FSE Listings

General Standard

Deutsche Börse listing segment for companies fulfilling the transparency requirements prescribed by German law

Admission to General Standard does not require any action on the issuers’ part; it occurs automatically with the listing in either the Official or Regulated Market.

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Exchange trader

Exchange traders are employees of firms admitted to exchange trading (see market participant).

Exchange traders conclude transactions on the exchange in the name of and for the account of their employer, or on behalf of a third party.

In order to be admitted to trading, exchange traders must demonstrate that they possess the necessary aptitude and sense of responsibility for trading on the exchange in an exam administered by the board of examiners at FWB® Frankfurter Wertpapierbörse (Frankfurt Stock Exchange). Traders who are active only in currency trading are not required to take the exam.

Exchange traders are permitted to trade only on behalf of their employer or a third party, and may not participate in own-account trading. In floor trading, each trader can represent only one firm; in electronic trading, one exchange trader can act on behalf of several firms.

To list and trade your firm on the Frankfurt Stock exchange contact info@fselistings.com

Entry Standard

Capital market access provided by Deutsche Börse for small and medium-sized companies as an alternative to EU-regulated segments

Entry Standard is a transparency standard within the Open Market (Regulated Unofficial Market) with additional requirements. Companies in Entry Standard must meet the following criteria and publish on their website:

• significant company news or circumstances that may be significant for the valuation of the respective stock/issuer
• the audited consolidated financial statements and management report (respective national accounting principles or IFRS) no later than six months after the end of the reporting period
• a brief, up-to-date profile of the company and a calendar of company events
• an interim report no later than three months after the end of the first half.

Inclusion in Entry Standard does not equal admission to a regulated market in the sense of article 2, para. 5 of WpHG (German Securities Trading Act). In Entry Standard, the provisions for organized markets do not apply. This particularly concerns the following stipulations:

• admission to the stock exchange (article 3, para 2 of AktG – German Stock Corporation Act)
• obligation to publish ad-hoc announcements (article 15 of WpHG – German Securities Trading Act)
• notification when threshold levels are reached (article 21 of WpHG – German Securities Trading Act)
• mandatory offer in the case of a change of control (WpÜG – German Securities Takeover Act)
• publication of a prospectus in the case of a private placement (article 3 of WpPG – German Securities Prospectus Act)

Therefore, Entry Standard is primarily aimed at qualified investors in the sense of article 2, para. 6 of WpPG (German Securities Prospectus Act), who are able to assess and accept the potential risks related to the investment in shares of the respective organization. Investors must be aware of the fact that this part of the Open Market (Regulated Unofficial Market) on the Frankfurt Stock Exchange is not subject to the high Europe-wide transparency standards and strict provisions for investor protection on organized markets.

If you are interested in listing on the frankfurt stock exchange, contact info@fselistings.com

Electronic exchange

A largely automatic, computer-based system for securities trading

An electronic exchange is a trading platform in which order entry and forwarding, matching of buy and sell orders, and price determination are performed by a computer. In most cases, the system also includes functions for clearing and settlement procedures, market supervision, and the publication of relevant information.

Unlike a trading floor, which requires the physical presence of participants, an electronic exchange can be accessed from any location. Trading can take place 24 hours a day, or during established hours. The advantages of an electronic exchange are low costs, error-free settlement, quick reaction times, flexible markets and access from anywhere in the world.

Germany has two electronic exchanges: Eurex® for derivatives, and Xetra® for the cash market. Participants in an electronic exchange must be admitted to electronic trading.

If you are interested in listing on the frankfurt stock exchange contact info@fselistings.com

Clearing

The netting and settlement of claims and liabilities arising from securities and derivatives transactions

Clearing is typically performed by a central institution, the so-called clearinghouse. The clearinghouse determines the bilateral net debt of buyers and sellers involved in exchange transactions, and, at the end of the trading day, provides its members with a summary of their transactions, as well as the resulting net claims and liabilities. In the case of derivatives transactions, the clearinghouse will inform its members of the funds they must put up to meet their margin requirements.

To become a member of a clearinghouse, an institution must have a license, a securities account and a money settlement account with the clearinghouse. Moreover, it must furnish material, organizational and financial collateral as specified in the licensing agreements.

In its capacity as the central settlement institution for stock exchange transactions, the clearinghouse functions as a counterparty to trades, thereby guaranteeing the proper execution of trades as well as the settlement of the net debt. Eurex Clearing AG is the clearinghouse affiliated with Deutsche Börse AG.

