Which stock market segments are available?
First Quotation Board
Entry Standard
General Standard
Prime Standard
For the admission of shares a distinction is made between General Standard, the segment with the statutory minimum requirements of the Regulated Market, and Prime Standard, a segment with additional, international transparency standards. Admission to trading on the regulated unofficial market leads to the Open Market with its Entry Standard segment.
On which legal basis are shares admitted to trading at Frankfurter Wertpapierbörse (FWB®, the Frankfurt Stock Exchange)?
The basis for the admission of shares to trading at the Frankfurt Stock Exchange are the statutory provisions governing the Official Market and Regulated Market and, more particularly, the Exchange Rules. The inclusion of securities to the Open Market is governed by the Directives for the Regulated Unofficial Market.
What is the First Quotation Board?
The First Quotation Board and Second Quotation Board structure the Open Market for shares and certificates representing shares. All companies that have their initial listing in the Open Market are included in the First Quotation Board, which means that they have not been admitted to any other national or international trading venue or included in trading.
All companies included in the Second Quotation Board are those whose shares have already been admitted to an international or national trading venue or have been included in trading and which have applied for inclusion in the Open Market. With the introduction of the First Quotation Board, initial listings are now more easily and clearly identifiable when included for trading.
The First Quotation Board is attractive for companies that want to make their shares fungible and include them for trading. The First Quotation Board has no transparency requirements for companies. It is aimed at qualified investors within the meaning of section 2 no. 6 of the German Securities Prospectus Act (Wertpapierprospektgesetz – WpPG) hat are in a position to assess and bear any significant risks in connection with an equity investment in the First Quotation Board. Investors must be conscious of the risk that the company shares are not admitted to exchange trading in an EU-regulated market. The high transparency requirements, which were standardized across Europe, and the strict investor protection regulations for organized markets thus do not apply.
Why did Deutsche Börse create the First Quotation Board within the Open Market?
The introduction of the new First Quotation Board is Deutsche Börse’s response to the increasing number of initial listings in the Open Market. Since 2005, national and international companies are increasingly using the Open Market as a fast and cost-effective way of offering their shares for trading without any subsequent admission requirements. Particular benefits for companies include fungibility and ongoing valuation of their shares. The majority of companies included in the First Quotation Board are based abroad (61 percent).
Deutsche Börse has introduced the First Quotation Board to structure the Open Market.
It creates more visibility for the initial listing of shares in the Open Market, as it makes them more easily and clearly identifiable. In the future, the master data of all companies will include the labels “First Quotation Board” for primary listings or “Second Quotation Board” for companies whose home market is not in Frankfurt.
Which companies are included in the First Quotation Board?
Companies that have their initial listing in the Open Market are included in the First Quotation Board, which means that they have not been admitted to any other national or international trading venue or have not been included for trading. Companies which initially listed in the Open Market in the past are automatically included in the First Quotation Board.
How can companies include their shares for trading in the First Quotation Board?
There are few formal requirements to include shares for exchange trading in the First Quotation Board. The application is made by a participant admitted to trading at the Frankfurt Stock Exchange. It supports the company into the First Quotation Board and is the central contact as well as the coordinator between the company and Deutsche Börse. Around 300 admitted trading member firms are currently available as applicants.
What application documents are required for including shares for trading in the First Quotation Board?
- Application to include the shares (form)
- Exposé and the information and documents it requires or the prospectus within the meaning of the WpPG (for public offerings) approved by the national supervisory authority (in Germany: BaFin)
- Proposing a Xetra Frankfurt Specialist and naming a designated sponsor (Xetra), if necessary
- Confirmation of an authorized lawyer or authorized auditor that the share capital of at least €250,000 has been fully paid (cash contributions)
What are the requirements for inclusion for trading in the First Quotation Board?
- Free tradability of the shares
- For public offerings: The prospectus including the audited consolidated annual financial statements approved and notified by the national supervisory authority (in Germany: BaFin)
- Exposé, filled out and signed by applicant
- Minimum share capitalization in the amount of €250,000 (fully paid and confirmed by an attorney or auditor)
How can companies include their shares in trading in the Entry Standard?
