1 Organization of the Regulated Unofficial Market (Open Market) on the Frankfurt Stock Exchange for the Trading with Structured Products

Transcription

1 of the Scoach Europa AG for the Trading with Structured Products in the Regulated Unofficial Market On the FWB Frankfurt Stock Exchange (Frankfurter Wertpapierbörse) First Part: General Provisions 2 1 Organization of the Regulated Unofficial Market (Open Market) on the Frankfurt Stock Exchange for the Trading with Structured Products 2 2 Scope of Application; Participants 3 3 Termination rights of Scoach 3 4 Amendments to the 4 5 Administration, Publication of Announcements 4 6 Cooperation Obligations of the Participant 4 7 Notification Obligation of the Participant 4 8 Secrecy 5 9 Liability of Scoach; Contributory Negligence 5 10 Applicable Law, Jurisdiction 5 Second Part: Provisions for the Inclusion of Structured Products 5 11 Inclusion of Structured Products in the Open Market 5 12 Inclusion Application 6 13 Inclusion Prerequisites 6 14 Disclosure Obligations of the Participant 7 15 Termination of Inclusion 7 Third Part: Provisions for trading with Structured Products 7 16 Application of the Rules of the Regulated Market 7 17 Publication of prices 8 18 Selection between Market Maker Model and Specialist Model 8 19 Quote Provider 8 20 Quotation and Reporting Obligations of the Quote Provider in the Market Maker Model 9 21 Quotation and Reporting Obligations of the Quote Provider in the Specialist Model Instruction and Monitoring of the Specialists Duties of the Specialists Prohibition of short selling 12 Fourth Part: Measures in the case of violations Measures in the case of violations 12 Fifth Part: Fees Fees 12 Sixth Part: Data Protection Data Protection 13

2 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 2 of 13 Preamble The following shall apply to trading during Exchange hours of the Frankfurt Stock Exchange in structured products that are neither admitted to nor included in trading in the Regulated Market of the Frankfurt Stock Exchange (Regulated Unofficial Market): First Part: General Provisions 1 Organization of the Regulated Unofficial Market (Open Market) on the Frankfurt Stock Exchange for the Trading with Structured Products (1) For structured products not being admitted for or included in either the Official Market or the Regulated Market, the Frankfurt Stock Exchange (hereinafter referred to as FWB ) has admitted a Regulated Unofficial Market ( Open Market ). (2) Structured products within the meaning of these General Terms and Conditions are non-standardized derivatives which are currently licensed on the German market and which are issued in a large quantity and in unified form as bonds within the meaning of the German Civil Code ( Bürgerliches Gesetzbuch ). Structured products include in particular certificates, warrants (except Company Issued Warrants) and reverse convertibles. Structured products do not include - warrants which are issued in connection with a corporate action of the issuing company, including Company Issued Warrants of financial intermediaries; - standardized non-licensed derivatives (such as derivatives traded at the futures exchange of Eurex Deutschland); - bonds for financing purposes with a nominal interest paid on a regular basis (coupon) which has already been agreed upon when issuing the bond (a homogeneous or also a heterogeneous nominal interest is possible during the term) or which is coupled with the development of a reference interest rate (e.g. EURIBOR, LIBOR); - shares and share substitute certificates like ADRs or GDRs, profit participation certificates, participation certificates, cooperative shares, fund shares, Exchange Traded Funds (ETFs) and similar securities; and - Exchange Traded Commodities (ETCs), Real Estate Investment Trusts (REITs), Contracts for Difference (CFDs) and similar products. (3) The Administering Institution of the Open Market on FWB for the trading of structured products is Scoach Europa AG (hereinafter referred to as Scoach ). Scoach organizes the Open Market for the trading with structured products upon approval of the Management Board of FWB.

