July 17, 2020 / 5:49 AM / 20 days ago

Deutsche Boerse proposes new rules for quick DAX expulsion in wake of Wirecard

FILE PHOTO: The logo of Wirecard AG, an independent provider of outsourcing and white label solutions for electronic payment transactions, is pictured at its headquarters in Aschheim, near Munich, Germany, July 1, 2020. REUTERS/Andreas Gebert/File Photo

FRANKFURT (Reuters) - In the wake of the Wirecard accounting scandal, exchange operator Deutsche Boerse said on Friday it was proposing rules to enable it to quickly expel companies from the leading DAX index if those firms file for insolvency.

The ruling, if adopted, could mean that Wirecard would leave the DAX index in August, rather than during a regular review of the index makeup in September.

Wirecard was promoted to the DAX index of 30 leading companies in 2018, displacing Commerzbank, as the fortunes of a rising technology star underscored the declining fortunes of the nation’s top banks.

But in a dramatic fall from grace, Wirecard filed for insolvency last month owing creditors 4 billion euros ($4.55 billion) after disclosing a 1.9 billion euro hole in its accounts that its auditor EY said was the result of a sophisticated global fraud.

The rule change proposed by Deutsche Boerse would allow it to eject companies from the DAX two trading days after such news.

Deutsche Boerse is seeking feedback from market participants about the rules change by Aug. 7 and will make an announcement before Aug. 13.

(The story corrects day to Friday in paragraph 1.)

Reporting by Hans Seidenstuecker and Tom Sims; Editing by Michelle Martin

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below