Contact info@fselistings.com if you are interested in listing on the frankfurt stock exchange.

Dual Listing (DL)

A second listing on an exchange that isn’t the company’s domestic bourse

With a dual listing, also called a secondary listing, a company’s shares are placed on an exchange other than its domestic exchange. This can happen at the behest of the company or a market maker. A second listing is therefore not an initial public offering: It isn’t the worldwide debut of the company’s shares or a public offer, and the company is not required to produce a prospectus.

Contact info@fselistings.com if you would like to list on the Frankfurt Stock Exchange

Double listing

The listing of a security on more than one exchange.

Companies become listed on a second exchange in order to reach a broader-based public and attract additional investors. Because the fragmentation of share capital between different exchanges often results in diminished liquidity, companies usually undertake a capital increase in connection with a double listing.

Are you looking to go public on the Frankfurt Stock Exchange, contact info@fselistings.com

Disclosure requirement (Ad-hoc disclosure)

Obligation of issuers of securities to immediately report and publish any information that might have a bearing on the price of their securities.

The regulations pertaining to the disclosure requirement are contained in section 15 of the German Securities Trading Act, which states that issuers of securities admitted to the Regulated Market on a German stock exchange are obliged to report all corporate developments that have a sufficiently strong impact on the issuer’s financial situation or its business activities to influence the market price of the security. Securities listed in the Unofficial Regulated Market are exempt from this requirement.

The obligation to release such information without delay is intended to mitigate the abuse of inside information and enhance market transparency. A violation of the disclosure requirement is punishable with a fine.

While the Federal Supervisory Office for Securities Trading (BAFin) is responsible for investigating whether issuers are meeting the disclosure requirement as stipulated in section 15 of the Securities Trading Act, it is the task of the Exchange Operating Board to decide whether the information published requires a temporary suspension of a quotation.

According to section 15, paragraph 1, no. 1 of the Securities Trading Act, the information must be published in the German language in at least one national “Börsenpflichtblatt” (the journal for statutory stock market publications), or via an electronic information dissemination system. Furthermore, companies in Prime Standard are obliged to publish ad-hoc messages in English.

Prior to publication, the information must be communicated directly to BAFin and the Exchange Operating Board of the German exchange where the securities or their derivatives are listed.

Directors’ Dealings and Insider Trading on the Frankfurt Stock Exchange

Private purchases and sales by management of shares they own in the company they manage

Directors’ dealings cover securities transactions by people with management duties at publicly traded companies. Since 1 July 2002, such transactions are subject to new notification rules. Per section 15a of the German Securities Trading Act (WpHG), people at publicly traded companies who have leadership duties, or people who have close relationships with these managers, must declare any securities transactions made with their own contingent of company shares.

Through the Fourth Financial Markets Promotion Act (FiMaFöG), the reporting requirement for so-called directors’ dealings was expanded to apply to all companies admitted for trading on the Regulated Market. This requirement used to apply only to companies on the Frankfurt Stock Exchange’s technology segment, Neuer Markt.

The goals of the new regulation covering directors’ dealings is to provide better investor protection, make the financial markets more transparent and to create more trust. In conjunction with the new rules for ad-hoc announcements, private investors are now offered a basis for damages claims in the case of missing or late publication of facts influencing the price development of a share.

Investors can review directors’ dealings online:

Database of the German Federal Financial Supervisory Agency (BaFin)
BaFin operates an Internet platform that publishes directors’ dealings.

www.insiderdaten.de
A privately run Web site that presents stock transactions in a very clear manner. The latest transactions are sorted by company, insider name, date and order volume.

Synonym: insider trading

Direct offering

Type of issue in which the issuer places its securities directly with investors, without the support of an underwriting syndicate

Direct offerings are typically undertaken by banks and insurance companies – i. e., companies that have already developed business relations with the investing public and established an extensive sales system which they can use to place the securities.

A direct offering is less costly than an issue supported by an underwriting syndicate. However, there are potential difficulties associated with a direct offering, for example, if the securities are to be placed with international investors. Moreover, if the issuing volume is particularly large, it can overload the issuer’s sales system. For this reason, issuers are increasingly handling direct offerings via the Internet.

Frequently, a company will opt for a direct offering if it has been able to agree upon the terms of the issue with a large-scale investor (private placement).

If you are looking to go public on the frankfurt stock exchange contact info@fselistings.com