The exchange, which is being dubbed as the "Entrepreneurs' Exchange" by NYSE Euronext, will help raise money for companies from investors more easily.

It will facilitate fundraising via issues of bonds as well as equity and will be carved out of existing Euronext and Alternext markets, according to the FT.

Companies would carry out both initial public offerings of shares and initial bond offerings, and even a "Pre-IPO" of convertibles - investments that would in time convert from bonds into equities.

About 900 companies already listed on Euronext with market capitalizations of less than 1 billion euro ($1.23 billion) would be transferred to the new exchange, as would companies listed in the Alternext which is Euronext's share trading platform for small companies.

NYSE Euronext is also seeking to ban so-called high-frequency trading in such stocks.

This involves the use of superfast computers to trade and hold positions for fractions of a second and is widely blamed for increasing volatility in small company shares, The FT said.

($1 = 0.8104 euros)

(Reporting by Stephen Mangan; Editing by Eric Meijer)

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