Stock market segment

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A stock exchange segment is a submarket of the stock exchange in which the traded securities have to meet certain admission and disclosure requirements or follow-up obligations.

General

With the increasing diversity and number of securities traded on stock exchanges, market transparency for stock exchange participants decreases . For this reason, the international stock exchanges have started to divide the traded securities into sub-markets by segmenting them according to specific subject areas. However, the same exchange practices and rules apply within the various submarkets. Regardless of the existing stock exchange segments, a trading surveillance office ensures that the stockbrokers , lead brokers and specialists adhere to the rules and regulations of the individual stock exchange segments. The Federal Financial Supervisory Authority (BaFin) also monitors compliance with statutory regulations .

history

The first stock market segment is the "Dow Jones Average" set up by Charles Dow on the New York Stock Exchange in July 1884 , the predecessor of today's Dow Jones Industrial Average . It originally consisted of 11 joint stock companies , including 9 railway companies , a steamship and a money transfer company. The main purpose, however, was to determine an average stock price with the help of a stock index , but this was also associated with segmentation. NASDAQ , founded in February 1971, initiated the publication of NASDAQ-100 , a stock index of 100 non-banks with the highest market capitalization , from January 1985 .

In May 1987, the regulated market was set up on the German stock exchanges as an alternative to the official market . The regulated market in turn replaced the regulated unofficial market in May 1988 . The most important German share index, the DAX , has existed since July 1988 , which includes the 30 largest and highest-turnover listed companies . In January 1996, the MDAX was created, a share index comprising 50 companies. The Neuer Markt (NM) stock exchange segment was founded on March 10, 1997 for growth companies in the New Economy and closed on June 5, 2003 by Deutsche Börse AG . After the initial euphoria on the stock market, the closure was preceded by a loss of confidence in this stock exchange segment, which was triggered by false ad hoc announcements and, in some cases , forbidden insider purchases . In the meantime, the SDAX was created in June 1999 for 50 smaller companies, so-called small caps . This was followed in July 1999 by the Nemax50 , which fell into disrepute for insider trading and falsification of the balance sheet and was therefore replaced by the TecDAX in March 2003 . The shares in these stock exchange segments were transferred to the Prime Standard (DAX, MDAX, TecDAX and SDAX) and General Standard ( small and medium-sized companies ) segments, which were newly introduced in November 2007 .

species

Stock exchange segments can be formed according to legal or factual aspects.

  • Legally : In general, in all EU Member States since November 2007 between the "regulated market" ( English regulated market ) and the "exchange-regulated market" ( English regulated unofficial market ) to distinguish. While the "regulated market" is monitored by the European Union , the "regulated market" is regulated by the respective stock exchange itself. The previous German stock exchange segments "official market" and "regulated market" were added to the "regulated market" in November 2007 convicted. He puts on the Frankfurt Stock Exchange with the segments General Standard and Prime Standard -building retail segments with higher transparency standards. Segment "exchange-regulated market" on the Frankfurt stock exchange in the open market ( English open market ), 2005 Since October Open Market called. In the open market there are currently the sub-areas Quotation Board (formerly Second Quotation ), Basic Board and Scale . The First Quotation area was abolished in June 2012 after a few scandals ( market manipulation , capital investment fraud ). With its relatively low requirements and follow-up obligations, Scale is particularly suitable for smaller companies that want to go public.
According to § 42 BörsG , the stock exchange regulations for sub-areas of the regulated market can, in addition to the documents to be submitted by the company, additional requirements for the admission of shares or certificates representing shares and further information obligations of the issuer due to the admission of shares or certificates representing shares to protect the public or provide for orderly exchange trading. The requirements for admission to the regulated market result from Section 32 BörsG.

If the stock exchange segments are formed according to legal criteria, the presence of a company in a certain stock exchange segment requires the fulfillment of the criteria standardized there. A company can move from one legal segment to another if it meets the legal requirements of that segment. The easiest way to downlisting is from the regulated to the stock exchange regulated market, because the latter has lower admission and disclosure requirements and follow-up obligations.

Belonging to a stock exchange segment

Belonging to a stock exchange segment is associated with certain admission criteria and obligations for the issuer of the securities. These primarily concern publicity regulations ( ad hoc publicity , financial reports , quarterly reports ), possibly also the size of the company and the minimum amount of free float and market capitalization . The company is free to decide on which exchange and in which exchange segment an issue takes place. It has to take into account the higher costs resulting from stricter disclosure and follow-up obligations.

Such regulated stock exchange segments are used for quality assurance in stock exchange trading. Investors can rest assured that trading in the securities of a certain segment and possibly also the financial reports of the issuer meet certain quality standards. However, membership of a stock exchange segment says nothing about the business quality of a company and its future prospects.

The admission criteria of the private law stock exchange segments are controversial. Many companies left the Frankfurt small-cap segment SMAX with disappointment because they no longer saw an appropriate cost-benefit ratio in their affiliation . Above all, the course support prescribed there ( designated sponsoring ) turned out to be relatively expensive. The SMAX was also discontinued in June 2003.

Differentiation of different stock exchange segments

Individual stock exchange segments can be clearly delimited from one another, for example the EUWAX derivatives segment and the Bond-X bond segment in Stuttgart. The segments can, however, also overlap, for example the cross-exchange, public-law segment regulated market and the quality segment Prime Standard in Frankfurt. A share can be part of the regulated market and the Prime Standard at the same time.

If several stock exchange segments come into question for an issuer, it is at its discretion which of them it participates in. Choosing a higher quality segment is associated with greater effort and higher costs.

Segments on German regional stock exchanges

Regional Exchange Stuttgart

At the Stuttgart stock exchange there is the EUWAX segment ( EUropean WArrant eXchange ) for trading in warrants and certificates , the Bond-X segment for bonds, the IF-X segment for investment units , the Gate-M segment for small caps and the 4 segment -X for foreign stocks.

Regional Exchange Munich

At the Munich Stock Exchange is available with the m: access a special small caps segment, represents the transparency requirements and builds both on the regulated market on the open market and each additional.

Regional Exchange Düsseldorf

The Dusseldorf Stock Exchange introduces the so-called primary market , a segment for equities, bonds and participation certificates ready to apply the equally special transparency requirements. It is only based on the open market and must be distinguished from the economic term primary market .

See also

Individual evidence

  1. Ann-Kristin Achleitner : Handbook Investment Banking , 2002, p. 290.
  2. Viktor Heese: Indices in der Wertpapieranlage , 2014, p. 66
  3. Yu-Hui Liu: Procedure of an Initial Public Offering on a German Stock Exchange and the Role of the Auditor , 2013, p. 11, FN 75.