Entry Standard
Tailor-made capital market access
for small-caps and mid-caps
Entry Standard
A simple, quick and cost-efficient way of including
shares in exchange trading with reduced formal requirements for companies – higher risk profile for investors
ENTRY STANDARD 3
Before you can benefit from the advantages of a listing
in the Entry Standard, you need to make a number of
organizational, legal and tax decisions. Comprehensive
information and professional and experienced advisors
can assist you in this strategic process.
4 ENTRY STANDARD
At FWB ® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange), there are three levels of transparency
Companies have the choice between:
f
Two ways to access
EU-Regulated Market
f
Three statutory
Regulated
Unofficial Market
the capital market
market segments
Amtlicher Markt
Freiverkehr
(Official Market) and
(Regulated Unofficial
Geregelter Markt
Market/Open Market)
(Regulated Market)
Three levels
Prime Standard
Entry Standard
of transparency
(segment)
(segment)
f
General Standard
ENTRY STANDARD 5
Companies Can Choose the Best Market
In Europe, there are two legally defined ways to access the capital market: EU-regulated markets,
and markets regulated by the stock exchanges themselves (regulated unofficial markets). At FWB ®
Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange), an IPO in the EU-regulated Official
Market or Regulated Market leads into the General Standard or its Prime Standard segment. In the
Open Market, the fulfillment of special transparency requirements leads into the Entry Standard,
which is regulated by the Frankfurt Stock Exchange.
Issuers in General Standard and Prime Standard fulfill the highest European transparency requirements and gain all the advantages of a full listing. With the Entry Standard, the Frankfurt Stock
Exchange uses the available flexibility to create a simple, quick and cost-efficient way of including
shares in exchange trading which is particularly suitable for small and medium-sized companies.
Companies wishing to differentiate themselves within the Open Market and increase investor visibility,
opt for a listing in the Entry Standard – an entry segment which does not exclude the possibility of
a subsequent listing in the General Standard or Prime Standard.
Entry Standard: An Alternative Point of Access
to the Capital Market Based on the Open Market
The Entry Standard is open to all companies wishing to include their shares in trading with reduced
formal requirements. It is a particularly attractive option for young and established small to mediumsized companies. Private equity and venture capital investors can use it as an exit route.
Within the Open Market, the Entry Standard offers increased visibility and a showcase for companies
that voluntarily provide the capital market with more information. Currently, the shares of around
5,900 German and international companies are traded on the Open Market, alongside 4,200 bonds
and 52,000 warrants and certificates. The Entry Standard is a market segment organized under
private law. The legal framework is set by the “Freiverkehrsrichtlinien” (rules for the Regulated Unofficial Market) of the Frankfurt Stock Exchange. For companies, this is reflected in reduced regulation and limited transparency requirements. For investors, it means a higher risk profile compared
to investments in EU-regulated markets.
The shares of companies listed in the Entry Standard are traded on Deutsche Börse’s established
platforms: the floor of the Frankfurt Stock Exchange and the fully electronic trading system Xetra ®.
6 ENTRY STANDARD
Deutsche Börse Group is an important partner. Our diverse
markets and standards offer you tailored access to the capital
market. Through broker-supported trading on the floor and
through the electronic Xetra ® platform, we provide access to
national and international investors. With price information,
indices and capital market data, we increase trading transparency and the visibility of your company for investors.
ENTRY STANDARD 7
Tailored Access
to the Stock Market
There are a number of advantages to having your shares admitted to trading on the Entry Standard:
they are included in trading quickly and easily, allowing you to make use of the stock market’s core
functions as a trading platform and a mechanism for price determination. Due to the reduced level
of regulation, admission costs for the Entry Standard are much lower than those of an IPO on a
EU-regulated market – particularly for admission with an exposé. You may also choose the Entry
Standard as your point of entry to the capital market and from there prepare for a full listing on one
of the EU-regulated markets, i.e. the General Standard or Prime Standard. An all-share index which
comprises all companies in the Entry Standard will provide additional investor visibility.
All the advantages of an Entry Standard listing at a glance
Quick and cost-efficient access to the capital market
Increased visibility through all-share index
Reduced formal requirements
Support from around 300 registered trading
Low ongoing transparency requirements
participants as admission sponsors and around
Use of the stock market as a trading platform and as
70 Deutsche Börse Listing Partners
a mechanism for price determination
Deutsche Börse’s capital market services
®
Efficient trading (floor/ Xetra )
One-stop access to all capital market functions
Opportunity of further development towards meeting
at the only fully integrated exchange organization
the transparency standards of the EU-regulated
worldwide
markets, i.e. the General Standard or Prime Standard
8 ENTRY STANDARD
Admission to the Entry Standard: A Quick
and Simple Way of Including your Shares
in Exchange Trading
Including your shares in exchange trading on the Entry Standard is one of the simplest and quickest
ways of accessing the stock market. The application is submitted by a trading participant registered at FWB ® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange). This participant also
monitors compliance with transparency requirements and acts as a central interface between you
and Deutsche Börse.
Main application documents
For public offerings: the prospectus approved
An undertaking from the admission sponsor to
and notified by the national regulator
comply with the rules of the Entry Standard and
For private placements: the unpublished exposé,
monitor the transparency requirements to be
which is the sole responsibility of the company
fulfilled by the company
Proof that a Deutsche Börse Listing Partner has
been appointed
To admit your shares to trading, the Frankfurt Stock Exchange needs a maximum of five trading days.
This requires either a prospectus examined and approved by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – the German Federal Financial Supervisory Authority) or an exposé prepared
by the issuer. In the Entry Standard, the annual listing fee is E5,000 and the one-off fee for inclusion
in exchange trading is E1,500 with an exposé and E750 with a prospectus.
Admission to the Entry Standard
The trading participant at the Frankfurt Stock Exchange monitors the transparency requirements to be fulfilled by the
company and acts as a coordinator between the company and Deutsche Börse.
f
Deutsche Börse Listing Partner
Company
f
f
f
f
f
Trading Participant (at the Frankfurt Stock Exchange)
Deutsche Börse
ENTRY STANDARD 9
Reduced Transparency Level:
Higher Risk Profile for Investors
Stringent transparency requirements on the EU-regulated markets General Standard and Prime
Standard often represent an obstacle for small and medium-sized companies. The Entry Standard
lowers the entry barriers to the capital market, as the high transparency requirements and stringent
investor protection regulations that have been harmonized for organized markets across Europe
do not apply. If you wish to include your shares in the Entry Standard, thus increasing visibility to
investors, you will need to fulfill transparency requirements on an ongoing basis.
Transparency requirements on the Entry Standard
The Open Market rules apply, plus:
On the company website
Publication of the audited consolidated financial
Publication of the interim report no later
statements and management report (respective
than three months after the end of the first
national accounting standards or International
half of the fiscal year
Financial Reporting Standards) no later than six
Immediate publication of important price-
months after the end of the reporting period
sensitive news or facts about the company
Publication of a brief, up-to-date company profile
and a calendar of company events
The admission of shares to trading is not equivalent to a stock exchange listing as defined by section
3, subsection 2 of the Aktiengesetz (AktG – German Stock Corporation Act). Since Open Market and
Entry Standard are not organized markets as defined by section 2, subsection 5 of the Wertpapierhandelsgesetz (WpHG – German Securities Trading Act), certain regulations do not apply here, e.g.
the obligation to publish ad hoc announcements, notification when threshold levels are reached,
and compulsory publication of interim reports.
Since there are fewer transparency requirements and investor protection regulations than in organized
markets, the basis of liability is also smaller, and investors have less information on which to base
their investment decisions. For this reason, the Entry Standard is primarily aimed at qualified investors
as defined by section 2, subsection 6 of the Wertpapierprospektgesetz (WpPG – German Securities
Prospectus Act). Investors should be able to assess and accept any increased risks associated with
investing in shares included in the Entry Standard.
Shares in the Entry Standard are monitored by the German Federal Financial Supervisory Authority
(BaFin) with regard to insider trading and market abuse regulations. Price determination is monitored
by the Market Supervisory Authority.
10 ENTRY STANDARD
Experience and Expertise:
Deutsche Börse Listing Partners
For many companies, admission to the Entry Standard is their first step towards the capital market.
They are therefore required to engage at least one Deutsche Börse Listing Partner. Deutsche Börse
Listing Partners accompany aspirants to the stock market before, during and after their listing and
support them in publishing the prescribed and voluntary information. Deutsche Börse Listing Partner
status is accorded to independent service providers who have supplied proof of their expertise and
references to Deutsche Börse. Profiles of the individual partner companies can be found at:
www.deutsche-boerse.com > Listing > Deutsche Börse Listing Partner
Core tasks performed by Deutsche Börse Listing Partners
Brief the company on transparency requirements on
Give advice when the company publishes the
the capital market
prescribed information (e.g. calendar of company
events, brief company profile)
The Entry Standard at a glance
Tasks and advantages of market participants
Companies
Investors
Exchange trading of shares
Higher risk due to lower transparency level
Quick and cost-efficient access to the market
New investment opportunities
Reduced regulation and simple rules
Use of established trading systems
Entry Standard
Deutsche Börse Listing Partners
FWB trading participants
Support and know-how
Admission sponsors
Reputation and expertise
Core functions: trading, price
Company‘s development
determination and monitoring
on the capital market
Lead brokers and Designated Sponsors
ENTRY STANDARD 11
Preparation for admission starts long before the first
trading day. Deutsche Börse Group supports you through
all phases of the process: before, during and after the
listing. You can also make use of the capital market
expertise of the Deutsche Börse Listing Partners.
12 ENTRY STANDARD
With admission to trading, your company has passed an
important milestone: gaining access to the capital market.
You can now benefit from the core functions of the stock
market as a trading platform and a mechanism for price
determination. But please remember: from now on you
have an additional product, which you should manage
just as carefully as your other products – your own shares.
