SIX Swiss Exchange - Launch of SPARKS
SIX Swiss Exchange to Launch SPARKS, a New Equity Segment for SMEs
On July 8, 2021, the SIX Swiss Exchange announced the launch of SPARKS, a dedicated new equity segment on the Swiss stock exchange targeting small and medium enterprises (SMEs). The new segment is designed to allow SMEs to raise capital in public offerings, whilst enabling investors to tap the growth potential of SMEs.
With somewhat more relaxed listing requirements compared to the SIX main market – track record of only 2 years, shareholder base of minimum 50 investors, equity capital of minimum CHF 12 m, and a capital increase of at least CHF 8 m as part of the IPO unless the equity capital is higher than CHF 25 m – SPARKS targets companies with a market capitalization of less than CHF 500 m. Annual (audited) and semi-annual (unaudited) financial reporting and corporate governance reporting will be applicable, as well as disclosure of important shareholdings, management transactions and events that could affect the share price (ad hoc publicity).
Catering for anticipated lower secondary market trading liquidity, SPARKS will operate a proprietary trading model specifically tailored to companies with smaller market capitalization to give investors the best possible execution. The model will feature a condensed trading window with continuous trading every day, with an opening auction at 3.00 p.m., trading until 5.20 p.m. and a closing auction until 5.40 p.m. SPARKS listed companies can request a transfer to the SIX main market after a certain period, but must transfer to such main market if their average market capitalization exceeds CHF 1 bn over a period of 12 months.
Pursuant to the announcement, the new equity trading segment will go live upon approval by relevant authorities. All necessary applications have been filed.
We believe SPARKS will be an interesting proposition for a number of parties: for SMEs, allowing them to efficiently raise capital whilst taking advantage of less onerous listing requirements, and for their investors, allowing for enhanced liquidity, effective price formation and best execution. We expect the new segment to address an actual need of both companies and investors, by establishing and extending to SMEs an ecosystem for raising public capital for growth. Based on the strength of our leadership and expertise in capital markets, we look forward to helping our clients make optimal use of the new framework at the forefront of the ECM field.
This Bulletin expresses general views of the authors as of the date of this Bulletin, without considering any particular fact pattern or circumstances. It does not constitute legal advice. Any liability for the accuracy, correctness, completeness or fairness of the contents of this Bulletin is explicitly excluded.