Listing process Regulated Market

Listing process Regulated Market Prime Standard


The public offering of securities, for instance at an IPO, requires a securities prospectus to be published. This prospectus shall enable the future investory to gain a picture of the securities offered and the company and to decide on their investment based on this information.

Briefly, you have to do the following:

  • Prepare a prospectus in cooperation with the issuing bank and, if need be, legal counsels and certified accountants
  • Submit the prospectus at “Bundesanstalt für Finanzdienstleistungsaufsicht“ [German Federal Agency for Financial Market Supervision] for approval
  • Publish the approved prospectus prior to the start of the public offering or the admission to stock exchange trading, respectively

Legal basis for the prospectus

As a rule, pursuant to the regulations of the Wertpapierprospektgesetz [WpPG, German Securities Prospectus Act] and the Börsengesetz [BörsG, German Stock Exchange Act] public offerings of securities or the admission of securities to trading on an organized market require a prospectus. Existing exemptions from this obligation, which the regulations provide for, are specifically described in the respective law and mean the exception from the rule. The prospectus is an information document and has to contain the legally regulated information which is necessary to put the investors in a position where they can form a true opinion about the securities they are offered and, above all, about the risks connected to these securities.

The legal basis for requiring a prospectus for public offerings can be found in Sect. 3 WpPG for securities offered to the domestic public (Paragraph 1) or for securities to be admitted to trading at a domestic organized market (Paragraph 3). Pursuant to Sect. 2 No. 4 WpPG any communication to the public, irrespective of its form or the kind or way it is communicated, is considered a public offer as long as such communication contains adequate information about the offer conditions and the offered securities, so that an investor may be put in the position to decide on the purchase of or subscription for these securities. The exemptions set forth in the WpPG which do not require the publication of a prospectus are of merely minor importance for practical use as well as for the case of a classical IPO as described here; they may, however, be important for future corporate actions.

Regarding the admission of securities to trading on a Regulated Market Sect. 32 Paragraph 3 Börsengesetz (BörsG) refers to the WpPG and demands submission of a prospectus which was approved of pursuant to the regulations of the Wertpapierprospektgesetz (WpPG).

Approval of the prospectus

Bundesanstalt für Finanzdienstleistungsaufsicht
Lurgiallee 12
D-60439 Frankfurt am Main
Telephone: +49 (0) 2 28-41 08-0
Fax: +49 (0) 2 28-41 08-15 50

The prospectus has to be submitted to the agency in single execution as original document bearing signature and accompanied by an application letter. If the approval of the document is not applied for by the company itself, the application letter has to be accompanied by an adequate power of attorney. More detailed information on the application letter’s contents and additional necessary records you can find, for instance, in the brochure “Der Wertpapierprospekt“ [“The Securities Prospectus”] published by the BaFin.

The supervisory authority will decide on the prospectus’ approval after having completed an integrity review of the prospectus, including a review on the coherence and comprehensibility of the submitted information, Sect. 13 Paragraph1 WpPG. The integrity has to be answered to the positive if the prospectus contains the minimum data required by the Prospektverordnung [Prospectus Resolution (EC)] as well as further components required by law (e. g. certain warning notices in the summary). However, the BaFin does not perform any checks on the prospectus’ contents in excess of the aforementioned reviews; therefore, a prospectus approved of by BaFin may be erroneous all the same. This means that claims arising from prospectus liability pursuant to Sect. 21 WpPG may be enforced in spite of the approval.

As provided by law, the BaFin has to decide on the application for approval within ten working days following receipt of the prospectus, Sect. 13 Paragraphs 2, 3 WpPG. The period of time is prolonged to twenty days, if the public offer refers to securities of an issuer whose securities have not yet been admitted to trading on an organized market situated in a state of the European Economic Area and if the issuer has never before made a public offering of securities by means of an IPO. According to the wording of the respective regulation, the time periods described above will start no sooner than upon submittal of a complete prospectus.

