New Financing Opportunities for Emerging-Growth Companies on the Swiss Exchange SWX

The Swiss Exchange SWX has laid the groundwork for enabling young, rapidly-growing companies to raise capital in the Swiss equities market. The SWX Admission Board approved on 23 April a draft of the corresponding rules and regulations. Only the approval of the Swiss Federal Banking Commission (EBK) needs still to be obtained. It is expected that the Supplementary Listing Regulations will already take effect by summer of this year. SWX and introducing banks have already established contact with a number of companies which have expressed serious interest in having their shares publicly traded in a new market segment. With this market sector, SWX will offer qualified companies an ideal and cost-efficient means of gaining access to domestic and foreign investment capital that is professionally managed in the Swiss financial industry. In so doing, SWX is addressing the clearly identifiable needs of investors who are increasingly seeking investment opportunities with a higher risk/reward profile, as well as those of innovative entrepreneurs who in today's economic environment have become ever more reliant on alternative means of financing their corporate growth. In order for the potential listing candidates to benefit from the attractiveness of the Swiss financial marketplace, SWX will place its proven trading platform at the disposal of these companies. The listing regulations are generally oriented towards those of other European emerging-growth securities markets. Minimum equity capital requirements are CHF 2,5 million. The total market value of freely-trading shares should amount to at least CHF 8 million, and this free float should represent a minimum of 20% of the company's outstanding shares. Evidence of an operating track record of at least one year must be provided. The new market segment will serve as a means of financing growth, and is not intended to be primarily an exit opportunity for previous shareholders. For this reason, public listing in this segment will be conditioned on a capital increase taking place at the time of initial quotation. The portion of shares being offered to the public must represent at least 50% of the capital increase. Existing shareholders may only sell any of the remaining portion after a six-month holding period, at the earliest. By way of a counterbalance to the liberalised listing requirements and in order to provide investors with an added degree of security, the stipulations for financial transparency are tougher than those in other SWX market segments. For example, use of international accounting standards (IAS or US-GAAP), as well as quarterly reporting are prerequisites. A sponsoring bank must ensure that it will provide sufficient market liquidity for the shares it introduces in the new segment. Contacts with banks and other financial services providers, as well as potential issuers, demonstrate that the new market segment is being received with open arms and is viewed as an opportunity for both the Swiss economy and the entire Swiss financial marketplace.