3 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 3 of 13 2 Scope of Application; Participants (1) These shall apply to the whole business relation between Scoach in its function as Administering Institution of the Open Market for the trading of structured products on FWB and the Participants of the Open Market. Other business relations of the Participants of the Open Market with Scoach remain unaffected thereof. Participation in the Open Market shall take place through trading of structured products included in the Open Market (Paragraph 2) and/or through application of admission of structured products in the Open Market trade (Paragraph 3). (2) Admitted for trading of structured products in the Open Market are all companies which are admitted for trading on FWB and who were granted access to the Exchange EDP. (3) The admission of structured products in the Open Market trade may be applied for by all companies which are admitted to trading on the Open Market pursuant to Paragraph 2. (4) Irrespective of whether the prerequisites pursuant to Paragraph 2 or 3 are fulfilled, Scoach may refuse the establishment of business relations with a Participant if reasonable cause in such Participant exist which may damage the reputation of Scoach or FWB. 3 Termination rights of Scoach (1) Irrespective of 2 Paragraph 2 to 4, Scoach may terminate all or individual business relations to a Trading Participant pursuant to these General Terms and Conditions upon legitimate reason only. Legitimate reason exists if even under consideration of the legitimate interests of the Participant a business continuance of trade is unacceptable for Scoach. A legitimate reason exists in particular - if, after effectless reminder, the Participant continues to violate against essential contractual obligations of these or - if circumstances in the person of the Participant retroactively occur which fulfil the prerequisites of 2 Paragraph 4. (2) Termination rights of the Participants remain unaffected.

4 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 4 of 13 4 Amendments to the (1) Amendments to these shall be announced to the Participants in writing or electronically prior to their effectiveness. They shall be deemed approved when the Participant does not object thereto with Scoach in writing or electronically within 10 Exchange days after announcement of the amendments. Scoach shall expressly point out this legal consequence to the Participant. (2) In case of an objection pursuant to Paragraph 1, Scoach may terminate its business relation to the Participant with a six months notice. 3 shall remain unaffected. 5 Administration, Publication of Announcements In the absence of any provision to the contrary hereinafter, information which have to be published according to these, shall be published on the Scoach website at for at least three Exchange days. Scoach may determine other electronic media for publishing the General Terms and Conditions. 4 shall remain unaffected. 6 Cooperation Obligations of the Participant Regardless of any particular service obligations according to these General Terms and Conditions, the Participant is obligated to contribute to an orderly operation of the business relation. This contains in particular - the punctuality, clarity and consistency of applications and notifications, - a special note to any urgent matters or matters with a period of time - the review of notifications of Scoach regarding correctness and completeness within the scope of these and immediate raising of objections, - the notification of Scoach in case of absence of expected or announced information of Scoach. 9 Paragraph 2 shall remain unaffected. 7 Notification Obligation of the Participant The Participant is obligated to inform Scoach immediately and in reasonable extent about all circumstances it has gained knowledge about, such circumstances being necessary for an orderly process of the business relation according to these, in particular for an orderly trade and transaction conduct of the structured products included in the Open Market.

5 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 5 of 13 8 Secrecy Scoach is sworn to secrecy regarding all Participant-related facts it has gained knowledge about. Legal duties of disclosure of Scoach remain unaffected. 9 Liability of Scoach; Contributory Negligence (1) Scoach is liable regarding fulfilment of its obligations pursuant to these for gross negligence of its employees and the persons it calls for fulfilment of its obligations. (2) If, by culpable behaviour, in particular by violation of obligations according to these, the Participant has contributed to the occurrence of the damage, the principles of contributory negligence determine to what extent Scoach and the Participant have to bear the damage. (3) Scoach is not liable for damages caused by force majeure, tumult, warlike events and phenomena or by other events not being caused by it (e.g. strike, lockout, traffic block, decrees by public authorities). (4) Liability of Scoach vis-à-vis third persons not being Participants according to 2 Paragraph 2, is excluded. 10 Applicable Law, Jurisdiction (1) Regarding the business relation between the Participants and Scoach pursuant to these, German law exclusively applies. (2) Sole place of jurisdiction for all disputes in connection with these General Terms and Conditions is Frankfurt am Main. Second Part: Provisions for the Inclusion of Structured Products 11 Inclusion of Structured Products in the Open Market (1) Structured products which are neither admitted nor included in the Regulated Market of FWB may be included in the Open Market. (2) On application of a Participant ( 2 Paragraph 3), Scoach shall decide upon the inclusion. A claim of the Participant of the inclusion of particular structured products does not even exist if the inclusion prerequisites ( 13) are fulfilled.

