China is as of primary importance to The Frankfurt Stock Exchange and its parent company Deutsche Boerse, the largest exchange organization in the world. Deutsche Börse sees considerable growth and enormous potential in China. It is expanding its base in the region to capitalize on its existing business relationships and to build new business.
- provide Chinese investors access to European products
- give wide exposure of Chinese products to the European market place
- help to develop domestic markets in China
- benefit from the growth by collaborating with local players
The business generated by Deutsche Boerse in China has been increasing steadily for years and will continue to grow organically while Deutsche Boerse Group is simultaneously developing new opportunities in areas such as Listing Chinese Companies, Trading & Clearing, Custody & Settlement and Market Data & Analytics. Besides a number of Memorandums of Understanding (MOU) signed with various Chinese partners, Deutsche Boerse has also taken concrete steps in the following fields:
Chinese Company Listings
Deutsche Boerse and its subsidiary the Frankfurt Stock Exchange continue to strongly expand its relations with China in order to be an effective and reliable partner for Chinese companies. For example, it organizes capital market events and listing seminars in China in collaboration with its listing partners, and is expanding its listing partner network to include Chinese intermediaries and capital market participants.
The Frankfurt Stock Exchange listed the first Chinese company on its Open Market segment on March 30, 2007 and listed the first Chinese company on the Prime Standard segment of the Frankfurt Stock Exchange on July 6, 2007. Since then many more Chinese companies have chosen a primary listing on the Frankfurt Stock Exchange. There are more Chinese companies already in the pipeline for this year as well.
The XETRA® Trading Platform
Deutsche Börse’s own XETRA® electronic trading platform is widely known as the most efficient and flexible automated trading system for fully electronic securities trading in the world. China’s largest stock exchange, the Shanghai Stock Exchange, has licensed Deutsche Börse’s Xetra® electronic trading platform, which Accenture will adapt and implement specifically for the Chinese market. Xetra’s trading technology was chosen on the basis of its performance record of high scalability, speed, reliability, quality of core technology and the ease with which it can be adapted in other markets.
Clearing & Settlement
China Government Securities Depository Trust & Clearing Co. Ltd (CDC) has opened an omnibus account with Clearstream, which is owned by the Deutsche Börse Group. The qualified members of CDC are now able to settle and safe keep international securities via CDC’s account with Clearstream. The partners are discussing further cooperation in the field of collateral management.
Market Data & Analytics
Deutsche Börse and the China Securities Index Company (CSI), a joint venture between the Shanghai Stock Exchange and the Shenzhen Stock Exchange, signed a sales cooperation agreement on September 25, 2007. Under the terms of the agreement, Deutsche Börse acts as an exclusive sales partner for the CSI300 Index’s license of the ETF issuer in Europe.
Why the Frankfurt Stock Exchange?
For approximately ½ the cost of going public on the OTCBB, Chinese companies can go public on the Frankfurt Stock Exchange. Moreover, companies that trade on the Frankfurt Stock Exchange do not have to deal with the often criticized and overly burdensome requirements of Sarbanes-Oxley. This in itself is why many companies from all over the world are choosing the Frankfurt Exchange over the U.S. stock exchanges.
For these reasons and many more, the Frankfurt Stock Exchange listing is fast becoming the better choice for Chinese Companies that want to go public.
