Brokers team up on new platform to boost retail interest in UK capital markets (updated)

Rothschild & Co SCA

02/02/2023 08:35

(Adds more detail on the collaboration)
    By Huw Jones
       LONDON, Feb 2 (Reuters) - Investment firms and brokers
in Britain teamed up on Thursday to back a new standalone retail
platform to strengthen access for small investors to the UK
capital market.
    Investment bank Peel Hunt's REX distribution platform will
become a standalone business known as RetailBook in the second
half of 2023, the company said.  
   Jefferies, Numis and Rothschild & Co will enter into a pact
with the platform with the right to buy stakes, the company
said, adding that Hargreaves Lansdown will sign an exclusivity
agreement for follow-on equity fundraisings.
    By combining forces, the brokers can wield more influence in
the face of institutional investors, who are typically first in
line for initial public offerings and capital raising by
companies.
    "The collaboration of market participants using this service
is an important step towards the more equitable inclusion of
retail investors in UK capital markets," said a joint statement
from brokers.  
    Britain is reforming its financial rules post-Brexit and is
looking to copy the much deeper, broader culture of retail
investment evident in the United States.
    One aim is to make it easier for retail investors to
participate in capital markets, a step the European Union is
also working on, with legislative proposals due in April.
    "The acceleration in adoption of REX on capital markets
transactions and the formation of strategic partnerships have
taken place against the backdrop of significant regulatory
tailwinds," the statement said.
    The government has said it will implement recommendations
from a review of secondary capital markets to overhaul company
fundraisings and give more access to retail investors.
    REX enables retail investors to participate in capital
markets transactions such as initial public offers and follow-on
equity offerings through retail brokers and wealth managers.
    "The growth of REX has reflected the increasing importance
of the retail investor over recent years, with adoption of the
technology on both primary and secondary transactions
accelerating," said Steven Fine, Chief Executive of Peel Hunt.
 (Reporting by Huw Jones; Editing by Sinead Cruise and Arun
Koyyur)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))