Off Exchange (OFEX)
The Off Exchange (OFEX) was started as a way for shareholders to deal in the shares of small companies that do not meet the requirements of Aim and the LSE’s official list.
The Off Exchange (OFEX), now owned and operated by PLUSmarkets, was started in 1995 as a way for shareholders to deal in the shares of small companies that do not meet the stringent requirements of Aim and the LSE's official list.
Companies on OFEX are usually smaller than those on Aim, and are typically seeking to raise under £500,000 when they list. A panel determines entry to the market. The low level of regulatory requirement means that OFEX investments should be considered more risky than those listed on Aim.
Trading happens on a matched bargain basis, so you can only sell your shares if OFEX finds a buyer for them. This means that, although bargain hunters and penny-share buyers are attracted to the idea of getting into promising companies early on in their lifecycle via the OFEX exchange, illiquidity can often be a problem for the shares.
See Tim Bennett's video tutorial: What is a stock exchange?