Deutsche Börse developed the Going Public Principles together with representatives of banks, issuers, investors, shareholder associations and IPO consultants on its Primary Markets Advisory Committee (PMAC). The version now presented also contains input from a broad circle of market participants, compiled by Deutsche Börse during a public hearing period.
The following banks welcome the publication of the Going Public Principles and will support their application in conjunction with future IPOs: Bayerische Hypo- und Vereinsbank, Deutsche Bank, Dresdner Bank, DZ-Bank, Goldman Sachs, Merrill Lynch and UBS Warburg. "The Going Public Principles are a clear signal that the German capital market has taken another step in the direction of international standards and equal treatment for investors. This will strengthen confidence in the German capital market", said Rainer Riess, Head of Xetra Customers at Deutsche Börse AG.
The Principles include a so-called black-out period for issuers. During this time, no information may be given out about the company's business or its financial and earnings situation that is essential for an assessment of the stock but is not contained in the prospectus. This will prevent a selective release of information, and will provide for more equal treatment of private and institutional investors.
Banks of the consortium involved in an IPO are also subject to a black-out period, during which time they are not allowed to publish any corporate studies about the respective issuer's business or financial and earnings situation. The Principles do not apply to company studies by banks that do not belong to the consortium involved in the IPO.
The Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (DSW), a German shareholder association, supports the initiative of Deutsche Börse. "The Going Public Principles will serve to curb the unequal treatment of private and institutional investors in connection with IPOs. Moreover, putting the Principles in the form of a code ensures that they can be adapted quickly and easily, and that regulation of this sensitive domain meets with high acceptance on all sides in the capital market. The DSW will monitor compliance with the Principles and will publish and comment upon non-compliance.
The German Association of Investment Professionals (GAIP) welcomed Deutsche Börse's Going Public Principles. "The Going Public Principles will keep issuers from releasing information and making other claims that are not included in the prospectus, which are not subject to the issuer's liability for statements made in the prospectus. The Principles are in line with the standards that are common in the international capital market and are therefore in the interest of investors, " said Dr. Helmut Henschel, President of the GAIP.
The Going Public Principles also limit the use of pro-forma information in prospectuses and require that such data be certified by the auditor in accordance with duly recognized auditing standards. Furthermore, the Principles define the formal design of the prospectus, from the use of clear language that is easy to understand and the outline of the contents for the prospectus to the size of the print and graphic presentations. Risk factors and statements oriented to the future have to be presented clearly, business transactions and legal relationships with third parties as well as the professional background and experience of the Management Board members have to be disclosed, including any sanctions (e.g. penalties, fines) that may have been imposed on them in the past.
The Going-Public Principles can be downloaded from the Press Service section of the Deutsche Börse web-site.
