Euronext announced three major changes aimed at improving the visibility and liquidity of small and mid-caps, and giving European companies new opportunities for raising capital. Changes to the Euronext list come after wide-ranging consultations with stakeholders on all Euronext markets. Modifications to regulated markets will first be introduced at Euronext Paris, then progressively implemented in Amsterdam, Brussels and Lisbon, in each case adapted to meet local needs.
1. For greater simplicity and visibility, a single list – “Eurolist by Euronext” – is to be adopted. From January 2005, this will replace the three regulated markets now operated by Euronext Paris: the Premier Marché, Second Marché and Nouveau Marché. Companies on this regulated market will be classified in alphabetical order and be identified by market capitalisation, making it easy to locate small caps (market capitalisation under EUR 150 million), mid-caps (EUR 150 million to EUR 1 billion) and large caps (over EUR 1 billion). Companies on Eurolist will be subject to a single set of listing and disclosure rules, reflecting the regulatory context in Europe.
2. Small and mid-caps are the focus of a second change, also scheduled to take effect in January 2005 on Euronext Paris.
To highlight the expertise of brokers active in these segments, Euronext is creating a special status - “small and mid-cap expert” - for intermediaries setting up a team dedicated to research, marketing and sale of listed small and mid-caps. In France, approved experts must undertake to track 60 mid-cap stocks including 20 with market cap under EUR 150 million. In exchange, Euronext will provide suitable support with a dedicated marketing program.
At the same time, Euronext will launch a new index range for mid-caps, weighted by float. This will comprise three different indices: CAC Mid100, 100 component stocks with market cap between EUR 250 million and EUR 4 billion (approx.); CAC Small90, 90 components with market cap under EUR 250 million, and CAC Mid&Small190, combining the first two. A new index for high-performance technology stocks, CAC IT20, will replace the existing IT.CAC 50, and a broad index of around 500 stocks will also be created. Euronext Paris will naturally maintain its benchmark CAC 40 and SBF 120 indices, along with sector indices. In contrast, the Nouveau Marché, Second Marché, Midcac and IT.CAC 50 indices will be phased out.
3. Finally, in keeping with the European Financial Services Directive, a new structured and organized market, yet unregulated as defined by the Directive, will be set up in 2005. Called Alternext, this will be a first step towards Euronext, offering companies raising capital in the euro zone simplified market access in exchange for a commitment to financial transparency and investor protection. Alternext is for companies seeking new opportunities in a special regulatory framework, and rounds out existing services already offered by other Euronext markets.
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