Deutsche Börse jumps on small-cap bandwagon
Norma Cohen, FT Syndication Service
LONDON: Three years after the Deutsche Börse closed its Neuer Markt for growing, high-tech companies, the Frankfurt-based exchange is once again seeking to attract small and medium-sized companies that want to list their shares in a lightly regulated market with lower costs than its main board.
The move comes just months after the Börse's Paris-based rival, Euronext, launched its own lightly regulated market for small and growing companies, Alternext, in response to the highly successful Aim market of the London Stock Exchange.
Late last month, Aim attracted its first primary listing from a German company, SQS Software.
A Börse spokesman recently insisted the latest efforts were not an attempt to resuscitate the Neuer Markt, which fell victim to the dotcom bubble and a series of scandals that repeatedly forced the exchange to raise reporting standards for companies listed there.
Instead, the Börse has created a new category of listing within its own newly renamed Open Market, which is regulated by the exchange itself rather than financial regulators.
The new category of listing, to be known as Entry Standard, will launch on October 25 and will have disclosure requirements higher than those of the Open Market but lower than those of the regulated market.
In particular, companies will not need to make price-sensitive disclosures to the entire market via a news service, unlike companies listed on the regulated sections of the Börse's list. Instead, they will be able to disclose them on their own company websites.
Companies listed in the Open Market -- where 5,700 to 5,900 equities listed are secondary listings for foreign companies -- do not need to make such disclosures at all.
"The Entry Standard is designed to appeal to small and medium-sized companies from all sectors, which aim to utilise the [exchange's] core functions as a regulated trading platform and to raise capital," the Deutsche Börse said.
Separately, the Deutsche Börse announced that its supervisory board has formally appointed Reto Francioni as chief executive, who will assume his new responsibilities "at the earliest possible date".
The company reiterated plans to return Euro1.5bn ($1.8bn) in capital to shareholders by the end of May 2007, including some Euro800m in 2005.