Legal Action Against the Decision of a German Stock Exchange Sanctions Committee

Occasionally, situations may arise during day-to-day trading that give rise to the suspicion - justified or unfounded - of a breach of the rules and regulations of a German trading venue, in particular the Exchange Rules. It is not uncommon for allegations to be made of market manipulative behaviour or, in the case of market makers (e.g. designated sponsors or specialists), of failures in connection with their quoting obligations.

If the Sanctions Committee (Sanktionsausschuss) decides in unfavour of the trading participant, it can impose a fine of up to one million euros or decide to exclude the participant from trading in full or in part for up to 30 trading days. A relatively small fine is often imposed (e.g. EUR 2,000). However, higher amounts are also possible depending on the severity of the offence.

For affected trading participants, the question arises as to how to deal with such a situation. Particularly in the case of small administrative fines, financial considerations will tend to speak in favour of accepting the sanction decision, even if the accusation is unfounded in terms of substantive law. On the other hand, the trading participant is then tainted with the stigma of having violated applicable law and perhaps even committed market manipulation.

This in turn can result in further measures being taken by the supervisory authority responsible for the trading participant (in Germany, BaFin and Deutsche Bundesbank), which can be quite serious. If there is an allegation of market manipulation, subsequent criminal or at least administrative offence proceedings are also conceivable. Such consequences are so serious that, depending on the case, legal action against the decision of the Sanctions Committee may be necessary.

Kronsteyn will assist you in preparing and conducting legal proceedings against the decision of a sanctions committee. Please contact lawyer Dr Hendrik Müller-Lankow if required.

FAQ

Which German stock exchanges have set up a sanctions committee?

Each German stock exchange has set up a sanctions committee. This means that sanctions committees exist on the following exchanges:

• Frankfurt Stock Exchange - Frankfurter Wertpapierbörse (FWB)

• Eurex Deutschland - Eurex Deutschland

• European Energy Exchange (EEX)

• Stuttgart Stock Exchange - Baden-Württembergische Wertpapierbörse (Börse Stuttgart)

• Tradegate Exchange

• Berlin Stock Exchange - Börse Berlin

• Düsseldorf Stock Exchange - Börse Düsseldorf

• Hamburg Stock Exchange - Hanseatische Wertpapierbörse Hamburg

• Hannover Stock Exchange - Niedersächsischen Börse zu Hannover (Börse Hannover)

• Munich Stock Exchange - Börse München

Which court has jurisdiction over the action?

What is the deadline for filing legal action?