Initially, 49 gilts and 10 corporate bonds will be available for trading including securities issued by Tesco, BT, National Grid, GlaxoSmithKline, Morgan Stanley, GE Capital, Enterprise Inns and a bond issued for this new service by Royal Bank of Scotland. Investors can see prices on-screen and trade in increments as low as £1 for gilts and £1,000 for corporate bonds, in a process similar to share dealing.
Lord Myners, financial services secretary to the Treasury, said: "Economic growth depends on individual businesses being able to raise the funds necessary to operate and flourish. I welcome the launch of the London Stock Exchange's new bond market today, which will offer companies a new route to access capital that is vital for growth, benefiting the wider British economy."
Philip Hammond, MP and shadow chief secretary to the Treasury, said: "This is an important day for savers in the UK. For the first time ordinary individuals in this country have a dedicated platform which will allow them to invest modest amounts of money in individual company bonds. At a time when equity markets have been volatile, and interest rates have remained low, this represents a new way for private investors to save while supporting the capital raising needs of British companies."
Xavier Rolet, CEO of LSE Group, said: "We are very excited to be launching this new market today. We are determined to continue expanding and diversifying our product offering while responding to the needs and demands of our customers. There has already been considerable interest in this new platform from issuers, member firms and private investors, and we look forward to further facilitating that growing interest as the market establishes itself over the coming months."
Andrew Umbers, CEO at Evolution Securities, said: "We are enthusiastic about the London Stock Exchange's new electronic order book for bonds, and are pleased to be playing a key part in its launch by operating as a market maker from today. The new initiative reaches out to retail and, working together, we look forward to building continuous, transparent and liquid access to gilts and corporate bonds."
Paul Killik, senior partner at Killik and Co, said: "There has been growing demand from our private investor customers to access the corporate bond market but until now a centralised, transparent order book for trading in individual retail-friendly sized bonds has not existed. We are delighted to be participating in this market from its launch and, working with the London Stock Exchange, we look forward to providing our customers with an entirely new type of access to fixed income markets."
Andrea Sozzi Sabatini, head of sales in EMEA & Latin America at RBS, said: "RBS is one of the leading issuers of bonds for private investors on Borsa Italiana's MOT platform and our 'Royal Bonds' have become the backbone of many personal portfolios in Italy. The LSE's development of a similar market in the UK is a great advance and enables RBS to provide more and more British investors with the same opportunities, with the same small denominations and the same tight spreads."