The UK’s only residential property stock exchange, the Property Investment Market, has been forced to suspend its business after failing to meet new European financial regulations. Financial Times
The company has become one of the first victims of the Markets in Financial Instruments directive, the wide-ranging European regulatory reform of the finance industry that was introduced on1 November.
Private investors who own shares in the exchange’s properties will be unable to retrieve their money until the company starts trading again. There are between 500 and 750 investors in the exchange, who have invested up to £875,000 in total.
The closure of the market, which promised investors the chance to benefit from buy-to-let market growth for as little as £1 when it launched in 2005, has been caused by failure to meet certain Mifid requirements.
Under the regulations, the online residential property shares market is now required to operate as a 'multilateral trading facility', which needs authorisation from the Financial Services Authority, the City regulator. Previously, the Property Investment Market was unregulated.