Talks to set up a new Scottish Stock Exchange look set to re-establish an icon of Scottish finance that has been missing for nearly 50 years. But the law firm advising on the project is not Scottish, nor is it English. Instead, Texas-native firm Baker Botts has secured the lead role.

The last Scottish Stock Exchange began trading in 1964, but in 1973 merged with the London Stock Exchange, closing its trading floors in Glasgow, Edinburgh and Aberdeen.

But a new stock exchange platform is set to launch in the Scottish capital later this year, with London-based Baker Botts corporate technology partner David Ramm advising the company behind the project, nicknamed 'Project Heather'.

The new stock exchange is aimed primarily at businesses with a social enterprise leaning, worth between £50 million and £100 million.

Ramm, who joined Baker Botts from U.S. rival Morgan Lewis in September last year, told Legal Week that a key aim for the new exchange is to offer a means for Scottish social impact companies to raise capital more effectively. "For them, there has been an element of detachment from the London Stock Exchange," he explained.

"A lot of the focus now is on making the Scottish stock exchange an international exchange for social impact. Social impact firms are often financed by private finance and private equity companies. With this platform, the public can participate in these projects. It's more transparent," he added.

David Ramm

Ramm explained that the key reason the project has turned to a U.S. rather than a Scottish firm is due primarily to his credentials in the area, as well as his longstanding relationship with Scottish businessman Tomas Carruthers, who is spearheading the revival with his company Bourse Scot.

The two worked together in 2016 on the Carruthers-fronted Social Stock Exchange, which Ramm helped establish by negotiating a joint venture with electronic financial markets company NEX.

Ramm also pointed to his recent successes in the electronic trading space, including his work on an agreement between Astana International Exchange and platform provider Nasdaq last year, and a deal between American block trading platforms Bids Trading and Bats LIS.

"Accordingly, we were a more obvious choice to assist with the Scottish Stock Exchange," Ramm added. "The client went for expertise rather than location of law firm."

However, for those aspects of the project concerning purely Scots law, including leasehold and other property matters, he expects to outsource to a Scottish law firm.

Earlier this month, Project Heather obtained a £750,000 Scottish government grant for the project. And last year, Carruthers secured a partnership agreement with European stock market operator Euronext to use its trading platform to launch the exchange, which is still subject to Financial Conduct Authority approval. 

Baker Botts City finance partner Richard Brown, who joined Baker Botts from Latham & Watkins earlier this year, is also assisting on the deal.