The new market, which has the backing of Nasdaq, the US stock market, is to be known as Easdaq, the European Association of Securities Dealers Automated Quotation. A feasibility study is being funded by Nasdaq, the Paris Bourse, the European Commission and the European Venture Capital Association.
The market will provide Europe-wide access to investment funds for high-growth entrepreneurial companies.
Demand for the market in the UK comes, in part, from a perceived failing by the London Stock Exchange to provide an adequate market for entrepreneurial companies following the decison to close the Unlisted Securities Market at the end of 1996.
Andrew Beeson, chief executive of Beeson Gregory, the stockbroker, said the proposed market would operate along similar lines to Nasdaq. It would be aimed at institutional investors, would be highly regulated and would operate a screen-based dealing system.
A European lobby group of securities dealers, to be known as the European Association of Securities Dealers, will be launched at the conference in London's Park Lane Hotel in mid-November.
Market research on demand for the new market has been carried out by Coopers & Lybrand, the accountancy firm. Coopers has contacted venture capitalists and other development capital providers in the UK, Spain, France and the Netherlands, which have seen a high level of small company new issues.
Graham Cole, a corporate finance partner at Coopers, said: 'Current indications show there is a healthy demand for the market.'
Cisco, the City Group for Smaller Companies, has been campaigning for a replacement market to the doomed USM. Last September, the London Stock Exchange proposed the Alternative Investment Market, which would update the stock market's rule 4.2, which offers a way of trading shares in small companies by matching buyers and sellers of a stock.
In its response Cisco said the AIM was acceptable as a successor to rule 4.2 and as a feeder nursery market for the official list. 'However, it is unlikely to meet the needs of many developing companies. Continuing to relax requirements of the official list . . . threatens the integrity and reputation of the official list. In our view, a separate market for developing companies will emerge either in London or in Europe, possibly through the Easdaq initiative.'