According to information made available by the EU the current costs of an initial public offering (IPO) amount to between 200.000 and 500.000 Euros. In addition, there is a similarly high annual sum which must be spent in order to stay on the stock exchange. Costs which only few small and medium-sized entities (SMEs) are able to bear.
With the special exchange segment “Entry Standard” the Deutsche Börse in Frankfurt offers a cost-efficient and less strictly regulated capital market acces option for SMEs. According to the Managing Director, Rainer Riess, this segment in particular aims at companies with a market value of at least 20 million Euros. Thus, about one hundred IPOs are expected for this segment in the long run. Such an initial public offering is particularly reasonable, if the company in question is in need of equity capital in order to keep expanding.
The costs for going public on the Entry Standard amount to an one-off sum of between 50.000 to 100.000 Euros. The annual admission fee is 5000 Euros. If a private placement or listing is intended, a so-called Exposé instead of a prospectus is sufficient. As regards offerings to the public, however, even in the Entry Standard a prospectus is required, but the signature of the issuer instead of that of the leading bank will do. The obligation to report is sufficiently fulfilled, if the issuer publishes all the relevant company information on the company website.
Stock exchange experts consider the new market segment set up by the Deutsche Börse to be a reaction to the increasing number of corresponding solutions offered by foreign stock exchanges such as the French “Alternext“, the Italian “Mercato Expandi” and the British “Alternative Investment Market“. 