The new Prospects Market offers small and medium enterprises the possibility of raising finance through the Malta Stock Exchange with accessible and cost-effective procedures, as opposed to a listing on the regular market, which is usually reserved for larger companies with different aspirations.

Compliant with MIFID II, which is operated by the Stock Exchange, the Prospects Market is a regulated multilateral trading facility (MTF). The MTF was launched to cater for the high demand for financing currently present on the Maltese islands of SMEs, which practically dominate the local business sectors.

Currently SMEs are fully dependent on bank financing to expand their businesses which, although may result in economical rates, have numerous disadvantages when compared to access to finance from the capital markets. The Prospects Market allows SMEs to list both bonds and shares to raise finance. Furthermore, it is not solely limited to Malta-based businesses but foreign companies may also apply to be listed.

Listing on the Prospects Market provides plenty of leverage. For example, when issuing debt securities, the issuer is only required to repay the amount on maturity, allowing more flexibility on the repayment of the bond, which eases pressure on cash flow.

Listing on the Prospects Market provides plenty of leverage

On the other hand, with a bank loan, the borrower would need to immediately start repaying the principal of the said loan, which in some cases may prove difficult for a business that is aiming to expand due to its initial costs.

Admission to the Prospects MTF entails: phase one: an introductory meeting between the Exchange, the corporate adviser and the prospective applicant to discuss the application process; phase two: compilation of the admission document; phase three: a meeting with the corporate adviser to verify the thoroughness and completeness of the formal application and accompanying documentation; phase four: submission of the formal application; and phase five: the Admissions Committee reviews and makes its recommendation to the Exchange board of directors.

As mentioned, the assistance of a corporate adviser is essential for the high market confidence required to ensure a proper and successful market issue. It is required to ensure that the company going to the market is soundly structured both legally and financially.

KSi Malta has been licensed to act as corporate adviser by the Malta Stock Exchange and can therefore assist SMEs in the entire process of raising finance through a listing on the Prospects Market.

For more information, contact Bernard Gauci on info@ ksimalta. com or on +356 2122 6 176.

http://www.ksimalta.com/