Catalist Readies For Launch Of NZ’s New SME Stock Exchange With Public Rules Consultation
CATALIST, which aims to be NZ’s only licensed and regulated stock exchange designed for small and medium-sized enterprises [SMEs], is readying for launch, with its public rules consultation underway.
The consultation seeks public feedback on issuer rules, which aim to lessen costs and simplify the public listing process for smaller businesses.
Differing from a traditional stock exchange,Catalist uses regular auctions, rather than continuous trading, allowing for periodic information disclosure and the ability for businesses to focus on their day-to-day operations between auctions.
The proposed market rules mean fairer pricing for SME investments, simplified administration, lower fees and the ability for businesses to publicly raise up to $20 million per year, without the usual associated costs.
Catalist’s Chief Executive, Colin Magee, says in doing so, Catalist aims to simplify the way businesses and investors connect and grow.
“While working as the Head of Conduct for the Financial Markets Authority [FMA], I realised there was a real lack of options for SMEs trying to raise capital between $2 million and $20 million.
“Traditional stock exchanges don’t work for SMEs because the costs and constant focus on short-term share price often get in the way of focusing on the long-term health of the business.
“Investors will also benefit from the Catalist Public Market, by having access to well-regulated investment opportunities, where they can be confident in the standard of information they receive,” he said.
As many SMEs struggle with the current Covid-19 environment, the need to improve access to capital for businesses that have growth potential is only increased.
By helping to fill the gap and giving investors better access to SME investments, both investors and businesses are presented with an opportunity to enable growth and job creation, coming out the other side of this.
Tony Mitchell, Chair of the NZ Shareholder’s Association (NZSA), says Catalist is one of the most important developments for the NZ capital markets in recent years.
“The NZSA welcomes any initiative that expands the scope of New Zealand's capital markets and offers both businesses and investors new opportunities, in an appropriately regulated environment.
“Diversity is key to healthy environments. Catalist appears to offer an appropriate mechanism to appeal to a range of entities, from beginners to mature companies, and we will watch its genesis with interest,” he said.
As well as the Catalist Public Market, Catalist offers private markets for individual companies and an online investor management solution.
Submissions for the Catalist public market rules consultation will close at 5pm on Friday the 1st May 2020. The consultation document, a draft of the rules and other information can be found at https://www.catalist.co.nz/info/documentation