In practice, the issuer and the issuing bank or cooperating law firms usually will receive about two to three weeks after the first submittal of the prospectus remarks by the BaFin regarding the submitted version of the prospectus. After the document has been revised and a second version has been submitted to the approval authority, there might be further comments of the BaFin. Thus, the actual processing time at the BaFin largely depends upon the quality of the document submitted as well as upon the complexity of the circumstances concerned. It seems advisable to contact the approval authority already at an early stage in the course of the IPO-time schedule, in case of ambiguities regarding the necessary contents of the prospectus even prior to the preparation of the document.

After the approval, the prospectus has to be deposited at the BaFin and has to be published prior to the start of public offering, see Sect. 14 WpPG. The publication of the prospectus is a requirement for the legitimacy of the public offer. Additionally, the publication of the prospectus also is a requirement for the securities being admitted to the Regulated Market.

Publication of the prospectus

There are various options for publishing the prospectus, Sect. 14 WpPG. The prospectus may be printed in a newspaper which meets the requirements of Sect. 14 Paragraph 2 No. 1 WpPG; however, in view of the complexity of such document this option does not appear actually feasible. Alternatively, the prospectus may be kept as hard copy for free-of-charge distribution either at the stock exchange where the respective securities are to be admitted at the issuer’s offices, at the issuing bank or at the paying agents. Another option is the publication of the prospectus on the websites of the issuer, the issuing banks or the paying agents or on the homepage of the stock exchange, where the securities are to be admitted for trading. In case of a publication on the internet the issuer or issuing bank has to provide a free-of-costs hard copy upon request. The issuer has to communicate place and date of the publication immediately to the BaFin.

Contents of the prospectus

The necessary minimum contents of the prospectus is determined exactly by the EU-Directive on Prospectuses 2003/71/EC, the Regulation EC No. 809/2004 (Prospectuses Regulation) and the WpPG. Pursuant to the general provision of Sect. 5 Paragraph 1 WpPG the prospectus has to be written in an easily analysable und comprehensible manner and has to contain any information regarding the issuer and the securities required by the investing public to gain a true opinion on assets and liabilities, the financial situation, profits and losses, the issuer’s prospects for the future as well as the rights connected to the securities. The choice of wording has to allow for an easy understanding and evaluating of the information given on the issuer and the securities. The chart below gives an example for the composition and corresponding bulletins of a prospectus prepared in the course of an IPO:

Table of Contents

Prospectus Summary

Risk Factors

General Information

The Offer

  • Reasons for the Offer
  • Application of Issuing Proceeds
  • Issuing Cost
  • Third-Party Interests in the Issue

Information on Securities

  • Income and Dividend per Share Performance
  • Dividend Policies
  • Dilution

Information on the Issuer’s Financial Situation

  • Capital Resources, Debt Position and External Financing Requirements
  • Selected Financial Information
  • Explanation and Analysis of the Property, Financial and Profit Situation

Information on the Issuer’s Business Situation

  • Market and Industry Survey
  • Regulatory Environment
  • Business Activities

General Information on the Company

  • Information on the Company’s Assets and other Significant Provisions from its Articles of Association
  • Company Bodies and Employees
  • Shareholders Structure (prior to and after Performing the Offer)
  • Transactions with and Legal Relationships to Associated Persons

Taxation in the Federal Republic of Germany

Financial Part


Latest Development and Prospects

In practice, the prospectus for stock issue consists of one single document. The contents of some of the bulletins above will be explained briefly below. Please note that the following description shall serve merely for simplistic orientation and is by no means appropriate as only base for preparing a prospectus. In any case, details should be discussed with the competent department at the BaFin.

