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March 30, 2021

IPSX announces new features for the Wholesale market

IPSX has announced the introduction of new features to IPSX Wholesale which provide more flexibility for issuers and more opportunities for institutional investors to trade.  Shares admitted to trading on IPSX Wholesale may now be traded under two market models. 

Market Maker Model

Shares which trade under the Market Maker model will have at least one market maker who will provide firm two-way prices throughout the trading day against which investors can trade.

Broker-Driven Model

The Broker-Driven model will operate in the same way as the current IPSX Wholesale model. Shares which trade under the Broker-Driven model will not have market makers.  Instead, brokers will publish firm quotes for orders in such shares.

Issuers admitted to trading on IPSX Wholesale will be able to select the most appropriate market model for trading in their shares.  

Further, the minimum value that assets admitted to IPSX Wholesale must generally have has been aligned with that of IPSX Prime to £50m.

IPSX has updated its Rules for Issuers, Rules for Members and Guide for Trading Members to incorporate the changes that arise as a result of the introduction of the new market models. 

Features of IPSX Wholesale include:

  • The loan-to-value requirement for IPSX Wholesale is set at a maximum of 80%, compared to 40% for IPSX Prime, allowing companies with more leverage to seek admission to trading
  • IPSX Wholesale issuers must have asset(s) that have a minimum market value of £50 million
  • IPSX Wholesale does not prescribe a minimum free float. Issuers can seek admission to IPSX Wholesale with a free float lower than the 25% requirement of IPSX Prime
  • IPSX Wholesale issuers that are not required to produce a prospectus for approval by the FCA are required to produce an admission document which complies with requirements outlined in the rules for IPSX Wholesale and will need to be prepared by the Lead Adviser to set out the investment opportunity

Alan Ramsay, Chief Executive for IPSX UK said “Our Wholesale market provides significant choice and flexibility for commercial real estate owners with no prescribed minimum free float on admission. As well as stabilised assets, IPSX Wholesale is open to development and regeneration projects in addition to more complex structures such as JV REITs. The new features we have announced today make the market even more attractive to both real estate owners and institutional investors. We look forward to welcoming new issuers to our new market over the coming months.”

To join the market, IPSX Wholesale issuers are required to appoint an IPSX Lead Adviser to take them through the admission process, and an IPSX Approved Valuer to produce a RICS compliant Red Book Valuation.