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Your guide to trading
Your guide to trading
Welcome
Your guide to trading 01
By making this communication, none of London Stock Exchange Group plc and/or its group undertakings (which shall be construed in accordance with section 1161 of the Companies Act 2006) (together, “LSEG”) intend to invite or induce you to engage in any investment activity for the purposes of the UK regulatory regime (other than, where relevant, in respect of the London Stock Exchange plc’s exempt activities of operating UK-regulated investment exchanges and providing clearing services in the UK).
This publication does not constitute an offer to buy or sell, or a solicitation of an offer to sell, any securities, or the solicitation of a proxy, by any person in any jurisdiction in which such an offer or solicitation is not authorised, or in which the person making such an offer or solicitation is not qualified to do so, or to any person to whom it is unlawful to make such an offer or solicitation.
Information in this publication may or may not have been prepared by the LSEG, but is made without any responsibility on its part. All information in this publication is provided ‘as is’ and LSEG does not make any representations and disclaims to the extent permitted by law all express, implied and statutory warranties of any kind in relation to this publication, including warranties as to accuracy, timeliness, completeness, performance or fitness for a particular purpose.
No action should be taken or omitted to be taken in reliance upon information in this publication. LSEG does not accept any liability for the results of any action taken or omitted on the basis of the information in this communication. The information in this publication is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular, information in this publication does not constitute legal, tax, regulatory, professional, financial or investment advice. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances.
AIM, London Stock Exchange, the London Stock Exchange coat of arms device are registered trademarks of London Stock Exchange plc. Other logos, organisations and company names referred to may be the trademarks of their respective owners. No part of these trademarks, or any other trademark owned by LSEG can be used, reproduced or transmitted in any form without express written consent by the owner of the trademark.
The UK has always been at the forefront of financial innovation, bringing UK and international companies and investors together to raise and invest capital efficiently. Firms from over 100 countries
are listed on London Stock Exchange and the FTSE 100 index is seen as the global benchmark for blue-chip firms listed on our markets. Through London, global blue-chips are looking outwards whilst securing strong inward investor support. Deep market liquidity provides them with increased access to long-term capital, allowing them to innovate, grow and create jobs. This is a clear demonstration of international investor confidence in UK plc. And more broadly, deep and liquid capital markets reduce the cost of investment capital and global clearing liquidity pools cut the cost of regulatory capital.
Nikhil RathiCEO, London Stock Exchange plc
Contents
Page
Our diverse range of offerings 04
London Stock Exchange trading services 05
London Stock Exchange Main Market 06
London Stock Exchange AIM 09
London Stock Exchange International Order Book 10
Shanghai-London Stock Connect 12
Turquoise 14
Borsa Italiana 15
Exchange Traded Products 16
Fixed income 17
Closed-ended funds 18
FTSE Russell 20
Your guide to trading 03
“ With a single connection to London Stock Exchange Group, investors can access securities from over 100 countries including developed as well as emerging markets.”
Our diverse range of offeringsLondon Stock Exchange Group (LSEG) operates a broad range of international equity, ETP, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; and Turquoise, a pan-European equities trading venue. Through its platforms, LSEG offers market participants, including retail investors, institutions and SMEs access to Europe’s global capital markets. London Stock Exchange Trading Services are designed to maximise liquidity for all participants and include fully electronic order-driven services for liquid UK and international Global Depositary Receipts, and quote-driven market maker services for less liquid securities. With a single connection to London Stock Exchange Group, investors can access securities from over 100 countries including developed as well as emerging markets.
DID YOU KNOW?
70%+of revenues of London Stock Exchange’s largest 100 companies are derived from outside the UK
Trading venues
Your guide to trading 05
London Stock Exchange trading services– SETS is London Stock Exchange’s flagship electronic order book, trading
FTSE 100, FTSE 250 and FTSE Small Cap index constituents as well as liquid AIM, Irish and London Standard Listed securities. Auctions are available at 7.50am, 12.00pm and 4.30pm.
– SETSqx is designed for securities less liquid than those traded on SETS and combines continuous quote-driven market with five electronic auctions (8.00am, 9.00am, 11.00am, 2.00pm and 4.35pm).
– International Order Book (IOB) is dedicated for trading GDRs using the same underlying technology as SETS. Almost all securities are traded in USD. Auctions are available at 7.50am, 12.00pm and 4.30pm.
