Stock Exchanges Enter Corporate Access Game


Stock exchanges are likely to continue to increase services offered to asset managers, potentially in competition with the sell side.  A case in point is corporate access, which is a natural product extension for exchanges.

Stock exchanges have been thriving even as pressures have been mounting on sell side firms.  The Financial Times noted recently that regulation such as the US Dodd-Frank Act and Basel III, which are forcing banks to restructure their equities businesses as they raise capital ratios, have been beneficial for exchanges.  The new rules curb off-exchange trading between banks and mandated more transparency and trade processing, boosting exchange trading.

In a recent Bloomberg article, Larry Tabb of Tabb Group observes that exchanges have an oligopoly on market data and have been dramatically increasing the fees they charge for market data and trade access.  Tabb estimates that data revenues for the major US exchanges increased 62%.from 2010 to 2015.

Meanwhile, recent weakness in equity markets globally have continued to pressure sell side firms and the range of services that they offer to the buy side.  Stock exchanges are starting to fill some of these gaps.

Exchanges have historically provided two service lines that compete with services provided by the sell side: corporate access and company research.  These services are natural extensions of the exchanges’ listing business, designed not only to retain existing listed companies but also to attract new listings.

In November, London Stock Exchange Group launched a proprietary corporate access platform, ELITE Connect, after a six month beta testing phase with major listed European companies, investors and brokers. Around 125 listed companies and institutional investors signed up during the testing phase, amounting to 230 users that held 600 meetings.

The LSEG platform is modeled on social network LinkedIn, allowing companies and investors to build online profiles. It facilitates messaging and users can host meetings in digital “meeting rooms” that feature integrated video conference, document-sharing and note-taking technology. Companies must pay a subscription fee to take part, but LSE-listed companies will receive a free trial period.

As LSEG Director of Capital Markets Raffaele Jerusalmi put it: “We think there is a tremendous opportunity for a modern, digital approach to Investor Relations which offers companies, investors and intermediaries greater opportunities to engage and enhance visibility in a cost effective manner.”

Several stock exchanges manage their own conferences or partner with sell side firms on corporate access events. NASDAQ OMX have for several years run investor conferences. The annual London conference has recently been run in partnership with Morgan Stanley. The Vienna Stock exchange has for years some hosted both conferences and roadshows for listed companies in partnership with sell side firms.  The Tel Aviv Stock Exchange has also for several years run conferences for their listed companies in different locations.

There has recently been a rapd rise in the number of new corporate access platforms available to asset managers. These include WeConvene, Ingage, A2 Access, OpenExchange, Meetyl, CorporateAccessNetwork, and CorpAxe as well as new arrival Closir.  Stock exchanges have long term established relationships with their listed companies. Corporate access is a natural service for stock exchanges to provide and is likely that more and more stock exchanges will do so.


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