1.    Introduction

At its meeting on 3 July 2024, the Exchange Council of the Frankfurter Wertpapierbörse (FWB^®, the Frankfurt Stock Exchange) decided on amendments to the Exchange Rules for the Frankfurter Wertpapierbörse (Exchange Rules) which will come into force on 11 July 2024. 

The amended rules and regulations including the amendment ordinances are published on the Xetra website www.xetra.com under the following link: Rules & Regulations.

With this circular, we would like to inform you about the most important aspects of the changes.

2.    Required activities and notes

We recommend that you familiarize yourself with the changes that will come into force on 11 July 2024.

3.    Details
 
The amendments to the Exchange Rules affect the application procedure for the admission of securities to trading in the Regulated Market (eligibility to apply in the General Standard and Prime Standard; subject of admission in the Prime Standard). In addition, there are changes with regard to the submission deadline (creation period) of the annual financial report in the event of new admission to the Prime Standard and with regard to the transmission format for the annual financial report. The amendments also affect the provision of collateral required by the exchange.

a) Co-Applicants
 
The Future Financing Act has opened up the possibility for stock exchanges to waive the so-called Co-Applicants (credit institutions, financial services institutions, securities institutions or companies operating pursuant to § 53 (1) sentence 1 or § 53b (1) sentence 1 of the Banking Act that are admitted to a domestic securities exchange with the right to participate in trading and have liable equity in the equivalent of at least EUR 730,000) for the admission of securities to the Regulated Market (General Standard) (§ 32 (2a) of the Stock Exchange Act).

FWB is making use of this to reduce costs and effort for issuers and to align the admission procedure with the European standard. In future, the application for the admission of securities to trading in the General Standard will have to be submitted solely by the issuer (§ 45 (1) Exchange Rules (new version)).

The amendment does not affect the possibility of legal representation of the issuer. It is therefore still possible to represent the issuer by authorising a third party (e.g. group company, service provider, bank, consultant, law firm).

The omission of the co-applicant does not apply to the admission of shares and certificates representing shares to trading in the Prime Standard. The application for admission requires a co-applicant (§ 48 (1) Exchange Rules (new version)). 

Applications – for both the General Standard and the Prime Standard – will continue to be submitted electronically via the eListing platform.

b) Admission of classes

In order to make the admission procedure for issuers more efficient and cost-effective in the Prime Standard as well, the admission of shares and certificates representing shares will in future take place as an admission of class (§ 48 (1), (2), (4) Exchange Rules (new version)). Shares and certificates representing shares that are already admitted to the Prime Standard before 11 July 2024 are considered to be admitted as a class.

In the General Standard, the legally required admission of definitive securities remains. Therefore, issuers of admitted shares and certificates representing shares are still obliged to admit all shares of the same class issued later (§ 40 Stock Exchange Act, § 69 Stock Exchange Admission Ordinance).

c) Extension of the deadline for submission of the annual financial report in the year of admission to the Prime Standard

The four-month period for submitting the issuer's annual financial report is extended to five months once in the year of admission (§ 51 (2) sentence 2 of the Exchange Rules (new version)). The five-month submission period only applies to the issuer whose shares are admitted to the Prime Standard in the first four months after the end of its financial year (= creation period). For admissions to the Prime Standard outside the above-mentioned period and for all subsequent reporting periods, the four-month submission deadline for the annual financial report remains unchanged.

The extension of the deadline takes appropriate account of the considerable time and resource commitment at the issuer in the year of the IPO. At the same time, the retention of the obligation to submit an annual financial report in the event of admission during the creation period prevents transparency gaps from arising.

d) Deletion of the requirements on the transmission format

The references in the Exchange Rules to regulatory requirements for the European Single Electronic Format (ESEF) will be deleted without replacement (deletion of § 51 (1) sentences 2 to 4 Exchange Rules). Due to the fact that the requirements of the EU Transparency Directive have now been transposed into the national law of the EU member states, an additional reference in the Exchange Rules is not required.
 
In the future, issuers will again be able to publish their annual financial reports in a single (. PDF) file.

The provision on language requirements for financial reports (§ 51 (1) sentences 5 and 6 Exchange Rules (old version)) remains unchanged (§ 51 (2) sentences 2 and 3 of the Exchange Rules (new version)).

e) Discontinuation of exchange collateral

The provisions on the exchange collateral requirements pursuant to §§ 19-31 Exchange Rules will be deleted without replacement. Trading Participants will therefore not have to bear any additional capital costs for the provision of collateral for bilateral transactions in future. The Management Board of the FWB will contact the admitted companies concerned in order to return the collateral provided. 
 

Further information