PrimaryBid and Winterflood announced a collaboration to further advance UK retail investor participation in equity and debt capital markets, including IPOs and follow-on fundraises.
Together the firms will “offer API integration to any stockbroker or wealth manager wishing to distribute primary market deals to retail investor clients, leveraging the UK’s retail trading network which currently pools secondary market retail liquidity.”
This digitization initiative aims “to significantly lower the frictional barriers in the UK’s retail capital raising infrastructure, including simplifying participation from almost £300bn of uninvested ISA monies currently held as cash1.”
Despite recent regulatory reforms designed to level the playing field for retail investors in the UK’s public markets, “the distribution of IPOs and other time-sensitive transactions has traditionally remained a manual process and focused on institutional participation.”
Historically too many investors have “not been presented with details of public company capital raisings and this collaboration will help address the absence of end-to-end automation and digitization within the UK’s retail distribution infrastructure.”
This initiative comes “at a critical moment for the UK’s capital markets and for the status of retail investors within them.” In 2022 HM Treasury’s ‘Secondary Capital Raising Review’, led by Mark Austin, stated clearly “that retail investors should no longer be excluded from UK public company fundraisings while acknowledging that the framework to facilitate this participation was still novel and would require significant investment.”
In parallel, the arbitrary financial ceiling “on retail investor participation in public company capital raises is set to be eliminated in 2023 via the Financial Services and Markets Bill, as part of the Chancellor’s commitment to widening the ownership of public companies.”
Alex Skrine, Director and Head of Electronic Trading at Winterflood Securities, said:
“PrimaryBid has the leading track-record in delivering retail access to IPOs and secondary fundraisings, and Winterflood has a 34-year history of developing innovative solutions to allow retail investors access to secondary market liquidity. This endeavour brings together two leading market infrastructure providers with an ambition to digitise retail investor access to capital markets and ensure investors are treated fairly.”
Anand Sambasivan, CEO of PrimaryBid, said:
“The future is clear: regulatory changes in both the UK and abroad mean that retail investors will play a more meaningful role in the public markets. But the ambitions of UK policymakers will only be realised if the underlying plumbing that broadcasts deals, captures retail demand and delivers allocations is upgraded. In our European operations, API-driven access to the PrimaryBid deal platform has delivered outstanding results for corporate issuers, retail investors and the investment platforms that service them. I am excited to be collaborating with Winterflood on what we believe will be a meaningful step toward modernising the UK’s infrastructure.”