A venue for European small- and medium-sized (SME) listings is expected to launch before June next year, following amendments to an initial proposal following a public consultation.
The pan-European venue, titled Entrepreneurial Exchange and run by market operator NYSE Euronext, is designed to facilitate capital raising by smaller companies away from venues dominated by blue-chip listings.
The venue would operate according to NYSE Euronext’s federated model in all countries the exchange operator has a market, which comprises France, Belgium, the Netherlands and Portugal.
The proposals put forward by the committee would bring together companies currently listed on segments B and C of NYSE Euronext's main platform and its Alternext platform, which currently serves SMEs. Altering primary national indices would be avoided by listing companies on both NYSE Euronext and Entrepreneurial Exchange.
The conclusions of the consultation period called for an official decision to proceed to be made before the end of the year, with a provisional opening date for the exchange before summer 2013.
“We are very pleased to have been the originator of the SPC and we will now take the time needed to analyze the report and propose suitable solutions working with all the actors of our financial market places. Our aim is to communicate our proposed pan-European strategy within the coming weeks," said Dominique Cerutti, president and deputy CEO of NYSE Euronext.
The SME Strategic Planning Committee, began the public consultation on July 3, hearing from more than 200 industry participants, and urged decision-makers for a rapid launch of the venue.
Fabrice Demarigny, committee chairman said the exchange would help smaller-sized businesses in Europe when they needed it most.
“It offers a critical solution to the long-term financing requirements of SMEs, who need it to come through the crisis and pave the way for a return to growth,” Demarigny said, adding that governments, tax authorities and regulators must all help push for the exchange if it was to reach its intended goals.
“Our conclusions call for all stakeholders in the stock market ecosystem to embrace these recommendations and for an official decision creating the Entrepreneurial Exchange to be taken quickly,” Demarigny said.
The reluctance of many large banks to lend, particularly outside of their domestic markets, and the economic uncertainty fuelled by the euro-zone debt crisis have created an environment where SMEs struggle to thrive, while they can be a strong source of growth for economies in recession.