markets.
The London Stock Exchange has evaluated investment departures and lackluster companies, with top -class groups such as Chip Designer Arm Holdings floating in overseas and relocating public companies such as the Betting Group Flutter to New York.
Sales with secondary stocks in non -listed companies have become widespread as a company Wait longer List and let the investors list, to find other ways to be able to pay out.
In the United States, the Nasdaq private market enables investors and employees to act company shares since 2013, while platforms such as Crowdcube, Seedrs and JP Jenkins enable stock trading in Great Britain.
But several risk capital and private equity investors to whom the government said that fish will be “of interest”, the Financial Times said that they would probably not use the platform for selling shares in their own portfolio companies or that You didn’t believe that this would do high -quality companies.
Managing Directors of Top Start-Ups with fast, “want to control their shares violently”, in particular to avoid that people throw stocks on the first day of a later public list, added the venture capital partner.
A person in an international international private equity company added that “it would be difficult to work with the shareholders that they did not know.
The Financial Conduct Authority has proposed that companies determine the “very limited” scope of the restrictions of the types of investors who can buy their shares, also in some situations in which a list of “specific persons” is given. It was proposed that companies restrict the price range in which their shares could act.
The International Stock Exchange (TISE), based in Guernsey, already has a service for companies to carry out auctions from their own stocks without a broker. Cees Vermaas, Managing Director of Tise, said that because of his experience he started, he would be successful.
“We are skeptical that the rules (for fish) go far enough to make it a success, since companies continue to have disclosure obligations,” he said, adding that “they will have many costs for a full list” .
“Pisces is not much more than a new version of AIM,” said Vermaas, who refers to the London Junior stock market and suffered from a decline in listings and low liquidity, although they have fewer strict rules than the main market of the London Stock exchange.
The FCA said that fish “open the door for more options for investors and change the way in which private companies access investors and grow”, during the Ministry of Finance that the proposal was “only part of. . . Further reforms to increase competitiveness and investments ”as well as new listing rules and the creation of pensions“ megafunds ”.
Charles Hayes, global co-manager of private capital at the law firm Freshfield, said: “For everyone (buyout manager) who tells you:“ I don’t want to deal with thousands of investors, the direction of travel is clear to increase Routes to liquidity and. . . broader access to private capital ”.
