On 1 March 2017, Deutsche Börse AG, the operator of the Frankfurt Stock Exchange, launched Scale, a new market segment for small and medium-sized enterprises ("SMEs"). Scale replaces Deutsche Börse's former market segment Entry Standard for shares and corporate bonds. The market segments General Standard and Prime Standard of Deutsche Börse are not affected by Scale.

As of today, Scale comprises 43 corporations, including penny-stocks such as MIC AG with a market value of just under €14 million; some companies which had already been listed earlier on the former "Neue Markt" segment of Deutsche Börse (see below), such as Mensch und Maschine and Beta Systems; and a multibillion-euro enterprise like the real estate company Grand City Properties. There is no focus on specific industries.

The prerequisites for the inclusion are tailored especially to the needs of SMEs and are intended to facilitate the raising of capital on the capital market by such companies.

As a prerequisite for the inclusion in Scale, at least three of the following criteria must be fulfilled:

  • Turnover of at least €10 million per year;
  • No annual loss;
  • Equity capital of more than €0;
  • Number of employees of at least 20 people; and
  • Cumulated, collected equity capital before IPO at least €5 million.

Such company-specific ratios were not required in the market segment "Neuer Markt" of Deutsche Börse, which was established in 1997 in the course of the "dot.com boom" at the end of the 1990s and which was closed down in June 2003.

Further material prerequisites for the inclusion in Scale are:

  • The issuer has existed as a company for at least two years;
  • An inclusion document or, in case of a public offer, a valid and approved prospectus;
  • Annual financial statements and management reports in accordance with national accounting standards (for issuers with a registered office in the EU or in EEA countries), International Financial Reporting Standards ("IFRS") or (in case of a third country) accounting standards that are recognized by the European Commission as being equivalent to IFRS;
  • The expected market value of the shares or certificates representing shares to be included amounts to at least €30 million at the time of inclusion into trading;
  • The shares or certificates representing shares to be included are sufficiently spread; and
  • A research report generated by a research provider chosen by Deutsche Börse AG (Deutsche Börse mandated the research firms Morningstar and Edison).

Important follow-up obligations arising from the inclusion in Scale are:

  • Ad-hoc disclosures, directors' dealings, insider lists pursuant to the EU Market Abuse Regulation;
  • Submission of the audited annual financial statements including the management report within six months after the expiration of the reporting period;
  • Submission of the half-yearly financial statements including the interim management report within four months after the expiration of the reporting period;
  • Preparation and continuous updates of a corporate calendar;
  • Information event for analysts and investors at least once a year;
  • Submission of information needed for the generation of research report updates to the research provider by Deutsche Börse within the given period;
  • Notification of Deutsche Börse about significant changes concerning the issuer or the included securities; and
  • Language for follow-up obligations according to capital market law could be German or English.

An index for Scale will be introduced soon. The fees for the inclusion in Scale are higher than previously in the Entry Standard, but they include the research reports to be prepared for all enterprises included in Scale.