NYSE Euronext to open European small firms market

LONDON Wed Dec 5, 2012 12:42pm EST

LONDON Dec 5 (Reuters) - NYSE Euronext plans to launch a European stock market for smaller firms next year, as exchange groups battle to attract companies which have seen bank funding dry up due to the financial crisis.

The world's largest stock market said on Wednesday it would combine the smaller listed firms on its Euronext markets with those listed on its junior market Alternext "to achieve critical mass".

NYSE, which operates stock and futures exchanges in the United States and Europe, said the new exchange, which has not yet been named, will launch in "the middle of 2013", according to a spokeswoman.

Dominique Cerutti, the deputy chief executive of NYSE Euronext, said in an emailed statement the project showed the firm's commitment "to revitalising market financing for small and medium-sized enterprises (SMEs)".

The announcement followed recommendations in September by a NYSE-appointed committee to look at ways the exchange could support smaller listed companies.

It also marks the latest move by a European exchange to help smaller firms access much-needed investment capital.

The London Stock Exchange Group, which runs the Alternative Investment Market (AIM), said in September it was working on a "launch pad" for European high-growth businesses seeking a full London listing.

ICAP, the European futures broker, in June bought PLUS Markets, a struggling British exchange, and pledged to overhaul the platform to boost investment for its 133 small and mid-sized listed firms.

"Governments and competent European and national authorities also have an essential role to play in creating a more efficient legislative, regulatory, fiscal and fee framework, above and beyond new infrastructure," said Cerutti.

British small and medium-sized enterprises (SMEs) received a potential boost on Wednesday when finance minister George Osborne launched a review of investing in these firms.

"We will consult on allowing investment in SME equity markets like AIM to be held directly in stocks and shares Individual Savings Accounts, to encourage investment in growing businesses," Osborne said in an update on the government's economic policy, referring to tax-free savings accounts.

The LSE, which owns AIM, welcomed the plan.

"This is good news for small businesses up and down the country," said Xavier Rolet, the chief executive of the British exchange.