There are many reasons why the GXG
Markets within the UK have the advantage of the Frankfurt Stock
Exchange to become the new World Stock Exchange and global OTC market
for firms.
With the closure of the Frankfurt Stock
Exchange open markets there is no longer a real OTC market in
Frankfurt. Start-up firms and firms searching for liquidity in Europe
once went to the Frankfurt Open Market, listed on the Frankfurt Stock
Exchange or bought a Frankfurt Listed Shell for sale, and made a
market raising funds for their firm.
The exchange rules changed, and not
only did the open market get taken away, but a new toxic regulation
enforced by the Frankfurt Stock Exchange for volume trading.
Basically BAFIN and the Frankfurt Stock
Exchange agreed on the requirement of constant trading requirements
on the Frankfurt Stock Exchange, however, the market maker is
responsible. Thus, by making the market makers responsible for the
bid and ask, every time the market maker puts up a BID that an
investor hits, the market maker goes into debt. Every market maker
then signs and agreement for the company to pay this debt. Thus, the
Frankfurt Stock Exchange has made a toxic trading cycle of which
“Frankfurt listed companies” need to buy back the shares from the
market maker. Thus, companies end up buying back all of their
shareholders shares.
For most markets, such as the UK, a UK
listed firm on the Frankfurt Stock Exchange who has to pay the market
maker for the shares would in most cases have to make a tender offer
to all shareholders of the company at the same price. Basically, the
Frankfurt Stock Exchange and its market makers have formed a
jurisdictionally “grey area” which is not really in compliance
with the jurisdictions of the companies that are listed on their
exchange.
Regardless of the legality, the
companies take on the debt of buying back shareholders shares on the
Frankfurt Stock Exchange. Listing on the Frankfurt Stock Exchange
simply is just not worth the risk to companies to do. Companies need
to seek alternative stock markets, such as the GXG Markets in the UK.
For Frankfurt Listed firms, they have
the deadline of July 1st to apply to the entry standard
without a prospectus, and December to build a prospectus and meet the
Frankfurt Entry Standard’s requirements. My advice to companies, is
list your firm on the GXG markets while you still can before you
become knocked off the Frankfurt markets and are no longer public. If
you want to stay a public company, move to the GXG Markets.
Who is the best Broker Sponsor for
the GXG Markets?
One of the Frankfurt and Berlin
listings specialists IFXBG Limited (http://www.ifxbg.com)
can help move your firm from the Frankfurt Stock Exchange and Berlin
Stock Exchange to the GXG OTC Markets (http://www.gxgotcmarkets.com).
Contact info@ifxbg.com.
This article has been
written and published by FSE
Listings Inc, http://www.fselistings.com
The Frankfurt Stock Exchange Listings professionals.