The Investors Noticeboard, a proposed UK order matching system for private investors, is seeking regulatory approval to begin trading in the first quarter 2001.
INB says it will be the first Internet service in the UK to offer private investors the opportunity to buy and sell listed shares with other investors direct online with no spread costs or intermediaries.
The system is being pitched at small and medium-sized businesses as a means of boosting liquidity and interest in their shares, including AIM registered stocks.
INB-registered traders will post the quantity and price of shares they want to buy or sell and the transaction will be completed immediately on the order being accepted by another member. The company is talking up the benefits to investors of the elimination of the broker-dealer bid/offer spread - a costly burden for individuals trading in small and mid-cap stocks. INB has calculated that a £4000 Internet trade on an AIM stock could cost the private investor £166 in fees (£151 spread and £15 commission) compared to a flat £14.95 with INB.
To support the core dealing product, INB says it will offer a live information feed, real time share prices from the London Stock Exchange and an investor research facility featuring company press releases, regulatory news statements, key financials and details of directors’ dealings.
Tim Waterstone, chairman of the HMV Media Group, is chairman of INB. Other members of management include Amber Rudd, CEO, a former corporate financier and sales and trading executive with J P Morgan, Mike Pitcher, chief technology officer, and Rab Harley, COO, previously a main board director of Dresdner Kleinwort Benson.
CEO Rudd believes the elimination of the spread will be a key attraction: "Independent research undertaken by Primark concludes that in the year 2000 private retail investors will pay anything between £1.5bn - £2bn per annum on spreads. INB removes this cost entirely from the equation and enables investors to trade with the same access to information and news as the professional market."