The Stock Exchange Automated Quotation system (or SEAQ) is a system for trading

small-cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St P ...

(LSE) stocks. Stocks need to have at least two market-makers to be eligible for trading via SEAQ. New securities cannot be listed via the SEAQ system. In the LSE, only AIM stocks with low

liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity, the ease with which an asset can be sold * Accounting liquidity, the ability to meet cash obligations when due * Liq ...

are traded on the SEAQ market. It is a quote-driven market made by specialized and competing dealers, also known as market-makers. The system contains no public limit order book. The idea behind the SEAQ system is that individual investors should always be able to trade and that the element of competition between market-makers should lead to narrower dealing

Bid–ask spread The bid–ask spread (also bid–offer or bid/ask and buy/sell in the case of a market maker) is the difference between the prices quoted (either by a single market maker or in a limit order book) for an immediate sale ( ask) and an immediate pur ...

s. However, Bid/Ask spreads and hence trading costs on SEAQ are typically high because of the combination of the market-maker driven trading system and the lack of liquidity.

Regulation

The AIM market is not considered to be an EURM (European Regulated Market), it is instead classified as

multilateral trading facility A multilateral trading facility (MTF) is a European Union regulatory term for a self-regulated financial trading venue. These are alternatives to the traditional stock exchanges where a market is made in securities, typically using electronic ...

(MTF). Because of this the SEAQ system is allowed to continue even though it is not considered to be

MiFID Markets in Financial Instruments Directive 20142014/65/EU commonly known as MiFID 2 (Markets in financial instruments directive 2), is a legal act of the European Union. Together with Regulation (EU) No 600/2014 it provides a legal framework fo ...

compliant. For this reason the LSE developed the SETSqx system which replaced the SEAQ system for all Main Market securities in October 2007. The SETSqx system allows members of the public to display limit orders, although these orders are traded through so that typically incoming market priced orders will trade with the 'Market Makers Quotes' and not at better prices, which may be available inside the market makers

References

External links

*A weekly updated list of

securities A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...

traded on via the SEAQ system can be foun
here
Electronic trading platforms London Stock Exchange {{Stockexchange-stub