Prospects – SME’S alternative means to access financing
Prospects is a new platform created by the Malta Stock Exchange (MSE) to offer small and medium sized enterprises (SMEs) an alternative avenue to access capital at a significantly lower overall cost than larger companies, enabling SMEs to tap broader sources of financing beyond traditional bank loans. SMEs may issue equity or corporate bonds on the Prospects market, and whilst not being restricted by a minimum value for the initial public offering, can potentially raise up to EUR 5 million capital.
Prospects affords to SMEs not only a less costly option than larger companies to be listed on the stock exchange, but also a less bureaucratic process. In fact, the MSE, should, within 10 working days from the successful submission of the application, either approve or refuse an application. Such simplified means of admission makes Prospects an attractive alternative for SMEs to grow and expand.
The MSE application fee for admission of equity or debt securities to Prospects is €5,000 whilst the annual fees applicable for companies with a market capitalization of up to €5 million, is €5,000 per annum. Additional expenses relating to listing depend on the complexity of the company and the transaction.
Entities eligible to apply for financing through Prospects
Any company which falls within the EU definition of a SME is eligible to apply for access to Prospects. This also includes startup businesses.
The Corporate Advisor
SMEs considering admission to Prospects require the services of a Corporate Advisor. The Corporate Advisor will assist the SME to apply for admission to Prospects through the completion of the necessary admission documents, business plans and other disclosure documents and will guide the SME towards creating a solid management structure.
Once the SME has been successfully admitted to Prospects, the Corporate Advisor must be retained for as long as the SME’s securities remain listed on Prospects. The Corporate Advisor shall ensure that the SME maintains good corporate governance throughout its listing on Prospects in order to enhance investor protection and promote transparency.
Whilst Prospects is based and operated in Malta, access to this market is also be available to foreign companies seeking to be admitted to Prospects, as well as to investors interested in investing in instruments admitted to prospects. Nevertheless, there is no EU passporting for marketing the securities.
How can ECOVIS Malta help?
In our capacity as approved Corporate Advisors, ECOVIS can assist SMEs to plan the appropriate capital structure, prepare for admission to market listing and subsequently, ensure ongoing compliance with all the applicable rules and regulations of corporate governance and transparency.
As corporate advisors, ECOVIS GRC Limited shall:
Maintain independence, impartiality, objectivity, confidentiality and ethical standards ensuring that the Company can identify, prevent, manage and monitor conflict of interests in order to prevent them from adversely affecting the interest of the client and their investors (as applicable)
To the extent allowed, a process by which the Company, as Corporate Advisors, or any Covered Person, may invest or trade in securities issued by our client Prospects Companies and the immediate disclosure of any such investment or trading therein; and
Maintain a quality assurance framework in respect of our services to client prospects companies