Inclusion of shares in exchange trading in the Entry Standard is one of the easiest and quickest ways of accessing the stock market, as there are few formal requirements. The application is made by an authorized trading participant at the Frankfurt Stock Exchange. The trading participant is there to assist and support the company when it lists in the Entry Standard. It also acts as a central contact and as a coordinator between the company and Deutsche Börse.
There are around 300 authorized trading participants available to act as Applicants and more than 70 Deutsche Börse Listing Partners available to provide support for companies going public.
What application documents are required before shares can be included in trading in the Entry Standard?
- Application for inclusion of shares (form).
- Exposé or, in the case of a public offering, securities prospectus approved in accordance with German securities law by the national competent authority (in Germany: Federal Financial Supervisory Authority, Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).
- Formal declaration of consent by the issuer.
- Undertaking regarding compliance with the Rules and Regulations (Appendix 1 to the Rules for the Regulated Unofficial Market).
- Nomination of a Xetra Frankfurt Specialist and, if necessary, a designated sponsor (Xetra).
- Proof that the issuer has engaged a Deutsche Börse Listing Partner to provide the company with ongoing support in the Entry Standard (the minimum requirements are set out in Appendix 3 to the Rules for the Regulated Unofficial Market).
- Record of the company registration in the Commercial Register, dated no more than 4 weeks before the time the application for inclusion is made.
- Company Articles valid at the time of the application for inclusion is made.
- Audited consolidated financial statements and group management report prepared by the issuer in the legal form of an Aktiengesellschaft (German stock corporation).
- A brief company profile of the issuer, complying with Deutsche Börse’s requirements set out in Appendix 2, for the purpose of publication on the issuer’s website.
What are the criteria for inclusion of securities in trading in the Entry Standard?
The Entry Standard enables companies to include their shares in exchange trading quickly, easily and cost-efficiently. The criteria for the shares’ inclusion in trading are as follows:
- The shares must be tradable (eligible for collective safe custody).
- For public offerings, the prospectus, vetted and approved by the national regulator (in Germany, BaFin), and including audited consolidated financial statements for the year.
- For private placements, the unpublished exposé, which is the sole responsibility of the company, including audited consolidated financial statements for the year and group management report.
- A registered Frankfurt Stock Exchange trading participant must be appointed as the Applicant.
- A Deutsche Börse Listing Partner must be appointed as a “capital market coach”.
- The Applicant’s undertaking to comply with the Rules and Regulations.
How is the Entry Standard positioned from a regulatory perspective?
The regulations for organized markets do not apply in the Entry Standard, which is instead subject to the relevant Open Market rules. It is the regulatory equivalent of the non-EU regulated market segments in the United Kingdom (AIM/Alternative Investment Market) and in France (Alternext).
More specifically, the following regulatory requirements do not apply:
- Admission to listing within the meaning of section 3(2) of the AktG
- Publication of ad hoc disclosures in accordance with section 15 of the WpHG
- Notification that thresholds have been reached in accordance with section 21 of the WpHG
- Obligation to publish interim reports in accordance with section 40 of the Börsengesetz (BörsG – German Stock Exchange Act) together with section 53 of the Börsenzulassungsverordnung (BörsenZulVO – German Stock Exchange Admission Regulations)
- Compulsory offer in the event of a change of control in accordance with the WpÜG
- Prospectus if it is a prospectus-free private placement in accordance with section 3 of the WpPG
Why does Deutsche Börse allow shares to be traded in the Entry Standard on the basis of a securities prospectus or an exposé?
In principle, it is for the issuer to decide whether to include its shares in trading in the Entry Standard on the basis of a securities prospectus or an exposé. This gives it the option and flexibility to choose the most appropriate route. But in doing so, the issuer is required to fulfil the statutory requirements set out in the WpPG, in particular those relating to public offerings.
For non-public offerings, i.e. private placements, intended for qualified investors within the meaning of section 2 no. 6 of the WpPG, Deutsche Börse enables shares to be traded efficiently on a trading platform on the basis of an exposé for which the issuer takes sole responsibility and which is not available publicly. Investors must be aware that the stringent requirements of the WpPG, and in particular those relating to the content of a securities prospectus approved by BaFin, do not apply in these circumstances. Moreover, an exposé forming the basis of a non-public offering is not subject to review either by BaFin or by the Stock Exchange.
Why does the Frankfurt Stock Exchange not require a securities prospectus for inclusion in trading in the Entry Standard?