6 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 6 of 13 (3) The application of inclusion of structured products may be refused also if the inclusion prerequisites ( 13) are fulfilled, in particular if, in Scoach s view, the prerequisites for an orderly trade or for orderly business transaction are not fulfilled or if the inclusion results in an overreaching of the public or a severe damage of general interests. (4) Inclusions shall be published pursuant to Inclusion Application (1) Participant Inclusion has to be applied for in writing. The Applicant has to indicate company and office of the Participant as well as issuer and category of the structured products to be included. Scoach is authorized to require additional information in the application. (2) The application shall contain all supporting documents required for verification of the inclusion prerequisites ( 13). Other supporting documents shall be submitted to Scoach upon request. Scoach may decide that certain information has to be transferred electronically and in a specific file format. 13 Inclusion Prerequisites (1) Structured products can be included if: a) they possess an International Securities Identification Number (ISIN), and b) they are unofficially tradable, and c) the orderly fulfilment of the transactions is guaranteed, and d) there are no regulatory prohibitions against the Exchange trading, and e) they are either admitted for trading on a domestic or foreign Exchange-like market place already or if a prospectus made for them exists which is approved by a domestic or foreign authority recognized by Scoach. The prospectus shall not be older than 12 months and shall be written in either English or German language or contain a summary in either English or German. If the prerequisites named in item e are not fulfilled, the Participant may create an exposé containing details about the structured product and the issuer. The information contained in the exposé shall be determined by Scoach. Subject to legal disclosure and publishing obligations, Scoach is not authorized to either publish or transfer this exposé to third persons. (2) In particular cases, Scoach is authorised to determine additional inclusion prerequisites.

7 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 7 of Disclosure Obligations of the Participant The applying Participant is obligated, over the entire term of inclusion, to inform Scoach about all circumstances being essential for the assessment of the included structured product or issuer. Only circumstances which the Participant has actual knowledge about or which it can acquire information by generally accessible information sources in a reasonable way, underly such information obligation pursuant to Clause Termination of Inclusion (1) Regardless of the termination right pursuant to 3 Paragraph 1, Scoach may terminate the inclusion of a structured product within an adequate term, if the prerequisites for the inclusion have not existed or have ceased to exist retroactively at the time of inclusion. When assessing the term, the justified interests of the Participant and the public shall be taken into consideration. The inclusion may be terminated without any period of time if an orderly trading of business transaction is affected or an overreaching of the public is imminent. Actions for suspension trading remain unaffected. (2) Regardless of the termination right pursuant to 3 Paragraph 2, the Participant may terminate the inclusion at any time subject to an adequate term. When assessing the term, the justified interests of the Participant, the public and, as far as the structured product is traded in the Specialist Model, the Specialist have to be considered. (3) Actions pursuant to Paragraph 1 and 2 shall be published pursuant to 5. Third Part: Provisions for trading with Structured Products 16 Application of the Rules of the Regulated Market (1) In addition to these General Rules and Regulations, the trading and settlement of structured products transactions on the Open Market, the decision concerning the type of price determination and price fixing in these structured products, including their supervision, shall be governed mutatis mutandis by the Rules of the Regulated Market, unless special rules apply under these. The trading hours (hereinafter referred to as trading hours ) on the Open Market are the same as those for floor trading at the FWB. The business days of Scoach under these are the Exchange days determined by the Executive Management of the FWB. (2) Notwithstanding 38 Paragraph 2 of the Exchange Act structured products that are issued for public subscription may already be included before termination of the allocation period to the subscribers in the Open Market. (3) If violations occur, Scoach may take appropriate actions, as set out in 25 of these.

