The characteristics of new equity markets for SMEs

Against the background of a continuing SME equity gap, this paper describes the regulatory framework and characteristics of three new secondary equity markets (AIM, OFEX and EASDAQ) which have recently been launched in an attempt to facilitate the raising of external equity finance by SMEs. The paper provides some new evidence of the costs of joining each market compared to those of joining the Official List (the "first market"). New evidence is also provided of the characteristics and performance attributes of AIM firms, together with the cost of raising finance on AIM relative to the Official List. In addition, the characteristics of each market are examined with reference to market capitalisation, liquidity and share trading. The paper concludes with a discussion of the potential of the expanding number of new European secondary equity markets to bridge the SME equity gap, together with suggested areas for future research.