The aim of the National Stock Exchange Development Fund is to promote the stock market presence of small and medium sized entreprises operating in Hungary, thereby increasing the number of listed companies on the Budapest Stock Exchange. With the help of the fund competitive companies can receive funding in the form of capital, supplemented by a quasi equity investment or a member loan on a case by case basis. In addition to the capital injection the fund manager can provide consulting services in compliance with the rules of the capital market mechanisms. The joint application of these tools will allow the execution of necessary reorganizations, the repositioning of external financing sources and the usage of non-refundable subsidies provided by community or national resources.
The fund has two goals. On the one hand, the program focuses on supporting the development of domestic entreprises, including the critical factors of competitiveness, growth and efficiency improvement. Thereby it can help them access new markets, extend the range of their products, and implement business development solutions which may contribute to improving their existing operations and the acquisition of new clients. The fund invests in private companies, and it can also participate in public or private offerings related to both the main market and the MTF platform of the Budapest Stock Exchange.
On the other hand, the aim of the capital program is to increase the number of small and medium sized domestic companies appearing on the Hungarian capital market, particularly, on the Budapest Stock Exchange. The diversification of the financing tools provides efficient capital-raising opportunities for entreprises having the ability to enter international markets while having high growth-potential. The goal is to introduce these companies to the MTF platform or to make the target companies execute public transactions on the stock exchange. Therefore, the investment is followed by an appearance on the MTF platform. If the fund manager decides that the company is not sufficiently mature to be introduced, it should be done within 12 months after the preparation. Exceptionally, the period of preparation can be extended by an additional 12 months. In case of a public offering, the fund will participate in the transaction as a co-investor.
Capital investments must move forward the private capital investment by involving independent and/or financial and professional investors as a co-investor. Section 21 of the General Block Exemption Regulation is normative for the involvement of the private capital investor, its participation should be between 10 and 60%.