Following the speculation that the London Stock Exchange is looking to establish an international trading platform, allowing blue-chip stocks listed on home markets in up to six countries to be traded through a single linkage during London hours, Financial News looks at the concept of global secondary markets.
The article looks at the attractions of this concept. For issuers, a global secondary platform would provide enhanced exposure to a wider range of investors, while for investors, it would increase the accessibility of stocks listed in foreign markets and could reduce the cost of investing in new and attractive equities markets such as APAC.
GreySpark maintains that a global platform would create new hedging opportunities and provide essential price points for firms trading ETFs and global derivatives, enhancing cross-asset trading strategies.
Currency would be one potential challenge, with securities needing to be fungible, ideally denominated in the same currency as they were issued in. However clearing and settlement would be the most notable hurdle, since a firm would need to be able to settle anywhere, ideally using transferable credit lines and pools of collateral.