Regulation light - Germany's Entry Standard

On 25 October 2005, a new stock exchange segment was created in Germany: the Entry Standard of the Frankfurt Stock Exchange. The young stock exchange segment is particularly targeted at small companies and offers a smart way to get listed. London's famous Alternative Investment Market (AIM), which attracted 2,948 new firms from 1995 until 2007, served as a model. The Entry Standard, however, differentiates in many ways. It can be described as a typical "unGerman" creation. Only three pages of rules are sufficient to regulate the going and being public. The Entry Standard belongs to the so-called alternative stock markets, which are exchange regulated stock markets. Throughout Europe, stock exchanges have established these form of listing platforms in order to offer companies less regulation. Indeed, there is a demand for such platforms. Since State regulation is based on the 'one-size-fits-all' approach and there is a trend to introduce even more regulation, small companies regard the EU Regulated Market as overregulated. They are burdened with huge costs and administrative work to fulfil the requirements. The objective of this work is to analyse and evaluate the Entry Standard from multiple different perspectives. The analysis will focus partly on describing State regulation in Germany compared with exchange regulation and partly on analysing the success factors of the Entry Standard in comparison with not only the Regulated Market but also with the former Neuer Markt and other European exchange regulated markets. It will be shown that the creation of the Entry Standard brought about a paradigm shift. Exchange regulated markets can serve as important platforms to close the "equity gap" of small and medium sized companies.

Autorentext
Prof. Dr. Dr. Claudius Schikora; Professor an der Fachhochschule für angewandtes Management Erding für Unternehmensstrategie, Medienmanagement und Marketing; Unternehmer, Business Angel und Aufsichtsrat. Prof. Dr. phil. Andreas Beyer war bis Herbst 2003 Leiter des Instituts für Kunstgeschichte an der RWTH Aachen, ist seit 2009 Direktor des Deutschen Forums für Kunstgeschichte in Paris und hat jetzt die Professur Kunstgeschichte der Frühen Neuzeit an der Universität Basel inne.

Inhalt
1;Table of Contents;6 2;1. List of Illustrations;10 3;2. List of Abbreviations;12 4;3. Foreword by Alexander Dibelius;14 5;4. Prolog by Pierre Rafih and Claudius Schikora;16 6;5. Introduction;19 7;6. Theoretical Considerations on the Economic Necessity of Equity and Stock exchanges ;21 7.1;6.1 Equity: Concept and Functions;21 7.2;6.2 Stock Exchange: Concept and Functions;23 8;7. Theoretical Considerations on the Economic and Legal Necessity of Capital Market Regulation;27 8.1;7.1 Forms of Capital Market Regulation: Public- and Exchange- Orientated Regulation;29 8.2;7.2 Intensity of Capital Market Regulation;30 9;8. State Regulation of the Capital Market in Germany 8.1 Historical Development: the Emergence of the Unregulated Market at Germany's Stock Exchanges;33 9.1;8.2 The Exchange Segments under German Law;33 9.2;8.3 Legal Environment for Listed Companies under German Law ;35 9.2.1;8.3.1 An Overview of Capital Market Laws;35 9.2.2;8.3.2 The Central Components of Investor Protection and its Field of Application;36 9.2.3;8.3.3 Tightening in Obligations under Capital Market Law since 2005;60 9.2.4;8.3.4 Latest Act and Drafts;70 9.3;8.4 Empirical Studies on Capital Market Regulation;74 9.3.1;8.4.1 Experiences in the USA;74 9.3.2;8.4.2 Experiences in Germany;76 9.4;8.5 Appraisal of Regulation from the Perspective of Industry Practice;78 9.5;8.6 Analysis of Listings in Germany;81 9.6;8.7 Concluding Assessment of the Legal Environment for Small Caps;83 10;9. Overview of Market Segments of the Frankfurt Stock Exchange ( FSE);85 10.1;9.1 General Standard;85 10.2;9.2 Prime Standard;88 10.3;9.3 Open Market ;91 10.3.1;9.3.1 Organisation of the Open Market;91 10.3.2;9.3.2 Number of Companies Going Public and Appraisal of the Open Market;95 10.4;9.4 Entry Standard;101 10.4.1;9.4.1 Roles and Tasks of the Applicant;106 10.4.2;9.4.2 The Functions of the Deutsche Börse Listing Partner ( DBLP);109 10.4.3;9.4.3 Number of Public Offerings and Assessment of the Entry Standard;112 11;10. Entry Standard Positioning ;114 11.1;10.1 Comparison of IPOs and Company Profiles for Companies in the Entry Standard and Companies in the Prime Standard;114 11.2;10.2 Comparison of Entry Standard with Neuer Markt;117 11.3;10.3 Entry Standard Sector Analysis;119 11.4;10.4 Characteristics of a Typical Entry Standard Stock ( Quality of Firms);122 11.5;10.5 Investor Sentiment;123 11.6;10.6 Applicants;129 11.7;10.7 Going and Being Public Principles on Other Exchange Regulated Markets;129 11.7.1;10.7.1 AIM;130 11.7.2;10.7.2 Alternext;140 11.8;10.8 Shared Organizational Peculiarities of Exchange Regulated Markets;145 11.8.1;10.8.1 Organizational Characteristics of the Entry Standard as an Alternative Public Market;146 11.8.2;10.8.2 Functions of the 'Trust Intermediary' on Exchange Regulated Markets;146 11.8.3;10.8.3 Comparison between the Qualifications of Nomads, Listing Sponsors and Deutsche Börse Listing Partners;148 11.9;10.9 Comparison between Primary Market Liquidity on the AIM, Alternext and the Entry Standard;150 11.10;10.10 Comparison between AIM, Alternext and Entry Standard Stock Exchange Costs and Secondary Market Liquidity;152 11.10.1;10.10.1 Overview of Costs for Listed Firms;153 11.10.2;10.10.2 Summary of Comparison;160 12;11. Summary and Outlook;162 13;12. Appendix;167 14;13. Literature;170 15;14. CVs;200