A year on from the launch of its new private markets offering, Guernsey-based The International Stock Exchange (TISE) has reported record turnover, profit and earnings. But is private share trading really the future? CEO Cees Vermas believes so.
In the 2023 financial year TISE saw a £10.8 million turnover, an increase of 6.5% on the previous year, and £4.9 million in profits, an 18.1% increase YoY. The company also noted 842 new listings—contributing to overall public market growth of 6% YoY.
Formerly the Channel Islands Securities Exchange (CISE), the venue offers a regulated platform for international companies looking to raise capital, which operates within European timezones but outside the EU. Through TISE Private Markets, which launched last year in April 2023, it allows unlisted companies to trade shares through electronic auction trading.
“There’s a growing interest from companies to go to private markets rather than an exchange,” affirmed TISE CEO Cees Vermaas, speaking to BEST EXECUTION. According to TISE group chair Anderson Whamond, the number of UK private companies with more than 100 employees has increased by 3,096 to 19,148 over the last 10 years. Meanwhile, the number of listed companies has dropped by 270.
This is primarily due to costs, Vermaas said. “An exchange is fully regulated, there are a lot of things that you need to do. All the steps have parties in between them, and they all need to earn money”.
TISE launched its private markets offering in April 2023, aiming to provide unlisted companies with integrated electronic auction trading, settlement and registry management solutions. In the company’s 2023 financial year highlights report, Whamond stated that the launch left the group “well positioned for long-term growth”.
TISE’s offering provides a system where companies can register shareholders and shares and execute trades automatically, with no intermediary parties involved, Vermass explained. “We don’t run this as an exchange, we provide it as a platform,” he continued. “We help the company to put the administration in place, and they run their own markets.”
Also reacting to market demand, the UK Government released a consultation paper earlier this month on the proposed Private Intermittent Securities and Capital Exchange System (PISCES).
Developed by the London Stock Exchange (LSEG), PISCES would allow private companies to trade their securities in a controlled environment and on an intermittent basis.
“I don’t think it’s comparable to what we have,” Vermaas told BEST EXECUTION. “We think we have a better solution than others.”
He went on to say that PISCES “appears to be a hybrid form for private companies to open an investor network within the exchange”, connecting private markets to an intermediated system.
“How is that different from the alternative investment market (AIM)?” he asked.
LSEG – and others in the market – might disagree.
Speaking to BEST EXECUTION at FIX EMEA earlier this month, Jessica Morrison, co-chair of the FIX Trading Community global steering committee and LSEG’s head of market structure and quantitative analytics (capital markets), called the project “incredibly important”.
“It ties on with our listings agenda, and means that home-grown UK companies can get broader access to investment pre-IPO. [We hope this] will build a relationship of familiarly with the exchange, so that when they come to publicly listing, London will be a destination of choice.”
©Markets Media Europe 2024
