Unlisted Securities Market (U.S.M.)

Updated: Aug 20, 2021

This was launched by the Stock Exchange in 1980 to cater for the many companies which needed facilities for raising capital and marketing their shares but were unable or unwilling to apply for an official Stock Exchange listing. Until this market was opened, such companies were obliged to seek necessary facilities by private negotiation, and the Stock Exchange therefore did not get the business. Since the U.S.M. was established, well over 200 companies have entered it and obtained quotations for their shares.

In the case of smaller companies, the I U.S.M. is often preferable to an official listing, for various reasons. It caters for companies with a market capitalization below the £500,000 minimum insisted upon by the Stock Exchange as a prerequisite for an official listing, and a company can gain admission to the U.S.M. with only 10 per cent of its equity in public hands as against the 25 per cent necessary for entry to the official list. Other attractions lie in the shorter trading record demanded, the less stringent preconditions to entry and the considerably lower initial costs by way of both advertising and fees, thus giving the benefits of a quotation at a lower cost. Against the obvious advantages of a listing on the U.S.M. must be set the attendant duties and obligations to provide a considerable body of facts regarding trading and results on a regular basis to the Stock Exchange, individual shareholders and the general public. Disclosure requirements are almost as comprehensive as those applying to officially quoted shares.

Reference: The Penguin Business Dictionary, 3rd edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.