Prospects – a new tool to access capital markets

Prospects creates an opportunity for SMEs to access capital markets relatively easily and efficiently, and to benefit from the advantages which, so far, have only been available to much larger entities through the Main Market. Small and medium-sized businesses are now be able to raise capital by issuing bonds, issuing new shares, or selling existing shares to a pool of investors  far greater than their own family or business partners.

Prospects’ key features:

  • Compliant with Markets in Financial Instruments Directive (MiFID) which harmonises the regulation of investment services and Multilateral Trading Facilities (MTFs)
  • Admission granted by the MSE
  • A corporate advisor is required
  • A business plan is required
  • There is no minimum value for the IPO, though the MSE envisages IPOs of between €1million and €5 million
  • Any number of shares may be floated - there is no requirement for a minimum percentage of shares to be held by the public
  • This product is not passportable within the EU*
  • Securities admitted on Prospects will benefit from the MSE brand and reputation.
  • Prospects provides cost-effective access to capital – there is no need for security or collateral, though investor and market confidence are required for success.

Companies considering admission to Prospects require the services of a Corporate Advisor, both before and following an admission process. The involvement of a Corporate Advisor by the SME ensures that transparency and corporate governance efficiencies are achieved and retained, thus instilling greater investor confidence.

Prospects will also help in succession planning - admitted equities may be traded on the secondary market, thereby un-locking value for existing shareholders.

Application process

The Corporate Advisor will be responsible to ensure that the company achieves the right levels of corporate governance and transparency. The Corporate Advisor will also assist with applying for admission to Prospects through the completion of the relevant application forms, business plans, and other disclosure documents. These can be found and downloaded through the Prospects website.

Initial Public Offerings (IPOs) or issues made under the Prospects Rules, which are lower than €5 million, and have fewer than 150 investors from any single jurisdiction shall be approved by the MSE.

IPOs or issues with a value which is greater than €5 million (or which would exceed €5 million within 12 consecutive months in respect of the same issue), or with 150 investors or more, will fall under the Prospectus Directive, and will, therefore, need to seek authority for admission to Prospects from the relevant Listing Authority.

The Corporate Advisor will also be responsible to carry out a due diligence process on the owners, and management, of the applicant. As can be seen, the role of the Corporate Advisor is critical to the application, and subsequent admission to Prospects. The applicant’s relationship with its chosen advisor should be retained for as long as the company’s securities remain admitted to Prospects.

Entities eligible to apply for financing through Prospects

Any company which falls within the EU definition of a small to medium-sized organisation (SME) is eligible to apply for access to Prospects. This also includes start-up businesses. The company must be a public limited company (plc) with a minimum issued and fully paid up share capital of €46,588.

Potential benefits of Prospects include:

  • 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
  • The company 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.

How much will it cost to be admitted to Prospects?

Application Fee

ALL APPLICATIONS - €5,000 applicable for admission of equity or debt securities to Prospects

Where the MSE requires additional skills and resources in order to process an admission application, additional costs may apply.

Annual Fees

ALL TYPES OF SECURITIES

 

Market Capitalisation

Annual Fee

On the first €15,000,000

0.1% - with a minimum of €5,000

On the next €35,000,000

0.05%

Above €50,000,000

No additional fees

 

 

Market data services

Currently included in the Annual Fee


Visit www.smeprospects.com for more information.