The provisions of the WpPG require a prospectus to be prepared if the company decides to make a public offering.
If the company does not wish to make a public offering, however, and decides to conduct a private placement and to approach only qualified investors within the meaning of section 2 no. 6 of the WpHG in the process of coming to the market, it must prepare an exposé. The issuer bears sole responsibility for the exposé, which is not available to the public. Investors must be aware that the stringent requirements of the WpPG, and in particular those relating to the content of a securities prospectus approved by BaFin, do not apply under these circumstances. Moreover, an exposé forming the basis of a non-public offering is not subject to review either by BaFin or by the Frankfurt Stock Exchange. For the Entry Standard, the intention is that the option of applying on the basis of an exposé should be subject to no requirements over and above minimum requirements already imposed by law. It is intended that the Entry Standard should make this route available for companies in a similar manner to AIM and Alternext.
Is there a qualitative difference between shares included in the Entry Standard on the basis of an exposé or a securities prospectus?
In principle there is no connection between the document serving as the basis for inclusion and the quality of the company, and no general statement can be made in this respect. Whether or not a securities prospectus serves as the basis for inclusion in the market, investors must bear in mind that on the Open Market and the Entry Standard, the principal transparency requirements and investor protection regulations that have been standardized across Europe do not apply. For this reason, investors must always examine carefully and on an individual basis the nature of the company in which they are investing and the level of transparency or post-admission information it provides.
Are stocks included in trading in the Entry Standard with a securities prospectus better than those without a securities prospectus?
The Frankfurt Stock Exchange does not prescribe a particular form. The market is free to decide on the method and documentation for market entry in each case.
The general principle is that inclusion in the Entry Standard or the Open Market, as in the case of AIM or Alternext, does not constitute listing on a stock exchange and therefore fundamental investor protection requirements do not apply. Since inclusion in the Entry Standard does not constitute listing on an organized market in accordance with 2(5) of the WpHG, significant regulatory requirements for organized markets do not generally apply to it, in particular:
- Admission to listing within the meaning of section 3(2) of the Aktiengesetz (AktG – German Stock Corporation Act)
- Publication of ad hoc disclosures in accordance with section 15 of the WpHG
- notification that thresholds have been reached in accordance with section 21 of the WpHG.
- Obligation to publish interim reports in accordance with section 40 of the Börsengesetz (BörsG – German Stock Exchange Act) together with section 53 of the Börsenzulassungsverordnung (BörsenZulVO – German Stock Exchange Admission Regulations)
- Compulsory offer in the event of a change of control in accordance with the WpÜG
- Prospectus if it is a prospectus-free private placement in accordance with section 3 of the WpPG
Investors must therefore be aware that there is less information available and that there is a higher level of risk. First and foremost, only qualified investors within the meaning of section 2 no. 6 of the WpPG, who are able to assess and accept any increased risks associated with investing in these companies’ shares, should act as investors in the Entry Standard.
Within the Open Market, however, the Entry Standard segment requires companies to provide additional information so that transparency can be increased.
Nevertheless, it should be made clear that the Entry Standard requires companies to make few disclosures and investors therefore have little information on which to base their investment decisions.
Who are the applicants in the Entry Standard?
An authorized trading participant at the Frankfurt Stock Exchange can formally apply to have shares included in exchange trading in the Entry Standard. There are more than 300 finance companies, financial services providers and credit institutions acting as authorized trading participants at the Frankfurt Stock Exchange.
What is the Applicant’s role for investors, companies and Deutsche Börse?
The applicant
- applies to have the shares included in exchange trading.
- monitors whether the company is complying with specified requirements.
- advises and supports the company when joins the Entry Standard, and for the duration of its inclusion in the Entry Segment.
- acts as a central contact for Deutsche Börse and as a coordinator between the company and Deutsche Börse.
- vouches for the seriousness of the company introduced to the market and that it will fulfil its obligations.
- is subject to possible sanctions imposed by Deutsche Börse in the event of non-fulfilment of its obligations.
What accounting standards are required?
The applicable national accounting standards (e.g. HGB for Germany), or alternatively IFRSs.
Are companies required to issue quarterly reports?
No.
Which investor group does the Entry Standard target?
As the Entry Standard requires companies to make few disclosures, the information available to investors on which to base their investment decisions may be correspondingly more limited.
