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Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange

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Page 1: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

Disclosure and Transparency

Ongoing Requirements on Frankfurt Stock Exchange

Page 2: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 3: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

Overview

Page 4: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 5: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

EU-regulated Market: General Standard

Page 6: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 7: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 8: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 9: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

EU-regulated Market: Prime Standard

Page 10: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 11: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 12: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 13: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 14: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 15: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

Rule Enforcement

Page 16: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 17: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 18: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

Exchange regulated Market: Entry Standard

Page 19: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

Page 20: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

Advantages of high transparency

Page 21: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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

.

Page 22: Disclosure and Transparency Ongoing Requirements … · Disclosure and Transparency Ongoing Requirements on Frankfurt Stock Exchange . Agenda ... Deutsche Börse tool for follow-up

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