www.killthespread.com
 
‘killthespread’ is a campaign which concerns all stakeholders in the LSE AIM market including:

 
 
 
  • Retail & Professional Investors & Traders.
  • Employees & Directors of Member Companies.
  • LSE Employees & Shareholders.
 

 
  The Alternative Investment Market is systemically flawed. The Market Maker system creates a fundamental conflict of interest in that those who are supposed to be creating the market are often actively competing with traders and investors.

During the latter part of 2008 liquidity all but dried up and spreads in most small cap stocks became so wide they deterred trading.
Market Makers were then able to pick up stock from distressed sellers at a price to suit them, since they were -  and still are  - the only game in town.

They often paid a mere 10% of their quoted bid for larger size deals. This is not making a market  - it is pure profiteering.

There is another way, such as the Direct Market Access systems employed in Canada and Australia, which allow traders to deal directly with each other. Or The SETS system actively used in larger AIM stocks.

We started a poll on 5th September to gauge the depth of feeling amongst those most affected. By 11th November we had over 1,400 voters, which was an incredible level of response, in such a short time period.  If you would like to participate please click here to go to poll
(when you have voted you will be able to see the overall results.)

Short Selling:

Another issue of significant concern to many investors is that of Short Selling. Whilst some see it as a legitimate function of the market, of late this function seems to be shrouded with allegations of manipulation and market abuse.

In this respect we have set up a poll to gauge investor sentiment and allow you to have your say. We intend to  publish the results when the poll closes.

Please click here to go to poll (when you have voted you will be able to see the overall results.)

Please also register your support below. To be kept informed. We have some interesting proposals and are working on improving the way the private investor is treated by the Industry.   Your personal details will be kept completely confidential and only used for the purpose of updating you with our progress.

 
 
 
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Your Comments:
 
 
 
 

Some of the comments we have received from supporters...

  • The market makers on aim are regularly quoting very wide spreads which makes a mockery of the pretence of a market.  
  • Fully support this on behalf of both companies that are listed on AIM and their investors. 
  • This "market maker" system stinks and is immoral. Winding down my investments in AIM and expanding in the Canadian market.  
  • It`s good to see that someone is starting to do something about this. 
  • Short selling kills funding for new companies and personal investors funds and confidence in the Stock market. Supply and demand alone should affect a stocks price.  
  • As a regular AIM private investor I fully support Kill The Spread and its aims.
  • If AIM Does not Compete on Spreads, it will cease to exist within 18 months, as all professional investors and traders will cease to trade or invest, moving to AMEX,NYSE, TSE, ASX, JSE and other markets. I have not taken a position on an AIM stock for 3 years at least. Good luck with your campaign.
  • I agree, some of the spreads imposed by Market Makers do nothing to encourage any market. The percentage of some spreads is absurd at time.  
  • Remove the MM's and breath new life into the AIM. Many investors do not trust the AIM or the MM's. Its time for a change. NOW. 
  • I would like to invest in a stock MARKET not an artificial contrivance regulated by a couple of brokers. 
  • In many of the shares there is no trading and still the prices are moving. This is clearly deterring any smaller investor from participating in these markets which will make it more difficult for small but deserving companies from ever coming to market. Good luck with the campaign 
  • Direct Market Access for AIM and small caps is definitely worth a try. It's got to be better than what we have now. 
  • Large spreads do discourage trades, even if MM's do provide liquidity. It's a bit self perpetuating at times - 'catch 22' and all that... It would be a pity if London was to loose the business, but if things carry on like they are it could well be that Co's look elsewhere for a listing. 

These were selected at random and represent just a tiny fraction of the feedback we have received to date.  Please join the campaign and show your support.  Every participant counts and every day we see more and more people signing up.  It is so exciting that so many investors are now standing shoulder to shoulder to put our market right.

Let's stop our market from dying.  Support www.killthespread.com and let's show the City that there really is another way!  Please spread the word - if you have a view on this issue, then make yourself heard! Any questions to: info@killthespread.com

 
 

Interesting articles

 
 


Stock exchange operators want companies to list and there's nothing wrong with that. The problem is with happens next. Once a company has 'floated', the exchange, the brokers, the advisers and so on have all made their money. While they might like to see companies thrive, financially it doesn't matter to them whether the company sinks or swims.

As Charles Breese, founder of Armshare.com, says, the LSE is too intent on simply recruiting new Aim entrants and is not doing enough to stimulate the secondary market, where existing holders are able to sell out and new investors can get involved.

On the exchanges in Canada, if you want to sell a stock, you offer it at a set price. That offer is placed on the exchange and if somebody wants to buy, they can at that level. In short, this is a direct, transparent market. AIM has seen fit to use a different method, the market maker system, with no such transparency. I reckon that as a result of this system - and the market makers operating it - liquidity on the exchange has all but dried up.
Dominic Frisby, Moneyweek.com
September 08, 2008


http://www.moneyweek.com/investments/stock-markets/whats-wrong-with-aim.aspx

A Toothless Market That Offers No Liquidity And Locks Its Directors Out - Just What Exactly Is The Point Of An Aim Listing?

http://www.minesite.com/nc/minews/singlenews/article/a-toothless-market-that-offers-no-liquidity-and-locks-its-directors-out-just-what-exactly-is-the-p/1.html

How you could help kill sky high dealing spreads on AIM.  Penny Sleuth by Tom Bulford 9/10/08.

http://www.fleetstreetinvest.co.uk/small-cap/aim-market/dealing-spreads-aim-53414.html

http://www.fleetstreetinvest.co.uk/small-cap.html

Shares Magazine article by Tom Sieber 20/11/08.The cost of the spread.

http://www.sharesmagazine.co.uk/node/5092

 
 
 
 

http://www.moneyshow.com/video/
Click here to play the video

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