Introduction
The French New Issues Market (DNIA) is a relatively new equities market that has been created to provide more opportunity for new small and medium-sized companies to access the capital necessary for growth. Established by the Autorite des Marches Financiers (AMF), the DNIA grants businesses the opportunity to go public through a simplified disclosure process. The French New Issues Market has been a resounding success and is of significant importance in aiding the growth of French entrepreneurship.
History
The French New Issues Market (DNIA) was created in 2008 under Regulation NS-RC with the primary goal of allowing growth-oriented French SMEs access to equity capital. It was determined that the existing regulated market, the Euronext Paris, did not offer a proper environment nor was properly suited to enable SMEs to take advantage of the opportunities afforded by the public markets. It was seen that the cost associated with joining the Euronext, coupled with the extra disclosure requirements, made it too difficult to access the capital necessary for such firms to grow.
Policy and Structure
The DNIA is a regulated market and is open to SMEs with assets not exceeding €12 million and net income of not more than €3 million in the two fiscal years before their entry. SMEs qualified for the DNIA enjoy a simplified disclosure process and are only responsible for producing prospective financial information. This simplified disclosure process is one of the key selling points for the platform making it an attractive option for many SMEs.
In addition to the simplified disclosure process, the DNIA offers a number of other advantages. The listing process is considerably faster than that of the traditional regulated markets; while the cost associated with a listing are far lower, making such a transaction realistically attainable for many SMEs. The DNIA also offers more variation in terms of the instruments that can be listed.
The DNIA operates with a tiered structure with each tier offering different features. The first tier, the Growth Application Tier, offers simplified disclosure due to the lower financial thresholds. The Second and Third tiers, the Professional Investors Application and Public Market respectively, have higher financial thresholds, but offer a greater degree of disclosure. Finally, the fourth tier offers the same features as the Euronext Paris but with a significantly lower cost.
Conclusion
The DNIA offers SMEs in France with the opportunity to access capital in a much less expensive and simpler manner than the Euronext. The DNIA has been a great success story and has enabled many SMEs to benefit from the opportunity to go public. The vast majority of the SMEs accessing the DNIA have seen great success and even significant growth that would not have been possible without access to the public markets. The DNIA offers a great opportunity for both innovators and investors to benefit from the expanding French small and medium-sized enterprise sector.
