Frankfurt Stock Exchange (FSE) Why list on the Frankfurt Stock Exchange?

By: Publisher 02-22-11

Founded over 400 years ago,The Frankfurt Stock Exchange "International Stock Exchange" With more international listings than any other stock exchange, the Frankfurt Stock Exchange is the most internationally respected stock exchange in the world. Companies from more than 80 countries are represented on the Frankfurt Stock Exchange with more than 40% from North America, 31% from Europe (including Russia), 14% from Asia and 6% from Australia and Africa. As of the end of 2010, more than 65% of the total trades were from countries outside Germany, with more than 22% from US investors and more than 24% of from UK investors. The parent company of the New York Stock Exchange announced Tuesday February 15, 2011 that it plans to merge with the owners of the stock exchange in Frankfurt, Germany, a deal that would create the world's largest trading group if it wins regulatory and shareholder approval on both sides of the Atlantic.

Massive Trading Volume/Liquidity

Trades executed by international investors through Xetra, the Frankfurt Stock Exchange’s highly acclaimed electronic trading platform, have increased continuously in recent years.  Last year, in 2010, 1.32 trillion Euros traded on the Frankfurt Stock Exchange, an increase of 16 percent over 2009! In just December 2010, 14.6 million transactions were executed through Xetra, a huge increase of 39 percent over December 2009.

Access to Investor Capital

The Frankfurt Stock Exchange receives massive exposure to investor capital with greater than 250 international trading institutions and more than 4,500 traders worldwide. Investors directly connected to trading on the Frankfurt Stock Exchange represent a full 35% of the world's investment capital.

Growth of the Frankfurt Stock Exchange

More than 17 million trades were executed through Xetra, with total trading volume of over 100 billion Euros in the month of November 2010 with more than 113 billion Euros traded on both Xetra and on the floor at the Frankfurt Stock Exchange, a full 18 percent increase over the prior year. In the month of December 2010, 92.9 billion Euros traded on the Frankfurt Stock Exchange. This order book turnover is up 14 percent compared to from December of 2009. In the year 2010, 1.32 trillion Euros traded on the Frankfurt Stock Exchange (an increase of 16 percent compared to 2009). In just the month of December 2010, 14.6 million transactions were executed through Xetra, which was a huge 39 percent increase over December 2009. Based on our experience, this growth trend is very likely to continue in the coming years.

 Fun Frankfurt Facts

Frankfurt Stock Exchange statistics as of Jan, 2011

    * Total companies listed on the Frankfurt Stock Exchange: 11,877
    * German companies listed on the Frankfurt Stock Exchange:  1,082
    * US companies listed on the Frankfurt Stock Exchange:  3,451
    * Total companies listed on the OTCBB:  2,896
    * Canadian companies listed on the Frankfurt Stock Exchange:  1,622
    * Chinese and Hong Kong companies listed on the Frankfurt Stock Exchange:  534
    * UK companies listed on the Frankfurt Stock Exchange:  563
    * Australia companies listed on the Frankfurt Stock Exchange:  588
    * Indian companies listed on the Frankfurt Stock Exchange:  30
    * Japanese companies listed on the Frankfurt Stock Exchange:  535
    * French companies listed on the Frankfurt Stock Exchange:  241

 Not-so-Fun Facts About the OTCBB  

 
    * There are more US companies listed on the Frankfurt Stock Exchange than there are total companies listed on the OTCBB(3,451US companies listed on the Frankfurt Stock Exchange vs only 2,896 total companies listed on the OTCBB)
    * Market makers per security in the OTCBB has gone from an average of 6.8 per company in 2009 to only 2.32 per company in 2010. That’s more than a 65% drop in the market makers stock coverage in only 1 year. This is not good.
    * In 2009, there were 3,535 companies trading on the OTCBB.  In December 2010, there were only 2,896.  A drop of almost 20% in only one year.
    * Progress?...there were more companies trading on the OTCBB in 2002, than there are today, in 2011, nine years later. Compare this decline to a massive growth of a full 39% in the Frankfurt Stock Exchange trading volume in only one year from December 2009 to December 2010.

