NewConnect has the status of an organised market; it is operated by the WSE outside the regulated market as an alternative trading system. It is an offer for young, growing companies, especially in the high-tech sector (but companies from other sectors may naturally be eligible for trading).
NewConnect was developed for young dynamic Polish companies which need equity to tap the potential of innovation, this getting a chance to grow and to become one of Poland's large companies. Because of this issuer profile, NewConnect offers more liberal formal obligations and information requirements, which reduces the cost of capital. NewConnect was conceived as the first step on the exchange market for listed companies.
NewConnect addresses the needs of (institutional and individual) investors interested in higher-risk investments offering above-average profits. The needs of innovative companies with a short track record and the needs of investors interested in the segment have so far remained unfulfilled due to the lack of a safe trading platform. NewConnect solves this problem. Investors interested in promising companied listed on NewConnect include among others:
Investors in NewConnect should realise that the higher potential of growth of listed companies carries a higher investment risk.
This specificity of the market is a consequence of its profile: it lists companies with a short track record, operating in the most volatile
and competitive sector: the high-tech industry.
NewConnect offers the advantage, new to the Polish capital market,of private placements for up to 149 institutional and individual investors. In this case, irrespective of the size of the issue, the admission to trading is based on a short and simple information document prepared and approved by an Authorised Advisor. The preparatory phase from the decision to the start of trading may be as short as 2-3 months, much less than in the regulated market. A public offering is another procedure for the admission of shares to trading. The issuer has to comply with the same admission procedure as that binding in the regulated market with the obligatory issue prospectus approved by the Financial Supervision Commission (KNF). In the case of offerings up to EUR 2.5 million, the admission may be based on an information memorandum subject to KNF's scrutiny. The procedure from the decision to the IPO is the same as in the regulated market: 6-9 months.
The capacity and the readiness of an issuer planning the introduction of shares to NewConnect in a private placement are assessed by an independent Authorised Advisor under a co-operation agreement executed with the company. The Authorised Advisor gives assurance for the company entering NewConnect; it also supports the company in preparing the entry and co-operates with the company for at least 1 year of trading in NewConnect. Recognised, reliable investment companies, legal firms, auditors, and financial advisors may act as Authorised Advisors. The company appoints an Authorised Advisor
of its choice.
In the period of trading, at least for 2 years, the company is supported by an investment company acting as Market Maker who mainly ensures the liquidity of trading in the company's shares.
The NewConnect trading platform is the UTP (Universal Trading Platform) represents world-class quality in technology which will rank the Warsaw Stock Exchange among the most advanced global stock exchanges. All shares are traded in a continuous system with a double fixing (at session opening and closing). Companies may choose between two systems: a system based on orders and a system based on prices. Sessions is open at 9.00 a.m. and close at 5.05 p.m. in the system based on orders, and open at 9.30 a.m. and close at 4.10 p.m. in the system based on prices. The types and the priority of orders are the same as in the regulated market.
The information requirements for companies listed on NewConnect are significantly reduced. Compared to the regulated market, NewConnect offers:
• Beata Kacprzyk, Business Network Development Department, phone direct + 48 22 537 76 10
• Maciej Wojdyła, Business Network Development Department, phone direct + 48 22 537 71 93
|Alternative Trading System Rules|
|Calendar of market action|