Germany
| Jurisdiction | United Kingdom |
| Pages | 815-848 |
| Author | Raj Panasar,Philip Boeckman |
15
Germany
15.1 Listing Securities in Germany 15.01
15.1.1 e German stock
exchanges 15.01
15.1.2 e German Federal Financial
Supervisory Authority (BaFin) 15.03
15.1.3 Listing of shares on the
Frankfurt Stock Exchange 15.07
15.1.4 Legislative overview 15.25
15.1.5 Eligibility for listing 15.31
15.2 The Prospectus 15.39
15.2.1 Applicable law 15.39
15.2.2 Obligation to publish a
prospectus 15.42
15.2.3 Preparing a prospectus 15.52
15.2.4 Prospectus contents 15.70
15.2.5 e advertisement regime and
roadshow materials 15.77
15.2.6 Prospectus liability 15.80
15.3 Continuing Obligations 15.83
15.3.1 Applicable law 15.83
15.3.2 Disclosure and control of inside
information 15.92
15.3.3 Managers’ transactions 15.113
15.3.4 Periodic nancial reporting 15.115
15.3.5 Changes in shareholding
notications 15.126
15.3.6 Dissemination of other
information 15.134
15.3.7 Penalties 15.136
15.3.8 e German Corporate
Governance Code 15.139
15.1 Listing Securities inGermany
15.1.1 e German stockexchanges
Germany has a total of seven stock exchanges. e largest, the Frankfurt Stock Exchange
(Frankfurter Wertpapierbörse— the ‘FSE’), is administrated by Deutsche Börse AG and
its subsidiary Börse Frankfurt Zertikate AG. Deutsche Börse AG also operates, among
others, the European futures exchange, Eurex, and owns the clearing company Clearstream
Banking SA. e Stuttgart Stock Exchange is the second largest stock exchange in Germany.
e country’s oldest stock exchange (dating back to 1558)is the Hamburg Stock Exchange,
which merged with the Hannover Stock Exchange in September 1999 under the roof of a
holding company, BÖAG Börsen AG, which operates both exchanges. e remaining stock
exchanges are the Berlin Stock Exchange, the Munich Stock Exchange, the Düsseldorf Stock
Exchange, and the Bremen Stock Exchange (the latter being no longer an active exchange,
having transferred all its assets into a charitable trust).
Germany is also home to other securities exchanges, such as the Frankfurt- based Eurex,
which is a derivatives exchange and clearing house. Given its status as the largest stock ex-
change in Germany, this Chapter will focus on the FSE.
15.1.2 e German Federal Financial Supervisory Authority (BaFin)
e German Federal Financial Supervisory Authority (Bundesanstalt für
Finanzdienstleistung saufsicht— ‘BaFin’) is, among other responsibilities, the competent
15.01
15.02
15.03
816
authority in Germany for purposes of securities supervision, in particular under the German
Securities Prospectus Act (Wertpapierprospektgesetz— the ‘WpPG’) and the German
Securities Trading Act (Wertpapierhandelsgesetz— the ‘WpHG’). In addition, BaFin per-
forms various supervisory functions as the competent authority supervising securities stock
exchanges.1 Although the relevant stock exchange is nominally the competent authority
for granting admission to trading and listing of securities on a particular regulated market
in Germany,2 BaFin is responsible for reviewing and approving the prospectus as the sole
competent authority in Germany under Regulation (EU) 2017/ 1129,3 as amended (the
‘Prospectus Regulation’).4 Germany’s stock exchanges have no mandate under German law
to challenge a prospectus that has been approved by BaFin in the context of the admission of
securities to trading.
In preparation for a listing on the FSE, a company’s advisers, particularly its legal counsel,
are likely to be in close contact with BaFin regarding the review of the prospectus and the
timing of its approval; typically, the preparation of the prospectus is the most important
and time- consuming part of the process of listing securities on a regulated market. e
ability of an applicant and its advisers to maintain an amicable working relationship with
BaFin can be an important factor in achieving prospectus approval as prerequisite for a
public oer of securities and admission to trading and listing of securities on the FSE in
a timely manner.
