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Frankfurt Stock Exchange Listing Requirements

Please note that these listing rules are only a summary and it is important to understand that there are other ‘unwritten’ listing rules and requirements as well which are not published by the London Stock Exchange. As such, the rules and requirements provided herein are a summary of the written London Stock Exchange listing requirements and should only be relied upon in conjunction with a specialized London Stock Exchange Main Market listing partner like GPP and its law firms.

Introduction

In Europe, there are two types of capital stock markets:

1. EU-regulated markets and;

2. Markets regulated by the stock exchanges themselves.

The Frankfurt Stock Exchange (Deutsche Börse) offers access to both the Regulated Market and the Regulated Unofficial Market (Open Market). The Regulated Unofficial Market is also referred to as the exchange regulated market because, as the name implies, it is regulated only by the Frankfurt Stock Exchange itself. Within the regulated market and the regulated unofficial market, there are three listing segments which serve the different needs of issuers and investors. The three segments beginning with the segment with the simplest requirements are as follows:

Regulated Unofficial Markets (exchange regulated and governed by private law):

1. Quotation Board (now only for dual listings for companies already listed on a “like exchange”

2. Entry Standard (note that admission to the First Quotation Board for primary listings has been closed permanently)

EU Regulated Markets (based on the European Union transparency standards):

3. General Standard

4. Prime Standard

Listing and Ongoing Requirements Summary

Please note that the rest of this document includes only the general issuer qualification requirements, not the technical requirements, which are considered proprietary property of our firm. This document is only a guideline and listing requirements are subject to change without notice.

I. Quotation Board

The Quotation Board is only for dual listings for companies already listed on a stock exchange considered a “like exchange” by the Frankfurt Stock Exchange.

II. Entry Standard Segment

The Entry Standard segment is the entry level segment for primary (first/only) listings on the Frankfurt Stock Exchange. The following are the general requirements for listing the Issuer on the Entry Standard segment of the Frankfurt Stock Exchange Regulated Unofficial Market (Exchange Regulated Market), hereinafter “Frankfurt Stock Exchange” plus XETRA:

• Minimum age of company—2 years

• Minimum 30 shareholders;

• Company must provide evidence of a minimum nominal capital of €750.000 (EUR or its equivalent in another currency at the exchange rate on the date of confirmation) paid-in-capital and the nominal value of the shares must not be less than €1.00 (one euro);

• 10% minimum free float shares • Audited financials (National GAAP or IAS/IFRS US-GAAP, et. al.), prepared locally, for the year prior three years, or less if the company is not three years old;

• Approved Prospectus

• And other listing documents, forms and requirements.

• Our law firm, FSE Law GmbH (www.fselaw.com), conducts all of our listings and prospectuses.

Estimated Time to Listing—Approximately 24 weeks.

IMPORTANT:

The Frankfurt Stock Exchange Entry Standard is an extremely high quality entrance level stock exchange and, as such, the approval process is very much a case-by-case basis. Companies wanting to list on the Frankfurt Stock Exchange should consider the following unwritten requirements:

• Typically, we recommend that the company have at least €25,000,000.00 in revenues, but there is no requirement as such;

• The company should be profitable; • The company should have strong 5-year revenue and net profit growth prospects;

• The company should be operating in an industry that has strong growth prospects;

• The company’s financial audit should be completed by a top 5 or 6 auditing firm;

• The company should have a very good website, business plan and other corporate documents which present the company in the most favorable light possible. The company must put its best foot forward, not only for the exchange, but also for potential investors;

• If a company CEO travels to meet with the decision makers at the Frankfurt Stock Exchange and can convince them that they are a great company with great prospects, then such company might be approved with very little revenues and/or profits. Again, the approval or denial by the stock exchange is on a case-by-case basis.  

II. General Standard Segment

The following are the general requirements for listing the Issuer on the General Standard segment of the Frankfurt Stock Exchange EU Regulated Market (hereinafter “Frankfurt Stock Exchange”) plus XETRA.

• Minimum age of company—3 years (exemptions possible);

• Minimum issuing volume—minimum market capitalization of €1.25 million;

• Minimum 30 shareholders;

• Equity capital minimum of €1.25 million (cash at some time in past or present);

• Free float minimum of 25%;

• Nominal issuing volume minimum of 10,000 shares;

• EU Prospectus (underwritten by company + bank/FWB-member);

• 3 years audited financials—IAS/IFRS (or adequate for Non-EU issuers);

• And other listing documents, forms and requirements.

• Our law firm, FSE Law GmbH (www.fselaw.com), conducts all of our listings.

Estimated Time to Listing—Approximately 28 to 32 weeks.

III. Prime Standard Segment

The following are the general requirements for listing the Issuer on the Prime Standard segment of the Frankfurt Stock Exchange EU Regulated Market (hereinafter “Frankfurt Stock Exchange”) plus XETRA.

• Minimum age of company—3 years (exemptions possible);

• Minimum issuing volume—minimum market capitalization of €1.25 million;

• Minimum 30 shareholders;

• Equity capital minimum of €1.25 million (cash at some time in past or present);

• Free float minimum of 25%;

• Nominal issuing volume minimum of 10,000 shares;

• EU Prospectus (underwritten by company + bank/FWB-member);

• 3 years audited financials—IAS/IFRS (or adequate for Non-EU issuers);

• And other listing documents, forms and requirements.

• Our law firm, FSE Law GmbH (www.fselaw.com), conducts all of our listings.

Estimated Time to Listing—Approximately 28 to 32 weeks.