The Prague Stock Exchange presents START, a new market for small and medium-sized enterprises
The Prague Stock Exchange is opening a new START market for small to medium-sized Czech companies. For companies in the SME segment, this creates an opportunity to raise non-debt capital directly from investors under considerably simplified conditions corresponding to the capabilities of businesses in this category.
The new START market organised by the exchange in cooperation with selected partners and exchange members is intended for smaller Czech joint-stock companies with a total value between EUR 1 million and EUR 80 million. The rules and conditions of the new market are aimed at removing all barriers that have thus far prevented small and medium-sized businesses from using the capital market as a source of funding.
START offers new opportunities to experienced, capital-strong investors, not only individual investors but also from private funds.
The form of trading at START will be different than on current Prague Stock Exchange markets. There will be no continuous trades, but liquidity will be concentrated into auction days, so-called START Days. During these START Days, issuers’ supply and investors’ demand will be matched four times a year. The auction days will also include presentations by issuers, either personally at the auction site or through videoconferencing at www.pxstart.cz. Immediately thereafter, an auction will be held in the Xetra stock exchange system. A lot, or the minimum traded volume, is set at CZK 500,000.
The Stock Exchange had already organised a market for small and medium-sized businesses in the past, which did not prove viable. It was built on active cooperation with stock exchange members serving as so-called “issue guarantors”, who were meant to guide issuers through the process of admission, support their liquidity and oversee the fulfilment of the disclosure duty.
In START, the fulfilment of the disclosure duty is fully transferred to the hands of the issuers themselves. According to the market rules, they must have an independent analysis issued at least once a year to serve as a guide for potential investors in deciding whether or not to invest their funds.
Tomas Vacha
Senior Relationship Manager
Global Securities Services Czech Republic
tomas.vacha@unicreditgroup.cz