For the regime on ‘cold delisting’ see Q 18.
2. If the answer to 1. is yes, who decides so?
BoD GA (X) Other (X)
Relevant provision:
Sections 95(5) no 15, 148(2a) AktG; sections 38(6) et seq BörseG
Pursuant to section 95(5) no 15 AktG, section 38(7) BörseG, the Board of Directors (Vorstand; hereinafter ‘BoD‘) of an Austrian corporation needs the approval of the Supervisory Board (Aufsichtsrat; hereinafter ‘SB‘), and, if listed in Austria,
1) of the General Assembly (Hauptversammlung; hereinafter ‘GA‘; see Q 3) or
2) of shareholders who collectively hold at least ¾ of the voting capital.
3. What is the quorum requirement for the delisting decision of the competent organ?
Unless provided otherwise by the Articles of Incorporation (Satzung; hereinafter ‘AoI‘), the BoD and the GA (section 121(1) AktG) of an Austrian corporation can decide when at least one member (shareholder) is present, whereas resolutions of the SB require the presence of at least three members (section 92(5) AktG).
4. What is the majority requirement for the delisting decision of the competent organ?
Unless provided otherwise by the AoI, the BoD and the SB of an Austrian corporation decide with a simple majority. The approval of the GA (see Q 2) requires ¾ of the votes cast and, if the AoI of an Austrian corporation demand delisting, ¾ of the voting capital participating in the vote (section 38(7) BörseG, section 146(1) AktG).
5. Do (minority) shareholders have statutory veto rights as to a delisting decision?
Yes No (X)
Relevant provision:
Shareholders can challenge the GA’s approval if it violates the AoI (without properly amending them) or the law (sections 195 et seqq AktG; see also Q 28).
Pursuant to section 38(2) no 3 BörseG, only the issuer can appeal to the Federal Administrative Court (Bundesverwaltungsgericht; hereinafter ‘BVwG‘) if the market operator rejects the delisting application. Only the issuer and the market operator can appeal against the decision of the BVwG to the Austrian Supreme Administrative Court (Verwaltungsgerichtshof; hereinafter ‘VwGH‘)(1).
6. Should delisting take place within a specific timeframe after the relevant decision? Is there a specific period of time after the decision in which the delisting should be completed?
Yes No (X)
Relevant provision:
There is no specific timeframe tied to the issuer’s decision. However, in most cases a mandatory bid is necessary before the issuer’s application for delisting (Q 1) and the time between the bid’s publication and the application must not exceed six months (section 38(8) BörseG). According to section 43(4) BörseG, as a general rule, the market operator has to decide within 10 weeks after the application has been received. It has to publish its decision and, taking into account the interests of the issuer and the investors, determine a date on which the delisting becomes effective. The period between publication of the decision and it becoming effective must not be shorter than three months or longer than 12 months (section 38(10) BörseG).
7. Should the delisting application give a full statement of reasons for the submission of such application?
Yes No (X)
Relevant provision:
Section 43 BörseG
No reasons have to be provided; the required information and documents under section 43(2) et seq BörseG are sufficient.
8. Is it required that a competent authority approves the voluntary delisting?
Yes No (X)
The public oversight body (Finanzmarktaufsicht; hereinafter ‘FMA’) has no competence to challenge the delisting. However, the market operator (Wiener Börse AG) acts as a public entity.
If the answer to 8. is yes, who is the competent authority?
See above. The market operator acts as a public entity.
If the answer to 8. is yes, does the competent authority has the competence to verify the reasons of delisting?
Yes No (X)
Relevant provision:
Sections 38(9), 45 BörseG
The market operator is obliged to delist the issuer if the formal requirements are met (cf Q 1).
If the answer to 8. is yes, does the competent authority have any discretion? Can the competent authority impose additional terms for investor protection? Can the competent authority postpone the decision? If Yes, do you know whether this discretion has been used in the past?
Yes (X) No
The market operator has discretion – inter alia – in deciding whether a certain level of investor protection is met. For further details, see Q 6 and 22
No data regarding this issue is available.
9. In case of a voluntary delisting does the issuer have to make an offer to buy the shares of (dissenting) shareholders?
Yes (X) No
Relevant provision:
Section 38(6) and 8 BörseG, sections 27e et seqq ÜbG
In most cases; see Q 1 for exceptions.
If the answer to 9. is yes, at what price should the offer be made? How is the price calculated?
