Newconnect in Comparison With Multilateral Trading Facilities in Europe: Irregularities in the Functioning of the Polish MTF Market

Roman Asyngier
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Roman Asyngier: Maria Curie-Sklodowska University, Lublin, Poland

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Abstract: Introduction: It is hard to consider five years of the functioning of the NewConnect market explicitly successful. On the one hand, the market quotes an increase of quoted instruments which is unusual in other multilateral trading facilities. On the other hand, it does not result in quality improvement of this market. Low value of public offers, limited share liquidity and excessive number of penny stock companies discourage investors from investing in this market and inhibit its further development. Methodology and the purpose of research: An analysis of statistical data showing development of the NewConnect market will be presented in the article as well as its position in comparison with other multilateral trading facilities in Europe. It will help to achieve the goal of the article that is defining activity areas of the NewConnect market which inhibit its development. On the basis of organizational and legal solutions used by selected European markets, some actions will be indicated which could be implied by an organizer of the NewConnect market in order to eliminate its functioning problems. Results: MTFs are currently organized by regulated markets (it is defined by Directive 2004/39/WE of European Parliament and Council from 21 April 2004 on Markets in Financial Instruments - MiFID) in 15 European countries. Straight majority of markets function as MTF( Multilateral Trading Facilities) and only three as regulated markets(RM). An unquestionable leader of multilateral trading facilities in Europe is London’s AIM. Over a thousand of quoted companies are reflected in 40% of capitalization of European markets and generated turnover of their shares is over 56% (data from the end of 2012).

Date: 2013
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