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

small-cap A small cap company is a company whose market capitalization ( shares x value of each share) is considered small. In the United States, this includes market caps from $250 million to $2 billion (as of 2022). Overview A small cap company typicall ...

London Stock Exchange The London Stock Exchange (LSE) is a stock exchange based in London, England. the total market value of all companies trading on the LSE stood at US$3.42 trillion. Its current premises are situated in Paternoster Square close to St Paul's Cath ...

(LSE) companies. 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 In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quic ...

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 Order book (trading), limit order book) for an immediate sale (Ask ...

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