The Frankfurt stock exchange is one of the biggest trading
centers of the world, and there are over 3000 US companies listed on it. The
brutal Sarbanes Oxley Act introduced in United States in the year 2002 has led
North American and other foreign companies to Choose Europe over the United
States.
The Deutsche Borse owns and operates the Frankfurt Stock
Exchange other than FSE; it also owns the European futures exchange Eurex and
clearing company Clearstream. It is the largest of all German stock exchanges,
responsible for approximately 90 percent of the securities trading volume in
Germany.
Advantages of Listing on FSE
Xetra is the latest and most versatile trading platform in
the world. The Xetra platform continuously scans the market to match buyer and
sellers at a faster speed compared to the New York stock exchange’s platform.
It lets faster alert detection such as irregular buying and selling patterns
tapped in the market. More than 90% of trading is now done through Xetra with a
fifth of them placed by private investors. Companies can be sure of fair
pricing, low costs (no brokerage fees), tremendous speed with fastest execution
times, broad selection with over 6,000 securities, and flexibility on order
execution. Today, a total of 260 market participants in 19 countries are linked
to the system. At peak times, Xetra processes up to 1.4 million trades per day.
The benefit, which Frankfurt stock exchange allows, is ease,
speed to market, and low cost when it comes to listing a company. The audited
financials are not needed along with the assets or revenue requirements, which
grant ease of entry to the companies. The time needed for getting listed on FSE
is as little as 12 weeks, and the approximate cost incurred is $70000.
Other advantages,
which a company enjoys by listing on Frankfurt Stock Exchange, are the relaxed
regulations that allow U.S. listed companies to avoid the grueling load of the
Sarbanes-Oxley Act that U.S. public companies must stick on to if they’re
listed on a U.S. Exchange.
European investors can buy shares of the North American company in their local currency if the North American company gets listed on Frankfurt Stock exchange. It also helps to establish a more acknowledged presence of these companies in Europe and Asia. The company gets access to over 100 million people in Germany, Switzerland, Austria, and Liechtenstein by getting listed on FSE.
European investors can buy shares of the North American company in their local currency if the North American company gets listed on Frankfurt Stock exchange. It also helps to establish a more acknowledged presence of these companies in Europe and Asia. The company gets access to over 100 million people in Germany, Switzerland, Austria, and Liechtenstein by getting listed on FSE.
European investors wanting to invest in Canadian and
American companies pay higher brokerage fees if they have to buy the stock on
the North American Market.
There is a huge drop in the fee if the European investor opts for buying from Frankfurt stock exchange instead from North American stock exchange. The fee drops by almost one-tenth of the original fee, thus providing the European investors cheaper and easier trading conditions for
There is a huge drop in the fee if the European investor opts for buying from Frankfurt stock exchange instead from North American stock exchange. The fee drops by almost one-tenth of the original fee, thus providing the European investors cheaper and easier trading conditions for
Canadian and U.S. stocks.
The company gets the stability by listing on Frankfurt
stock exchange. It enhances the company’s public perception. This is the key to
providing a company with the resources and ability to expand the company, as well as raise capital.
The company gets noticed by the more affluent
retail and institutional investors, searching the European and other financial
websites, to help make their investment decision.
For investors in any stock exchange, transparency
is the extreme important criteria. At Frankfurt Stock Exchange, there are three
levels of transparency. First is Prime Standard, second is General Standard,
and third is Entry Standard.
Frankfurt stock exchange has greater access to capital. It has access
to 1/3 of the total investment capital in the world. Frankfurt Stock exchange
gets huge exposure to investor capital with more than 250 international trading
institutions and over 4500 traders worldwide.
Naked short selling is prohibited in the Frankfurt stock exchange.
Germany passed this regulation in June 2010. Critics and experts said that the
short selling was a major cause behind the US market downturns. Short selling
is a technique where the investors or short sellers manipulate the market by
selling the securities which they actually don’t have. This act leads to
manipulation in the market.
Frankfurt stock exchange is an internationally acknowledged stock
exchange just like NASDAQ or the New York stock exchange. The liquidity of
stocks listed on the FSE is the greatest in all of Europe, including London and
Paris stock exchanges. Market liquidity and trading volume of Frankfurt Stock
Exchange is number three in the world, behind only to NASDAQ and NYSE but
without their listing requirement.
Fastest rate of growth, the highest
earning per person in the EU and the strong Euro are some reasons why companies
are looking forward to get listed on Frankfurt stock exchange rather than on
the NASDAQ, Bulletin Board, or Pink Sheet.
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