Your guide to trading 04
Key terms
AuctionA period where no automatic execution takes place in order to concentrate available liquidity. During an auction call period, orders can be entered, modified or deleted. Following the auction call period an auction uncrossing takes place. The auction uncrossing generates the auction uncrossing price.
Global Depositary Receipts (GDRs)Negotiable certificates issued by depositary banks which represent ownership of a given number of a company’s shares which can be listed and traded independently from the underlying shares. These instruments are typically used by companies from emerging markets. These securities are generally traded in USD on the exchange’s electronic trading service, the International Order Book (IOB).
07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00
16:30 Closing auction and closing price crossing session (CPX) A short, modified regular trading session that follows the closing auction, where executions can only be executed at the closing auction price.
12:00 Intra-day auction A two-minute call period followed by a random 30-second uncrossing
08:00 SETS opens for trading
TRADING ON SETS
07:50 Opening auction call
Securities available
Equities including Depositary Receipts ETPs Closed-ended funds Bonds Derivatives
London Stock Exchange Main Market
Your guide to trading 06
DID YOU KNOW?
2,000+listed companies
5of the top 10 IPOs by market cap in 2018 were international
Banks, Mining and Oil & Gas Producers were the three most traded sectors on Main Market in 2018
Home to FTSE 100, FTSE 250, FTSE 350 and FTSE All-Share
London Stock Exchange’s Main Market is the world’s most international market for the admission and trading of equity, debt and other securities. Its location at the heart of the world’s leading financial centre makes it the ideal home to over 2,000 companies, including many of the world’s largest, most successful and most dynamic companies. It has the deepest pool of capital in Europe.
Underpinned by London’s balanced and globally-respected standards of regulation and corporate governance, the Main Market represents a badge of quality for every company admitted to and traded on it, and an aspiration for many companies worldwide.
TOP FIVE MOST TRADED STOCKS IN 2018
Issuer name TIDM
BP PLC BP
HSBC HOLDINGS PLC HSBA
BRITISH AMERICAN TOBACCO PLC BATS
RIO TINTO PLC RIO
ROYAL DUTCH SHELL PLC RDSA
BST* 8.00am UK MARKET OPENS
UK MARKET CLOSES
China market closes
HK market closes
US market opens
European trading hours sit between Asia and US trading hours
Your guide to trading 07
BST 9.00am
BST 2.30pm
BST 4.30pm
* British Summer Time
Your guide to trading 09
London Stock Exchange AIMAIM is the world’s leading international growth market. Since its launch in 1995, over 3,800 companies from across the globe have chosen to join AIM. Powering the companies of tomorrow, AIM continues to help a wide range of businesses, including early-stage, venture-capital-backed and more established companies, raise the capital they need for expansion.
TOP 10 TRADED NAMES ON AIM IN 2018
Company name ICB sector
ASOS plc General Retailers
Fevertree Drinks plc Beverages
Burford Capital Limited Financial Services
IQE plc Technology Hardware & Equipment
Boohoo Group plc General Retailers
Abcam plc Pharmaceuticals & Biotechnology
Blue Prism Group plc Software & Computer Services
Victoria plc Household Goods & Home Construction
Keywords Studios plc Support Services
Hurricane Energy plc Oil & Gas
DID YOU KNOW?
900+quoted companies
$180bn+Total money raised since launch in 1995
Consumer Services, Technology and Financials were the three most traded industries in 2018
AIM is the largest growth market in Europe
AIM securities have significant tax advantages as they attract no stamp duty
Your guide to trading 10
London Stock Exchange International Order BookInternational Order Book is a London Stock Exchange dedicated service to trade Global Depositary Receipts (GDRs). GDRs are securities issued by depositary banks, which represent ownership of a given number of a company’s shares. Traded in USD, it offers cost-efficient, secure and transparent access to invest in some of the world’s fastest-growing markets.
The Shanghai-London Stock Connect GDRs will be traded on the newly dedicated Shanghai Segment of the International Order Book.
DID YOU KNOW?
Top three traded Russian GDRs in 2018Sberbank of RussiaPJSC LukoilPJSC Gazprom
Top three traded South Korean GDRs in 2018Samsung ElectronicsHyundai Motor CompanyLG Electronics
Top three traded Indian GDRs in 2018Reliance IndustriesState Bank of IndiaAxis Bank
Countries with GDR listing on LSEG
DID YOU KNOW?
