London Stock Exchange Group (LSEG) formally announced plans to launch the International Securities Market (ISM), an additional market for the issuance of primary debt that would compete with exchanges such as Ireland’s Global Exchange Market and the Euro MTF in Luxembourg.
The new exchange would also act as an alternative venue for emerging-market issuers without an EU equity listing to raise debt finance.
The step comes less than a month after the UK’s market regulator, the Financial Conduct Authority, announced that it is gauging the appetite for a wholesale bond multilateral trading facility to be set up in London. The exchange-regulated multilateral trading facility (MTF) proposal is part of a broader reflection by the FCA on how to improve the UK’s primary capital markets.
Though within the LSEG, the ISM will operate as a separate market with distinct rules that apply to membership, trading, clearing and settlement and listing of securities. This is a type of trading venue in the EU that serves as an alternative to traditional stock exchanges.
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LSE’s debt credentials
The key to the ISM lies in its name. Over time, the aim is to transform it into an international securities hub, a single marketplace offering international corporations and institutions the chance to list and trade securities in a jurisdiction firmly embedded in the global financial system.
The ISM will offer all the benefits of London’s distinguished reputation, heritage and status as a global financial centre. The city is home to over 2,300 companies from more than 70 countries around the world. In addition, 70% of all bond secondary trading activity is conducted out of London and as such issuers on ISM will have access to one of the deepest pools of global capital.
Nikhil Rathi, CEO, London Stock Exchange, commented: “The London market has always provided an efficient process for UK and international companies to raise debt capital and the ISM will further reinforce London’s standing as an international finance centre and a dynamic place to do business.”
“Ensuring London Stock Exchange continues to innovate for its customers is a priority for the Group. The International Securities Market will provide UK and international fixed income issuers an additional efficient London listing venue, giving them access to the City’s deep pool of global capital and an international investor base,” he added.