Regulation by the Stock Exchange in the legitimate interests of investors had imposed conditions for admission to quotation incorporated in the Listing Agreement which represented a considerable barrier (distinct from cost alone) to potential new entrants in the 1970s (Wilson 1980: paras 759-761). Specific features of this included minimum size thresholds both for size of firm and size of issue, together with minimum proportions of equity to be marketed and minimum time periods for trading and financial history. It is hardly surprising, therefore, when these formal entry barriers were reinforced by sc ale effects, that very few small firms

the 1980s. Buckland and Davis (1989) investigated the extent to which the innovation of the USM had lowered threshold costs of entry. They found (Tables 7.2 and 7.3), after allowing for differences in method of issue, in particular the much greater popularity of placings on the USM, that the percentage costs of obtaining a placing on the USM were significantly lower than a placing on the officiallist. But there was a continuing c1ear size effect in relation to the size of issue involved: while the USM appears to have helped entry of sm aller firms to quotation it has not alte red the fact of significant economies of scale in the issuing process.