PLUS: new option for small and mid market caps

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Sponsored Feature: Major changes in European equity capital markets have taken place and there are more markets for small and medium sized companies and their investors to choose from than ever before. PLUS Markets is the UK’s newest stock exchange, providing access to capital and investment opportunities in a well regulated and liquid market place.

Granted Recognised Investment Exchange (RIE) status by the Financial Services Authority, PLUS has exactly the same rights and privileges as the London Stock Exchange and other European market operators. Being an RIE promotes investor confidence in the PLUS market offering and opens up the market to a wider pool of investors and supporting equity fundraising for companies on PLUS.

Currently, PLUS trades more than 7,500 securities that are listed or quoted on other European exchanges, including the most liquid FTSE 100 securities. Because of its competitive tariff structure and the manner in which securities are traded, PLUS is becoming the market of choice for many brokers executing retail size order flow. The secondary market trading platform is based on a quote-driven model, the most efficient and effective system for trading shares in small and mid-cap companies.

PLUS operates two primary markets for the raising of initial capital; the PLUS-listed market, for issuers seeking admission to the FSA’s Official List or alternatively passporting into the UK through an EU listing; and the PLUS-quoted market, for small and medium-sized growth companies which for tax purposes are considered “unquoted”, ie not fully listed.

The PLUS-quoted market

The PLUS-quoted market is dedicated to the needs of growing companies seeking access to a public market for the first time, whether to raise capital or enhance the profile of their business. The entry criteria are clear and transparent, offering companies a unique, disclosure based regulatory framework, ideally suited to smaller companies. There is a clear and simple admission process which does not impose specific eligibility criteria but instead requires companies to meet certain basic standards.

PLUS is committed to providing investors with a market dedicated to offering quality investment opportunities. Investors are assured that PLUS is a select listing destination offering the best investment value due to stringent regulatory control and a particular focus on investor protection that has played a strong role in the company’s business model.

Tax benefits for PLUS-quoted companies

Investors in PLUS-quoted companies benefit from a range of unquoted company tax reliefs, including capital gains tax and inheritance tax reliefs; eligibility for venture capital trusts and enterprise investment schemes and eligibility for inclusion in self-invested pension plans (SIPPs).

PLUS’ status as a Recognised Investment Exchange provides an added level of regulatory comfort and the knowledge that transactions executed on the market are “on-exchange”. This is encouraging greater institutional flows into fundraisings and burgeoning secondary market liquidity.

PLUS = liquidity, choice, momentum

As of June 2008, there were 220 companies on the PLUS-quoted market. PLUS has seen 21 new admissions to its market so far this year and its pipeline remains strong in tough market conditions. Significantly, over £66 million was raised by companies through primary and secondary fundraisings in 2007. From January to May 2008, PLUS has recorded a total of £39.2 million in funds raised.

The growth of PLUS trading activity has also been impressive. Since November last year, seven months after the introduction of a European directive enabling greater competition among market operators, PLUS has posted a total number of 2,245,805 trades of 11,715.28 million shares worth £17,898.73 million in trade value. This is more than double the number of trades and value recorded on the PLUS market for the whole of 2007. Since January 2008, PLUS has maintained over 50% or more of the trades in over 600 small and mid-cap companies, solidifying its position as a leading small and mid-cap UK stock exchange.

There will be an opportunity to learn more about PLUS at a seminar to be held on September 3 at SWRDA’s offices at Sutton Harbour, Plymouth.

The seminar is aimed at companies looking for an introduction to PLUS and/or introduction and placing with a view to raising any amounts of capital, and will feature a number of presentations from both local and national experts including:

  • Rob Seymour, MD, Finance Cornwall
  • Paul Haddock, head of capital markets, PLUS
  • Jonathan Wilde, senior company commercial lawyer, Coodes
  • Jonathan Williams, head of corporate finance, Bishop Fleming
  • David Newton, broker, Dowgate Capital Advisers

To reserve your place, contact Jonathan Wilde on jonathan.wilde@coodes.co.uk or Coodes, Elizabeth House, Castle Street, Truro, TR1 3AP