Stock market

Financing thanks to the market

If on the other side of the Atlantic finance on capital markets is anchored in customs, in Europe, the development of this alternative is much smaller. Bank credit remains at the forefront of financing modes. And yet, the stock market hosts (also) SME and the ETI (undertaken from size to intermediary) of the euro zone. Let’s discover without waiting for more the universe of the Stock Exchange.

The operation of the stock market

By definition, the Exchange is a market where valued companies meet investors (professionals or individuals). That is, it is a financial market that directly puts supply and demand of capital in contact. Unlike the banking system, the stock market is presented as a system.

However, banks can be an essential intermediary between companies and capital markets. Issue and place the securities on the market in the place of the companies, assuming a part of the counterparty risk.

Thus, two roles are played by the Stock Exchange within the economy :

  • The first is to be able to optimize investor placements.
  • The second is to allow companies, the State and collectives to finance themselves by issuing different financial products (particularly shares and obligations).

Stock market: the places of negotiation

We saw it, the stock market then it is split into two submarkets.

The primary market

On the primary market the securities are issued in exchange for capital. In principle, the latter is reserved for high companies that have significant appreciated volumes.

  • If the securities issued (for the first time) are shares, we are talking about an introduction to the stock market or a capital increase.
  • If it is about obligations, we are simply talking about issuance.

It should be noted that the issue price of the securities will be defined according to the demand.

The secondary market

For the purchase and resale of the securities, the secondary market is then more active since all the negotiations are made in cash, and the information note referred to by the AMF (Financial Markets Authority) is not required.

On the other hand, the price of the shares and obligations may vary according to their issue price. For an obligation, if the price falls, profitability is high for the buyer, and vice versa. The investor, as for him, will not find a difference that buys his obligation on the primary or secondary market.

The two major market types

The regulated market

With all evidence, a regulated market presents current obligations that are not found on an unregulated market.

For example :

  • Have an admission procedure.
  • Make available a percentage of capital on the market (for example, disseminate 25% of the capital to issue securities on the primary market, or give its result every 6 months as soon as the company is admitted).
  • Disseminate information, such as a history of accounts of more than 3 years, a quarterly or half-yearly turnover, etc.

The Financial Markets Authority (AMF)

In France, the operation of the regulated market is controlled by the Financial Markets Authority. It is a public body whose mission is to ensure the protection of savings invested in financial products, the information of investors, and the proper functioning of financial markets.

Created by law n ° 2003-706 of the financial security of August 1, 2003, the AMF is currently recorded by more than 460 agents. And it is a member nonetheless of the Observatory of the financing of companies by the market. The role of this observatory placed in 2010 is precisely to facilitate SME and ETI access to financing by the market. Nyse Euronext is an example of this regulated market.

The unregulated market

Unlike regulated markets, unregulated markets are less strict and present more risk taking. Among these markets, we can mention :

The Alternext market

Alternext was founded by Euronext in May 2005 in order to offer SMEs and the ETI of the euro zone the simplified conditions of access to the quotation. Although not subject to all the pressing rules of the regulated market, the Alternext market is subject to precise rules, which makes it an « organized » market.

There are three ways to be admitted to the quote on the Alternext market.

  • An offer to the public: corresponding to a classic bag introduction, consists of making a public call for savings close to public and institutional investors. And even non-professional investors can participate in that.
  • A private investment: in the case of an investment of shares, private investment requires a fund withdrawal of at least 2.5 million euros over the last two years, before the demand for the admission of listed securities. In principle, only qualified and institutional investors are accepted.
  • A direct quote: in the latter case, a capital increase is not necessary since the admission is made to the negotiation. In addition, issuers are already admitted to trading on an eligible market..

In summary, companies that wish to be numbered on the Alternext market must :

  • Deposit a minimum of free float (2.5 million euros)
  • Have a minimum of seniority (2 years)
  • Have a list of sponsors (financial intermediary in charge of accompanying the company throughout the quotation process)

The free market

The free market was founded in 1996 as an unregulated market. It is the NYSE Euronext that sets its operating rules. Thus, the mission of the free market is to welcome companies that are too small and too young to help them access the stock market.

For this :

  • Admission must be made under the responsibility of an intermediary
  • A minimum percentage of dissemination of the titles in the public is not imposed. But, eventually 2 years old for the presentation of the accounts
  • Free market societies do not value publishing their information
  • Investors have no obligation to declare the threshold of capital of a company in the MFA.

Multilateral Trading Facilities (MNS)

More recently, NMSs appear to be riskier markets, but offer very competitive prices. Admission therefore requires a great deal of understanding of stock market activities if one wishes to succeed in a good negotiation.

Their specificities? Multilateral trading systems are highly diversified in terms of the investors they serve and the securities they trade.

The advantages of investing on the market


  1. The market offers access to liquidity or capital in order to allow companies to increase their social capital and develop their activity.
  2. The market attracts potential investors who, in return, enjoy great long-term financial returns.
  3. Investments in the stock market also allow saving taxes in favor of the saver. Case of the Share Savings Plan (PEA) in France.



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