FSE Listings

Dealer

Persons or companies that function as intermediaries in the purchase and sale of securities. Dealers are also authorized to trade securities for their own account.

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Business plan

Plan that documents the viability of a company

In its business plan, a company outlines its business model and its medium-term goals. The main reason for writing up a business plan is to give providers of outside capital – and in particular venture capital companies – a means of evaluating the company’s approach and development potential. Important components of a business plan are thus the investment plan, financing plan, liquidity plan and profitability forecast. The planning period usually spans three to five years.

Business angel

Private investor who supports a start-up company by providing capital and what is usually many years’ management experience

Business angels are typically former entrepreneurs. They support new companies in their early stages by providing risk capital. In addition, they advise the management team or assume management tasks themselves. In return for their support, they acquire stock in the company.

Deutsche Börse AG and KfW Bankengruppe have joined forces with BAND (Business Angels Netzwerk Deutschland) to create a forum for establishing contacts between business angels and innovative companies.

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Brokerage commission

Fee paid by investors to cover the intermediation function performed by brokers

When a security is bought or sold on the floor, the investor is required to pay a brokerage commission that is determined on the basis of the order size. In the case of shares, it is calculated as a percentage of the price of the stock; in the case of bonds, it is specified as a percentage of the par value of the bond. The fee is charged by the institution responsible for executing and settling the order.

Brokerage fees are standardized and stipulated in the fee schedule of the stock exchange. In the Official Market, the brokerage fee for exchange brokers comes to 0.08 percent of the price of a stock, warrant or subscription right, but in all cases at least 0.75 euro. For stocks in the DAX index, the brokerage fee is 0.04 percent. For bonds, the fees are between 0.0015 and 0.075 percent, depending on the transaction.

Broker

Brokers determine prices on the stock exchange.

They also provide assistance in making investment decisions and execute their clients’ buy and sell orders. Their role thus corresponds to that of a “Freimakler” in the German system.

Synonym: exchange trader

If you are looking to go public on the Frankfurt Stock Exchange you should contact info@fselistings.com

Bridge capital

In venture capital language, capital used to finance an IPO

Investment banks and underwriting houses will help a company go public by providing bridge capital, which serves to “bridge” the period until the equity capital generated by the IPO flows into the company.

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Börsenordnung (Stock Exchange Rules and Regulations)

Statutes of the stock exchange

The Stock Exchange Rules and Regulations (Börsenordnung) are issued by the Exchange Council in agreement with the operating body of the stock exchange. It ensures that the respective exchange can perform the tasks expected of it, and guarantees the interests of the public and trading. More specifically, the Stock Exchange Rules and Regulations regulate the organization of the stock exchange and the publication of all information regarding prices and volumes. In the case of securities exchanges, the Rules and Regulations also govern the composition of the Admissions Office and the appointment of its members.

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Bodies of the stock exchange

Committees that are directly responsible for performing the functions of the stock exchange

As stipulated in the 1994 amendment to the German Stock Exchange Act, the bodies of the stock exchange comprise the Exchange Council, the Exchange Operating Board, Market Surveillance, the Sanctions Committee and the Arbitration Panel of the stock exchange.

The Stock Exchange Act and the Stock Exchange Rules and Regulations require that the admission of securities to trading be handled by two separate exchange bodies: the Admissions Office the Official Market and the Admissions Committee for securities not listed in the Official Market.

The relevant provisions can be found in sections 1, 3, 9, 28, 30, 37, 72 of the Stock Exchange Act.

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Bear market

Market trend characterized by sustained price declines, usually in all market segments

Investors in a bear market tend to have a pessimistic outlook. Their strategy is to acquire so-called short positions, for example, by selling securities in the hope that they will be able to buy them back at a much lower price, or by selling short (see also short sale).

As a consequence, prices and indices continue to fall over the long term.

Antonym: bull market

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Balance-sheet analysis

Analysis of individual items on the balance sheet with the goal of evaluating a company’s economic situation

Balance-sheet analysis can be subdivided into internal and external analysis. Internal balance-sheet analysis generates information on the company for the management staff, and is part of corporate controlling operations. In external balance-sheet analysis, outside persons or institutions examine key ratios, as well as the published financial statements and accounts prepared for tax purposes, in order to ascertain the company’s earning power, creditworthiness, and profitability. However, the findings of external balance-sheet analysis cannot be regarded as completely valid, because information on unused credit lines, outstanding contracts or undisclosed reserves can be concealed in the balance sheet by calculating higher depreciation expenses.

Balance-sheet analysis is the most important component of fundamental analysis.

In order to list on the Frankfurt Stock Exchange your companies balance sheet needs to be prepared and your documentations in order for listing. To hire  a professional team to assist in taking you public on the Frankfurt Stock Exchange, contact info@fselistings.com