Pursuant to Sect. 52 of the Exchange Rules for the Frankfurter Wertpapierbörse (BörsO FWB), all issuers in Prime Standard are obliged to prepare and transmit via electronic means their Half-yearly Financial Report in both German and English.

Sect. 52 BörsO FWB refers to Sect. 115 Paragraphs 2 to 4 of the German Securities Trading Act (WpHG) and in case of group reporting requirements to Sect. 117 No. 2 WpHG. Generally, Sects. 115 and Sect. 117 No. 2 WpHG require all domestic issuers, whose securities are admitted to the Regulated Market, to prepare and publish their Half-yearly Financial Report within certain time limits. Requirements regarding the language and publication modalities for the Half-yearly Financial Report pursuant to WpHG can be found in the German Securities Trading Reporting and Insider List Regulation (WpAIV). The competent authority for interpreting and supervising the provisions of the WpHG and the WpAIV is the German Federal Financial Supervisory Authority (BaFin). You can find helpful information on financial reporting requirements in the Issuer Guideline of the BaFin.

Particular for Sect. 52 BörsO FWB, as compared to the obligations resulting from the WpHG is the fact, that as a rule, preparation and electronic transmission of the Half-yearly Financial Report has to be performed in both German and English. In the scope of the explanations at hand, primarily the questions arising from Sect. 52 BörsO FWB will be discussed.

Issuers in Prime Standard have to prepare a Half-yearly Financial Report pursuant to the requirements of Sect. 115 Paragraphs 2 to 4 WpHG or in case group accounting requirements exist, pursuant to Sect. 117 No. 2 WpHG. Pursuant to these provisions, the minimum contents of the Statements are these:

• the condensed Financial Statements,
• the Interim Management Report and
• the so-called “balance sheet oath”.

As a rule, issuers in Prime Standard have to prepare their Half-yearly Financial Report in both German and English and to transmit it in electronic form.

Issuers situated outside of Germany may prepare and transmit their Half-yearly Financial Report exclusively in English without the need of specific permission procedure.

The Half-yearly Financial Report has to be transmitted electronically to the Stock Exchange Management Board. For electronic transmission the Exchange Reporting System-interface (ERS) has to be applied. The issuers may either get themselves connected to this interface or may employ a service provider with connection to the ERS in order to transmit their reports.

The Half-yearly Financial Report transmitted via the interface will be published subsequently on the company website of Deutsche Börse AG, www.boerse-frankfurt.de (under the respective issuer’s name / Company Details / Recent Report / Company Reports), and thus provided to the interested investing public in a timely and easily accessible manner.

The Half-yearly Financial Report may be transmitted either in one unique document or, separated into its different parts, in up to four documents at maximum.

The electronic transmission does not have to be performed on the same day as other publications take place, like the report’s publication on the company website, for example. The only important fact is that transmission is performed prior to expiration of the time limits determined in the BörsO FWB.

Start and end of reporting requirements

The emergence and expiration of the reporting requirement is regulated in § 50 BörsO FWB. Regarding to Paragraph 1 for the emergence of the reporting requirement it is essential, that already those Financial Reports and Quarterly Statements covering the reporting period (called “period covered by the Statement” in the context of Sect. 53 BörsO FWB) and/or preparation period in the course of which the admission is granted, have to be transmitted to the Stock Exchange Management Board via ERS.

Example:

The admission of stock of the X-AG to the Regulated Market with additional obligations arising from admission (Prime Standard) is granted on 03 February. The financial year of the X-AG corresponds to the calendar year.

Therefore, the admission takes place within the preparation period (01 January to 30 April) of the Annual Financial Report (covering the previous financial year), within the period covered by the Statement (01 January to 31 March) of the first Quarterly Statement and within the reporting period (01 January to 30 June) of the Half-yearly Financial Report.

Thus the reporting requirements have occurred in regard to both Financial Reports as well as the Quarterly Statement. The first transmission obligation after the admission concerns the aforementioned Annual Financial Report. The time limit for transmission of this report expires on 30 April at the end of day.

Already in the course of submitting the application for admission to the sub segment of the Regulated Market with additional obligations arising from admission (Prime Standard) the start of the reporting requirements has to be identified diligently in order to secure that the first Financial Report or the first Quarterly Statement will be transmitted in due time.

In case the issuer withdraws from the Prime Standard due to a revocation of the admission, the reporting requirements will end regarding to § 50 Paragraph 2 BörsO FWB no sooner than the revocation of admission to the Regulated Market (Prime Standard) becomes legally valid. For all preparation periods concluded before the revocation decision got legally valid, the reporting requirements have to be fulfilled.

Example:

The revocation order concerning the admission of the stock of X-AG to the Regulated Market with additional obligations arising from admission (Prime Standard) becomes legally valid on 03 July at the end of day. The financial year of X-AG corresponds to the calendar year.

Therefore, the revocation becomes legally valid only after the end of the preparation period (01 January to 30 April) of the Annual Financial Report (covering the previous financial year) and the preparation period of the first Quarterly Statement (01 April to 31 May). As a result, both the Annual Financial Report as well as the first Quarterly Statement have to be transmitted.

As the revocation order becomes legally valid during the preparation period for the Half-yearly Financial Report (01 July to 30 September), the reporting requirements for this report initially occur on 01 July; however, upon the revocation order’s legal validity at the end of day on 03 July, the reporting requirements do not apply any longer. Thus, the Half-yearly Financial Report does not have to be transmitted anymore.