8 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 8 of Publication of prices In accordance with the provisions applying to the Regulated Market, Scoach is obligated to publish the determined prices of the structured products traded on the Open Market. 18 Selection between Market Maker Model and Specialist Model (1) In his application for inclusion according to 12, the Participant has to specify whether trading of the structured products shall be included in the Market Maker Model or in the Specialist Model. Insofar as the prerequisites for inclusion in orderly trading in the Market Maker Model have not been fulfilled, Scoach may arrange for inclusion in the Specialist Model. 11 Paragraph 2 Clause 2 and Paragraph 3 shall remain unaffected. (2) For structured products already included in Open Market, Scoach decides upon written application by the Participant, who applied for inclusion, on a change of trading model. Changing to the Specialist Model should be completed within an appropriate term, in general not more than three exchange trading days. Changing to the Market Maker Model should be completed within three months after the application. If orderly trading is not guaranteed, Scoach rejects the change in trading model. (3) If prerequisites for orderly trading of a structured product in a particular trading model subsequently cease to exist, Scoach may arrange for a change of trading model even without application of the Participant. In this case, Scoach is not subject to the terms set out in Paragraph 1 Clause Quote Provider (1) Regardless of the selected trading model, the Participant applying for inclusion of a structured product must specify a quote provider for the respective security. The quote provider must have access to the electronic trading system at FWB and undertake vis-à-vis Scoach by written declaration to provide indicative and/or binding quotes for individual structured products or types of structured products. Provided these prerequisites are fulfilled, also the Participant applying for inclusion or the issuer may act as quote providers. (2) For fulfilment of quotation obligations, the quote provider shall fulfil personnel, technical and financial prerequisites; Scoach may determine further details thereto. The quote provider shall nominate vis-à-vis Scoach an expert contact person admitted to trading at FWB and a technical contact person. Both contact persons must be reachable for Scoach and the Specialists via telephone starting one hour before start of electronic trading until one hour after close of electronic trading. (3) Scoach may interdict quote providers partly or fully to enter quotes if the prerequisites for their admission either were not fulfilled or subsequently ceased to exist or if they do not orderly fulfil their obligations pursuant to 20 and 21. In case of an interdiction, the Participant who applied for inclusion of the structured products in question must immediately nominate a new quote provider.

9 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 9 of Quotation and Reporting Obligations of the Quote Provider in the Market Maker Model (1) During trading hours of electronic trading, the quote provider must continually enter binding quotes in the system provided for this purpose; as soon as a binding quote has entirely been executed, the next binding quote shall be entered within five minutes. Binding quotes up to a limit of 0.10 EURO may be entered with three decimal places. They must be valid for a volume usual in trade. The quote provider is obliged to conclude transactions at least up to the volume covered by his quotes. If the quote provider is not the issuer of the security for which he has undertaken to supply quotes, such quote provider must ensure by means of appropriate contractual and technical provisions that the binding quotes supplied by him do not deviate at the expense of the counterparty from the indicative quotes the issuer of that security supplies at FWB or on the Open Market vis-à-vis third parties. Separate binding quotes of the quote provider during the outcry of the continuous quote shall be entered at the latest five seconds after start of outcry (2) The quote provider should guarantee that at least one price determination per trading day takes place through the electronic trading system for each security traded in the Market Maker Model. If no price determination with turnover is possible, the quote provider should enter a separate quote in the electronic trading system for determination of a price without turnover. (3) Upon application of the Participant who applied for inclusion of the structured product concerned, Scoach may set a quotation period deviating from the trading hours of the electronic trading system, provided orderly trading on the Open Market is not put at risk by this measure. In case such measure is taken, the Participant must ensure that this fact is communicated immediately to the other participants; also, the Participant must keep a record of the communication. (4) The obligation to supply quotes does not apply if it is unacceptable for the quote provider to supply indicative or binding quotes due to exceptional circumstances at his operations or as a result of an unusual market situation. The quote provider must notify Scoach immediately of any interruption in quotation. Scoach may publish information about quotation interruptions on its internet website ( (5) the quote provider has no obligation to enter a volume for the ask side of quotes entered in the trading system for such securities, if a security 1. is sold out completely by the issuer (sold-out status), 2. has been terminated by the issuer, 3. does not possess any security mechanisms due to violation of all security limits or 4. is affected by a statutory amendment in such a way so that a purchase of the security is no longer possible.