According to sections 26 and 27e ÜbG the price must not be lower than any of the following:
1. the offer at a takeover bid by the same bidder(s) within the last twelve months;
2. the average stock exchange price in the last six months before the intention to submit an offer was announced;
3. the average stock exchange price during the last five days before the intention to submit an offer was announced.
However, if the determined price is still obviously below the actual value, an appropriate price has to be assessed (cf section 27e(7) sentence 2 ÜbG) by common valuation methods, such as the DCF procedure.
Shareholders addressed by the mandatory bid may apply for a verification of the price offered pursuant to sections 26(5), 33 ÜbG, unless more than 50 per cent of the addressees have already accepted the offer (see section 27e(8) ÜbG). In addition, the Takeover Commission (Übernahmekommission; hereinafter ‘ÜbK‘) is entitled to apply for a verification (cf section 33(1) ÜbG).
10. Are there any restrictions due to the principle of maintenance of the share capital?
Yes (X) No
Relevant provision:
Sections 52, 56, 65 et seq AktG
In practice, the majority shareholder(s) is/are the bidder(s). In theory, it is possible that the issuer itself could bid to buy back shares. However, section 65 AktG restricts the issuer from doing so.
11. Does a (majority) shareholder or a third person has the right to offer to buy the shares of (dissenting/all) shareholders and relieve the issuer?
Yes (X) No
Relevant provision:
See Q 10.
12. In case of a voluntary delisting does the issuer or a third person have the obligation to publish a prospectus / informational document?
Yes (X) No
Relevant provision:
Section 38(8) BörseG, sections 7, 27e ÜbG
In the course of a mandatory bid (Q 1), a takeover prospectus pursuant to section 7 ÜbG must be published.
13. Is an exit opportunity / mechanism that allows investors to exit their investments (e.g. sell – out right) available for shareholders in case of delisting? What are the relevant provisions (please provide translations)?
Yes (X) No
Relevant provision:
Sections 1 et seqq GesAusG; see Q 18 and 19
If yes, please define:
The requirement of a mandatory bid (Q 1) offers the shareholders an exit option.
However, if they decide not to accept the offer, they risk expulsion by a squeeze out. If the bidder holds more than 90 per cent of the corporation’s capital (section 1 Squeeze-Out Act, Gesellschafter-Ausschlussgesetz; hereinafter ‘GesAusG’), the bidder may squeeze minority shareholders out. The minority shareholders receive an appropriate cash settlement.
In case of a ‘cold delisting‘ (see Q 18 and 19) through corporate measures – depending on the exact constellation – shareholders who vote against the respective corporate measure in the GA may exit the corporation for an appropriate cash settlement. In return, they have to give up their shares. However, these corporate law measures do not replace the abovementioned mandatory bid pursuant to takeover/delisting law; both safeguards apply (2).
Bond holders and profit participation right holders only have the right to receive equivalent rights or adequate compensation (section 226(3) AktG, section 15(5) SpaltG) (3).
14. Is there any specific provision on downlisting? If not, is downlisting allowed, and how does it take place?
A downlisting occurs when the shares are no longer traded on a regulated market (as defined by Union law) but on an MTF.
Yes (X) No
If yes, please define:
A (voluntary) downlisting from a regulated market to an MTF is treated like a voluntary delisting (4).
15. Is there any specific provision on market migration (delisting from a regulated market and listing in another)?
Yes (X) No
Relevant provision:
Section 38(8) no 2 BörseG
If yes, please define:
See Q 1 for voluntary delistings and Q 18 for cold delistings.
16. Is there any specific provision on voluntary delisting in case of increase of listing requirements by both the Law and Stock Exchange?
Yes (X) No
If yes, please define:
There are no specific provisions in case of an increase in listing requirements by the law. Pursuant to section 2(1) of the General Terms and Conditions (hereinafter ‘T&C‘) of the Market operator, a membership to the stock exchange is regulated in the BörseG and the respective T&C.
If an amendment to the BörseG requires a change of the T&C, the market operator is obliged to amend its T&C following the procedure prescribed in section 11 of the T&C, ie publish the amendment. The amendment is deemed approved if the contracting party does not raise an objection in writing within 14 days. In case of an objection to appropriate and reasonable amendments, the market operator is entitled to exclude the respective party from the membership of the stock exchange and terminate its contract due to good cause with immediate effect.
17. Are there different rules on delisting for national and foreign listed companies?
Yes (X) No
If yes, please define:
Regulations of the AktG only apply to Austrian corporations, those of the BörseG to all corporations listed in Austria (see Q 2 et seqq).
