The 4 March 2020 saw the long awaited takeover of NEX by Aquis Exchange PLC (approved by the FCA) and rebranded as AQSE (Aquis Stock Exchange).
Since the acquisition, PKF has acted as Reporting Accountant for the first two listings on the AQSE, British Honey Plc and Vulcan Industries Plc. Prior to the acquisition of NEX, Aquis Exchange PLC also has two other divisions:
Aquis Exchange – Has set up in 2012 and as 2 MTFs regulated in the UK and the EU.
Aquis Technologies – developing and licencing proprietary exchange technology.
Both divisions have integrated seamlessly with the acquisition of the AQSE; it currently has 90 tradeable securities and a total market cap of £1.8 billion.
With this change, Aquis has inherited two markets from NEX being its Main Market and its Growth market. The AQSE Main Market is designed for larger companies and is an EU regulated market, much in the same way as the LSE Main Market. Therefore, listing on the AQSE Main Market will require adherence to the Listing Rules, UK Corporate Governance and Transparency Rules. This would also require a Prospectus with more hurdles to overcome.
The AQSE, and previously NEX, are more well known for the Growth Market which is suitable for smaller companies looking for investment. The AQSE, and previously NEX, are more well known for the Growth Market which is suitable for smaller companies looking for investment. Overall, listing on the Growth Market is a much less onerous process, with less regulatory requirements in the production of an AQSE Exchange Admission Document. This only requires 24 months of audited accounts, a 10% free float and only one non-executive director on the board.
As this is a Recognised Growth Market by HMRC, all trades executed in UK companies on this market are exempt from UK Stamp Duty and Stamp Duty Reserve Tax. This only requires 24 months of audited accounts, a 10% free float and 1 non-executive director on the board. As this is a Recognised Growth Market by HMRC, all trades executed in UK companies on this market are exempt from UK Stamp Duty and Stamp Duty Reserve Tax.
Planned enhancement to the AQSE
Aquis are planning on developing the AQSE through four main actions:
Segmenting the market – splitting the Growth market into Access (AXS) and Apex (APX);
Gaining greater institutional and asset manager support;
Develop and adopt enhanced trading mechanisms to enable greater liquidity;
The prohibiting of short selling of stocks on the growth market.
The splitting of the market into the two segments of Access and Apex, to go live in September/October 2020, is the primary move for the new owners. This split has the primary aim of creating better liquidity for those already listed and those looking to list.
Access will reflect the rules of the growth market currently, with the exception of the minimum raise for cash shells increasing from £500,000 to £1,000,000. Apex is aimed at larger companies with a minimum market capitalisation of £10m, although this is not fixed. A minimum 25% free float is required along with the adoption of either the QCA or UK Corporate Governance code, in line with other national exchanges.
Aquis Exchange Plc has set its stall out to refresh the old NEX by improving liquidity and corporate governance. However, it is supporting companies of a smaller size looking to raise a lower level than would be acceptable on other national exchanges.
PKF’s Capital Markets team are well placed to support any clients if they are interested in listing on AQSE. Written by Joseph Baulf in our London office.