140+issuers from 30+ countries
Shanghai-London Stock Connect
Trading Stock Connect GDRs
The UK and China are working in partnership to create the Shanghai-London Stock Connect. It allows global investors to benefit from China’s growth through London, while UK-listed companies are able to access Chinese investors directly. It allows listed companies to be traded by more investors, and provide them with more investment choice.
Traded on Underlying securities Cleared and settled at
GDR(Global Depository Receipt)
LSE A Shares already listed and traded on LSE
LCH, Euroclear Bank
CDR(Chinese Depository Receipt)
SSE Premium shares already listed and traded on LSE
ChinaClear
New dedicated Shanghai segment on International Order Book to trade Stock Connect GDRs.
Trading and settlement in USD on T+2 – no pre-funding and no pre-delivery requirements.
All trading participants with access to International Order Book trading will be able to access Shanghai Segment. Shanghai Segment trading hours
9.00am–4.30pm
07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00
16:30 Closing auction and closing price crossing session (CPX)A short, modified regular trading session that follows the closing auction, where executions can only be executed at the closing auction price.
12:00 Intra-day auctionA two-minute call period followed by a random 30-second uncrossing
08:50 Opening auction call for Shanghai Segment
07:50 Opening auction call
08:00 IOB opens for trading
09:00 Shanghai Segment GDRs begin trading
DID YOU KNOW?
The Shanghai-London Stock Connect represents a number of firsts:
FIRST time any foreign companies will be able to list in Mainland China
FIRST time SSE-listed companies will be able to raise capital abroad through instruments fungible with their domestic shares (two liquidity pools, one price)
FIRST time international investors will be able to access China A-shares from outside Greater China (and through international trading and settlement practices)
FIRST time Chinese investors will be able to access international stocks from China without being subject to domestic capital controls.
Your guide to trading 12 Your guide to trading 13
Turquoise Borsa Italiana
Your guide to trading 14 Your guide to trading 15
Turquoise is a pan-European trading platform majority owned by London Stock Exchange Group, in partnership with 12 investment banks. It offers a broad universe of 4,500 stocks with one connection to 18 major European and emerging markets, as well as US stocks, IOB Depositary Receipts, ETFs and European Rights Issues.
Borsa Italiana has been part of London Stock Exchange Group since 2007. Companies can choose to join Borsa Italiana’s Main Market (MTA) or the Italian Growth Market, AIM Italia. MTA is dedicated to mid and large-size companies that meet the highest international standards. AIM Italia is a dedicated growth market for SMEs looking to raise capital.
DID YOU KNOW?
$8tn+traded since launch
Turquoise Plato™ entered 2019 as the fastest growing and largest European dark pool as recognised by Rosenblatt Securities
Turquoise was featured in The Parliamentary Review 2016 and 2018 and recognised as the winner of The TRADE’s Leaders in Trading 2017 Award for Block Trading Venue
Turquoise won the Financial News 2015 Award for Excellence in Trading and Technology for Most Innovative Trading Product/Service.
1 connection 18 countries4,500+ securities
DID YOU KNOW?
241companies listed on MTA
115companies quoted on AIM Italia
24Italian listed luxury brands are included in the FTSE Italia Brands index, which promotes the best Italian brands by creativity, excellence, intuition, innovation and global appeal
Top three most traded luxury brands in 2018:Ferrari, Moncler and Pirelli & C
Exchange Traded Products
Your guide to trading 16
ETPs fall broadly into two categories: ETFs and other ETPs which include Exchange Traded Commodities (ETCs) and Exchange Traded Noted (ETNs). An ETF is an open-ended collective investment scheme that is traded on one or more exchanges. The aim of an ETF is to track the performance of a specific index, which can be country- or region-specific and/or based on a variety of asset classes such as fixed income, money markets and many more. Like a fund, an ETF gives access to a portfolio of shares, bonds or other asset classes, and like shares, ETFs are bought and sold on exchange. Consequently, ETFs combine the diversification of an investment fund with the tradability of a share.
TOP FIVE TRADED ETPS IN 2018
Issuer name TIDM
ISHARES CORE FTSE100 UCITS ETF GBP (DIST)
ISF
VANGUARD S&P 500 UCITS ETF VUSD
ISHRS CORE S&P 500 UCITS ETF USD (ACC)
CSPX
ISHRS CORE MSCI WORLD ETF USD (ACC)
IWDA
ISHARES PHYSICAL GOLD ETC IGLN
DID YOU KNOW?