18. Cold delisting is usually described as a transformation of a listed company resulting to its delisting, including especially the merger by absorption of a listed company by an unlisted company. What is defined as cold delisting in your legal order? Is there any specific provision on cold delisting?
There is no legal definition of a ‘cold delisting‘. However, the term is commonly used for measures that end a listing without an application pursuant to section 38 BörseG (5).
A protection of minority shareholders is stipulated in special provisions, such as: section 225(2a) AktG (mergers), section 240(3) AktG (conversions), section 21(5) EU-UmgrG, section 12(3) SpaltG (divisions) and section 148(2a) AktG (other changes of the AoI, which result in a delisting).
The common protective measure in the abovementioned provisions is the requirement of a mandatory bid pursuant to section 27e et seqq ÜbG (cf Q 9). However, see Q 13 for the second safeguard.
However, pursuant to sections 148(2a), 225(2a) AktG, section 12(3) SpaltG and section 21(5) EU-UmgrG, a mandatory bid is not required if the shares of the absorbing company are listed in at least one other market within the EEA with equivalent prerequisites for a delisting (see Q 1).
The legal legitimacy of ‘cold delistings‘ was highly disputed until the aforementioned delisting regime came into force in 2018 (cf Q 25).
In 2017 the Austrian Supreme Court (Oberster Gerichtshof; hereinafter ‘OGH‘) ruled that a merger to achieve a (cold) delisting is not per se unlawful. However, according to this ruling a merger is an abuse of rights if its sole purpose is to achieve a delisting and there is a massive imbalance between the assessed interests of the corporation and of the shareholders. Circumstances already known to the corporation at the time of the listing are only of secondary importance in the consideration of their interests (6).
19. Does the merger of a listed company with a non-listed company lead to delisting? Is an exit opportunity available for shareholders? What are the relevant provisions? (please provide translations)
Yes (X) No
Relevant provision:
Section 225(2a) AktG
Yes, if the absorbed company is listed. In this case, it ceases to exist and its listing ends. See Q 13 and 18 for the exit options in form of a mandatory bid or a cash settlement.
20. Does the successful completion of a mandatory bid give the right to delisting? If yes, are there any preconditions?
Yes No (X)
Relevant provision:
Section 38(6), (8) no 1 BörseG
If yes, please define:
The success of a mandatory bid is not in itself a requirement (see Q 1 and 9, but also Q 4 and 22).
21. Are there specific rules on delisting from an MTF?
There are no specific rules on delistings from MTFs. Section 38(6) BörseG is not applicable on a delisting from an MTF as section 38(6) requires securities listed on a regulated market according to Article 4(1) no 21 MiFiD II (7)..
PART II. OBLIGATORY DELISTING
A delisting is deemed compulsory/obligatory, if it is initiated by a supervisory authority or a market operator without consent of the company.
22. What are the prerequisites for compulsory delisting by the competent national supervisory authority?
According to section 38(4) BörseG the market operator has to delist an issuer that
i) does not meet certain prerequisites for a listing anymore (eg change of corporate form, free-float-requirement under section 40(1) no 7 BörseG),
ii) has obtained the listing under false pretenses or through willfully providing false information, or
iii) has repeatedly breached its obligations (cf sections 119 et seqq BörseG), eg disclosure duties (cf sections 124–126, 130–135, 140 BörseG; also cf a ruling by the BVwG: ‘structural breach of duties that occur frequently and repeatedly‘) (8).
If the protection of investors is not at risk, it is in the discretion of the market operator to grant a grace period for an amendment of the situation in cases of the first and third category (cf section 38(4) sentence 2 BörseG).
According to section 39(8) BörseG the market operator may withdraw the admission (ie delist) if the issuer does not meet the general conditions for an admission (cf sections 39(1)–(4), 40 et seq BörseG) anymore, in particular the fair, proper, efficient and free trading of the financial instrument (cf para 1). According to the doctrine, insider trading or omissions of ad hoc publicity (cf Articles 14, 17 MAR (9) ) can violate section 39(9) and (1) BörseG (10).
23. Which body has been designated as the competent authority, in particular regarding the power to require the removal of a financial instrument from trading pursuant to art. 69(2)(n) MiFID II?
Articles 69(2)(m) and 69(2)(n) MiFID II (11) have been implemented into section 93(2) no 12 BörseG. The FMA is the competent authority with the power to require the market operator to suspend or remove financial instruments from trading. However, as already stated in Q 8, the market operator acts as a public entity under the supervision of the FMA.
