LSE

PMK

The number of Aim companies dual-trading on both the London Stock Exchange (LSE) and Plus Market’s (PMK:AIM) platforms is gathering pace. In each of the past two months, more than 10 Aim companies moved to dual-trading and the total now stands at 61. If, as the companies as saying, dual-trading improves liquidity, the trend can only be a good one for investors.

Plus launched its trading platform in December 2005 to rival the LSE’s own SEAQ platform, on which most of the 1,600 Aim shares automatically trade. Shortly after, market-makers began trading all main market shares in the FTSE SmallCap and FTSE Fledgling indices on Plus’s platform. But, due to LSE’s rules, each Aim company has to apply individually and while take up was initially slow, it has stepped up.

As an investor, you are not able to access the platforms – although Level 2 gives you a window on the LSE’s SEAQ – since they are placed where market-makers advertise prices to buy and sell the stock and to which brokers go on your behalf. Plus claims that when your broker has the additional option of trading on its platform as well as the LSE’s, then liquidity improves, although the LSE denies this is the case. Either way, the growing perception of companies appears to be that it does improve liquidity.

The Financial Services Authority (FSA) is currently consulting on the future regulatory regime for markets such as Plus and Aim. This is aimed to set the framework for greater competition between exchange-regulated markets – i.e everything else but the main market, which is regulated by the FSA – and, Plus hopes, this will pave the way for a mass move of Aim companies onto its platform.