Stock Exchange Act (Börsengesetz)

The foundation for the Börsengesetz (BörsG) was laid in 1892 by a "Börsen-Enquête-Kommission" (Exchange Enquiry Commission) appointed by the Chancellor of the Reich. The task of the commission was to remedy the deplorable state of affairs which characterized the exchanges by developing guidelines for stock exchange activity. Important amendments followed in 1975, 1986, 1989, and in particular in 1994, with the enactment of the Gesetz über den Wertpapierhandel und zur Änderung börsenrechtlicher und wertpapierrechtlicher Vorschriften (the Second Financial Market Promotion Act). Each new amendment increasingly incorporated international law, adopting in particular the guidelines established initially by the European Community, and later by the European Union. One particular amendment - the Third Financial Market Promotion Act - was undertaken in 1998. It gives issuers easier access to the exchange, contains changes with respect to liability extending to statements made in an offering prospectus, and regulates the delisting procedure. The most recent amendment was made in 2002 when the Fourth Financial Market Promotion Act came into effect: This law especially underpins investor protection.

The Börsengesetz comprises six main sections:

I. General provisions on the exchange and exchange bodies

II. Exchange price determination and the broker system

III. Admission of securities to Official Market

IV. Derivatives trading

V. Admission of securities to other trading segments

VI. Regulations pertaining to penalties and fines; regulations on concluding transactions.