Expert Market to provided unlisted European share trading

Euronext will next week launch a market for trading non-listed securities electronically.

Euronext will next week launch a market for trading non-listed securities electronically.

The exchange operator said the Euronext Expert Market will provide a transparent and secure platform for the sale of unlisted equities through weekly auctions.

Euronext Expert Market is a multilateral trading facility based in Belgium and aims to replicate the former floor-traded Marché des Ventes Publiques (Public Auctions Market), but using an electronic trading model instead of open outcry.

Electronification will standardise and automate the post-trade processes of non-listed secondary trading and, Euronext said, make the market more efficient and transparent.

The exchange operator said it also hoped the market for unlisted shares will help to finance the real economy by increasing the visibility and accessibility of securities in the small and medium-sized enterprises that make up the bulk of unlisted securities.

Euronext Expert Market will go live on 9 December with weekly electronic auctions every Tuesday for bonds, securities and other fixed income instruments. It will be open to all investors through their bank or broker.

Euronext Brussels CEO, Vincent Van Dessel, said, “There is an evident need in the market for a venue where non-listed securities can be traded. The ongoing disintermediation and growing number of private initiatives on the primary market, including crowd-funding, boost the demand for a reliable and transparent secondary market.”

Euronext said this is the first time a European market operator has attempted to launch an electronic secondary market for unlisted equities.

In Canada, incumbent TMX Group and new startup Aequitas Innovations, have both revealed plans to launch private share markets to improve investor access to unlisted securities. More generally, onerous reporting obligations have been highlighted as a major disincentive for smaller businesses to publically list, driving them away from capital markets as a source of financing.