In addition to its competences relating to the approval of prospectuses and prospectuses
for other forms of equity investments (such as shares of closed- end funds), BaFin super-
vises the trading of securities conducted on the German markets. BaFin’s key objectives
are to ensure the transparency and integrity of the nancial market and the protection of
investors. Its principal securities supervision functions are the following:(i) combating
of insider dealing; (ii) enforcement of ad hoc disclosure; (iii) enforcement of disclosure
of managers’ transactions; (iv) authorization and supervision of central counterparties
and monitoring of clearing of OTC derivatives; (v)prevention of market manipulation;
(vi) monitoring of disclosure requirements regarding major holdings of voting rights; (vii)
supervision of compliance with rules of professional conduct and organizational require-
ments; (viii) review and approval of corporate takeovers; (ix) enforcement of nancial
reporting; (x)supervision of nancial analyses (including analyst reports); (xi) supervi-
sion of domestic management companies of investment funds; and (xii) supervision of
the solvency of nancial services institutions. In the exercise of its mandate relating to the
approval of prospectuses, BaFin is authorized to demand the inclusion of additional infor-
mation in the prospectus.5
e stock exchange supervisory authorities of each of the German federal states are respon-
sible for supervising the orderly conduct of trading on Germany’s stock exchanges in accord-
ance with the German Stock Exchange Act (Börsengesetz— the ‘BörsG’).6 In particular, they
monitor the pricing process in collaboration with the exchanges’ own trading surveillance
1 See paragraph 15.06 below.
2 BörsG section 32.
3 Regulation (EU) 2017/ 1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus
to be published when securities are oered to the public or admitted to trading on a regulated market, and re-
pealing Directive 2003/ 71/ EC.
4 Prospectus Regulation Article 20 in connection with WpPG section 17.
5 WpPG section 17.
6 BörsG section 3(1).
15.04
15.05
15.06
817
units.7 ey are also responsible for the multilateral trading facilities (‘MTFs’) operated by
the individual stock exchanges. BaFin cooperates with the stock exchange supervisory au-
thorities in its role as Germany’s national stock exchange regulator.
15.1.3 Listing ofshares onthe Frankfurt StockExchange
15.1.3.1 Generalremarks
e FSE is by far the largest German stock exchange, processing approximately 90% of the
total share turnover in Germany. Indeed, based on total share turnover, the FSE is the second
largest exchange in Europe, second only to the London Stock Exchange.
Until the establishment of BaFin in 2002, the FSE was also the regulator of the German se-
curities industry, fullling many of the functions that are today performed by BaFin. e
FSE’s current role in connection with the admission to trading and listing of securities is
focused on the verication of the formal listing requirements contained in the BörsG and
the German Ordinance on the admission of securities to the regulated market of a stock
exchange (Börsenzulassungsverordnung— ‘BörsZulV’) and the granting of the formal admis-
sion to trading.
15.1.3.2 Market segments oftheFSE
15.1.3.2.1 Overview
When listing securities on the FSE, an issuer can choose between the two statutory market
segments:the Regulated Market (Regulierter Markt) and the Open Market (Freiverkehr).
Depending on the stringency of the continuing obligations regime that an issuer wishes,
or is able, to follow, it can choose between two standards of the Regulated Market:the
General Standard and the Prime Standard. Both of these benet from the advantages of
being an organized and, thus, EU- regulated market and require issuers to meet the min-
imum standards imposed by the applicable EU directives. Prime Standard issuers, how-
ever, must meet super- equivalent disclosure requirements set out in the Exchange Rules
for the Frankfurt Stock Exchange (Börsenordnung für die Frankfurter Wertpapierbörse—
the ‘BörsO FWB’).8
Unlike the Regulated Market, the Open Market is not an organized market under the
Prospectus Regulation and the Transparency Directive, but rather an unocial regulated
market segment, which is governed only by rules and regulations established by the FSE.9
Depending on the level of transparency requirements that issuers elect to comply with, the
Open Market segment is subdivided into three segments:Quotation Board, Basic Board,
and Scale. Basic Board and Scale, which were both established in 2017 as successors to the
former Entry Standard segment, aim to provide an alternative to EU regulated segments
for small and medium- sized companies seeking access to the capital markets. Issuers ad-
mitted to Scale (with simultaneous admission to Basic Board) must comply with a range of
post- admission disclosure obligations. e Basic Board allows issuers of the former Entry
7 On the trading surveillance unit see BörsG section 7.
8 See Section 15.2 below for an overview on the most important indices of FSE.
9 While the Open Market is not an EU ‘regulated market’, it is not an ‘over- the- counter’ market either, since it is
regulated by the FSE.
15.07
15.08
15.09
15.10
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