24. What are the rules of the market that can justify a compulsory delisting imposed by market (Art. 52 MiFID II)?
According to section 17(1) BörseG (cf Article 52 MiFID II) the market operator has to suspend a financial instrument from trading that does not meet the requirements of the regulated market (as to obligatory delisting see Q 22), unless the suspension would be against the interests of the investors or the general interest in a functional market.
The ‘rules of the regulated market’ under this provision are not restricted to the T&C of the market operator, but also include major incidents that have an important influence on the stock price, including insolvency of the issuer (12). Also see Q 32.
If the market operator does not act on its own, the FMA may order/request it to suspend the security from trading (cf section 17(5) BörseG; see Q 23).
25. Have any of the voluntary or obligatory delisting requirements above changed materially since 2010 (e.g., due to a legal decision or amendment of the regulations)?
Before the BörseG and the amendments to the respective corporate law measures for cold delistings came into force in 2018, a voluntary delisting was possible only from MTFs, not from the regulated market. Therefore, some companies turned to “cold delistings”. However, this was highly controversial in the Austrian doctrine (see Q 18). The German court rulings (Macrotron (13) and Frosta (14) ) put additional pressure on the Austrian legislator, which subsequently led to the amendment of the BörseG and the corporate statutes.
Pursuant to section 181 BörseG in the initial version of BGBl. I Nr. 107/2017 and section 194 BörseG in the current version of BGBl. I Nr. 69/2022, the new regime came into force on 3 January 2018.
PART III. GENERAL QUESTIONS (if not already answered)
26. Ηow are dissenting shareholders protected in voluntary delisting?
The shareholders can challenge an unlawful decision by the GA and challenge the price of the mandatory bid (cf Q 5 and 9).
In case of a cold delisting, dissenting shareholders are protected by the requirement of a mandatory bid pursuant to section 27e ÜbG. Again, they can challenge the GA’s resolution on the measure (eg merger) or apply for a verification of the price offered.
27. What are the sanctions in case of a breach of the delisting rules?
There are no specific sanctions.
28. Is there a special duty of loyalty (for the board or, if applicable, the shareholders) imposing further restrictions in connection with a delisting?
There is no special duty of loyalty for the BoD in case of a delisting. However, the directors’ general duties apply (see sections 70, 84(1) et seq AktG) including the duty to act neutral and act in the best interest of the corporation in the course of a mandatory bid (sections 3, 12, 27e ÜbG).
Only in extreme cases, the majority’s conduct may constitute a breach of fiduciary duties or an abuse of power (cf also Q 18). Also, minority shareholders could theoretically be obliged to consent to the delisting (cf Q 1, 18) to prevent the issuer from taking severe harm.
29. Ηow are shareholders protected in obligatory delisting?
See Q 22 et seq, but cf also Q 5.
30. Have shareholders successfully challenged delisting decisions in the past? If Yes, could you provide any names of cases?
The decision regarding the legitimacy of cold delisting under the old regime (see Q 18) seems to be the only case in which a decision to delist was successfully challenged.
No court decisions concerning the new delisting regime have been published.
31. How is the issuer protected in (obligatory) delisting?
The issuer can appeal against the decisions of the market operator (section 38(2) no 2 BörseG); the procedure described in Q 5 is applicable.
32. How does insolvency and restructuring of a listed company affects delisting? Specifically: a) Does the initiation of formal insolvency (liquidation) procedures automatically trigger mandatory delisting? b) Does the initiation of formal restructuring / reorganization procedures automatically trigger mandatory delisting? c) If the above scenarios do not automatically trigger mandatory delisting, what else are the implications? d) Please give empirical information (if available) on the treatment of insolvent listed firms by trading venues in your jurisdiction e) What are the relevant provisions (please provide translations)?
Neither section 38 nor section 39 BörseG have any provisions addressing the insolvency or restructuring of the issuer. However, insolvency can affect functional trading and, in turn, lead to suspension or delisting (Q 22 et seq, especially Q 24).
Furthermore, section 17 of the T&C deals with the insolvency of a member of the stock exchange, but mainly concerns the publication by the market operator and the consequences on contracts (such as futures).
Under the Rulebook on the Prime Market of the Vienna Stock Exchange the Agreement on the Inclusion in the prime market automatically ends or can be terminated by the end of the day on which insolvency proceedings or similar procedures are opened. However, although not completely clear, in this case the company seems to stay listed in the standard market, which also qualifies as a regulated market.
The data from the table in Q 36 does not offer much insight about/regarding insolvency.
33. Do relevant courts have the power to examine the delisting reasοns on the merits?
See above, especially Q 22, 24, 26 and 29.
