Private Trading River Rachel Rives Criticized by Executives

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The government’s desire to revive London with a new system of trade shares in private companies was rejected by venture capital and private capital executives as unnecessary and like the “new version” of AIM patient in the UK.

A private intermittent securities system (fish) – proposed by the previous conservative government and with the support of the Chancellor Rachel Reivz – would allow investors to sell stocks on regulated exchanges.

London Group Stock Exchange is one of the companies planning to manage fish trade grounds where shares You can trade for a limited number of days each year.

But investors question how much demand will be for the system, adding that the heads of fast -growing companies will be reluctant to choose because they risk losing control over who owns their business.

“I just don’t see who will use them,” the partner said at the leading company of Venture capital. “This is a bold solution to a problem that is much more difficult than the main characters are ready to understand.”

Hussein Kancia, which founded HOXTON Ventures, said, “What problem is solved?” The new system would be problematic for venture capital supporters, because sharing shares on private exchanges would have given the price of its portfolio companies that will probably be low and perhaps unstable, “he added.

Treasury said markets.

The London Stock Exchange suffered from the outflows of investment and insufficient estimates of the company, with high-profile groups such as Chip Designer Hard Holdings, floating abroad and public companies such as Group Betting Group, moving their major lists to New York.

Sales of secondary shares in non -traded companies have become widespread as companies Wait longer To list, leaving investors to find other ways to pay money.

In the US, NASDAQ’s private market has allowed investors and staff to trade stocks from 2013, while platforms such as Crowdcube, Seadrs and JP Jenkins allow you to trade in the UK.

But several venture capital investors and private capital – to whom the government stated that the fish will be “interesting”, – said the Financial Times that they would hardly use the platform for sale in their portfolio companies or that they don’t think it will attract quality business .

The main executives of the upper, fast -growing startups “want to rigidly control”, which owns their actions, in particular, to avoid the fact that people drop the shares on the first day of a possible public list, the partner of the venture capital added.

A person from the highest international private capital added that it is difficult to manage to work with shareholders they did not know.

The financial behavior proposed to allow companies to “very limited” the setting of restrictions on the types of investors who can acquire their shares, including in some situations showing the list of “specific people”. It suggested allowing companies to limit the price range in which their stocks can trade.

The International Stock Exchange, based in Guernse, already has a service for the auctioning companies without a broker. CEES VERMAAS, CEO of Tise, said that, based on his experience, he doubted that the fish would be successful.

“We are skeptical that the rules (for fish) go far enough to succeed because companies will still have requirements for disclosure,” he said, adding that “they will have a lot List. ”

“Fish is not much more than the new version of AIM,” said Vermaas, citing London’s Junior Stock Market, which suffered from low lists and low liquidity, despite the less stringent rules than the London Stock Exchange.

FCA said the fish “open the door for more opportunities for investors and will be able to convert how private companies gain access to investors and grow” while the Treasury stated that the offer “was only one part… Increasing competitiveness and investment “together with the new list rules and the creation of” Megafunds “.

Charles Haiss, a world co -chairman of the private capital at the Freshfields law firm, said that “for each (for the executive), which says to you,” I do not want to deal with thousands of investors, “the direction of travel is clear to the route to liquidity and. Widespread access to private capital. ”