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The Strategic Planning Committee presented its recommendations beginning of July during the traditional Paris Europlace event. Made up of personalities known for their expert role as intermediaries, investors or issuers, the committee is designed to advise NYSE Euronext on its SME strategy. Its conclusions are “ambitious and innovative,” says Fabrice Demarigny, attorney with Marccus Partners, Head of Capital Market Activities for the Mazars group and Chairman of the Strategic Planning Committee.
“We recommend the creation of a new stock exchange dedicated to SMEs. It would include the companies that today are listed on compartments B and C of NYSE Euronext and on NYSE Alternext, around 900 companies in all. Having sufficient critical mass to impact the economic model for the various players in an exchange (issuers, intermediaries, investors and market companies) is crucial,” explains Mr. Demarigny. This new stock exchange would have its own governance and a presence in all four countries of the NYSE Euronext zone – Belgium, France, Netherlands and Portugal – but would be open to other countries and markets that wish to join. This new market, christened “The Entrepreneurs’ Exchange,” would include a “foyer” market where companies that are not yet ready for listing could take a few years to gather experience. “One of our goals is to favor growth of transaction volumes and to gain international visibility,” says Chris Buyse, Director of Finance for Belgian biotech Thrombogenics and a member of the Strategic Planning Committee.
A dedicated team would be assigned to developing marketing services for this new exchange and charged with supporting issuers at every level.
The Strategy Committee is also proposing new products. Issuers could opt for an IBO (Initial Bond Offering), for example, in which their debt is listed, or a pre-IPO (convertible bond listing). “The main thing is to make access to the market easier for companies,” says Mr. Buyse.
The status of the different participants in the exchange – listing sponsors, banks, brokers, etc. – also drew the attention of the Strategy Committee. “We defined their rights and responsibilities, in particular in terms of financial analysis and providing liquidity,” explains Mr. Demarigny.
Finally, the committee explored ideas for attracting more savings to the SME exchange. The French Management Association (AFG), for example, suggested dedicating a percentage of employee savings programs to midcap funds. “And we need to talk to governments about formulating an attractive tax framework,” says Mr. Buyse.
For the time being, the committee’s proposals will be submitted to the stock market ecosystem – major market organizations and stakeholders – between now and September 2012 in NYSE Euronext countries. Comments and suggestions are all very welcome throughout the summer. Results of the survey and recommendations will help the Strategic Committee prepare a final version that will be released end of September.