Is LISE making the right choice by focusing on SME equities?
The recent publication of the rules governing the LISE platform by the French Financial Markets Authority (AMF), within the framework of the DLT Pilot Regime, represents a further step in integrating blockchain technology into the core of market infrastructures.
Beyond the technological innovation, a key question arises: does this type of market bring a real transformation of the value chain and, more importantly, is the chosen positioning—focused on SME equities—the most relevant in the short term?
1. A genuine innovation: towards an integrated infrastructure
The proposed model is based on the integration of trading (MTF-type) and settlement within a single DLT infrastructure.
This architecture theoretically enables reduced settlement times, simplification of intermediation chains, and improved transaction traceability.
In this sense, DLT is not merely a technological shift, but a reconfiguration of post-trade processes.
2. A highly regulated innovation
However, a detailed reading of the rules shows that the framework remains fundamentally aligned with traditional regulated markets.
It notably includes full KYC and MiFID II compliance requirements, market abuse obligations (MAR), an infrastructure operated by a regulated entity, and custodial wallets.
In practice, this is not a “crypto-native” market, but rather DLT integrated within a conventional financial environment.
3. Significant structural limitations
Several limitations are already apparent at this stage:
Restricted access: prior onboarding of participants and technical constraints.
No real disintermediation: centralized custody and a significant role for the market operator.
Limited product scope: a framework essentially suited to equities and bonds.
4. SME equities: a coherent but demanding positioning
LISE’s positioning emphasizes access to capital for SMEs, with the implicit objective of recreating a more accessible equity market.
This approach addresses a real need: SMEs’ limited access to regulated markets, reliance on bank financing, and the lack of depth in secondary markets for small-cap equities.
It also follows logically from the development of crowdfunding.
However, recent experience shows that creating a market does not automatically generate liquidity.
The limitations observed in certain segments of crowdfunding are well known: absence of structured secondary markets, very limited liquidity, and valuation challenges.
The introduction of an order book and a regulated framework is a clear improvement. Nevertheless, liquidity remains a function of market depth rather than infrastructure alone.
There is therefore a risk of developing organized but inactive markets if a sufficient critical mass of investors and issuers is not achieved.
5. Bonds: a potentially more immediate use case
In this context, bonds appear to be a natural candidate.
Strong structural compatibility
Unlike SME equities, bonds benefit from an established secondary market structure, a simple framework (nominal, coupon, maturity), and relatively straightforward valuation.
They integrate naturally into an order book model.
A historically inefficient market
The bond market is characterized by fragmentation, OTC dominance, high post-trade costs, and still significant settlement delays.
These are precisely the types of inefficiencies that DLT can address in a tangible way.
More immediately capturable benefits
A DLT-based infrastructure could enable reduced issuance costs, faster settlement, streamlined operational processes, and improved investor access.
Unlike SME equities, where the key challenge is liquidity, the bond market presents structural inefficiencies that technology can more directly address.
6. Conclusion
The framework proposed by LISE and the AMF reflects a pragmatic approach: testing innovation while preserving core regulatory principles.
LISE’s focus on SME equities serves a legitimate objective of financing the real economy.
However, it relies on the ability to create a liquid secondary market for inherently illiquid instruments.
By contrast, bonds appear to offer a more immediate use case, where efficiency gains are more clearly identifiable and market frictions are already well documented.
The strategic choice is therefore less about technology than about market positioning: demonstrating operational efficiency on existing instruments, or attempting to build a market where one still needs to emerge.
The first issuances and trading volumes will need to be closely monitored to assess whether this positioning can reach the critical mass required for the success of such infrastructures.
CerLab Finance supports asset managers and institutional investors in preparing for these regulatory developments, through tailored regulatory due diligence, internal framework reviews, and strategic sectoral monitoring.