34. What are the legal consequences of delisting: a) on shares, b) on shareholders, c) on the issuer?
a) Shares: After one year, bearer shares will be treated as registered shares (section 10(3) AktG).
b) Shareholders: There are no specific consequences. However, rules (only) regarding listed corporations do not apply anymore (eg section 22 ÜbG; ie acting in concert).
c) Issuer: The issuer is relieved from many obligations resulting from its listing, such as transparency and disclosure obligations (cf Directive 2013/34/EU (15), Directive 2004/109/EC (16), MAR) and Rules on Corporate Governance.
35. Are there any statistical data on delisting in your Country? If yes, please provide further details. Are there any statistical data, or evidence, on downlisting in your Country? If yes, please provide further details. Are there any statistical data, or evidence, on delisting from an MTF in your Country? If yes, please provide further details.
See Q 36. The published data does not clarify whether securities delisted from the regulated market were simultaneously listed on an MTF/other market. In some cases, it was stated that a downlisting had occurred.
36. More specifically, how many cases of voluntary delisting and / or obligatory delisting by the competent national supervisory authority have there been since MiFID I entered into force in 2007? Please also provide the main reasons for mandatory delistings, if available.
The market operator published the following annual statistics. Not every statistic included the reason for each delisting.
The relevant securities range from participation certificates, common and preferred shares to other types of certificates.
Also, it is not clear whether the security was delisted or only downlisted/migrated. Sometimes, only the offered category of shares was changed (e.g. preferred shares vs. normal shares) or an MTF/other market-traded stock was upgraded into the regulated market. Whenever feasible, we distinguished between the regulated market and MTF/other markets, and between domestic and foreign securities (mostly through the information provided by the market operator and subsidiary through the respective ISIN).
If reasons were provided, we focused on voluntary/mandatory and cold delistings.
The total amount of recorded delistings in the years from 1997 to (December) 2023 are as follows:
• Regulated Market: TOTAL: 236
• of those domestic securities: 181 (with an additional 5 foreign delisted entities with an Austrian ISIN)
• MTF/other markets: TOTAL: 136
• of those domestic securities: 63 (with an additional 7 foreign delisted entities with an Austrian ISIN)
Please find the table displaying the available data for each year and the translations of the requested laws and statutes here.
__________________________
(1) R Wolfbauer, ‘§ 38 BörseG’ in M Gruber (ed), BörseG 2018/MAR (Wien, Manz, 2020) para 22; see also VwGH 28.03.2014, 2014/02/0033.
(2) P Fidler, ‘§ 38 BörseG’ in S Kalss, M Oppitz, U Torggler and M Winner (eds), BörseG/MAR: Börsegesetz 2018, Marktmissbrauchsverordnung (Wien, Linde, 2019) para 135.
(3) C Diregger and W Eigner, ‘Das freiwillige Delisting vom Amtlichen Handel‘ (2018) 66 Bank Archiv 850, 868; Fidler, ‘§ 38 BörseG’ (n 2) para 135.
(4) Fidler (n 2) para 78; Wolfbauer, ‘§ 38 BörseG ’ (n 1) para 52.
(6) OGH 23.06.2017, 6 Ob 221/16t; M Winner, ‘Verschmelzung zum Zweck des Delisting rechtsmissbräuchlich’ (2017) 12 Zeitschrift für Finanzmarktrecht 387, 387, 389; Wolfbauer (n 1) para 46.
(7) Fidler (n 2) para 77; Wolfbauer (n 1) para 52.
(8) BVwG 16.02.2015, W210 2003383-/13E.
(9)Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC Text with EEA relevance [2014] OJ L 173/1 (hereinafter ‘MAR’).
(10) Fidler (n 2) para 57.
(11) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) Text with EEA relevance [2014] OJ L 173/349 (hereinafter ‘MiFiD II’).
(12) M Wenzel, ‘§ 17 BörseG’ in S Kalss, M Oppitz, U Torggler and M Winner (eds), BörseG/MAR: Börsegesetz 2018, Marktmissbrauchsverordnung (Wien, Linde, 2019) para 8.
(13) BGH II ZR 133/01, BGHZ 153, 47.
(14) BGH II ZB 26/12, NJW 2014, 146.
(15) Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings, amending Directive 2006/43/EC of the European Parliament and of the Council and repealing Council Directives 78/660/EEC and 83/349/EEC Text with EEA relevance [2013] OJ L 182/19.
(16) Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC Text with EEA relevance [2014] OJ L 173/1.
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