3 questions to smart minds

Scale, the new stock exchange segment for small and medium-sized enterprises

For this 3 questions to Eric Leupold

German Stock Exch­ange AG
Photo: Eric Leupold
11. April 2017

For this 3 ques­ti­ons to Head of Depart­ment Pre-IPO & Capi­tal Markets at Deut­sche Börse AG

1. On March 1, 2017, Deut­sche Börse laun­ched the new stock exch­ange segment “Scale” for small and medium-sized enter­pri­ses, so-called SMEs. What goal are you pursuing with it and how did the launch go?

Scale prima­rily addres­ses the signi­fi­cantly increased invest­ment needs of small and medium-sized enter­pri­ses. SMEs are curr­ently facing major chal­lenges such as Indus­try 4.0 or digi­ta­liza­tion. With Scale, we provide these compa­nies with better access to growth capi­tal while incre­asing their visi­bi­lity to inter­na­tio­nal inves­tors. To do this, we have a whole range of new services in this segment, inclu­ding rese­arch reports for each issuer, which are commis­sio­ned by us as the exch­ange. We bring the compa­nies toge­ther with expe­ri­en­ced Capi­tal Market Part­ners, who conti­nue to support them closely after the IPO. And in the medium term, we are also thin­king about a selec­tion index, which has the poten­tial to bring in further atten­tion and thus addi­tio­nal capi­tal. We are satis­fied with the start. In the very first month, we had our first IPO with IBU-tec advan­ced mate­ri­als AG, and we laun­ched the Scale All Share Index, which tracks all stocks in the segment.

2. Are there any special crite­ria that compa­nies have to meet in order to be listed?

The compa­nies should be estab­lished in their markets and also alre­ady have expe­ri­ence with inves­tors. They must have a market capi­ta­liza­tion of at least 30 million euros and meet certain key figu­res, e.g. in terms of sales, equity, net income or number of employees. The Capi­tal Markets Part­ner also has a duty to review issuers on the basis of finan­cial and legal due dili­gence and confirm that they are suita­ble for Scale.

3. Is Scale also inten­ded as an entry segment for newco­mers to the stock exch­ange? Do you also hope that this will lead to more IPOs in Germany?

Scale is an entry-level segment, but at the same time chal­lenges compa­nies to main­tain a high presence on the capi­tal market even after going public. For exam­ple, an annual analyst confe­rence is manda­tory, and issuers are also obli­ged to conduct ongo­ing rese­arch. For us as a stock exch­ange, it is a very central task to provide the economy with suffi­ci­ent equity capi­tal. In this way, we are contri­bu­ting to the deve­lo­p­ment of Germany as a busi­ness loca­tion. So far, we have recei­ved a lot of posi­tive feed­back on Scale, on the one hand from the market, but also from the fede­ral govern­ment. We believe Scale has the poten­tial to increase the number of IPOs in the long term. 

About Eric Leupold

Eric Leupold joined Deut­sche Börse Group in August 2009. From Janu­ary 2014 to March 2016, he headed the Issuer & Primary Market Rela­ti­ons Section. Since May 2016, he has headed the “Pre-IPO & Capi­tal Markets” depart­ment as Head of Depart­ment. Previously, he worked in Group Compli­ance at Deut­sche Börse AG, where his respon­si­bi­li­ties included insi­der trading preven­tion and compli­ance training.

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