10 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 10 of 13 (6) In case of securities whose performance, according to the conditions set forth in the exchange admission prospectus or sales prospectus, is dependent on an underlying in a way that 1. they will become worthless if the underlying reaches a specific price 2. they will be traded only at a fixed repurchasing price and will not depend any more on the further performance of the underlying upon the underlying reaching a specific price, the quote provider shall immediately notify Scoach via telefax or of this incidence, specifying the respective security as well as the nature and exact time of the incidence. (7) Scoach registers and documents, if and to which extent quote providers fulfil their quotation obligations. Scoach may publish this data on its internet website ( should this be required in order to inform the participants and issuers. 21 Quotation and Reporting Obligations of the Quote Provider in the Specialist Model (1) The quote provider shall supply at least one indicative quote to the specialist per trading day.for indicative quotes and the reporting obligation of the quote provider in the Specialist Model, 20 Paragraph 1 Clause 2 to 5 and Paragraph 3 7 apply accordingly. (2) Further to the quotation obligations pursuant to Paragraph 1, upon quote request of the Specialist, the quote provider shall supply a binding quote to the Specialist. After coordination with the Specialist, the binding quote will be entered by the Specialist in the electronic trading system on behalf of the quote provider. In addition to Scoach, the quote provider is obliged to inform the Specialist immediately about any quotation interruptions. 22 Instruction and Monitoring of the Specialists (1) In the Specialist Model, trading participants (Specialists) instructed by Scoach in accordance with Paragraph 2 take over the tasks of a Specialist pursuant to 23. The Specialists must undertake to fulfil these duties for all securities traded in the Specialist Model. According to Paragraph 2, the tasks of the Specialists may be contractually restricted to specific securities, provided orderly trading in Open Market is not put at risk by this measure. In case securities change to the Market Maker Model, the duties of the Specialists with respect to the corresponding securities shall end; a right to take over fulfilment of these tasks for specific securities does not exist. (2) Based on a written agreement, Scoach commissions a Specialist for each structured product traded in the Specialist Model to take over the duties pursuant to 23. Only Participants who 1. ensure orderly fulfilment of the duties pursuant to 23 by virtue of their personnel, technical and financial resources and their professional qualification and experience,

11 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 11 of use a Limit Control System, which complies with the requirements for Limit Control Systems used by Specialists set out in the rules for the Regulated Market, and appropriate entry devices (front-ends) for entering quotes and orders in the electronic trading system. 3. guarantee that information disclosed to them and to individuals acting on their behalf in the context of their activity as Specialists is treated confidentially and in particular, is not passed on to third parties. 4. do not give reason for doubts that the orderly fulfilment of tasks entrusted to them as Specialists conflicts with further activities of theirs or with the legal structure of their institution. 5. perform their activities in a way that Scoach and FWB are able to fully monitor the operations may be instructed as Specialists. In accordance with Clause 1, Scoach may define more precise requirements on a contractual basis. (3) Scoach registers and documents, if and to which extent Specialists fulfil their obligations pursuant to 23. Scoach may publish this data on its internet website should this be required in order to inform the participants. Scoach may interdict Specialists partly or fully to act as Specialist if the prerequisites for their admission either were not fulfilled or subsequently ceased to exist or if they do not orderly fulfil their obligations pursuant to Duties of the Specialists (1) During the time for which the quotation obligation of the quote provider exists, specialists shall continuously provide indicative quotes on basis of the respective order book situation and the quotes entered by the quote provider. The bid-/ask limit as well as the volume of these quotes shall correspond to or be narrower than the quote entered by the quote provider. 20 Paragraph 1 Clause 2 and Paragraph 2 and 4 shall apply to the quotation obligation of the specialist. (2) In order to avoid prices not reflecting the market situation, specialists shall check the bid-/ask limit of the quotes requested with the quote provider against the quotes continuously submitted by the quote provider pursuant to 21 Paragraph 1 in connection with 20 Paragraph 1 and against the price last determined in the continuous auction. In doing so, changes usual in the market shall be considered. In case quotes of the quote provider turn out not to be plausible, the quote provider shall be requested either to confirm the quote or to name a new quote. As long as no plausible quote of the quote provider exists, quotes pursuant to Paragraph 1 do not have to be provided. In these cases, Scoach shall immediately be informed via telefax or . (3) In case of executable order book situations in the continuous auction, specialists shall provide own or third-party liquidity. Partial executions through the electronic trading system shall be avoided.

