Newsroom I Press Release

5 December 2005

The London Stock Exchange today successfully migrated the constituents of the FTSE UK AIM50 Index, together with the 100 remaining Main Market FTSE Small Cap Index constituents, to its SETSmm trading system.   

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 AIM UK 50 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.”

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For further information, please contact:

Richard Webster-Smith   
Press Office  +44 (0)20 7797 1058
newsroom@londonstockexchange.com    
 

Notes to editors:

About SETSmm:
 
SETSmm is a hybrid order book / market maker trading system for the trading of less liquid securities.  This extension to SETS is a hybrid market supported by continuous liquidity provision from market makers. 

Since its launch on Monday 3 November 2003 for the trading of Main Market Mid Cap securities, the market has benefited from tighter spreads and greater liquidity. 

In July 2005, after an extended period of market consultation the Exchange introduced SETSmm to the largest 200 Main Market Small Cap Index securities, by market capitalisation.

The remaining 100 Main Market Small Cap securities and AIM 50 securities were transferred to SETSmm on 5 December 2005.

SETSmm securities were previously traded on SEAQ, the Exchange’s quote-driven trading system.  SEAQ remains the trading system used for the trading of FTSE Fledgling Index securities on the Main Market and for all AIM securities outside of the FTSE AIM UK 50 index.

A full list of all market makers and the securities in which they have registered is available at: www.londonstockexchange.com/setsmm

About the London Stock Exchange:

The London Stock Exchange is one of the world’s leading equity exchanges and an international provider of services that facilitate the raising of capital and the trading of shares and debt securities.
 

The London Stock Exchange is the most international equities exchange by trading in the world and Europe's largest pool of liquidity. In 2004, 80% of all European IPOs floated in London. By the end of 2004, the market capitalisation of UK and international companies on the London Stock Exchange’s markets amounted to £3.5 trillion, with £4.7 trillion of equity business transacted over the year.

AIM 50 stock registration summary - by market maker
		SEAQ stock registrations	SETSmm registrations
1	ABN AMRO BANK NV	5	4
2	ALTIUM CAPITAL LD	11	11
3	ARBUTHNOT SECURITIES LIMITED	3	3
4	ARDEN PARTNERS	2	2
5	ATON INTERNATIONAL LIMITED	2	2
6	BEAR STEARNS INT TRADING LD	1	1
7	BRIDGEWELL SECURITIES LD	1	6
8	CANACCORD CAPITAL (EUROPE) LTD	11	12
9	CENKOS SECURITIES LIMITED	4	4
10	CITIGROUP GLBL MKTS UK EQTY LD	2	5
11	CODE SECURITIES	1	1
12	COLLINS STEWART LD	4	5
13	DEUTSCHE BANK AG,LONDON BRANCH	1	1
14	DRESDNER KLEINWORT WASSERSTEIN	11	11
15	EVOLUTION SECURITIES LIMITED	53	59
16	HSBC BANK PLC	1	1
17	INVESTEC BANK (UK) LD	7	7
18	JEFFERIES INTL LD	21	0
19	JPM CAZENOVE T/A CAZENOVE	5	5
20	KBC PEEL HUNT LD	47	48
21	LEHMAN BROTHERS INTL (EUROPE)	1	1
22	MERRILL LYNCH INTL	16	59
23	MORGAN STANLEY LD	4	59
24	NUMIS SECURITIES LD	21	21
25	PANMURE GORDON (UK) LIMITED	12	11
26	ROBERT W BAIRD LD	7	0
27	SEYMOUR PIERCE LD	1	0
28	SHORE CAPITAL STOCKBROKERS LD	22	16
29	TEATHER & GREENWOOD LD	11	12
30	UBS INVESTMENT BANK	5	5
31	UFG UK LD	1	1
32	WILLIAMS DE BROE PLC	1	1
33	WINTERFLOOD SECS LD	58	58
34	GOLDMAN SACHS	0	5
	Totals	353	437

Note:  50 x Index constituents & 9 reserve/other securities transferred to SETSmm

AIM 50 - Stock registration summary - by security
		Number of market makers on SEAQ	Number of registrations on SETSmm
1	ACCIDENT EXCH	4	5
2	AMINO TECH	3	5
3	ANGLO ASIAN	3	6
4	ASIA ENERGY	8	9