As of 1 June 2012 the Prague Stock Exchange has created a
special market segment – START. The START market is
regulated only by the Prague Stock Exchange and its rules. The aim
of the START market is to provide small and medium–sized
companies with easier access to capital to aid their potential
growth.
Unlike entering the main market of the Prague Stock Exchange,
there are no requirements for the START market concerning the
company existing for a minimum of three years. In order to operate
on the START market the company shall: (i) produce an information
document or a prospectus for the issue, (ii) regularly file and
publish annual reports and all prices – sensitive
information and (iii) pay an admission fee of CZK 10,000. There are
no annual fees required for the companies operating on the START
market.
In order to enter the START market, the company should contact one
of the Guarantors (a list of Guarantors is to be found on the
Prague Stock Exchange's website). The Guarantor provides a
guarantee to the Prague Stock Exchange concerning the company's
ability to comply with all obligations of a publicly traded company
arising under statute. Furthermore, the Guarantor shall once a year
prepare an analytical report which compares the company's
latest economic result with their business plans presented upon
their market launch.
After contacting the Guarantor, the company shall conclude an
agreement with one of the Guarantors who will cooperate with the
company in the preparation of an information document or prospectus
for the issue. Following the conclusion of the agreement, the
company shall file an application with the Prague Stock Exchange
for the admission of the issue on the START market. The process of
admission (the time between filling the application with the Prague
Stock Exchange and approval thereof) shall not take more than ten
days.
Once the company has entered the START market, the Guarantor will
start providing the issuer with the so – called
"Issue Patron's service". The main purposes of the
Patron's service are (i) to maintain the conditions for the
liquidity of the issue and (ii) to make sure that the supply and
demand prices are maintained during the course of a trading
day.
As mentioned above the START market focuses primarily on small and
medium-sized companies and gives them an opportunity to access
capital in an easier and a more comfortable way. As the information
on all stock issues traded on any of the Prague Stock Exchange
markets are available to all investors worldwide (through the
agencies using the trading data), the company may become known not
only in the Czech Republic but wherever it operates.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 25/06/2012.