London, Tuesday 26 March 2019 – The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has responded to the Financial Stability Board’s (FSB) consultation on the effects of financial regulatory reforms on the provision of financing to small and medium-sized enterprises (SMEs).
WFE exchange members are committed to improving the range of financing options available to SMEs; indeed, many WFE members operate dedicated SME platforms. In addition to providing listings platforms, many of these market operators also provide pre- and post-listing support for SMEs, and alternative financing platforms that provide access to debt capital, or offer mechanisms to connect firms with private equity/venture capital investment.
The WFE has conducted extensive research into various aspects of SME markets through its dedicated SME Working Group including looking at the challenges faced by SMEs and others in the financing ecosystem. Research has included a report on SME Exchanges (March 2016 produced with the support of the World Bank); SME Financing and Equity Markets (February 2017); Small and Medium Sized Enterprises and SME Exchanges (July 2017, produced in conjunction with the Milken Institute); Family Firms and Listing: Opportunities for Public Capital Markets (February 2018); and WFE SME Markets – Key Datapoints and An Overview of WFE SME Markets (October 2018).
In the response, the WFE recommends a number of core principles to enhance SME use of public markets, and thereby access to finance and other benefits associated with listing. The proposals include: reducing the costs associated with listing; enhancing the information that is available about listed SMEs; addressing barriers to use of public markets; looking at secondary market trading mechanisms to assess whether these impede the attractiveness of markets for SMEs; and investing in effective market education, for both companies and investors.
Nandini Sukumar, Chief Executive Officer, WFE said: “The WFE is committed to supporting the growth and development of SMEs; one of our primary policy mandates is to promote more effective provision of SME finance through regulated markets. Meeting the needs of SMEs requires a holistic approach that ensures the effective functioning of various parts of the financing ecosystem. The focus must be on achieving this."
You can read the full response to the FSB here.