Investors buying and selling shares in small and medium sized companies listed on the Enterprise Securities Market of the Irish Stock Exchange will be exempt from Stamp Duty from next month.

The Minister for Finance Michael Noonan has published an order providing for the Stamp Duty exemption on such share transfers from June 5.

"The purpose of the measure is to encourage more investors to back Irish Small and Medium Enterprises, increasing the supply of equity available to SMEs for growth and job creation," the Minister said.

The Enterprise Securities Market is an offshoot of the Irish Stock Exchange aimed at smaller companies which are seeking to raise equity through a public listing of their shares. Unlike the larger Main Securities Market, the ESM does not require that companies have a minimum of 25% of their stock in public hands.

The Department of Finance has estimated the cost to the Exchequer of the new stamp duty measure at €5m in a full year.

Irish Stock Exchange chief executive Deirdre Somers said she was confident benefits to business and to the wider economy from the elimination of stamp duty on investing in ESM companies would "become clear very quickly". "We hope that the Government's wider review of the stamp duty regime will result in the measure being extended to all Irish-quoted companies, making it easier for them to access finance and scale their business," she said.