France: The Nouveau Marche

Last Updated: 6 March 1996
France is gearing up for the launch of a new market. "Le Nouveau Marche", was officially launched on February 14, 1996, and the first quotation is scheduled to occur around May 20, 1996. The intended purpose of the Nouveau Marche is to provide a forum for young, up and coming entrepreneurial firms, whereby they can gain access to the funding they need for their continued expansion.

The Nouveau Marche is directly inspired from the US Nasdaq. Other markets based on the US Nasdaq model include the European Easdaq, based in Belgium, the U.K. Aim and other projects in Frankfurt or Milan. France is thus the forerunner in an area currently being explored by the Frankfurt, Milan and Brussels Stock Exchanges.

The Nouveau Marche is a regulated market under the EEC Directive on investment services. The Directive is scheduled to be transposed in French law around May of this year. The Nouveau Marche is an entirely autonomous market and has no vocation to become a simple means of access to other French markets. In the long run it will be part of a web of similar markets in view of the construction of a Europe-wide network. To that effect, a "groupement europeen d'interet economique" (GEIE) called Euro NM will soon be created.


1. Societe du Nouveau Marche

The Societe du Nouveau Marche ("SNM") mainly approves the regulation governing the Nouveau Marche, approves new members of the Nouveau Marche, decides upon the suspension of a withdrawal of securities, and more generally manages the Nouveau Marche. The SNM is represented by its board of Directors.

The SNM was created in May 1995 following the recommendations of a work group set up to study the need to implement a new and independent stock exchange to cater to the needs of dynamic young companies. The SNM has masterminded the launching of the Nouveau Marche and will be responsible for the operation of the new marketplace.

The Nouveau Marche will benefit from the expertise of the Paris Bourse in electronic infrastructure. Data will be relayed on-line and made available simultaneously on 50,000 screens worldwide to, amongst others, Reuters, Telerate, Bloomberg, GL and Fininfo.

2. The Comite des Admissions

The Comite des Admissions, upon delegation of the SNM, approves the listing of the securities.

3. The Comite Consultatif

The Comite Consultatif is composed of permanent members with experience in the scientific and industrial fields. It assists the SNM in the promotion of the Nouveau Marche and the review of the merits of the listing applications.


While it is difficult to draw up a standard profile of the target companies for listing on the "Nouveau Marche", the obvious "target" is the fast-moving, high-potential company in a rapid expansion phase. Naturally the tendency would be towards quite young companies who given their short financial history would not be in a position to obtain funding elsewhere. While involvement in a high tech sector is not a prerequisite it is often the case mainly because such businesses often have massive cash requirements engendered by research and development costs. The single most important aspect of possible candidates is their high growth potential. The SNM already has more than 15 probable candidates in the pipeline involved in sectors ranging from biotechnology, individual insurance, marketing and communications to the computer industry. The pool of possible candidates is estimated at about 4500 companies and the SNM currently anticipates listing approximately 30 companies by the end of 1996.


Listing requirements are designed to be as flexible as possible while ensuring the best possible information for future investors. The minimum is FRF 20 million total balance sheet, and FRF 8 million in equity. At least 100,000 shares must be offered to the public, for a minimum value of FRF 10 million. Those companies who have been operating for less than two years are obliged to implement their listing through a capital increase.

The listing application must contain:

- general information such as a list of the managing shareholders, the draft prospectus;
- legal information such as by-laws, minutes of shareholders meetings;
- financial statements;
- a description of the risk factors;
- a development project including projected financials. This requirement may raise difficulties in circumstances where the shares are also to be listed or quoted in the U.S., since forward-looking statements in the context of an initial public offering may give rise to substantial liabilities in the U.S. This issue should be carefully addressed upon dual listings.

The shareholders who are managers must also undertake to keep at least 80% of their shares for the first three years after listing. For companies of less than two years standing this requirement is raised to 100% for two years, reducing to 80% in the third year. An exemption from (or limitation to) such requirement may be asked to the SNM under certain circumstances.

The company further undertakes to set aside approximately 10% of the capital raised by the floatation for the purpose of ensuring the promotion of the shares issued. Throughout the listing process the company works closely with a listing advisor/market maker who plays an important role in the admissions procedure.


The members of the Nouveau Marche are financial intermediaries established in Europe which are qualified to operate in the investment services. They are divided on the three categories.

1. Introducteur - Teneur de Marche

The Introducteur-Teneur de Marche ("ITM") (Listing Adviser-Market-Maker) firstly prepare the application for listing and, based on a financial analysis of the company the ITM assists the company, in the preparation of the required documents and makes its financial analysis available for future investors.

The secondary function of ITM is to ensure the successful flotation of the shares, which obliges it to ensure that a purchase price/sales price is constantly available.

The ITM is responsible for the market making on the securities of certain companies (for which the SNM has appointed it) for a minimum three-year period following the initial public offering.

2. Negociateur-Courtier

The Negociateur-Courtier (Broker-Dealer) is an intermediary entrusted by the SNM to execute clients order. He may also trade for his own account.

3.CompensateurThe Compensateur (Clearer) is the intermediary entrusted by the SNM with the final settlement of transactions.


The company may offer its securities through a pre-placement with selected investors. Pre-placement can be total, in which case all the shares are placed with the public and fixing takes place directly on line on the first day. Alternatively a reduced number of shares can be listed the first day, generally through a fixed price offering mechanism. In this case the price may not be above that practiced at preplacement.

Should the company decide not to preplace two mechanisms can be envisaged. One possibility is a minimum price offering (Offre a Prix Minimum or OPM) whereby the company and the ITM indicate the number of shares being offered and a minimum price. The SNM then centralizes purchase orders and fixes the share price in agreement with the listing advisor(s). Alternatively the listing advisor can fix a trading price which is firm and binding (Offre a Prix or OPF).


The market is open to both professional and individual investors. The risk element is inherent to the very nature of the market. Factors to be taken into consideration are the probable absence of dividends in the foreseeable future, a risk of losses and no true guarantees as to the longevity of the company.


In order to encourage investment in the Nouveau Marche, the French Government has recently adopted favorable tax measures in that respect. Purchase and sale of securities, as well as public offerings, capital increases and initial public offering of securities listing stock on the Nouveau Marche will be exempted from stock exchange tax (impot de bourse).

Furthermore, the favorable tax regime for venture capital is to be extended to include shares listed on the Nouveau Marche. Under this favorable regime, capital companies (Societe de Capital Risque or SCR) and venture Capital Investment Funds (Fonds Commun de Placement ... Risque or FCPR) investing at lease 50% of their portfolios in securities of companies which are not listed or which are listed on the Nouveau Marche will thus be exempted from paying corporation tax on the proceeds and capital gains of 100% of their portfolios, under certain circumstances. Similarly, individual shareholders of SCR or individuals having invested in FCPR may be exempted from paying tax on securities income under certain circumstances.

The contents of this article are intended as a general guide. Specialist advice should be sought for your specific circumstances.

For further information contact Herve Letreguilly on +33 1 44 71 17 17, or enter a text search 'Shearman and Sterling' and 'Business Monitor'.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions