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Disclosure and Transparency
Ongoing Requirements on Frankfurt Stock Exchange
Agenda
Overview
EU-regulated Markets:
General Standard
Prime Standard
Rule Enforcement
Exchange regulated Market: Entry Standard
Advantages of high transparency
1
Deutsche Börse Group, March 30, 2012
Overview
Overview
Established companies
with focus on international
investors
Entry-level segment for small-
and mid-cap as well as high-
growth companies
Companies with focus on
German investors
Market regulated by German
Stock Exchange (DBAG)
Governed by private law
Inclusion (listing) by Executive
Board of DBAG
EU-regulated Market
Governed by public law
Admission and introduction
(listing) by Board of
Management of FSE
Regula
ted U
noffic
ial
Mark
et
Regula
ted M
ark
et
Incre
asin
g T
ran
sp
are
ncy
FSE market segments and target companies
3
Deutsche Börse Group, March 30, 2012
EU-regulated Market: General Standard
EU-regulated Market: General Standard
General information:
Requirements are regulated by the Securities Trading Act (WpHG)
Have to be fulfilled towards public authorities
Monitoring and sanctioning is the sole responsibility of the Federal Financial
Supervisory Authority (BaFin)
In case of DRs: Issuer of underlying shares has to fulfil the reporting
requirements
Detailed information on the internet:
www.bafin.de > English > Companies > Listed companies
5
Ongoing requirements (1)
Deutsche Börse Group, March 30, 2012
Main requirements:
Annual financial reports, half-yearly financial reports and interim management
statements (§§ 37v-37y Securities Trading Act)
Publication language pursuant to § 3b Securities Trading Reporting and
Insider List Ordinance (WpAIV), German or English in most cases
Ad hoc disclosure (§ 15 Securities Trading Act)
Directors’ Dealings (§ 15a Securities Trading Act)
Insider lists (WpAIV)
Major holdings of voting rights (§ 21 Securities Trading Act)
Company takeovers (Securities Acquisition and Takeover Act (WpÜG))
6
Ongoing requirements (2)
Deutsche Börse Group, March 30, 2012
EU-regulated Market: General Standard
Reports - Accounting Standards:
IFRS, if issuer is obliged to prepare consolidated financial statements;
otherwise national GAAP
Instead of IFRS also accepted for consolidated financial statements are currently: US GAAP, Japanese GAAP On a temporary basis: GAAPs of China, Canada, South Korea and India (for financial years beginning not later than December 31, 2011)
7
Ongoing requirements (3)
Deutsche Börse Group, March 30, 2012
EU-regulated Market: General Standard
EU-regulated Market: Prime Standard
EU-regulated Market: Prime Standard
General information:
Requirements are regulated by §§ 50 – 54 Exchange Rules for the FSE (BörsO)
Have to be fulfilled towards FSE
Monitoring and sanctioning is the sole responsibility of FSE
Have to be met in addition to those requirements of General Standard
Detailed information on the internet:
www.xetra.com > English Version > Admission to trading > Rules and
Regulations for the FWB > Exchange Rules for the FWB
9
Ongoing requirements (1)
Deutsche Börse Group, March 30, 2012
Overview:
Annual financial reports
Half-yearly financial reports
Quarterly financial reports mandatory instead of interim management statements
Publication language of all financial reports both German and English,
issuers with registered offices outside Germany may prepare their statements
in English only
Financial Calendar of corporate action events
Analysts Meeting
Ad hoc disclosures also in English
10
Ongoing requirements (2)
Deutsche Börse Group, March 30, 2012
EU-regulated Market: Prime Standard
Reports:
Accounting standards as in General Standard
Annual financial reports shall be transmitted to FSE at the latest by 4 months
after the end of financial year in electronic form
Half-yearly financial reports and quarterly reports shall be transmitted to FSE
within 2 months of the end of the reporting period in electronic form
Electronic transmission is done via ERS – Exchange Reporting System
11
Ongoing requirements (3)
Deutsche Börse Group, March 30, 2012
EU-regulated Market: Prime Standard
Beginning of reporting obligation
As soon as the shares / DRs are admitted the issuer has the obligation to fulfil its
reporting obligations, e.g.:
Financial year of the issuer = calendar year
Admission date: March 30, 2012
First report to be transmitted electronically:
annual financial report for 2011
Deadline for transmission: April 30, 2012
12
Ongoing requirements (4)
Deutsche Börse Group, March 30, 2012
EU-regulated Market: Prime Standard
Excursus: ERS
Information according to §§ 50-54 BörsO has to be disclosed electronically via
Exchange Reporting System (ERS)
General information about ERS:
Deutsche Börse tool for follow-up obligations and IR since 2003
Interface for issuers
Issuer can either deliver his data directly or through a service provider
Data is then disclosed to the public through the website of Deutsche Börse at
very short notice
Detailed information about ERS on the internet
www.xetra.com > English Version > Listing > Being Public Services >
Exchange Reporting System
13
Ongoing requirements (5)
Deutsche Börse Group, March 30, 2012
EU-regulated Market: Prime Standard
Rule Enforcement
Rule Enforcement
The Board of Management of FSE is supervising the compliance of duties that
follow from the admission to the Prime Standard for the issuer.
If an issuer cannot fulfil the requirements in the time allowed, the admission can
be revoked.
Breaches of duties can be published by FSE.
Breaches of duties are reported to the Disciplinary Committee of FSE.
15
Board of Management of FSE
Deutsche Börse Group, March 30, 2012
Rule Enforcement
The disciplinary committee has the possibility to impose a reprimand or a fine if
the issuer breaches the duties he has due to his admission to the Prime Standard
Fine up to € 250,000
Malice or negligence
Composition of the disciplinary committee and proceedings of the disciplinary
committee are regulated in the regulations of the disciplinary committee (issued
by the Hessian Ministry of Economy, Transport and State Development).
In case of conflicts: recourse to administrative court.
16
Disciplinary Committee
Deutsche Börse Group, March 30, 2012
Exchange regulated Market: Entry Standard
Exchange regulated Market: Entry Standard
The applying participant has to ensure that the following facts and details are published on the website of the issuer:
Annual financial reports: Audited (consolidated) financial statements together with consolidated management report of the issuer according to national accounting principles (national GAAP) valid for the issuer or according to International Financial Reporting Standards (IFRS) within 6 months after the end of the reporting period
Interim report by the issuer within 3 months after the first half of each financial year
Disclosure of price sensitive information
Company profile – to be updated every year
Corporate calendar including all important dates such as the issuer‘s mandatory events (e.g. general meeting) of further activities (e.g. presentation to analysts or investor)
Contractual penalty or termination of inclusion in case of violations of obligations
18
Ongoing requirements
Deutsche Börse Group, March 30, 2012
Advantages of high transparency
20
Advantages of high transparency
Raises investor confidence
Higher investor visibility and analyst coverage
Higher stock liquidity and lower price volatility
Inclusion in selection indices of Deutsche Börse
Transparency
Liq
uid
ity
INSTITUTIONAL
INVESTORS
RETAIL
INVESTORS
Deutsche Börse Group, March 30, 2012
.
21
Average Quarterly Turnover Improvement
Advantages of high transparency Higher trading volumes*
3.16
7.57
0
2
4
6
8
Entry Standard Prime Standard
in €
millio
n 139,5 %
Improvement of
1.52
4.14
0
2
4
6
Entry Standard Prime Standard
In €
millio
n
Average Daily Trading Volume Improvement
Improvement of
Deutsche Börse Group, March 30, 2012
5.40
6.46
4.50
5.50
6.50
7.50
Entry Standard Prime Standard in €
millio
n
General Standard
Improvement of
Average Quarterly Turnover Improvement
0.59
5.48
0
2
4
6
Entry Standard Prime Standard
In €
millio
n
General Standard
Average Daily Trading Volume Improvement
5.22
5.90
4.80
5.00
5.20
5.40
5.60
5.80
6.00
Entry Standard General Standard
In €
millio
n
13.03 %
2.04
13.28
0
5
10
15
Entry Standard General Standard
In €
mil
lio
n
Improvement of High improvement
High improvement
Source: bloomberg, March 2011
* The data represents the mean values of transfers, in the period Jan. 2008 to Dec. 2011
172.35 %
19.62 %
46.38
60.71
0
20
40
60
80
Entry Standard General Standard
In t
ota
l
Average Quarterly Turnover Improvement Average Daily Trading Volume Improvement Average Daily Number of Trades Improvement
12.92
38.63
0
20
40
60
Entry Standard Prime Standard
Improvement of
Improvement of
30.58
62.50
0
20
40
60
80
General Standard Prime Standard
Average Daily Number of Trades Improvement
Improvement of
104.30 %
198.99 %
30.90 %
Average Daily Number of Trades Improvement