SETSmm is the Exchange’s electronic trading system for the trading of less liquid securities. It combines elements of SETS, the Exchange’s electronic order book, together with the existing market maker based trading model. Since its introduction in November 2003 for the trading of Main Market FTSE mid cap securities and subsequent extensions to securities in the FTSE Small Cap Index, SETSmm has delivered significant benefits to the market as a whole by stimulating a significant reduction in trading costs and increases in trading volumes.
The Exchange has received a notable increase in the total number of Market Maker registrations on SETSmm for the AIM securities transferred, compared to the previous registrations on its pure market maker trading system, SEAQ. As at 5 December 2005, there are 437 market maker registrations across the AIM securities on SETSmm, an increase of 24% on the previous 353 registrations on SEAQ. There is now an average of 7.4 market maker registrations on each AIM security on SETSmm compared to an average of 6.0 market maker registrations when these securities were traded on SEAQ.
Martin Graham, Director of Market Services and Head of AIM at the London Stock Exchange, said:
“The extension of SETSmm to the largest companies on AIM is a core part of the Exchange’s strategy of implementing improvements to our markets. We believe the level of market marker registrations we have received augurs well for a strong start to trading of the FTSE UK AIM50 Index on SETSmm and we believe that this initiative will deliver significant benefits to the whole market.”
The extension of SETSmm to AIM is one of a series of developments the Exchange is undertaking to enhance the secondary market liquidity of AIM. Other developments include the introduction of a new series of FTSE AIM indices in May 2005, and the introduction of supersector indices for AIM in 2006. It is anticipated that these measures, together with the migration of the FTSE UK AIM50 Index securities to SETSmm, will lead to increased investor interest in AIM.
Martin Graham continued:
“The migration of the FTSE UK AIM50 Index to SETSmm is part of a series of secondary market enhancements we are undertaking on AIM, and is a further step in AIM’s progress as a mainstream asset class. We believe that these measures will deliver increased visibility and reduced trading costs and will stimulate greater retail and institutional investor participation in AIM, benefiting the whole market.”
AIM 50 stock registration summary - by market maker
AIM 50 - Stock registration summary - by security
