The Frankfurt Stock Exchange is divided into 4 tiers called “segments”, as follows:
- Quotation Board (dual listings only)
- Entry Standard
- General Standard
- Prime Standard
Effective in 2012, the “Quotation Board” (formerly the Second Quotation Board) is available for dual listings only and the First Quotation Board segment is closed to new admissions.
The “Entry Standard” is the segment with the least stringent reporting requirements and the Prime Standard is the segment with the most stringent reporting requirements. Moving up through the segments is relatively seamless (compared with a graduation from the OTCBB to the NASDAQ in the US, for example) since all of the segments are part of the same Frankfurt Stock Exchange.
There are two types of capital stock markets in the European Union:
1. EU-regulated markets (the “Regulated Market”) which, as the name implies, is regulated by EU law and;
2. Self Regulated Markets (the “Regulated Unofficial Market”), which are regulated by the stock exchange itself, and governed by private law rather than EU law.
The Quotation Board (dual listings) and the Entry Standard segments belong to the Regulated Unofficial Market while the General Standard and Prime Standard segments belong to the Regulated Market. The Regulated Unofficial Market is also sometimes referred to as the Exchange Regulated Market or, more commonly, the ‘Open Market’ because it is self-regulated by the Frankfurt Stock Exchange, rather than by the EU.
Regulated Unofficial Markets:
- Quotation Board
- Entry Standard Segment
EU Regulated Markets (based on the European Union transparency standards):
- General Standard Segment
- Prime Standard Segment
Many companies enter the market on the Entry Standard with the goal of graduating to the General or Prime Standard segments, once they qualify.