Decisive Spark

Many fast-growing SMEs are struggling to attract meaningful financing. Conscious of the challenges facing these businesses, SIX Swiss Exchange has launched Sparks, a new stock exchange segment designed specifically to support SMEs in their efforts to raise capital.

The article – which was published in ”Capital Market Switzerland 2021” – highlights that Sparks strikes a sensible balance between proportionate requirements for SMEs on the one hand and investor protection needs on the other.  The listing requirements on Sparks, for example, are lower than those for issuers on the main market – but robust enough to admit only high-quality SMEs. Further, Sparks is a regulated  stock exchange segment in contrast to typical European SME Growth Markets, which are set up as Multilateral Trading Facilities (MTFs) on which only equity securities are admitted to trading.

In addition to benefiting from the increased visibility that is associated with being publicly traded, Sparks also provides SMEs and their investors with a condensed continuous trading window, supporting optimised price discovery and execution.

Appetite among SMEs and their owners for Sparks is expected to be strong. SIX Swiss Exchange estimates that there could be approximately 200 rapidly expanding Swiss SMEs looking for equity capital on the public markets in the next five to ten years. Sparks could also prove enticing from private market owners (Private Equity, Venture Capital, Family Office) of SMEs looking to exit their investments.

In a time during which the social role of financial institutions is scrutinised by politicians and the public, Sparks will play an increasingly important role as a support option for SMEs. They are seen as the backbone of our society and economy – and efficient access to capital for them is of ever greater importance. You can find more information about Sparks here.