ENTRY STANDARD 13
Liquidity: Access to National and
International Investors
The shares of companies listed on the Entry Standard are traded on two platforms: on the floor of
FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange) and on the fully electronic trading
system Xetra ®. Both platforms offer efficient trading and optimum liquidity.
In floor trading, independent lead brokers are responsible for fixing the price of securities. A lead
broker is responsible for each stock; he fixes bid and ask prices and either executes incoming
orders in accordance with the rules for price determination or manages them in an order book until
their execution, deletion or expiry. Less liquid securities can also be traded efficiently on the floor.
Xetra is one of the world’s most powerful trading infrastructures. Buy and sell orders from anwhere
in the world are matched in a central electronic order book. National and international investors
have access to shares listed on the Frankfurt Stock Exchange using the trading screens of over 4,300
registered traders at around 280 participants in 18 countries. Together, the floor of the Frankfurt
Stock Exchange and Xetra account for over 96 percent of trading in German shares.
14 ENTRY STANDARD
Capital Market Services: Added Value for Companies
Deutsche Börse offers a comprehensive range of
services for aspirants to the stock market and those
companies that are already listed.
Stocks&Standards workshops
Listing Center
Deutsche Börse’s series of workshops on current
The Internet portal provides an overview of current
issues provides an opportunity to discuss topics with
exchange issues, events and statistics:
competent and experienced speakers and to exchange
www.deutsche-boerse.com > Listing
experiences with other market participants.
Deutsche Börse publications
German Equity Forum
Receive regular information by subscribing to the
At this leading information and networking platform
publication of your choice free of charge:
in the equity financing arena, German and international
investors meet companies wishing to bolster their
IPO Guide:
equity base. The companies present their business
comprehensive manual on going and being
model, products and prospects. At workshops, market
public, including a CD-ROM with the main
participants also discuss current issues surrounding
capital market laws
equity financing and going public.
vision & money:
customer magazine covering current capital
Up-to-date information on event dates and locations
market issues
can be found at www.eigenkapitalforum.com
facts & figures:
Deutsche Börse Spotlights
Circulars:
This series of industry-specific events for listed com-
official bulletins from Deutsche Börse, e.g. with
monthly statistics on market segments
panies, pre-market companies and institutional inves-
information on changes to listing particulars
tors focus on the high-tech engineering, software & IT,
or to rules and regulations
and life sciences sectors. Further industry initiatives
are to follow.
Your contact at Deutsche Börse
Issuer Relations Hotline: +49-(0) 69-2 11-1 88 88
Investor Guide
Here, you have online access to around 2,000 addresses
and contact details of institutional investors and asset
managers from 18 countries. The investor data can be
sorted using specific criteria, and are regularly updated.
www.deutsche-boerse.com > Listing > Being Public
> Products and Services > Investor Guide
E-mail: [email protected]
Deutsche Börse Group
Deutsche Börse is one of the most innovative exchange organizations and, yet possesses a considerable historic legacy. The exchange began in the 16th century as a regional marketplace. Today, it
is a transaction services provider using state-of-the-art technology to help issuers and investors
access global markets.
As the operator of FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange), Deutsche Börse
runs both EU-regulated and exchange-regulated markets. In addition to trading shares, bonds, mortgage bonds and debt instruments derivative products also plays an important role.
Deutsche Börse Group is the only fully integrated ex-
Central counterparty (CCP)
change organization worldwide. It offers its customers
On the equity and derivatives market, the CCP increases
one-stop access to all relevant services and systems:
security for trading participants and allows a cost-effective
netting of transactions.
Xetra ®
One of the world’s most powerful trading systems for
Indices
the cash market bundles liquidity from a network
DAX®, MDAX®, SDAX®, TecDAX®, GEX® etc. increase the
spanning 18 countries. At peak times, Xetra proce-
investor appeal of listed companies.
sses more than 260,000 trades a day.
Clearstream
Eurex
The subsidiary of Deutsche Börse is Europe’s leading
The Deutsche Börse subsidiary, is the world market
organization for post-trading services.
leader for trading and clearing futures and options.
Eurex has a global distribution network with over
Deutsche Börse Systems
400 participants in 18 countries. The derivative prod-
and Clearstream Services
ucts traded on this market, such as stock options,
The subsidiaries of Deutsche Börse develop, build and
index futures, and futures and options on exchange-
operate the technical infrastructure of Deutsche Börse
traded funds, provide additional liquidity for the
– and of 15 other exchanges worldwide.
underlyings on the equity market.
Published by
Deutsche Börse AG
60485 Frankfurt/Main
Germany
www.deutsche-boerse.com
October 2005
Order number: 9010-2000
Disclaimer
This brochure is published for information purposes only. The publisher assumes no liability for
its completeness and accuracy. No liability is assumed by the publisher for information contained
in the brochure relating to stock exchange listing, admission to trading and subsequent ongoing
requirements. Information contained in this brochure does not constitute any form of legal advice.
Legally binding are solely the relevant legal and exchange regulations.
DAX ®, FWB ® Frankfurter Wertpapierbörse, GEX ®, MDAX ®, SDAX ®, TecDAX ® and Xetra ® are registered
trademarks of Deutsche Börse AG.