Small and medium-sized enterprises (SMEs) represent the backbone of the European economy, employing two-thirds of all workers and generating almost 60% of all added value. In addition, start-up SMEs play a decisive role in economic growth. For this reason, the European Union has been working hard for improving the business environment in which SMEs operate – from the 2008 Small Business Act – for a long time.
An important aspect of the functioning of SMEs is their access to funding sources, both equity and debt. While large companies often have access to diversified sources, SMEs – especially start-up SMEs – are often neglected. Therefore, the latest legislative proposal of the European Commission focuses specifically on this aspect of their business, by facilitating their access to the so-called multilateral trading facility (MTF).
MTFs are platforms that are similar to traditionally regulated markets (stock exchanges) as they provide certain standards regarding transparency of operations and enable quick execution of transactions – thereby attracting investors. At the same time, MFTs, with financial instruments traded on them, impose less administrative obligations.
The European Commission seeks to facilitate the access of start-up SMEs to MTFs focusing on SMEs (eg. by simplifying the obligation to publish a prospectus) and, in general, to reduce their administrative burden (eg regarding mandatory disclosures under the Market Abuse Regulation).
In this way, transparent multilateral markets – attracting investors and traditionally reserved for large companies – are becoming easier to access (startup) SMEs. While the only Slovenian MTF (SI ENTER, managed by the Ljubljana Stock Exchange) is not yet specialized for start-up companies, some foreign MTFs are – the closest is the MTF Zagreb Stock Exchange.
Have you considered setting up an MTF as a way of financing your business?