The long-defunct Birmingham Stock Exchange is set to be reborn this summer as an online trading facility in the shares of West Midlands companies that are too small to list in London, reports the FT.
The new exchange, Investbx, “will be more like Ebay than the London Stock Exchange”, according to its sponsor Advantage West Midlands, a regional development agency. If Investbx turns out to be a success it is likely to be copied by other UK regions.
The move underscores a new orthodoxy in the exchanges industry: barriers to entry are coming down, says the FT’s Norma Cohen.
A combination of efforts by regulators to inject greater competition, along with development of high-speed, low-cost trading systems has opened the door to many potential competitors to existing exchanges, not just in the UK but across Europe and the US.
Indeed, she notes, participants at a conference of the World Exchange Congress in Dubai this week unveiled a vision of an industry poised for competition unlike any it has seen before.
Brian Healy, director of trading and regulation at the Irish Stock Exchange, noted that there had been more than 40 regulatory initiatives aimed at promoting competition between stock exchanges in recent years. “Exchanges will have to engage in open competition with their customers,” Mr Healy told the conference.
Already, in the UK, a potential rival to the LSE, known as PLUS Markets, is making inroads with a niche offering trading facilities for smaller company shares, or fledglings. According to Simon Brickles, chief executive, PLUS accounted for almost all trading in those shares on two days last week.