85%increase in order-book turnover over the last six years
1,600+ETPs on our market from over 30 issuers
With ETFs, retail investors can now gain access to broad-ranging exposures for the same cost as an institutional investor. ETFs often have lower management fees than active funds and attract no stamp duty.
Fixed income
London Stock Exchange cements its position as a leading global venue for international debt fundraising, with 13,000 listed debt instruments in 43 currencies from over 1,170 issuers. Our markets are home to debt securities issued by household FTSE 100 names such as National Grid, Tesco, Barclays Bank, British Telecom, British Petroleum and Royal Mail amongst others.
London Stock Exchange platforms offer many different options for private investors wanting to access sources of retail-focused fixed income capital – the Order Book for Retail Bonds (ORB) is an electronic, order-driven trading service for over 160 UK government, supranational and corporate bonds. Since 2010, it has offered retail investors efficient access to an on-screen secondary market in London-listed debt instruments. Our Order Book for Fixed Income securities (OFIS) also has the functionality to display prices for retail bonds, allowing for a wide variety of bond structures to be accessible to retail investors. A common characteristic of all retail bonds listed on ORB and OFIS is that they have trading denominations of under £1,000. The majority of retail dedicated issuances have been in £100 denominations with a minimum £2,000 investment. And retail investors also have access to a wide variety of alternative fixed income products including Fixed Income ETFs and closed-ended funds.
Your guide to trading 17
DID YOU KNOW?
478fixed income ETFs
47listed debt funds on our market worth over $17 billion, including investment across direct lending, real estate and infrastructure debt
110+London is the premier Renminbi trading hub outside Greater China with 110+ RMB bonds, including the first ever offshore ChineseSovereign RMB bond
Closed-ended funds
DID YOU KNOW?
$220bntotal market value of funds
200+fund managers have existing listed funds in London
300%listed green fund sector has grown over 300% in the last five years
London Stock Exchange’s investment fund market has over 450 listed funds worth over $220 billion. London-listed funds offer exposure to a range of investment strategies across geographies, equities and debt, and a range of alternative asset strategies including infrastructure, real estate, private equity, royalties and renewable energy. Investment funds have listed on our markets for over 150 years, and cover over 80 sub-sectors. These can be accessed by investors, including retail investors on the Premium Segment of the Main Market, and by institutional, professional, professionally-advised and knowledgeable investors on our Specialist Fund Segment. From accessing UK and European fintech to solar assets in the US and Australia, you can access the most international and diverse closed-ended funds market through London Stock Exchange.
Key highlights– Fund managers that list funds in London
include Baillie Gifford, JP Morgan Asset Management, Aberdeen Standard Investments, Janus Henderson, Fidelity and BlackRock.
– Innovative asset classes such as music royalties, energy efficiency and energy storage were welcomed to London’s funds market in 2018.
– We celebrated the largest fund launch ever in Smithson Investment Trust in 2018, raising over $1 billion which invests in global small-medium companies.
Your guide to trading 18 Your guide to trading 19
London investment funds sector breakdownDiverse investment mandates across asset classes and geographiesSource: London Stock Exchange, Numis Investment Companies Research
5%Emerging Markets
3%Infrastructure
3%Hedge Funds
2%Europe
1%North America
10%Global
10%Property
8%Asia Pacific
8%Sector Specialist
7%Private Equity
12%Debt
31%UK
450investment
funds
FTSE Russell
FTSE Russell is a leading global provider of benchmarks, analytics and data solutions with multi-asset capabilities. FTSE Russell’s expertise and products are used extensively by institutional and retail investors globally with approximately $15 trillion reported fund AUM. For over 30 years, leading asset owners,asset managers, ETF providers, and investmentbanks have chosen FTSE Russell indexes tobenchmark their investment performanceand create investment funds, ETFs, structuredproducts and index-based derivatives. FTSERussell indexes also provide clients with tools for asset allocation, investment strategy analysis and risk management.
DID YOU KNOW?
China A Shares areincluded in FTSE’s globalequity benchmarks.
FTSE Russell was the first international index provider of mainland China benchmarks 20 years ago.
Your guide to trading 20
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