12 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 12 of 13 (4) The specialists shall specify to Scoach an expert contact person admitted as exchange trader on FWB for their company, as well as a technical contact person. The contact person shall be available for Scoach at least via telephone starting one hour before trading until one hour after end of trading. Scoach may provide for further requirements in the agreement pursuant to 22 Paragraph 2 Clause Prohibition of short selling (1) Trading Participants are not permitted to sell structured products without having sufficient holdings in the respective structured product at the time that the sell transaction is made. In addition trading Participants must ensure that the customer who places such an order also has sufficient holdings in the structured product at the time that the sell transaction is made. (2) Cases in which a sale has unintentionally been executed despite insufficient holdings due to cancellations, technical problems or comparable or similar situations are not subject to the rules in paragraph 1. Fourth Part: Measures in the case of violations 25 Measures in the case of violations (1) Scoach is authorised to publish Participants violations of obligations from these, thereby naming the company of the respective Participant and specifying the relevant violation. (2) Actions pursuant to Paragraph 1 do not affect the implementation of a disciplinary proceeding pursuant to 22 German Stock Corporation Act. Fifth Part: Fees 26 Fees (1) The fees for the one-time inclusion of structured products in the Open Market shall amount to EURO (2) The fees to be paid by a participant for inclusion of structured products in the Open Market pursuant to paragraph 1 shall be limited to a total amount of EURO 15, per calendar year.

13 n the Regulated Unofficial Market on the Frankfurt Stock Exchange (FWB) Page 13 of 13 (3) For each application on cancellation of a transaction (mistrade application), a fee in the amount of EURO 500 shall be levied from the applicant. In case several mistrade applications requesting the cancellation of transactions have been submitted such transactions having been accomplished as a result of partial executions of the same order or the same binding quote of the applicant the fee in the amount of EURO 500 shall only be levied once. In case several mistrade applications are submitted in writing, via telecopy or in electronic form at the same time, or upon prior application via telephone, the required details for several mistrade applications are submitted afterwards in writing, via telecopy or in electronic form at the same time, 1. the fees in the amount of EURO 500 shall only be levied once, provided that the mistrade applications refer to transactions in the same structured product 2. a total fee of EURO 1,000 shall be levied, provided that the mistrade applications refer to transactions in structured products which belong to the same product type and have the same underlying. (43) Fees are payable with issuance of the invoice by Scoach. Sixth Part: Data Protection 27 Data Protection (1) In order to fulfil their obligation to monitor the orderly trading and trade settlement, Scoach shall record incoming and outgoing calls on the telephone lines announced via circular. These recordings shall at the latest be deleted after expiration of ten years. (2) Data collected pursuant to Paragraph 1 whose nondisclosure is in the interest of the participant or third parties in particular individual-related data as well as operating and business secrets shall only be used for the purpose named in Paragraph 1 and only if the clarification of facts relevant therefore is not possible or acceptable by other means of finding or evidence. In cases of Clause 1, collected data may be transferred to the authorities named in 10 Paragraph 1 Clause 3 Stock Exchange Act, provided these authorities need to have knowledge of these data in order to fulfil their obligations. Frankfurt/ Main, 15 August April Scoach Europa AG