Up until 1973 Scotland had its own independent stock exchange, the Scottish Stock Exchange, which was created from the merger of the Edinburgh, Glasgow, Dundee and Aberdeen Stock Exchanges in 1964. It was officially merged with the London Stock Exchange in 1973. In effect it was closed down as a working entity as all operations were moved to London.
SCOTEX now has an incredible opportunity to bring a new exchange to Scotland – and as an entirely new exchange we can bring about real innovation to the equity capital market:
We can bring profound change to the post-trade landscape through distributed ledgers thereby slashing settlement times and bringing significant cost benefits to all exchange participants. Every exchange in the world is looking at implementing this technology but they all face the intractable problem of switching from legacy systems on to very new and very different post-trade infrastructure. Without that problem to overcome SCOTEX can genuinely be the first in the world at implementing distributed ledger technology with the STARS system.
With no existing capital markets infrastructure in Scotland we can take the lead ourselves in bringing new companies to market instead of relying on the old way of banks and brokers carrying that role. We think we can bring companies to market quicker and more efficiently which improves the outcome for both issuers and investors. In future Scottish companies seeking a listing to raise capital for growth expansion will know they can access that service right on their doorstep without needing to engage with a bank or a broker in London or elsewhere.
Just 5% of large Scottish companies have a stock market listing in London, and only 10% of London Main Market companies are based in Scotland. So the opportunity for listings growth at SCOTEX is clear.
We know Scotland’s asset management firms have enormous sums of money to invest, and we know Scotland’s entrepreneurs and scientists have the talent to make investments in them produce the returns the asset managers are looking for. The link between them has been missing for 43 years and SCOTEX sees an opportunity to put that right.
SCOTEX will offer capital markets access for the next generation of scientists, inventors and entrepreneurs of Scotland. It is crucial for Scotland that its wealth creators – now and in the future – have a visible equity capital market that is able to provide them with access to the capital they need to grow their companies.