The impending closure of London’s third tier share exchange, Plus Markets, poses a dilemma for Arsenal. Plus’s less onerous listing requirements were attractive to the club and 155 other companies. However, Plus faced the imposition of higher capital regulatory requirements by the Financial Services Authority. The lack of liquidity on the market was an issue for some companies, although not so much for the Gunners.
The impending closure of London’s third tier share exchange, Plus Markets, poses a dilemma for Arsenal. Plus’s less onerous listing requirements were attractive to the club and 155 other companies. However, Plus faced the imposition of higher capital regulatory requirements by the Financial Services Authority. The lack of liquidity on the market was an issue for some companies, although not so much for the Gunners.
The number of listings on Plus fell after the onset of the global financial crisis, in line with a decline in investor appetite for smaller companies that were seen as risky. A succession of lossmaking years followed.
Several of the groups quoted on Plus have a market capitalisation of less than £1m. With a market capitalisation of £1bn Arsenal was one of the bigger companies but its shares were generally not actively traded.
Some companies may join the second tier Aim market but the costs and paperwork involved means that is not a solution for Arsenal. They will be courted by share trading platforms such as Sharemark, BritDaq and GXG Markets, a Danish-based exchange operator focusing on small and medium-sized companies across Europe.
Unlike Plus, stocks quoted on Sharemark trade only within ‘auction’ windows, usually no more than a week, but that would suit Arsenal and its fans who do not want any surprises in terms of dealings in their shares.
Once it was all the rage for clubs to issue shares which was a useful way of raising extra money from fans who then framed the certificates (you could even buy one share through a company for this purpose). There was even a unit trust dealing in football shares, although that soon disappeared. However, clubs found that dealing with many small shareholders was expensive whilst the compliance requirements could also be onerous and sometimes led to greater transparency than they wanted.