Investors must be aware that there is less information available and a higher level of risk. Therefore, only informed, risk-aware groups of investors and qualified investors within the meaning of section 2 no. 6 of the WpPG (legal entities and individuals) should feel that the Entry Standard is aimed at them.
Are there any minimum requirements for company size?
No. Trading participants and the Deutsche Börse Listing Partners make recommendations based on an assessment that orderly trading in the shares is ensured.
What advantages does the Entry Standard offer companies?
There are a number of advantages to listing in the Entry Standard: Shares are included in trading quickly and easily. Companies are therefore able to make use of the Frankfurt Stock Exchange’s core functions as a trading platform and price discovery mechanism while simultaneously increasing their visibility among risk-aware investors.
The cost of inclusion in the Entry Standard is significantly lower than for obtaining a listing on an EU-regulated market, as a result of the lower level of regulation.
The advantages at a glance:
- Quick and cost-effective access to the capital market
- Few formal requirements
- Low continuing transparency requirements
- Use of the stock market as a trading platform and price discovery mechanism
- Increased visibility among risk-aware investors for companies from all sectors
- Efficient trading (using Xetra Frankfurt Specialist Trading)
- Companies can prepare to move up to the EU-regulated General Standard and Prime Standard markets
- Support by around 300 registered trading participants (Applicants) and around 70 Deutsche Börse Listing Partners
- Deutsche Börse’s capital market services
- One-stop access to all capital market functions at the only fully integrated exchange organization worldwide
What are the inclusion and listing fees?
Open Market: €750 one-off fee for including shares in trading.
Entry Standard (in addition to the Open Market fee): one-off fee for including shares in trading of €0 if a prospectus is issued or €750 if an exposé is issued; €5,000 annual fee for the listing.
Are there any minimum requirements for company age?
No, but companies are required to file audited consolidated financial statements for the year as an “Aktiengesellschaft” (German stock corporation). They must therefore have existed in the legal form of a German stock corporation since at least the end of the previous financial year.
Can companies now only be admitted to the Open Market via the Entry Standard?
No, companies can continue to be admitted to the Open Market, too.
What are the arguments in favour of admission to the Open Market?
- Quick and cost-effective access to the capital market
- Few formal requirements
- Use of the stock market as a trading platform and price discovery mechanism
- Efficient trading (specialist model for Xetra Frankfurt Specialist Trading/open order book for electronic Xetra trading)
- Opportunity to move up to Entry Standard or the EU-regulated General Standard and Prime Standard markets
- One-stop access to all capital market functions at the only fully integrated exchange organization worldwide
Which companies is the Open Market aimed at?
The Open Market particularly addresses international companies and issuers of warrants, certificates and bonds.
Which selection indices are offered by Deutsche Börse?
Deutsche Börse calculates four selection indices: DAX®, MDAX®, TecDAX® and SDAX®. Below the DAX a distinction is made between classic sectors and technology sectors. For the classic sectors the MDAX and SDAX and for the technology sectors the TecDAX is calculated.
Which requirements do companies have to meet in order to be included in one of the selection indices of Deutsche Börse?
Apart from the admission to Prime Standard, companies must be quoted in continuous trading in Xetra®.
Which reporting obligations apply in General Standard?
In General Standard the statutory minimum requirements apply:
- Annual report/semi-annual report
- Ad-hoc disclosure in German
Which reporting obligations apply in Prime Standard?
In Prime Standard international transparency requirements apply:
- Quarterly reports as specified by the Exchange Rules
- Financial statements according to international accounting standards (IFRS/IAS or US-GAAP)
- Financial calendar
- At least one analyst conference per year
- Ad-hoc disclosure also in English
Which data must issuers in Prime Standard supply to the Frankfurt Stock Exchange?
The Exchange Rules oblige companies in Prime Standard to electronically submit their annual accounts, quarterly reports and financial calendar to the Fankfurt Stock Exchange.
What are the essential differences between admission to General Standard and to Prime Standard?