  • Summary:
    The summary contains all the core statements in abbreviated form including the risk factors.
  • Risk Factors:
    Here the relevant risks have to be explained which relate to the issuer, the issuer’s industry and the securities to be offered and/or admitted to trading.
  • Information on the Issuer and the Securities:
    The information on the issuer and the securities form the focus of the prospectus. Their actual description depends on the company’s individual particularities. In case of a holding or a start-up company, for example, the structure needs to be considered, above all, in the explanation of the actively operating group companies or the company history.
    Regarding the issuer, in addition to a description of its corporate circumstances (information from the commercial register including equity in subsidiaries and articles of association) also the company’s bodies and their members as well as information on the employees have to be included in the prospectus. The statements on business activities encompass a description of the core activities displaying significant products and services with indication of the sales volume, which has to be itemized in a certain manner; they also encompass important tangible assets as well as the dependency on patents, licences or significant contracts. Also, the market and market environment and the competitor environment of the company are explained. Finally the group of companies as a whole is described. Statements on the issuer’s capital resources, debt position and external financing requirements have also to be disclosed in the prospectus; the same applies to information about its existing shareholders, the shareholder structure (prior to and after the securities offer) and the existing controlling relationships, if any. In addition, statements on the income and dividend per share performance as well as the issuer’s dividend policy have to be included. Information on transactions with associated persons has to be described in the prospectus. Besides the explanation of selected financial information, independent of the prospectus’ financial part (see historic financial information), the property, financial and profit situation of the latest three business years has to be discussed.
  • Public Sales Offer:
    Information on the public sales offer, the reasons for such offer and the application of the issuing proceeds are to be included in the prospectus. Besides the time schedule for the public offer, among these are especially information regarding the number of offered stock, the nomination of the offering price or the price spread, respectively, as well as the offer period. The prospectus will also contain statements on the intended stock exchange listing and the expected start of quotation. There are statements on possible stabilisation measures, surplus or “greenshoe”-options. Finally market protection agreements, if any, have to be disclosed and a paying agent and a custodian have to be named.
  • Historical Financial Information:
    The issuer’s Annual Financial Statements for the precedent three business years have to be printed in the prospectus. In addition, there might be the obligation to insert an interim report, if this is necessary in order to achieve meaningful financial information, so-called pro-forma financial information. German issuers might be under the obligation to insert, in addition to the Annual Consolidated Financial Statements prepared in compliance with international accounting principles, also their individual financial statement pursuant to HGB [German Commercial Code] in order to meet the requirements regarding information for the assessment of dividend distribution.
  • Course of Business and Business Forecast:
    Here significant developments which took place since the latest historic financial information have to be described and a forecast on future business has to be given.
  • Formalities:
    Generally, the prospectus contains a cover sheet and starts with the table of contents. Depending on the industry, it might be helpful to add a glossary to the prospectus listing the industry’s technical terms. Essential elements of the prospectus are the explanation of taxing matters and finally the signatures of representatives of the issuer and the issuing banks involved.

Importance of the prospectus for admission to stock trading

As a rule, the publication of an approved prospectus is a requirement for the admission of securities to the Regulated Market. This means that the approval and publication of the prospectus obligatorily has to take place prior to the decision on admitting the securities to the floor. The prospectus, stating the kind of its publication as well as the letter of approval by BaFin, has to be attached to the application for admission of securities to the Regulated Market.

The legal basis for this is set forth in sect. 32 paragraph 3 BörsG [German Stock Exchange Act], which refers to the WpPG [German Securities Trading Act] for the question of admitting securities to trading on a Regulated Market and demands submittal of a prospectus approved of and published pursuant to the regulations of the WpPG.

Prospectus liability

Formerly in Sect. 44 BörsG set out basis for claims resulting the prospectus liability is passed over to Sect. 21 WpPG; a simplified survey of the conditions leading to an application of this provision is given below:

The relevant fact causing this liability lies in the purchase of securities, which are admitted to stock trading, based upon an incorrect or incomplete prospectus.

As a rule, this liability is limited to those securities purchased as a result of the prospectus, which were admitted to trading, for example, in the course of the IPO. If other securities, which were not admitted due to the respective prospectus, can be distinguished by their features or in another way from those securities admitted due to the prospectus in question, there shall be no liability for these other securities from this prospectus, Sect 21 Paragraph 1 No. 2 Clause 3 BörsG.

