SEAQ

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The Stock Exchange Automated Quotation system (or SEAQ) is a system for trading small-cap London Stock Exchange (LSE) stocks. Stocks need to have at least two market-makers to be eligible for trading via SEAQ.

In the LSE, only AIM stocks with low liquidity are traded on the SEAQ market.^[1] 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 spreads. 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.

The AIM market is not considered to be an EURM (European Regulated Market), it is instead classified as Multilateral Trading Facility (MTF).^[2] 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.^[3] 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 Bid/Ask spreads.

A weekly updated list of securities traded on via the SEAQ system can be found here.

Note: new securities cannot be listed via the SEAQ system.^[4]

Financial markets

Types of markets	Primary market Secondary market Third market Fourth market

Types of stocks	Common stock Golden share Preferred stock Restricted stock Tracking stock

Share capital	Authorised capital Issued shares Shares outstanding Treasury stock

Participants	Broker-dealer Day trader Floor broker Floor trader Investor Market maker Proprietary trader Quantitative analyst Regulator Stock trader

Exchanges	Electronic communication network List of stock exchanges Opening times Multilateral trading facility Over-the-counter

Stock valuation	Alpha Arbitrage pricing theory Beta Bid–ask spread Book value Capital asset pricing model Dividend discount model Dividend yield Earnings per share Earnings yield Net asset value Security characteristic line Security market line T-model

Trading theories and strategies	Algorithmic trading Buy and hold Concentrated stock Contrarian investing Day trading Dollar cost averaging Efficient-market hypothesis Fundamental analysis Growth stock Market timing Modern portfolio theory Momentum investing Mosaic theory Pairs trade Post-modern portfolio theory Random walk hypothesis Sector rotation Style investing Swing trading Technical analysis Trend following Value investing

Related terms	Block trade Cross listing Dark liquidity Dividend Dual-listed company DuPont analysis Efficient frontier Flight-to-quality Haircut Initial public offering Margin Market anomaly Market capitalization Market depth Market manipulation Market trend Mean reversion Momentum Open outcry Public float Public offering Rally Returns-based style analysis Reverse stock split Share repurchase Short selling Slippage Speculation Stock dilution Stock market index Stock split Trade Uptick rule Volatility Voting interest Yield

References

↑ "SETSqx and SEAQ". London Stock Exchange Group. Retrieved 2015-11-16.
↑ "FAQs - London Stock Exchange". www.londonstockexchange.com. Retrieved 2015-11-17.
↑ "SETSqx - Focusing on liquidity" (PDF).
↑ "Introduction to London Stock Exchange Capital Markets" (PDF).

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