The main differences have concern the follow-up obligations after admission and, more particularly, the publication obligations. Companies in General Standard must meet the statutory transparency standards (e.g., a semi-annual and annual report in IFRS/IAS or US-GAAP in German). Prime Standard companies must, in addition, meet high transparency requirements:
- Quarterly reporting according to the formal requirements of the Exchange Rules
- International accounting standards (IFRS/IAS or US-GAAP)
- Financial calendar
- At least one analyst conference per year
- Ad-hoc disclosure also in English
Is admission to Entry Standard, General Standard or Prime Standard also possible for foreign companies?
Shares of foreign companies can be included in trading in Entry Standard or admitted to either General Standard or Prime Standard.
Do Designated Sponsors have to be engaged as liquidity providers?
There is no legal obligation in this respect in Entry Standard, Prime Standard or General Standard. For the majority of all securities it is, however, necessary to engage at least one Designated Sponsor in order to be quoted in continuous trading on Xetra®. The continuous trading is a prerequisite for admission to the selection indices of Deutsche Börse AG. When it comes to increasing liquidity and trading, Deutsche Börse recommends the nomination of two Designated Sponsors.
How is the liquidity of a security measured?
The criteria for liquidity and activity of a security is the Xetra Liquidity Measure (XLM) as well as the average order book turnover.
What are Deutsche Börse Listing Partners?
The status of a ‘Deutsche Börse Listing Partner®’ can be obtained by independent service providers from the Going and Being Public sector, provided that they meet the corresponding quality standards.
What requirements must companies meet to be admitted as Deutsche Börse Listing Partners?
The following conditions should be met for an admission as Deutsche Börse Listing Partner:
- Signature of the contract ‘Deutsche Börse Listing Partner’
- Service provider in the Going and Being Public sector
- Proof of sound know-how in Going and Being Public
- Recommendation by two reference partners
- Proof of at least three mandates from listed companies
What services does Deutsche Börse provide for Deutsche Börse Listing Partners?
- Free-of-charge provision of marketing material on the listing platform of Deutsche Börse for the customers of Deutsche Börse Listing Partners (new)
- Extended use of the corporate logo on marketing materials concerning the listing platform of Deutsche Börse, e.g., partner display for trade fair stands (new)
- Preferred recruitment as speakers at events of Deutsche Börse on Going and Being Public
- Active marketing of the Deutsche Börse Listing Partners within the framework of Deutsche Börse events on Going and Being Public
- Free-of-charge participation in the regular stocks & standards workshops
What options and methods of coming to the market are available to issuers on the Frankfurt Stock Exchange with regard to transparency regulations?
Companies can choose from a number of different methods for listing on the Frankfurt Stock Exchange. By options for a listing in the General Standard, companies accept the continuing obligation to comply with the minimum legal standards for investor protection and transparency which have been harmonized across Europe.
Companies which wish to go further and provide the highest level of transparency, particularly for the benefit of international investors, can opt for a listing in the Prime Standard.
Companies which would like their shares to be included in trading with few formal obligations opt for the Entry Standard. In the latter case, investors must be aware that major transparency requirements and investor protection regulations that have been standardized across Europe do not apply.
How can companies submit the data to be reported to the Frankfurt Stock Exchange?
Deutsche Börse provides a system interface by means of which issuers in Prime Standard can meet their reporting requirements. Through the Exchange Reporting System (ERS) the issuer can transmit his data to the Frankfurt Stock Exchange either directly or through a service provider.
What is covered by the ad-hoc disclosure requirements?
Issuers of securities in the Regulated Market are subject to the duty of notification under § 15 WpHG (German Securities Trade Act). They must report all facts which are not yet publicly known and which, as a consequence of their impact on the assets and financial position or the general business development of the company, could have a major impact on the price of the admitted securities. On the unofficial regulated market there is no duty of ad-hoc disclosure.
Who answers questions on the content of the ad-hoc announcements?
Questions on the content of ad-hoc announcements can be addressed to the Federal Financial Supervisory Authority (BaFin) (http://www.bafin.de/).
With its Listing Center and its contents, does Deutsche Börse compete with the service offerings of its own customers?
No. The Listing Center of Deutsche Börse serves primarily as an information interface between companies which plan an IPO or are already listed and IPO service providers. The Listing Center offers companies information as well as products and services to support IPO and investor relations activities.
What are the trading hours?
At the Frankfurt Stock Exchange and Xetra, shares are traded on every trading day between 9 a.m. and 8 p.m..
Trading on the pan-European electronic platform Xetra ends at 5.30 p.m..
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