The contractual purchase transaction has to be concluded within six months following the publication of the prospectus and the initial listing of the securities, irrespective of the fact if it is a first or a subsequent purchase.

The purchaser is entitled to reimbursement of the purchase price plus the usual costs connected to such purchase in turn for reassignment of the securities. If the purchaser does not hold the securities any longer, they may demand the difference amount between the purchase price and sales price including the costs usually connected with securities transactions. In both cases, the purchase price is limited by the initial offering price of the securities, Sect.21 Paragraph 2 Clause 1 WpPG.

As regards the characteristics “incorrect“ and “incomplete“, it has to be noted that the characteristic “incomplete“ is a subset of “incorrect”; therefore, an incomplete prospectus will always be incorrect, too. A prospectus is incomplete, if it fails to contain significant or mandatory information. Inclusion of all information required by the Prospectus Resolution does not mean, however, that the prospectus is actually complete. Rather, the prospectus will get close to these requirements if it allows the investing public, among other things, to gain a true opinion on the issuer and the securities, see Sect. 5 Paragraph 1 WpPG as well as the chapter „Contents of the Securities Prospectus“.

Pursuant to Sect. 21 Paragraph 1 WpPG, the incorrect or incomplete information has to be of significant importance for the evaluation of the securities. With consideration of Sect. 23 Paragraph 2 No. 2 WpPG significant information, by all means, is information which upon orderly inclusion in the prospectus would not have lead to a decrease of the securities’ stock exchange price.

However, the prospectus liability resulting from the BörsG does not apply, if the incorrectness or incompleteness of the prospectus was not caused by wilful intent or gross negligence, therefore, the faulty nature of the prospectus was not known and such absence of knowledge does not result from a specifically aggravated case of violation of due care, Sect. 23 Paragraph 1 WpPG. At this point, the competent IPO-underwriters gain importance who by means of prospectus preparation, submittal of legal and disclosure opinions by the legal counsels and comfort letters by the certified accountants will assist in building a legal defence and, if need be, contribute to a discharge from liability. As a rule, also the co-applicant of the application for the securities’ admission to the Regulated Market, who usually is among the IPO-underwriters, can be held liable within the scope of the prospectus liability resulting from the BörsG.

It needs to be observed that approval of the prospectus by the BaFin is no indication for correctness and completeness of the prospectus. In addition to the prospectus liability resulting from the BörsG, whose basic principles were explained above, further prospectus liabilities exist based upon the German Investment Act [Vermögensanlagegesetz – Kapitalanlagegesetz], the prospectus liability resulting from investment-related regulations and the prospectus liability provided by civil law. However, these kinds of prospectus liabilities shall not be discussed here.

Helpful information for securities issuers

Where can a prospectus be obtained?

The prospectus has to be published pursuant to Sect. 14 WpPG [German Securities Prospectus Act]. In most cases, it may be obtained as a hardcopy at the issuer or the issuing banks and as electronic document from the issuer’s website. In addition, the Bafin [German Federal Agency for Financial Market Supervision] maintains a data base („Hinterlegte Prospekte für Wertpapiere“ [Deposited Securities Prospectus]) from which prospectus’ may be accessed.


How long does a prospectus remain valid?

Pursuant to Sect.9 Paragraph1 WpPG a prospectus will be valid for a period of twelve months following its authorisation for public offers or admissions for trading at an organized market, if it is updated by necessary amendments, if any (Sect. 16 WpPG). In summary, the amendment serves the purpose of updating, however under certain circumstances also the purpose of correcting the prospectus by describing “any important new circumstance” or by correcting “any significant incorrectness”. In view of prospectus liability the amendment requirement ought to be checked diligently.


Basic information for issuers

Please find information regarding the legal basis, the components, wording and further matters concerning the topic prospectus compiled under ”Basic Information”.

Contact Person

BaFin Bundesanstalt für Finanzdienstleistungsaufsicht,Referat PRO1

Telephone: +49-(0) 228-41 08-0

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