Wednesday 17th February 2016 saw the official roll out of ‘Prospects’- a MIFID compliant Multilateral Trading Facility operated by the Malta Stock Exchange (MSE), aimed at encouraging wider accessibility for small and medium-sized enterprises (SME’s) to previously inaccessible capital markets. Prospects has been developed to provide these opportunities in a simplified, efficient and straightforward manner.
Previously, access to capital markets was only available to larger entities. Prospects aims to give SME’s a platform where they are able to raise capital by accessing a much larger pool of potential investors than before. The MSE has presented the implementation of Prospects as one which supports the MSE’s initiative to create new business opportunities as well as giving businesses the possibility of being more competitive both locally and on the international playing field.
The MSE has emphasised the following key features of the trading facility and potential benefits which Prospects aims to achieve:
- MIFID compliant
- Admission granted by the MSE
- A corporate advisor is required
- Business plan required (instead of a prospectus)
- There is no minimum value for an IPO, though the MSE envisages IPOs of between €1 million and €5 million
- Any number of shares may be floated – there is no minimum percentage
- SMEs have full flexibility of issuing equities or corporate bonds
- Access to capital formation, through the issue of equities and corporate bonds
- Admission to Prospects will raise brand awareness and prepare for the issue, or sale, of equity as part of a succession planning process
- SMEs will enjoy the benefits of good corporate governance, and the enhanced efficiency and effectiveness which this brings
- Admission to Prospects opens up the opportunity of eventual migration to a listing on a regulated market
- Entities may secure capital at a competitive coupon rate, in the case of a bond issue, and under conditions more favourable to other, more traditional, methods of raising finance
- The admission of equity will create an opportunity for existing, or new, shareholders to exit the market efficiently in future
- No collateral is required to access finance on the capital market.
For further details kindly contact:
Ruth Galea, Partner