London Stock Exchange plc – FY Results: This is why market regulation is failing

Comments

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   J P Spaghetti

   8 March 2015, 04:59

   The lack of reliable and effective regulation of the LSE (particularly AIM, of course) has become a more serious issue, I think it’s reasonable to say, over the last few years as interest rates have dwindled away to essentially zilch. This is because – the current dip in inflation aside – it has no doubt led some who would have otherwise been wary of buying shares to invest in them rather than see their hard earned lose value in real terms languishing in a safe savings / deposit account. Not all of us are financial whizz kids with City experience. Makes the case for an effective regulator and far stiffer penalties for shysters all the more compelling, I’d say.

   Realising that many private investors are now essentially consumers, and that they purchase their slice of a company via the internet, I’ve occasionally wondered whether the scope of existing distance selling regulations covering misselling (the automatic spellchecker/editor just ‘misspelled’ that, by the way!) might be extended to afford them more rigorous protection. It seems to me they almost go a bit too far in protecting consumers who may go on to change their mind after an internet purchase from Argos, for instance. But I guess now I’m just being silly, and – besides – I can’t see it being countenanced (I mean FCA and LSE market abuse employees could be out of a job).

   *Interestingly, if we do enter a deflationary period will those with student loans have the amount they are to repay reduced – in absolute terms – assuming that they are still index linked to inflation (perhaps they no longer are)?

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   wildrides

   8 March 2015, 11:40

   With respect Nigel ……….. I think the point you are missing here is that retail share buyers are not the “customers” of LSE really . The companies joining LSE are the “customers” and they pay handsomely for the privilege with listing fees . So it can be seen that LSE is very successful in allowing any old shite to gain access to capital that would not normally be able to get it . No doubt LSE see “success” in terms of its member companies sucessfully extracting large quantities of hard earned loot from retail investors to provide capital for the most bizzarre , non compliant , ponsey shite as a legitimate business model that this country needs . It is a case of mind set …….. and you and I see things from the other end of the long dark tunnel . I dont think any progress will be made without a change of CEO to one enlightened enough to realise the retail consumer has to want to take part and for that to happen some benefit has to befall those who invest on AIM . There are those that benefit currently , but they are not the retail long investor . Only the traders and shorters make money on AIM . The long traders lose money relentlessly . However ……. traders absolutely love it and would not wish it to evolve from its current rapidly revolving volatility .Something must change ………. the CEO is not part of the solution so he is infact “the problem”

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   nigel somerville

   8 March 2015, 12:41

   Wild – of course they’re not! SO the only other ‘customer’ is the listed plc, and in the case of AIM the good ones (yes, there really are some around!) get tarred with the same brush as the bad and thus their shares get discounted and make life more difficult for both plc (who might just possibly have a genuine investment opportunity in front of them which needs extra capital) and shareholder (who is looking to make a gain by holding shares in a Casino stock, and suffers from the AIM discount applied by the market).

   Of course, the person buying/selling should also be seen as a customer of the LSE.

   But the LSE doesn’t give a stuff about that.

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   wildrides

   8 March 2015, 15:17

   Somerville

   Your still missing my point ……… AIM is very successful for LSE ………….. just not in the way you want it to be . It will never be any different under the current CEO . His vision is for something quite different to yours and also mine.

   What is the truth ? surely it is different to all men . It just depends on their perspective.

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   nigel somerville

   8 March 2015, 22:22

   Wild – I do take your point. But I think that AIM is an accident waiting to happen and the LSE is doing its best to ignore the problem and hope it goes away. Yes, AIM is making the LSE a fair penny for the time being, but I believe that the LSE is being negligent of its own market. The LSE is being fed evidence of fraud and corruption and doing nothing about it, and that makes its boardroom just as bad as the scumbags operating on its market. The question is whether the LSE’s boardroom is in denial or just doesn’t care, so long as the cash keeps on rolling in. I’d say both, wouldn’t you?

   So here we are back where we were last week: strip the LSE of its regulatory powers. The conflict of interests is too great.