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International
“There will be no regulatory arbitrage”
Interview with Marc Renell, CEO,
RENELL Wertpapierhandelsbank AG
It is estimated that more than 200 companies will be
affected by the forced exclusion from the First Quotation
Board at the end of 2012. Conference Magazine spoke to
the market leader for listings on the open market about the
changing framework conditions and the consequences.
Conference Magazine: Mr Renell, the market segments on
the Frankfurt Stock Exchange will look slightly different at
the end of 2012. What do you think of the new situation as a
specialist in small- and micro-caps?
Renell: In fact, the First Quotation Board has been closed
to new issues since the start of the year. For this reason, we
have been able to prepare extensively for the new situation
and we welcome the decision to increase requirements for
issuers and thus to improve the quality of the companies.
Conference Magazine: Can the obstacles be overcome?
Renell: Interestingly enough, a case such as Facebook
would not meet the new criteria for a primary listing in the
Entry Standard. The par value of EUR 1 per share would
have been breached at the very least.
Conference Magazine: What direction have companies,
which are in the First Quotation Board and threatened by possible
de-listing as of 15 December, been moving in so far?
Renell: I can only speak for the issuers that we support.
Their consensus was that the foreseeable extra expense
and effort involved in changing segments and subsequently
being public with half-yearly reports, FREP statements, etc.
is not worth it. We have specialised in helping those companies
who would like to move up into a higher market segment,
generally into the Entry Standard, but in some cases,
also into the Prime Standard.
Conference Magazine: Would you be able to give us a figure?
Renell: Taking a look at our customers, I would say roughly
15%. Assuming that this estimate is representative, 250 to
300 companies in the current First Quotation Board should
be forcibly de-listed by the end of the year.
Conference Magazine: Would those companies consider
any other alternative regional stock exchanges, whether
they are approved from a neutral perspective or not? Or is
this not possible?
Page 60 Deutsches Eigenkapitalforum 2012
Marc Renell is CEO of RENELL Wertpapierhandelsbank
AG. The company,
which was founded in 1985, is a
member of the Federal Association of
Securities Trading Firms on the German
Stock Exchanges (“bwf – Bundesverband
der Wertpapierfirmen an
den Deutschen Börsen” ).
Marc Renell, CEO,
RENELL Wertpapierhandelsbank AG
Renell: No, regional stock exchanges have practically
changed their requirements in the same breath. The German
Federal Financial Supervisory Authority (“BaFin – Bundes
anstalt für Finanzdienstleistungsaufsicht”) was definitely
among those who were happy that no door had been
opened for any kind of regulatory arbitrage here. In this way,
it has at least been ensured here in Germany that the new
standard and quality benchmark is placed at a roughly
equal level everywhere, as far as is possible. One or two
other regional stock exchanges are still looking for a final
solution to suit them, but the situation definitely looks very
promising.
Conference Magazine: Was this along the lines of where
you envisaged things going?
Renell: We should not make the mistake of saying that all
the companies that were previously in the First Quotation
Board were inadequate with regard to quality. This is not
true, not even for those companies that will soon be de-listed.
Indeed, there are also German SMEs among these
companies. However, the foreseeable costs of being public
are not worthwhile for every company. Issuers will make a
conscious and deliberate decision not to be public and will
not make a dramatic scene out of doing so.
Conference Magazine: Won’t smart issuers try to remain
in the Quotation Board as a secondary listing by using
foreign primary listings on foreign stock exchanges?