Launched in 2007, the NewConnect market was created by the Warsaw Stock Exchange (WSE) as an alternative marketplace for smaller firms to tap the capital markets to sell equity and raise funds. The exchange was formatted similarly to that of the London Stock Exchange’s Alternative Investment Market (AIM) which offers lower costs and fewer reporting requirements for smaller firms taking their company public.
Remaining focused on smaller sized companies, with the implementation of NewConnect 2.0, the WSE is applying new sets of guidelines and monitoring to raise the level of responsibility of the market and listed companies. According to the WSE, the goal is to “restore confidence in NewConnect and to make the market attractive to diverse investor groups.”
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The key feature being added is the appointment of a Board of Authorized Advisers that will be composed of 12 members, including nine Authorized Advisers. The board will be responsible for improving the quality of service provided by Authorized Advisers, issuing opinions on amendments to laws and regulations concerning the organisation and development of the NewConnect alternative market.
The launch of the new protocols comes as the NewConnect marketplace has experienced strong growth since launching in 2007. During that time, the alternative exchange has grown to currently list 432 companies, of which 11 are foreign firms, with a total market capitalization of $2.57 billion (PLN9.6 billion).
Commenting on the changes, Paweł Tamborski, President of the Warsaw Stock Exchange, stated in the firm’s public release, “We want Authorised Advisors, who are responsible for reviewing prospective issuers on NewConnect as reliable business operators, to assume more responsibility for the market. Confidence in the market can be restored if all market participants are committed to it.”