Below you will find a summary comparison of the Frankfurt Stock Exchange, GXG Markets, London Stock Exchange and Vienna Stock Exchange as well as the OTCBB:
| London Stock Exchange (Main Market Standard) | London Stock Exchange AiM Market | GXG Markets - Main Quote | Frankfurt Stock Exchange (Entry Standard) | |
| Audited financials required | YES | YES | YES | YES |
| Prospectus required | YES | YES | NO | YES |
| Nominated Advisor (NOMAD) | NO | YES | NO | NO |
| Paid-in-capital requirement | N/A | N/A | N/A | € 750,000 |
| Nominal value requirement | Paid up capital | Paid up capital | N/A | € 1.00 |
| Public float requirement | 25% | N/A | N/A | 10% |
| Age of company requirements | N/A | N/A | 2 years | 2 years |
| Shareholder requirement | N/A | N/A | N/A | 30 |
| Semi-automatic acceptance if meet requirements | NO | YES | NO | NO |
| Start-ups accepted | MAYBE | YES | YES | NO |
| Regulated/unregulated | EU regulated | unregulated | unregulated | unregulated |
| Estimated time to listing/IPO | 6 months | 7 months | 2 months | 7 months |
| Cost of listing/IPO | $$$$$ | $$$$$$ | $$$ | $$$$ |
| Ongoing costs | $$$ | $$$$$ | $$$ | $$$$ |
| Liquidity for smaller companies (1 to 10) | 8 | 10 | 5 | 6 |
| Sarbanes Oxley requirements | NO | NO | NO | NO |
| Ability for smaller companies to raise capital (1 to 10) | 8 | 9 | 5 | 7 |
| **but DTC (electronic stock transfers) can be a major problem | ||||
| ***Must be PCAOB approved auditor |
Comments and Summary:
Basically, we recommend GXG Markets for start-ups and companies sensitive to time and expense, the London Stock Exchange AiM Market for start-ups with more substance who can afford the much higher quality the AiM Market offers or the London Stock Exchange Main Market Standard and, finally, the Frankfurt Stock Exchange Entry Standard segment if the company has strong revenues, management, etc. and meets the requirements. The Frankfurt Stock Exchange Entry Standard is now quite selective so the London Stock Exchange Standard of the Main Market or London's AiM Market might more easily accept companies that the Frankfurt Stock Exchange Entry Standard marginally will not. The London Stock Exchange Standard and AiM Markets and the Frankfurt Stock Exchange are world-class stock exchanges. In any case, we always recommend audited financials and an approved prospectus, even if your company trades on GXG Markets where the prospectus is not required. Lastly, we do not prefer US exchanges or listing portals like the OTCQB due to the overwhelming expense and burdensome nature of Sarbanes Oxley.
Finally, it should be clear by now that stricter reporting and disclosure requirements by a stock exchange usually translates into a better stock exchange (we say 'usually' because we do not necessarily believe this to be the case with regard to the OTCQB of the US, which is not selective at all). A more open communication and transparency policy are definitely advantageous in other ways, for public companies who rely on investors for capital and stock market liquidity. investors today demand information from reliable sources.
Finally, a company's IPO is not likely to be the last time it will be in the limelight. After the listing and IPO, public companies listed on more transparent stock exchanges like the London AiM Market, London Stock Exchange Main Market Standard segment or Frankfurt Stock Exchange or who voluntarily adhere to greater reporting requirements even when not required to do so make themselves subject to a handful of disclosure and reporting requirements such as the publication of annual reports, quarterly reports and ad hoc reports on financial news, which can be presented to the general public.
Contact SIFG if you are interested in taking your company public and raising capital.
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