The World Federation of Exchanges, which represents more than 200 market infrastructure providers including exchanges and CCP's, today released the results of a study on SME markets.

The WFE took input from the World Bank Group's Finance and Markets Global Practice on the paper. It highlights the key role played by exchanges in the real economy by promoting capital formation and access to funding for SMEs. The research studied questions around how to build the ideal SME exchange, how it can be structured and the optimal conditions under which securities migrate to the main board.

"SME exchanges play a crucial role as bank financing becomes scarcer," said Nandini Sukumar, CEO of WFE. "Our study delivers practical guidance to existing or aspiring exchanges. The study covers ideas on how to bridge the information gap between issuers and investors, and how to improve the quality of the secondary market," said Sukumar.

The research builds on a previous World Bank Policy Research paper ''SME Exchanges in Emerging Market Economies: a Stocktaking of Development Practices,'' and adds four new case studies. The report highlights the importance not just of market structure in improving the ability of SMEs to access equity market finance but also of outreach and education of SMEs about financing options.

"This report is designed to be useful to markets and practitioners and includes how to provide incentives to list and invest," said Siobhan Cleary, Head of Research and Public Policy at WFE.