DOHA: The market model of Qatar Exchange's (QE) SME market is not a subset of the main market. The junior market will be structurally separate from the Main market, Colin Milton, Deputy Listings Director at QE, said.
The market would be focusing on SMEs and entrepreneurial companies. The QFMA-regulated market will be using same trading platform as the main market (UTP), but separately branded. The junior market will have 'lighter' regulation but sponsors and listing advisors will have important oversight responsibilities.
The SME market expects the listed companies to have a minimum operational track record of one year against the three year compared with the main market's mandatory three year track record. Against the QR40m subscribed capitalization of the main market, the SME market is expecting QR5m. Foreign issuers are allowed in SME where as they are only allowed in the secondary market of the QE.
For the SME market, the regulator envisages a corporate governance regime but one less onerous and modified for small companies.
Colin said the SME market would provide a dedicated route to market for small and mid-cap companies. The market would allow flexibility to develop a regulatory structure best suited to small and mid-cap companies and to develop a lower cost pricing structure.
SMEs would be an important contributor to Qatari economy. The junior market would help expand innovation and entrepreneurial capabilities and strengthen the private sector. Having dedicated market would help companies come to the public market. The market would help diversifying sources of funding and increase the company's equity base and enhance its credibility in the market.
Colin said Qatar's SME market is the region's first specially dedicated junior market. Currently, there is no junior market equivalent to the Qatari model in the GCC. Dubai SME100 is not a junior exchange. While in line with a long-standing strategy to nurture promising SMEs ,it is not directly related to preparing them to come to market.
© The Peninsula 2012
