SME Exchanges in Emerging Market Economies : A Stocktaking of Development Practices

In recent years, many emerging market countries have developed or are in the process of developing SME Exchanges to provide financing to SMEs, but few have succeeded. This paper aims to help stock exchanges and policy makers think through the key q...

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Bibliographic Details
Main Authors:	Harwood, Alison, Konidaris, Tanya
Format:	Publications & Research
Language:	English en_US
Published:	World Bank Group, Washington, DC 2015
Subjects:	ACCESS TO CAPITAL ACCESS TO INFORMATION ACCOUNTING ADVANCED ECONOMIES ALTERNATIVE INVESTMENT ASSET CLASSES ASSET VALUE AUCTION AUCTIONS AUDIT COMMITTEE BALANCE SHEET BANK FINANCING BANK LENDING BANK LOANS BANKRUPTCIES BID BLUE CHIP BROKER BROKERAGE BROKERS CAPACITY BUILDING CAPITAL GAINS CAPITAL INVESTMENT CAPITAL MARKET CAPITAL MARKET FUNDING CAPITAL MARKETS CAPITAL MARKETS REGULATOR CAPITAL MARKETS REGULATORS CAPITAL RAISING CAPITAL REQUIREMENT CASH FLOWS CHECKS COLLATERAL COLLATERAL REQUIREMENTS CONFLICT OF INTEREST CONFLICTS OF INTEREST CONSUMER GOODS CORPORATE FINANCE CORPORATE GOVERNANCE COST STRUCTURE COST STRUCTURES CREDIBILITY CREDIT RATING CREDIT WORTHINESS CUSTODY DEBT DERIVATIVE DERIVATIVES DERIVATIVES MARKET DEVELOPING COUNTRIES DEVELOPMENT BANK DEVELOPMENT FINANCE DISCLOSURE DOCUMENTS DISCLOSURE REQUIREMENTS DISCLOSURE STANDARDS DOMESTIC INSTITUTIONAL INVESTORS DUE DILIGENCE ECONOMIC DEVELOPMENT EMERGING MARKET EMERGING MARKET COUNTRIES EMERGING MARKET COUNTRY EMERGING MARKET ECONOMIES ENTRY REQUIREMENTS EQUITIES EQUITY CAPITAL EQUITY FINANCING EQUITY ISSUES EQUITY MARKET EQUITY MARKETS EQUITY SECURITY EQUITY VALUATION EXCHANGE BOARD EXCHANGE COMMISSION FINANCE CORPORATION FINANCIAL CRISIS FINANCIAL INFORMATION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL SERVICES FINANCIAL STATEMENT FINANCIAL STATEMENTS FINANCIAL SUPPORT FOREIGN EXCHANGE FOREIGN EXCHANGE MARKETS FOREIGN INVESTORS FUND MANAGERS GLOBAL ECONOMY GOOD GOVERNANCE GOVERNMENT BONDS GOVERNMENT POLICY GOVERNMENT SUPPORT GROSS DOMESTIC PRODUCT GROWTH RATE HOLDING HOLDINGS ILLIQUIDITY INCOME INCOME TAX INDEBTEDNESS INDIVIDUAL INVESTORS INFORMATION ASYMMETRY INFORMATION DISCLOSURE INFORMATION TECHNOLOGY INFORMATIONAL ASYMMETRIES INITIAL PUBLIC OFFERINGS INSIDER TRADING INSTITUTIONAL CAPACITY INSTITUTIONAL INVESTMENT INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTORS INTEREST RATES INTERNATIONAL BANK INTERNATIONAL FINANCE INTERNATIONAL FINANCIAL MARKETS INTERNATIONAL MARKET INVESTING INVESTMENT BANKING INVESTMENT BANKS INVESTMENT MARKET INVESTOR BASE INVESTOR BASES INVESTOR CONFIDENCE INVESTOR DEMAND INVESTOR PROTECTION IPO ISSUANCE JOB CREATION JURISDICTIONS LIABILITY LIQUIDITY RATIO LOCAL INVESTOR LOCAL INVESTORS LOW-INCOME COUNTRIES MARKET CAP MARKET CAPITALIZATION MARKET DEVELOPMENT MARKET EFFICIENCY MARKET INTERMEDIARIES MARKET MAKER MARKET MAKERS MARKET MAKING MARKET PARTICIPANTS MARKET RISK MARKET SIZE MARKET SPECIALIST MARKET VALUATIONS MINORITY INVESTOR MINORITY SHAREHOLDER MINORITY SHAREHOLDER RIGHTS MINORITY SHAREHOLDERS NATIONAL SECURITIES NATIONAL STOCK EXCHANGES PORTFOLIO POTENTIAL INVESTORS PRIMARY MARKET PRIVATE EQUITY PRIVATE INVESTMENTS PRIVATE PLACEMENT PRIVATE PLACEMENTS PUBLIC OFFERING PUBLIC UTILITIES REAL ESTATE REGISTRATION FEE REGULATORY AUTHORITY REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REPUTATION RESERVE RESERVE BANK RETAIL INVESTOR RETAIL INVESTORS RETURN RETURNS RISK PROFILE SAVINGS SAVINGS ACCOUNTS SECONDARY MARKET SECONDARY MARKET LIQUIDITY SECONDARY OFFERINGS SECURITIES SECURITIES EXCHANGE SECURITIES MARKET SECURITIES REGULATORS SECURITIES TRANSACTION SETTLEMENT SETTLEMENT INFRASTRUCTURE SHAREHOLDER SHAREHOLDER STRUCTURE SHAREHOLDERS SMALL BUSINESS STAMP DUTIES STAMP DUTY STARTUP STARTUPS STOCK EXCHANGE STOCK EXCHANGES STOCK MARKETS STOCKS SUPERVISORY AUTHORITY TAX TAX CONCESSION TAX EXEMPTION TAX INCENTIVE TAX INCENTIVES TAX INCENTIVES FOR INVESTORS TELECOMMUNICATIONS TRADES TRADING TRADING PLATFORM TRADING PLATFORMS TRADING SYSTEM TRANSACTION TRANSPARENCY TURNOVER TYPE OF INVESTOR VALUATIONS VENTURE CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2015/01/23777568/sme-exchanges-emerging-market-economies-stocktaking-development-practices http://hdl.handle.net/10986/21381

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Summary:	In recent years, many emerging market countries have developed or are in the process of developing SME Exchanges to provide financing to SMEs, but few have succeeded. This paper aims to help stock exchanges and policy makers think through the key questions to be addressed to determine if, when, how and for whom to develop an SME Exchange in emerging market countries. It takes stock of some of the actions that exchanges can take to reduce issuance costs, in time and money for SMEs, without compromising the prudential needs of investors. The paper draws on the experience of seven SME Exchanges and the World Federation of Exchanges that participated in a workshop organized and led by the WBG to discuss these and other questions. It does not recommend a specific model to follow and does not address specific context issues, however the analysis suggests approaches that are widespread and/or could be beneficial to consider such as (1) focus on SMEs with a sizeable growth rate, (2) have the SME exchange legally related to the main board, (3) do not reduce disclosure content to reduce costs, (4) allow private placements, (5) have well regulated advisors to vet issuers and provide comfort to investors about the quality of the issue, (6) have outreach, public awareness campaign and training for SMEs, (7) consider tax incentives for investors. The report is the first in a series on this topic, and subsequent reports will address and expand on related and broader issues.

SME Exchanges in Emerging Market Economies : A Stocktaking of Development Practices

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