Nxchange democratizes access to IPO: a threat to banks and brokers

Rick Steves

Amsterdam-based regulated market in Holland Nxchange, is offering a decentralized exchange for listed European companies, able to use their own websites to raise capital in their own networks and communities. Dutch fast charger network Fastned is the first firm to be admitted for listing. Nxchange argues that listed companies will see greatly reduced funding costs, […]

Nxchange democratizes access to IPO

Amsterdam-based regulated market in Holland Nxchange, is offering a decentralized exchange for listed European companies, able to use their own websites to raise capital in their own networks and communities. Dutch fast charger network Fastned is the first firm to be admitted for listing.

Nxchange argues that listed companies will see greatly reduced funding costs, less dependency on traditional financial service providers, long-term value creation, and direct feedback from the investing community. The contact between securities issuers and investors is facilitated by the exchange and takes place via their platform, with the option of anonymity.

Getting their inspiration from crowdfunding, but competing with Euronext and all other exchanges, regulated markets and MTFs under the same regulatory requirements, the firm allows companies to issue securities in a primary market, and investors can trade between them in a secondary market with security and transparency safeguarded by Nxchange. While the model is more focused on the long term, daytrading is not excluded.

Listed companies can issue securities through the centralized trading platform, but also through their website after software integration. Among them are shares, bonds, UCITS (mutual funds), and depositary receipts for shares. Dual listings, in different stock exchanges, is not allowed.

Nxchange expects listed companies to seek to obtain over €1,000,000 as the set-up fee and annual license fee would make it unreasonable to raise capital at the exchange for firms seeking €10,000, the minimum allowed.

The platform developed by Monopink International N.V. allows 24/7 trading and real time Delivery Versus Payment (DVP) settlement, where the securities are transferred and paid in real time regardless of the time and day. The exchange focuses in raising transparency in capital markets as investors can communicate directly among themselves and with listed companies, with all financial information of the issuing institution is available in the platform.

Marleen Evertsz, CEO of Nxchange said: “In the era of social networking it makes sense to come up with a solution for securities trading in which companies and investors can maintain direct contact with each other”.

“Companies wanting to be listed on Nxchange opt for unprecedented transparency that makes it possible for investors to make well-founded investment decisions”, she added.

Nxchange expects to approach ten listings as early as in 2016 and considers the modern, cheaper and easier access to Initial Public Offerings (IPO) one of the key points of its value proposition, as traditional IPO becomes expensive and complex to the common investor.

 

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