UPDATE 2-ICAP promises to "raise the bar" on listings

Wed Oct 31, 2012 9:25am EDT

By Luke Jeffs

LONDON Oct 31 (Reuters) - The chief executive of a London-based stock market launched on Wednesday by ICAP wants companies listed on his exchange to meet higher standards of disclosure and governance or face being forced off the market.

Seth Johnson, the chief executive of the ICAP Securities and Derivatives Exchange (ISDX), said he planned to introduce a "points scoring system" next year that would help establish if firms were suitable for listing.

"We are raising the bar for companies listed on the exchange. The 133 companies already listed will have time to pull their socks up. If they don't, they'll be forced to leave," said Johnson.

ISDX is the new name for the PLUS-SX stock market that ICAP bought in June for 500,000 pounds ($800,000), a move that saw the world's largest derivatives broker taking ownership of a British stock exchange licence for the first time.

Johnson said on Wednesday he expected to set the precise disclosure, corporate governance and financial criteria for listed companies early next year and he wanted to give firms "at least a year" to comply with the new requirements.

He also said ISDX should offer traders deeper and more active trading than its predecessor PLUS-SX because two large British brokers -- Peel Hunt and Shore Capital -- have signed up to support trading in the larger companies on the market.

The derivatives broker, which trades largely in the over-the-counter (OTC) market, sees ISDX as strategically important. Global regulators are seeking to force more of the vast OTC swaps market to use exchanges and authorities in Europe want to open up the futures markets to competition.

"From a group perspective ISDX is a strategic asset. We haven't got a timeline for listed derivatives but we will be looking at this in the coming months," Johnson said.

NYSE Euronext's Liffe and Deutsche Boerse's Eurex are the main European futures markets but they face competition from ICAP as well as the CME Group and Nasdaq OMX, which are planning exchanges next year.