Issuer

Issuer / Issuer are institutions that issue for the purpose of raising capital securities or similar instruments in the money market or capital markets or can be output with the help of a banking consortium. Even central banks are sometimes referred to on the issue of money as legal tender as issuers.

• 4.1 Listing
• 4.2 Reporting obligations

Purpose and object

For the issuer, the issue of procurement or increase in the equity or debt and the increase in market capitalization serves. The process of issuing securities is called emission. In the procurement of equity shares will be issued, while debt is absorbed by the issuance of bonds. Shares and bonds are traded on the capital market, participation certificates and convertible bonds as an intermediate form between equity and debt are also trading object of the capital market. Commercial paper or medium-term notes are trading object of the money market as a short-to medium-term loan obligations.

Type of issuer

Issuer in accordance with EC Regulation 1287/2006 ( Chapter 1, Article 2, No. 2 ) is a person who transferable securities and, where appropriate, other financial instruments. Even if these legal definition does not specifically exclude individuals as issuer, come in business practice issuable industrial, trade or transport undertakings, credit institutions, insurance companies or local authorities up to the State in question. Once these institutions do not meet their borrowing requirements through direct borrowing or her equity not deny from internal financing, but choose the securitization through securities, its function begins as an issuer. The term of the issuer is so closely associated with the securities term.

Type of Issue

Securities issues can be distinguished according to their frequency and the interest, which pursues an issuer. In addition, there are public and non- public issue.

After the frequency

If an issuer for the first time placed securities, there is a new issuers, issuers with a permanent presence on the money and capital markets are called according to duration issuer. New issues - even if an issuer after many years first appears again on the capital market - subject to special attention of all market participants, especially with banks, investors and media. The IPO belongs in this context to the new issues. Among the long-term issuers include in particular credit institutions, the permanent need debt to finance its lending business.

After the emission interest

The issuer placed in the self- emission of its own securities in its own name and for its own account. He then acts as a direct counterparty to the investing public and must consequently take itself the marketing risk, which also contains the complete technical processing is to be arranged by him. Therefore self emissions come mostly before with banks. Other companies can only occur as a self- issuer, if the emission takes place outside the stock exchange for legal reasons.

When the stranger mission, the issuer of one or more banks to act as underwriters and thereby carry out the securities issue for the issuer operates. Consortium members have the necessary expertise for securities underwriting and sales organization. In addition, the technical processing is performed by the consortium, which - in the case of a takeover consortium - also bears the market risk.

Public and non- public issue

The issuer need the IPO support from at least one credit institution, because in § 32 para 2 of the Exchange Act will require the participation of banks in the securities registration. This hurdle can be avoided only with self emissions by way of private placements outside the stock exchange. When securities issues in the context of private placements the offer is directed only to a few investors and is not - published - possibly through an offering circular. This form of OTC marketing is mostly done without any public participation.

Legal Issues

The issue of securities is regulated by law in some areas. In § 32 paragraph 2 of the Exchange Act is required that the admission of securities to trading by the issuer of the securities is to be made with a credit institution. This does not apply if the applicant is a credit institution itself. In both cases, the bank on a domestic exchange must be approved with the right to participate in trading. This is to ensure that issuers, which are not themselves financial institution, use the professional expertise of credit institutions. The legislature has a legitimate interest in protecting creditors and shareholders largely and to provide for an orderly exchange trading.

Listing

Main article: Stock Exchange Admission Regulation

The issuer and its securities shall meet the requirements that were enacted to protect the public and for an orderly exchange trading ( § 30 para 3 of the Exchange Act ). In § 34 of the Exchange Act No. 1a, the Federal Government is authorized to flesh out by regulation the requirements for the issuer in terms of its legal basis, its size and the duration of its existence. This is done in § 3 BörsZulV, after which the issuer of admission of shares in existence for at least three years and must have disclosed its financial statements for the three fiscal years preceding the application in accordance with the relevant rules.

Another important basis for the approval, the approval prospectus on the basis of the Securities Prospectus Act or a full Prospectus for the purposes of § § 42, 102, § 137 para 3 of the Investment Act. The prospectus shall also be signed by the attending institution. If the consortium together with the issuer the authorization application for the stock market, it takes full prospectus liability; an exemption from the liability claim is the internal relationship with the issuer regularly then agreed as a prospectus inducer, so that the issuer of the prospectus contents ultimately liable alone.

Reporting requirements

The admitted to trading issuer must satisfy pursuant to § § 44, 44a, 44b, 44c of the Exchange Act certain obligations, in particular

• A Paying Agent and to appoint a depository on the stock exchange,
• To publish new facts immediately, which could result in shares to a change of course and in debt to impairments in debt service,
• To provide regular progress reports during the current financial year.

Underwriters

The underwriting syndicate leads within the agency (§ § 675 ff BGB) for an issuer issuing securities (including shares or bonds; IPO ) through by keeping placed on the money market or capital market or in treasury this. The consortium will advise and assist the issuer in the different phases of the issue. First phase is the identification of needs, followed by the prospectus. After the approval process for the securities to be issued in cooperation with the relevant stock exchanges, regulatory and management agencies is operated. These are in particular Germany, the German stock market, the BaFin and the Clearstream. After approval finally follows the placement for which the underwriters as distribution channels in particular the stock market, the private placement are ( direct sales via the branches of the Underwriters ) or the assumption in its own stock available.

In underwriters (securities) is a Begebungskonsortium according to § 1 para 1 sentence 2 of the Banking Act No. 4, when only one broking services is adopted. Then the placement risk remains with the issuer ( "best effort" ). When underwriting the other hand, the lead underwriter binding obligation on the issuer to take on the entire issue amount (hence: underwriting syndicate ), the Lead Manager and / or the consortium to take the risk, put in the worst case, the entire issue alone or need to take. In stock offerings exclusively offers the underwriting syndicate, so that the planned capital increase comes about and may be entered in the commercial register. The underwriting applies for regulatory purposes as underwriting fees in accordance with § 1 para 1 sentence 2 of the Banking Act No. 10.

Issuer risk

Issuer risk consists of the risk that the issuer of the financial commitments can not meet. This can be the case of bonds or certificates in a deferral of only a partial interest payment or only partial repayment made ​​at the maturity date, at worst have a total loss for the creditor result. Accordingly, there is a risk of insolvency in shares, that can mean both a dividend failure, a dramatic decrease or even a complete failure for the shareholder.

The importance of the issuer risk was seen in the financial crisis from 2007. Example, the output from this bank certificates, for example, after the bankruptcy of Lehman Brothers in September 2008 was initially suspended from trading. It is to be expected with a total loss for investors.