SMEs to have simpler rules on the Lisbon stock exchange

  • ECO News
  • 29 October 2019

The status of SME Growth Market, developed under MiFID II, was granted to Euronext by the authorities in Portugal and in Belgium, France and Ireland.

Euronext, the company that manages the Lisbon Stock Exchange, has gained the status of SME Growth Market, both in the equity and bond segments. This classification aims to facilitate the access of small- and medium-sized enterprises (SMEs) to the capital market through simpler prospectuses and exemption from certain obligations.

The new statute allows SMEs to enjoy simplified procedures for two legislations: Prospectus Regulation and Market Abuse Regulation, the group announced in a statement this Tuesday. On the one hand, SMEs can use smaller initial and admission prospectuses than other companies. They are exempt from certain obligations under the information duties regime.

“This is basically a reinforcement of our commitment to SMEs and SME financing, and this is a segment we have been promoting for several years, encouraging and adapting the rules and admission requirements so that companies with smaller structures can have easier access to the capital market”, said Filipa Franco, director of admissions at Euronext Lisbon, recalling that with the status of SME Growth Market, prospectuses are “typically one of the most frightening aspects when a company plans to go to the market”.

The head of Euronext believes that this new approach to the market could capture the interest of companies in listing mainly in three sectors: technology companies, family businesses and REIT (Real Estate Investment Funds).

The entire Euronext group has 1,109 SMEs listed on its markets, of which 300 have entered the last five years (of which 50% are in the technology sector).

The company has been focusing on attracting smaller companies to the stock market, including Lisbon. One aim defined in Euronext’s strategic plan for the next three years is to create a partnership with private equity and venture capital companies to facilitate the entry of startups on the stock exchange.

When private investors want to get out of startups’ capital, the possibility of going public appears as an option. The basis of the initiative will be the sharing of information on market reading for each company and market, added Ucha about the project that still has no date to move forward and that will join other initiatives focused on startups, such as the training programme for TechShare technologies or the Tech Hub recruiting teams.

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