Regarding the end of the report requirements, it makes no difference whether the revocation was initiated upon application by the issuer or performed ex officio.

Duration of transmission time limit

Three months after expiration of the respective reporting period, at the latest, the Half-yearly Financial Report has to be transmitted to the Stock Exchange Management Board in electronic form. Prolongation of this time limit may not be requested.

The expiration of time limit is calculated for both cases pursuant to the provisions of Sect. 31 Paragraph 1 of the Administrative Procedures Act of Hessia (HVwVfG) in conjunction with Sect. 187 Paragraph 1, Sect. 188 Paragraph 2 and Sect. 193 of the German Civil Code (BGB). If the day the time limit ends is a Saturday, Sunday or a public holiday, the time limit will end on the next working day instead.

If certificates representing stock are admitted, the obligations arising from Sect. 52 BörsO FWB are borne by the issuer of the represented stock. The Half-yearly Financial Report of the issuer of the certificates representing such stock, however, does not have to be published according to the requirements of Sect. 52 BörsO FWB.

Do issuers in the Prime Standard have to transmit their (condensed) individual or consolidated Financial Statements in order to meet their obligations according to Sect. 52 BörsO FWB?

If the issuer has to prepare consolidated Financial Statements, the requirement set forth in the BörsO FWB is adequately met by exclusively transmitting the condensed consolidated Statements accompanied by the other components of the Half-yearly Financial Report. In these cases, the “individual Half-yearly Financial Report” does not need to be transmitted for meeting the obligations of the BörsO FWB.

Only the issuer is in the position to assess whether they are under the obligation to prepare consolidated Financial Statements; by no means, this assessment can be made by FWB. The same applies to the question if and, if so, from what date on there has been a modification entered into regarding the kind of Statements to be prepared.

The decision whether they are under the obligation to prepare consolidated Financial Statements, is taken by the issuer according to the legal regulations applicable. Therefore, in case of an issuer with registered office in Germany, the question regarding the possible requirement of group accounting is answered pursuant to Sect. 290 et seq. of the German Commercial Code (HGB).

Which accounting principles have to be observed in preparing such condensed Statements?

The condensed Financial Statements have to be prepared in compliance with the same accounting principles as the Annual Financial Statements.

Does the BörsO FWB provide exemption options from the Half-yearly Financial Report preparation requirements?

Pursuant to Sect. 52 Paragraph 6 Clause 5 BörsO FWB, the Management Board may exempt issuers having their registered office in a state outside the European Union or outside of another member state to the Treaty on the European Economic Area from the obligation to prepare a Half-yearly Financial Report in compliance with the requirements of Sect. 115 Paragraphs 2 to 4 or Sect. 117 No. 2 WpHG. In doing so, the Management Board may either grant a complete exemption from the obligation to prepare a Half-yearly Financial Report according to the aforementioned requirements (e.g. exemption from the obligation to prepare a (condensed) IAS/IFRS-statement) or may grant an exemption merely for a component of such Statements. In any case, an exemption will be granted exclusively if and to the extent that the issuer is subject to or submits to equal regulations of a third country. For the Statements prepared in compliance with the third country regulations, the explanations regarding language, time limit and kind of transmission apply accordingly.

While an exemption from the obligations pursuant to the BörsO FWB granted by the Stock Exchange Management Board (naturally) will leave unaffected the obligations set forth in the WpHG, something else does apply for exemptions granted by the BaFin: Insofar as the BaFin has granted an exemption pursuant to Sect. 118 Paragraph 4 WpHG, this exemption will also apply directly to the scope covered by the BörsO FWB. There is no need to apply for further exemption in these cases. However, the Management Board has to be informed of the exemption granted by the BaFin.

Does the Frankfurter Wertpapierbörse assist Prime Standard issuers with meeting their time limits relating to the Half-yearly Financial Report?

Prior to the expiration of respective time limits, FWB will remind Prime Standard issuers of reports still waiting to be transmitted by means of so-called “reminder mails”. The first reminder mail will be sent about two weeks, a second one about three days prior to the time limit’s expiration. While the first mail is not yet directed to the individual case, the second reminder mail is tailored to the issuer in question and specifically to the Financial Reports still missing.

What are the sanctions resulting from a violation of Sect. 52 BörsO FWB?

A violation of the obligations from Sect. 52 BörsO FWB may be punished by a reprimand or an administrative fine (Sect. 22 Paragraph 2 Clause 2 of the German Stock Exchange Act (BörsG)).

ERS service provider

Rule Enforcement
E-Mail: rule-enforcement@deutsche-boerse.com

• Exchange Rules for the Frankfurter Wertpapierbörse (BörsO FWB, Börsenordnung für die Frankfurter Wertpapierbörse)
• German Securities Trading Act (WpHG, Wertpapierhandelsgesetz)
• German Securities Trading Reporting and Insider List Regulation  (WpAIV, Wertpapierhandelsanzeige- und Insiderverzeichnisverordnung)
• German Federal Financial Supervisory Authority (BaFin,  Bundesanstalt für Finanzdienstleistungsaufsicht)
• Exchange Reporting System-interface (ERS)
• ERS service provider
• www.boerse-frankfurt.de
• Application for the admission of securities to  the sub segment of the Regulated Market with additional obligations arising from admission (Prime Standard)
• Administrative Procedures Act of Hessia (HVwVfG, Hessisches Verwaltungsverfahrensgesetz)
• German Civil Code (BGB, Bürgerliches Gesetzbuch)