The WFE 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 recommended 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 included: 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.
You can read the full response to the FSB here.