Mini stockmarket aimed at capital-hungry SMEs

LAURA WALTERS
Last updated 05:00 18/03/2014

Relevant offers

Small Business

Pussy cats galore at Rotorua cafe Taranaki hospitality players recognised by beer aficionados Marlborough Artisan Market steps up for pre-Marlborough Wine and Food Festival event Paekakariki woman brings true-blue Indian brew to NZ Designer jackets made in Taranaki Beerhive Blog: Hyper-local - the death of national and international brands Upper Hutt Brewtown playing it crafty Nelson gap year company changing lives around the world The korero of the carving is the most important thing 'Surprise' sale of Wellington's Osteria del Toro to owners of Auckland-based Wildfire

Small businesses could gain access to much-needed capital through a proposed stock market designed specifically for them, Business NZ head Phil O'Reilly says.

NZX plans to launch a new market to provide small-to-medium-sized enterprises (SMEs) with an easier, lower-cost alternative to accessing investor capital.

The yet-to-be-named market was aimed at businesses with an expected market capitalisation of between $10 million and $100m.

The market would reduce the costs and complexity associated with listing, with streamlined regulatory requirements and simpler, template-based rules and procedures.

O'Reilly said small businesses needed access to more capital to fund growth.

The new market was "very exciting in principle" but it had always been a challenge to get SMEs to list.

"Small businesses have been very wary of listing because of the cost of doing so and the compliance [requirements]."

A new market would need to strike a balance between making the listing process easier and cheaper while maintaining a high level of compliance and investor protection, he said.

But as long as investors were secure and standards were met it made sense to have a different compliance model for small businesses, O'Reilly said.

"Treating a $10 million business like Fletcher Building is simply ridiculous."

O'Reilly hoped the market would also encourage business owners to give up full control of their company in return for access to equity finance.

The proposed market would also give investors access to businesses that were in the earlier stages of development.

NZX spokeswoman Kate McLaughlin said the market would not immediately replace the existing NZX Alternative Market (NZAX). 

Ad Feedback

- BusinessDay

Special offers
Opinion poll

Do you feel better off than at this time last year?

Yes

No

In some areas yes, others no

Vote Result

Featured Promotions

Sponsored Content