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Welcome to SME Capital Markets Knowledge Page 

knowl•edge
n.
1. The state or fact of knowing.
2. Familiarity, awareness, or understanding gained through experience or study.
3. The sum or range of what has been perceived, discovered, or learned.
4. Learning; erudition:
5. Specific information about something.

 

"knowledge." The American Heritage® Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. 13 Sep. 2007.

SME Capital Markets is dedicated to leveraging knowledge by providing information that helps decision-makers including business owners, officers, directors, attorneys, auditors, and service or solution providers succeed on their paths to value creation in the capital markets.

There are many forms of entry-level capital market knowledge, information, and solutions, and new forms continually emerge.

This page presents an overview about the process of gathering knowledge that is followed to identify and aggregate content for the SME Capital Markets’ website.

Market Structure

Market structure is the highest order presentation about how forms of knowledge work. Market structure embodies the cumulative and combined work, practices, and outcomes for all forms of capital market knowledge, information, and solutions.

An emerging concept is that entry-level capital market structures must be organized and developed differently from upper-tier structures and practices.

Successful work by market participants creates practices, rules, regulations, and laws. This is a dynamic process that is governed by market and professional practices, policy-makers, securities regimes, and regulatory agencies. Tensions about the cost-benefit results of structural decisions and reaction to global competition from enlightened innovators will continue to create new entry-level capital market structures. Identifying the emergence of these structures and researching their evolution is a key objective for developing SME Capital Markets’ website content.

Upper-tier stock exchanges evolved over hundreds of years as more sophisticated forms of capitalizing companies and trading stocks emerged. Innovative and disruptive information technology applications have accelerated this process from it taking place during a centuries-long process to it happening in a decade or less as is evidenced by the Archipelago Exchange, a ten-year old electronic stock market merging with the 215-year-old New York Exchange.

Rapid changes in upper-tier capital markets have a dramatic impact on small-to-medium-enterprise entry-level capital market practices, programs, and structures that is generating policy debates.

One side in these policy debates wants to extend and apply upper-tier standards and securities regimes to small-to-medium enterprises. This imposes higher information production and governance costs on small-to-medium enterprises as a condition that they must meet to enter the capital markets.

The other side in this debate wants to fundamentally change the securities regimes, practices, and laws that govern how SMEs may enter the capital markets.

This is a dynamic, real-time debate, and its outcome will have a profound long-term effect on organizing and developing entry-level capital markets that can capitalize small-to-medium enterprises.

Meanwhile, proponents for both points of view and their networks continue executing projects in the SME capital market space. This process is creating unique neural networks of value creation interests.

These networks execute programs, produce information, create systems, offer services, and provide solutions that are helping SME-level decision-makers create value in the capital markets.

This sets up a proposition that developing models and methods to aggregate information about entry-level capital market evolutionary and emergent value creation processes and projects facilitates knowledge exchange that creates value if this information can be shared in a constructive context.

The following items identify elements that are being instilled into SME Capital Markets’ website content and information pieces. Developing effective methods to aggregate information within each element that centers on how it elevates the application of knowledge about organizing and developing entry-level capital market projects that help small issuer decision-makers create value is a challenge that must be overcome.

Entry-level Capital Market Structures

SME capital markets are structured by law, regulatory programs, and market participant practices. Initial offerings and secondary markets are enabled by a specific law or securities regime in each country that, in most instances, is administered by its securities regulatory organization through stated policies, programs, rules, and regulations. Typically, content about securities regimes are available on SRO and stock exchange websites. Different securities regulatory regimes govern offering and registration statements, secondary market information disclosure requirements, and market participant practices. An array of securities regimes, regulatory roles, and practices are combined to organize and develop SME capital markets.

Initiatives will be launched to aggregate and provide new and deeper levels of information about SME-level capital market structures, market participants, securities regimes, and regulatory organizations.

Entry-level Capital Market Participants

SME capital market participants include all entry-level market structure stakeholders. SME Capital Markets’ research projects have identified over 150 capital market participant role descriptors. Many of these roles are creating distinct and unique entry-level capital market niches. Over time, information pieces or research reports about these niches will be developed.

Entry-level Capital Market Securities Regulatory Regimes

Procedures and regulatory oversight for SME capital market access vary in individual detail by country and are often administered by different entities within each country.

The SME Capital Markets Alternative Markets page is an initiative to begin gathering information that will present an overview of securities regimes, regulatory bodies, agencies, and associations that govern and administer filing jurisdictions, registration categories, compliance review, and other functions by country.

Alternative Capital Markets by Exchange

More than 90 alternative exchanges or markets are developing capabilities to enable raising and trading equity, debt, private placements, pooled assets, index certificates, and other capital instruments that center on SME issuers and their capital providers. Many of these emerging projects are being interlinked. Fundamental challenges must be overcome to present actionable intelligence about these initiatives. Projects to accelerate the production of information about emerging alternative market initiatives are a high priority.

SME Capital Market Neural Networks

SME capital markets organize and develop via inputs and outputs from interconnected neural networks. Higher-order neural networks create the conditions and capabilities for debt and equity capital to be raised and for these securities to be sold in secondary market transactions. Other neural networks provide the information technology platforms that enable fund flow transactions, securities ownership changes, regulatory oversight, analyzing company information, and monitoring and managing credit reporting. Lower-order neural networks produce information, maintain governance, execute financial transactions, and provide management consulting or other professional services that facilitate the flow of information internally and externally to individuals, firms and markets in global SME market segments. Identifying neural networks is a critical step in the process of understanding how entry-level capital markets organize and develop. As information can be gathered and analyzed by neural network segment, research reports that cover these segments will be developed.


SME Capital Market Information Pieces

Information is generated by securities exchanges, securities regulatory organizations, economic development and SME segment policy analysts and other entities.

Refining this information into actionable intelligence is the key to understanding capital flows into SME segments and this is a necessary step to recognize the importance of small to medium enterprises in a global economic development policy context.


Capital Market Addressing Entities

The total value of the global capital market is approximately three times the value of the global GDP and it is continuing to increase.


The evolution of upper-tier capital markets are an important focus for global entities such as the World Bank, the IMF, and regional entities such as the Asia-Pacific Economic Cooperation Organization, the Eastern Caribbean Central Bank, and economic development policy-makers.

Research about upper-tier capital markets helps develop policies, regulations, and practices in a context that addresses improving capital markets. However, it is important to begin breaking out upper-tier analytic methods and applying these same high-level techniques to measure the performance of entry-level capital markets. This is a necessary step to monitor the effectiveness of entry-level capital market policy and regulatory schemes. The need for an initiative to facilitate this process is understood but projects to do it effectively have not been conceptualized.

 

Traditional concepts about applying capital market practices to capitalize smaller companies are being challenged.  Crowdfunding it the most recent example.  As this possibility enters the market place it offers great potential to change the paradigm. 

 

Please email bradsmith@smecapitalmarkets.net to share thoughts about applying capital market knowledge to capitalize smaller companies.