Small and medium-sized companies/organisations in Denmark are to a great extent ex- periencing difficulties in achieving the required and desired funding for their operations. In continuation hereof, it is especially relevant to focus on multilateral trading facilities, which are market places that encompass small and medium-sized companies in partic- ular. In Denmark, only one multilateral market place exists known as ‘First North’. How- ever, First North has for several years experienced difficulties in establishing the market place as an attractive investment for companies and investors. This can be largely at- tributed to the fact that, from a historical perspective, First North has been subject to many scandals primarily due to a lack of quality from the companies involved. These scandals have caused the public trust in the market place to decline, which is something that First North is still affected by today.
On may 15th 2014, the MiFID II Directive was adopted. The adoption of the MiFID II Directive was implemented as a means to uncover risks regarding the financial markets to a greater extent in order to further increase the public trust in the capital market, including the multilateral trading facilities. The majority of the MiFID II Directive has been implemented in the Danish legislation in the form of a new capital market law. The capital market law entered into force on January 3rd 2018 and contain, among other areas, regulations regarding multilateral trading facilities.
This thesis will examine to what extent the MiFID II Directive, including the capital mar- ket legislation, has affected the public trust of First North. By employing a legal meth- odology, it will be established throughout the thesis that issues still surround the uncov- ering of relevant risks pertaining to market places alike First North despite the imple- mentation of the capital market law and thereby also the directive’s implementation in Danish legislation. This notably showcases that the implementation of the MiFID II Di- rective in Danish legislation reflects a lack of transparency. The understanding of capital market law’s implementation of the regulations regarding multilateral trading facilities in general ambiguous which causes a lack of precision and clarification of relevant con- ditions. This implies that uncertainty surrounding the dispositions of the individual com- pany arises which in turn impedes the preservation of the quality of the market place and thereby also its public trust.
Furthermore, the thesis will from a law and economics methodology standpoint illustrate that the public trust of First North can be improved should the interests of the public and the public’s protections be taken into consideration to a higher extent, rather than the companies’ opportunity to become noted in the market place. The strategy in Swe- den has, as opposed to the Danish strategy, significantly focused more on the quality of the involved initiated companies rather than the quantity. This strategy has proven useful since multilateral trading facilities in Sweden are experiences a higher success rate than that of Denmark. In order to achieve an efficient and prudent operation of a multilateral trading facility in Denmark, a legitimate balance between the dispensation of demands and the quality of the market place needs to be in place.