The Free Markets—launched in Paris in 1996 and in Brussels in 2004—provide small (micro-cap) companies with easy access to an IPO and a framework adapted to their specific needs. These markets are, in principle, open to any company, regardless of size, performance, maturity or industry.
Operated by their respective NYSE Euronext market operators, these multilateral trading facilities (MTFs) provide a channel for disseminating buy and sell orders, with trades executed by NYSE Euronext -Member firms. The criteria for admission to the markets are much simpler and listing costs are low. Except for any relevant prospectus, the listing requirements for issuers on the Free Markets are lighter. Market abuse and transparency provisions do however apply in accordance with applicable laws. The securities traded on these markets have not gone through any admission procedures, and issuers are not subject to specific disclosure requirements. The Free Markets serve companies that are too young or too small to be listed on one of the compartments of the NYSE Euronext European Regulated Markets or on the NYSE Alternext markets.
As at June 2010, there were 296 companies listed on the Free Market Paris and 30 companies listed on the Free Market Brussels. Both markets boast a broad industry sector diversification based on Industry Classification Benchmark (ICB) classification.
Issuers tend to be relatively small operations – half have 24 or fewer employees and achieved an annual turnover of less than €4.8 million prior to IPO. However, the average company age at IPO is 10.5 years; it is therefore not a market for start-ups and important that a company has shown that it is able to withstand effects of an economic downturn.
Liquidity is in line with market capitalization. The Free Markets are less liquid than 'traditional' markets and money raised at IPO tends to be dominated by retail investors. In 2009, monthly turnover averaged €10 million.
The Free Markets target local companies that would like to finance the next phase of their development and benefit from the reputation bestowed on public companies, without having to satisfy all the requirements associated with a listing on the Regulated Markets.
They are, however, entry level markets and only represent the first step in a company’s development. Once a company has grown sufficiently it is encouraged to consider a transfer to NYSE Alternext and later to a NYSE Euronext Regulated Market. Approximately 10 percent of all companies listed on the Free Market in Paris have pursued a listing on another market at a later stage.
The Free Market is not a regulated market. As such, the issuer of securities tradable on the Free Market is not bound by the same constraints as the issuer of securities on a regulated market.
The main differences with regard to an admission to listing/trading on the Free Markets versus the NYSE Euronext European Regulated Markets are:
The main differences with regard to an admission to trading on the Free Markets versus an admission to listing on NYSE Alternext:
|Main Eligibility Criteria|
|NYSE Alternext||Free Markets|
EUR 2.5 million (public offer)
EUR 2.5 million (private placement)
|Past financial statements||
2 years financial statements,
with the last year certified
Two years of past financial statements
|Accounting standards||Domestic or IFRS||Optional IFRS or National Accounting Standards|
|Documents to be provided||
Prospectus approved by the Regulator
or offering circular without approval in the
case of a EUR 5 million private placements
with a number of qualified investors
Prospectus approved by Regulators
in case of a public offering
Nevertheless, companies that would like to be considered for an admission to trading on the Free Market in Belgium must prepare a prospectus and have it approved by the Financial Services and Markets Authority (FSAM). Similar requirements may apply with regards to the French regulator in case of a public offering on the Paris Free Market.
The prospectus details the company’s core business activities, its prospects and the characteristics of the securities to be admitted to trading. The issuer is assisted in the preparation of this document by a market member.
All transactions on the Free Markets are cash settled, i.e. the buyer must pay the funds and the seller must deliver the equities once an order has been executed. Trading and data dissemination are handled by NYSE Euronext Brussels and NYSE Euronext Paris respectively.
Trades are executed through a single fixing per session, followed by a period of trading at the last price. Order matching takes place at 15:00 for shares, at 15:30 for secondary lines and at 16:30 for bonds.
NYSE Euronext Brussels and NYSE Euronext Paris may suspend the trading of a security in the interest of the market or on the issuer’s demand.
For a comprehensive breakdown of fees relating to an IPO on the Free Market consult the relevant fee book or contact one of our team members.