This month for our ‘Meet the Players’ article we feature a ‘player’ that most investors will not have encountered. The Quoted Companies Alliance (QCA) is an organisation set up to fight for the interests of smaller quoted companies. In this context smaller is defined as being outside of the FTSE 350.

 I met with the QCA’s Chief Executive, John Pierce, at the Group’s offices in the City. On a board in John’s office are four words which encapsulate the work of the QCA: 

• Lobby
• Promote
• Educate
• Network

John explained that the QCA, ‘at the centre’ are a lobby group to protect and look after the interests of smaller quoted companies. John sees the QCA as sitting between the CBI, which is for larger businesses, and the Institute of Directors, whose membership is primarily drawn from private companies.

History

The Quoted Companies Alliance was set up 15 years ago, originally under the name of CISCO – City Group for Smaller Companies. John Pierce, who was formerly CEO of Airsprung Furniture, joined the Group in 1999 – Airsprung had been a member of CISCO. One of John’s first achievements on joining CISCO was to relaunch the group as the Quoted Companies Alliance.

Successes

John explained that sometimes it can be difficult to convince companies that the cost of QCA membership is justified. He finds the most convincing argument can be found in a review of the numerous victories achieved by the QCA. The ‘Recent Successes’ page (Click here to view) on the QCA website lists 14 achievements for the group over the last 7 years. The total savings from these successes for the average Smaller Quoted Company is estimated at £200,000 per year.

One particularly notable success for the QCA was in connection with the European Union’s Prospectus Directive. The key item in this directive was a requirement for all quoted companies to update their prospectus annually. This potentially onorous requirement was dropped after intensive lobbying.

Membership

The QCA has just over 300 member companies. Of these, 220 are quoted companies with most of these being listed on AIM. Additionally there are some PLUS listed companies and some smaller ones from the Main list. The remaining 90 members are categorised as ‘Advisers’ - these include Accountants, legal firms , brokers and fund managers.

Member companies pay an annual fee of £1300 for listed companies and £2400 for those in the Adviser category.

The total savings from

QCA successes for the average Smaller Quoted Company is estimated at £200,000 per year

Activities

The QCA hold regular events for members including seminars, lunches and forums which are held both in the City and around the country. The events provide member companies with important information as well as excellent networking opportunities. Recently, the QCA kindly invited me to attend one of their regional forums in Milton Keynes. At this event I enjoyed a number of very interesting presentations. In fact, we are planning to use the content of one of these presentations as the basis of an Aimzine article early in 2009.

For a list of QCA events click here.

Publications

The QCA produces a monthly newsletter for member companies and a number of guidance booklets. These booklets cover a variety of subjects to educate companies in the sector about best practice and regulation specifics. Titles include ‘A Brief Guide to Floating a Company’ and ‘Corporate Governance Guidelines for AIM Companies’. One excellent booklet that we would like to see as compulsory reading for all small companies is entitled ‘Investor Relations Guidance for Smaller Quoted Companies’. The booklets are available at a discounted price to member companies but are also available to non-members. A full list can be found here.

Committees

The QCA is governed by an Executive Committee which is elected by the members for a three year term. In addition, eight technical committees meet regularly to discuss issues and draft reports on the sector's concerns.  These Committees probably represent the largest pool of experience and expertise in small cap market issues certainly in the UK if not the world. The eight technical committees are: 

• Accounting Standards
• Corporate Governance
• Legal
• Marketing & Recruitment
• Markets & Regulations
• NOMAD
• Share Schemes
• Tax

The Future

John Pierce sees the current economic climate as a huge challenge for many small quoted companies. He sees the QCA’s role today as being more important than ever as they help their member companies weather today’s conditions. In addition to the economic challenges there will continue to be further regulations coming out of Westmister and Brussels to consider.

One particular challenge on the horizon for the QCA is that the European Union is due to review its Prospectus Directive in the near future and this could have a huge impact on smaller quoted companies sector. We will keep Aimzine readers posted on developments here.

To see if the companies you invest in are members of the QCA please see the full list of member companies here. 

If you would like to comment on this article please click here

Written by Michael Crockett

Copyright Aimzine Ltd

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