|
|
NASDAQ |
|
|
|
Shanghai Composite |
|
|
|
Hang Seng |
|
|
|
Straits Times |
|
|
|
NIKKEI 225 |
|
|
|
|
|
The German Stock Market
There are a total of
nearly 900 companies listed across German with a total
market capitalization of 1.2 trillion US$. A total of
22% of the listings are from outside the EU.
|
 |
|
 |
We can
offer a
'Start-to-Finish'
solution
for listing in Germany.
Experienced Lawyers and Auditors
We refer you to experienced U.S. lawyers and auditors that
have worked with many successful U.S. listed Chinese
companies.
Public Shells
We provide clean public shells from our own inventory or
from only the most reputable sources.
Financing
We work closely with clients to develop a realistic fund
raising strategy and then help raise the necessary
capital.
Investor Introductions
We have relationships with investors and fund managers
that are specifically looking for Chinese and other Asian
investments.
Transaction Completion
We oversee the entire going public transaction from start
to completion.
See Chinese Companies on the German
Stock Exchange |
|
Introduction |
|
Although the German stock market is strongly
dominated by the Frankfurt stock exchange, it in fact comprises seven
regional exchanges (see box 1). The other German exchanges can be of
interest to some foreign investors and companies thanks to the special
features they offer market participants (more information about regional
exchanges’ features are available on the exchanges’ websites) |
|
|
|
|
|
Market Structure- Prime and General Standard |
The German equity market is
divided into three so called traditional market segments:
The Official Market (“AmtlicherMarkt”, high standard listing
requirements), the Regulated Market (“GeregelterMarkt”), and
the Regulated unofficial market (“Freiverkehr”, low standard
listing requirements). Building on this basis, the biggest
German Exchange, the Frankfurt Stock Exchange (FSE)
implemented a new structure for equity markets on 1 January
2003. The aim of the FSE in introducing this new market
structure was to contribute to restoring investor confidence
in the German stock market through high standards and the
due enforceability of regulations. For this purpose, two new
standards were introduced for companies admitted to the
Official Market and the Regulated Market: The General
Standard and the Prime Standard. While the traditional
distinction between Official Market and Regulated Market
relates to the ad mission process, the new segmentation
refers to different disclosure standards.
The General Standard segment is aimed at smaller and
mid-sized companies that predominantly attract domestic
investors and are interested in a less expensive way of
becoming and staying listed. Nevertheless, this standard
requires companies to comply with the former statutory
minimum requirements of the Official Market or Regulated
Market segment. Reporting requirements include:
-Annual financial statements/six-monthly reports (interim
reports)
-Publication of ad-hoc disclosures (required under the
German Securities Trading Act) in German. The regulations
for the second segment, the Prime Standard, go even further.
This segment is intended for companies that wish to target
international investors. These companies are required to
meet high international transparency criteria over and above
those set out by the General Standard:
-Quarterly reporting
-Application of international accounting standards (IFRS or
US-GAAP)
-Publication of a financial calendar listing the most
important corporate events
-At least one analysts’ conference per year
-English language for current reporting and for ad-hoc
disclosures required under the German Securities Trading
Act.
A listing in the Prime Standard segment is a prerequisite
for inclusion in the DAX, MDAX, SDAX or TecDAX selection
indices.
As the new Prime Standard regulations cover the market
segments formerly envisaged for young and dynamic companies
(“Neuer Markt”) and the smallcaps segment (SMAX) , the
Deutsche Börse AG closed down these segments in June 2003.
All the companies formerly listed in the Neuer Markt or SMAX
have switched to the Prime Standard or the General Standard.
|
|
Listing Requirements |
|
Listing rules and regulations
vary substantially among the different segments. Box 2 and
box 3 indicate the most important conditions concerning
listing in different segments and standards at the Frankfurt
Stock Exchange and in selected segments of the other German
exchanges (e.g., the size of the issue or the required
documents). For admission to the General Standard, companies
are required to comply with the statutory minimum
requirements of the Official Market or the Regulated Market.
Companies that wish to be listed in the Prime Standard must
also fulfill very strict reporting requirements in order to
provide maximum transparency and protection to international
investors. Detailed information on the listing requirements
of the other German stock exchanges is available on the
respective exchanges websites.
|
|
Box 2 |
Statutory Minimum Requirements |
|
|
Amtlicher Markt
(Official Market) |
Geregelter Markt
(Regulated Market) |
Freiverkehr
(Regulated Unofficial Market) |
|
Company’s minimum age |
3 years |
-- |
-- |
|
Volume issued |
Expected market value: €1.25 million |
Total par value minimum: €250,000 |
-- |
|
Minimum number of shares |
10,000 |
-- |
|
Share classes |
Ordinary shares, preference shares |
|
Portion of shares that are widely held |
A minimum of 25% |
-- |
-- |
|
Approval documentation |
Listing prospectus: Detailed information about
the company (past 3 years) |
Report: Less detailed information than in the
official market |
Report: Less detailed information than in the
official market |
|
Retention obligation for existing shareholders |
--
|
-- |
-- |
|
Legal basis |
Stock Exchange Act (Sections 30 ff.), Stock
Exchange Listing Directive, Offering Prospectus
Directive |
Stock Exchange Act (Sections 49 ff.), Exchange
Rules and Regulations, Offering Prospectus Directive |
Third-Section Guidelines, Section 57 of the
Stock Exchange Act |
|
Other |
Trade monitoring (Trading Surveillance Office) |
|
Reporting Requirements |
Annual financial statements/six-monthly
reports(interim reports), publication of ad-hoc
disclosures(required under the German Securities Trading
Act) in German
|
Annual financial report required |
|
Organised market under the provisions of Section 2
Paragraph 5 of the Securities Trading Law |
Yes |
Yes |
No |
|
|
|
|
Box 3: Listing Requirements for Special Segments
(examples)
|
|
|
Praedikatsmarkt Munich |
Start Up Market
Hamburg |
4-X
Stuttgart |
Prime Standard
Deutsche Börse AG |
|
Volume issued |
Total par value minimum € 250,000 |
Total par value minimum € 250,000 for the first 3 years
|
Total par value minimum € 250,000 |
Companies have to comply with the statutory minimum
requirements of the Official Market or the Regulated
Market and additionally fulfill certain reporting
requirements listed below |
|
Minimum number of shares
|
-- |
10,000 |
10,000 |
|
Portion of shares that are widely held |
A minimum of 25 % |
A minimum of 25 %. After a 3 year listing period no free
float requirements
|
-- |
|
Approval Documentation |
Detailed information about the company |
|
Retention obligations of existing shareholders |
12 months |
6 months |
-- |
|
Legal Basis |
Local exchange rules |
|
|
-- |
Companies have to be admitted to the regulated market |
-- |
|
Reporting Requirements |
Quarterly letter to shareholders required |
Quarterly reporting |
Quarterly reporting |
|
The Costs
of Listing |
Although, there are several
types of costs which are typically associated with “going
public”, these costs may vary significantly from company to
company. Larger companies tend to have lower relative costs
because a significant portion of the cost is independent of
the emission volume (e.g. Public Relations costs).
Typically, the costs account for 5-12 per cent of the
proceeds of an issue.
Box 4 provides an overview of typical IPO costs. The numbers
should, however, be viewed with caution as they vary widely
depending upon the issuing bank and the characteristics of
the company going public. After entering the market, the
company must fulfill certain conditions (e.g., reporting).
The costs of these activities, as well as indirect IPO costs
such as the costs of underpricing, must be considered. |
|
 |
|
|
|
