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The WSE has adopted new solutions concerning the operation of the NewConnect market regarding the stage prior to the introduction of shares to trading on NewConnect, mainly comprising specific principles of private placements. The Authorised Advisers will continue to play the key role in the process as a crucial element of sustainable development of the market. The current amendments are a part of the process of improving the private placement market and the entire stage prior to the introduction of a company to NewConnect aimed at enhancing the effectiveness of the public market on NewConnect.
This will be supported among others by the introduction of a standard offering document (in addition to the company’s information document on the basis of which shares are introduced to trading on NewConnect and whose contents are regulated by the WSE), a Private Placement Report, and at a later time the adoption of the Code of Best Practice for NewConnect Listed Companies, the Code of Best Practice for Authorised Advisers, and assessment of the performance of Authorised Advisers.
In the case of a private placement, the Authorised Adviser shall ensure that the company or a shareholder (depending on the offering party) prepares an offering document containing the information on the offered shares required by the WSE. The new regulations define the specific requirements.
In addition, under the new regulations, not later than on the presentation of the company’s application for introduction of financial instruments to trading on NewConnect, the Authorised Adviser shall present a Private Placement Report if the instruments were subject to a private placement within the past 6 months.
The report should contain among others information about the number of offered shares, the mode of calculation of the issue price (or the selling price), the explanation of any difference between the issue prices and the selling prices, the detailed mode of identification of potential addressees of the private placement, information whether the private placement was addressed to qualified investors, the date of the private placement, the number of entities to which the placement was addressed, which accepted the placement, and which were allocated shares (without disclosing their personal data/names), the principles of allocation of the shares. The report should also specify whether the entities which acquired shares in a private placement are in any way related to the issuer, the offering shareholder, or the company’s Authorised Adviser.
If the information contained in the Private Placement Report is found to be untrue or unfair, or if the private placement was made in contradiction with NewConnect market regulations, or if the procedures of the private placement could jeopardise the safety of trading in these instruments on NewConnect, the WSE may suspend or exclude the adviser off the Authorised Advisers list and forbid the introduction of the shares to trading on NewConnect.*
In early autumn 2008, the performance of NewConnect Authorised Advisers will be assessed. In the nearest future, the WSE will present the principles and methodology of the assessment. The assessment will be carried out among others on the basis of information presented by the advisers in the annual financial statements, their activity, the quality of their work for NewConnect, and their commitment to building the market position of NewConnect.
In late summer, the Code of Best Practice for Authorised Advisers and the Code of Best Practice for NewConnect Listed Companies will be published. It was the intention of the WSE to introduce the Code of Best Practice on the NewConnect market as of the beginning of 2009; however, considering the dynamic growth of the number of listed companies and the projected future growth, the Code of Best Practice will be introduced in 2008.
The amendments presented in this press release were announced on 9 May 2008 at the ceremony of the 50th listing on NewConnect and in the report “NewConnect After 9 Months: Initial Development Period Assessment” published on 4 June 2008.
The WSE informs that on 30 August, on the first anniversary of the launch of the NewConnect market, a follow-up report will be published on the present situation and outlook for the alternative market.
*The WSE wishes to recall that the complete outlook of amendments introduced to NewConnect regulations can only be obtained from the “Authorised Adviser in the Alternative Trading System” document attached as an Appendix to Resolution No. 334/20007 of the WSE Management Board dated 25 May 2007 (as amended). The document, including the changes and the consolidated text, will be published on 16 June 2008 at www.newconnect.eu.
