UK exchange operator PLUS Markets Group and Bayerische Börse, the operator of the Munich Stock Exchange in Germany, are planning to develop a pan-European equity market for small- and mid-cap stocks.
The two exchange groups have signed an agreement to develop integrated, pan-European services. The agreement includes indicative terms for the creation of a new pan-European market segment, called PLUS-Europe, which will offer quote-driven trading services in the shares of smaller companies.
PLUS-Europe will be positioned under the regulatory permissions of Bayerische Börse as a market operator under MiFID. It will apply the MiFID-compliant standards of transparency and market surveillance expected of a full stock exchange and will be supported by the provision of key services and infrastructure by the company, including its rules and its high-performance trading platform.
It is intended that PLUS-Europe will deploy the pan-European passport rights afforded to Bayerische Börse under MiFID. This means it will be fully accessible to market participants based in London via their existing systems and connectivity providers.
PLUS-Europe expect to be able to provide an alternative mechanism for trading AIM-listed securities by market participants across Europe before the end of 2008. Its launch will be subject to the approval of the relevant supervisory authorities in Germany.
As well as forming the new pan-European market, the companies have also agreed to develop new integrated pan-European market services, specifically designed to meet the needs of small and medium-sized companies. The firms say the cooperation is wide-ranging and encompasses both capital markets and trading services.
The exchanges will look at ways to co-ordinate their existing exchange-regulated capital market services to offer small and mid-cap companies enhanced profile and liquidity across leading financial centres, and to facilitate access to a broader pool of equity capital than is provided by existing markets for non-listed securities. They believe that, through the extension of their investor reach beyond their home countries, European small- and mid-cap companies will be able to improve their fundraising capabilities.
“We are delighted to be working with our counterparts in Germany to lay the foundations of a pan-European equity market, to offer small and mid-caps companies access to European capital and liquidity,” said Simon Brickles, CEO, PLUS Markets Group, in a statement. “London is the deepest pool of international capital in the world and PLUS Markets is the new gateway to that capital for both listed and unlisted companies. We are excited at the prospect of opening this doorway to additional European issuers through our co-operation with our colleagues at the Munich Stock Exchange, such that they can realise the benefits of a route to London.”