Update JUNE 1st 2011, Penson Crack Down on Stock Prices Accepted Cause Companies Upheaval Penson Implements a $.10 Rule for Stock Clearing

 On June 1, 2011, Penson released a new policy whereby they will be restricting deposits of shares of any kind, whether they are made by physical certificate, DWAC, DRS (Direct Registration System) or ACAT. Penson will no longer accept deposits of equity securities traded on the Pink Sheet or OTC Bulletin Board markets priced below $0.10. The amount of companies affected could be staggering. This also affects a great deal of the 284 brokerage firms that clear through Penson, but not all since some will be able to clear depending upon status of accounts with Penson. Penson reasoned that somehow stocks at these low prices were more suspect to fraudulent activity than higher priced stocks. Penson related their reasoning as:

“Also, the regulatory community has recently become more focused on the deposits of physical certificates, particularly those that trade on the Pink Sheets or OTC Bulletin Board. The securities industry has experienced a significant spike in fraudulent transactions related to reduced valuations or non-existent or fraudulent transfer agent services for sub-penny securities. In addition, the potential for the use of these types of securities for money laundering or investor fraud are also of serious concern. As a result, the regulators have increased their scrutiny of transactions in these types of securities.” Interestingly, Penson does not name any of the supposed “Regulators” who have these concerns. None the less, Companies below, or even near this price point now find themselves at ultimate risk. Having a public trading market that many of their shareholders can not utilize. They can not sell or even deposit their legitimate shares of companies they invested in. While they can try to “broker shop” the solution very well is at the Company level. The Dreaded R Word Solution While no one wants to contemplate being forced into a reverse division of their outstanding shares, the actions of the market, and in this case the actions of a clearing firm, can force this solution on a company. Reverse divisions (splits) should be done when there are strategic reasons to do so. The actions like Penson took as to stock prices just made that decision a lot easier for companies to make. Expansion of your business operation on a national level is a good reason. There are others reasons and movements of some of your subsidiary businesses or new business relations that I am sure exist, would be adequate and solid reasons to declare a reverse.

A stock reverse is a function of state law. In some states (Delaware for instance) it takes a shareholder approval which could necessitate an expensive and untimely shareholder meeting. For these companies control of the share voting power is therefore essential. While in other States it is a matter of board resolution (Florida, Nevada). Articles of incorporation or bylaws also have to allow for reverse divisions. There are numerous matters that have to be completed during this process. The process should take 30 to 45 days on the outside to complete all matters. The most important factors are a law firm who works through the list of to dos and a clearing agent with a good relationship and responsiveness. FINRA is responsible for the action of the shares being reflected on the market to show the reverse. They are also in charge of approval of all of the paperwork which they issue for this, and for the giving of a new stock symbol as applicable. Working closely with FINRA is essential by the transfer agent and to make sure that all documents going to them are correctly done, and supplied in a timely fashion. The numerous items that have to be completed include: 1) getting a new Cusip for the new post-reverse shares 2) having the transfer agent involved to do the transfer agent notification form, and other documents to FINRA, 3) having a cover letter completed with a complete corporations history 4) having the transfer agent make sure there are sufficient stock available, 5) supplying FINRA with the issuer form, along with notarized copies of the corporations standing documents from the State, notarized articles of incorporation from the State, notarized resolution by the board of directors for the reverse, and notarized shareholder approval document if required. The matter must be announced by a press release and/or an 8-k, which would be positive in message stating why the strategic reason was made for the reverse. In this instance, it is to allow shareholders to trade the stock. And just how many stocks really should be below $.10 per share anyway. The timing for completion should be within 30 days. Under FINRA rules you have to give them at least ten days notice before execution. The execution date will actually be dictated by FINRA when they choose to effect it. Usually they only give one day’s notice, usually at about 2-3:00 EST that the reverse will be effective the next day at the start of trading, so you should have a canned press release ready to issue at a moment’s notice the afternoon you get the word on the effective date for the next day’s trading. Securus attorneys have completed many reverses for companies and may be able to help yours.

To find out more, plus benefits in getting your company listed on the Frankfurt Stock Exchange. Contact LevelStock.com  pmurray@levelstock.com today. The Frankfurt Stock Exchange is your next step to list.