PROSPECTUS Dated 5 July 2006

Transcription

1 PROSPECTUS Dated 5 July 2006 SAL. OPPENHEIM JR. & CIE. KGAA (incorporated as association limited by shares (Kommanditgesellschaft auf Aktien in the Federal Republic of Germany) Sal. Oppenheim jr. & Cie. KGaA ("Sal Oppenheim" or the "Issuer") 500,000 PROTECT BONUS CERTIFICATES ON NIKKEI 225 STOCK AVERAGE INDEX (the "Index"), (the "Protect Bonus Certificates") at an initial issue price of 100,00 per Protect Bonus Certificate and a term until 18 February 2011 (the "Maturity Date"). ISIN: DE 000 SBL2BN9 The Index is created, maintained and calculated by Nihon Keizai Shimbun Inc. (the "Sponsor"). Application has been made to the Bundesanstalt für Finanzdienstleistungsaufsicht (the "BaFin"), which is the German competent authority for purposes of Directive 2003/71/EC (the "Prospectus Directive") for its approval of this prospectus (the "Prospectus"). Approval by the BaFin means the positive act at the outcome of the scrutiny of the completeness of this Prospectus (except for parts of this Prospectus which are drafted in the Italian language) including the consistency of the information given and its comprehensibility. For the avoidance of doubt, the BaFin has not reviewed and approved the Italian language version of the Terms and Conditions of the Protect Bonus Certificates on the Nikkei 225 Stock Average Index. The Itlalian language version of the Summary of this Prospectus and the Italian language version of the Risk Factors have been set out in a separate document to this Prospectus. Such separate document has not been reviewed and approved by the BaFin and is available free of charge at the registered office of the Issuer. In this Prospectus all references to, EUR or euro are to the single currency which was introduced on 1 January 1999 with the start of the third stage of European Economic and Monetary Union by which date the euro became the legal currency in eleven member states of the European Union participating in the European Economic and Monetary Union. This Prospectus is for listing purposes only. Any reference contained herein to a public offer refers to the public offer of the Protect Bonus Certificates which started on 31 October 2005 and ended on 23 November No further public offer is intended by the Issuer.

2 - 2 - TABLE OF CONTENTS PART I TABLE OF CONTENTS PART A: PART B: SUMMARY OF THE PROSPECTUS...4 RISK FACTORS...12 Part C: DESCRIPTION OF THE PROTECT BONUS CERTIFICATES...15 Part D: REGOLAMENTO DEI PROTECT BONUS CERTIFICATES SULL INDICE NIKKEI 225 STOCK AVERAGE/ TERMS AND CONDITIONS OF THE PROTECT BONUS CERTIFICATES ON THE NIKKEI 225 STOCK AVERAGE INDEX...18 Part E: INDEX DESCRIPTION...31 Part F: SELLING RESTRICTIONS...32 Part G: TAXATION...35 Part H: DESCRIPTION OF SAL. OPPENHEIM...38 Part I: IMPORTANT NOTICE...53 ADDRESS LIST...54 SIGNATORIES...55

3 - 3 - TABLE OF CONTENTS PART II INCORPORATION BY REFERENCE The following documents shall be incorporated in, and form part of, this Prospectus: Documents Page Reference Incorporation on page of the Prospectus Annual Report 2004 (English language version) Consolidated Financial Statements for the financial year H 1 H ended 31 December 2004 Consolidated Balance Sheet H 2 H 3 51 Consolidated Income Statement H 4 H 5 51 Consolidated Cash Flow Statement H 6 H 7 51 Segment Reporting H 8 H 9 51 Consolidated Statement of Changes in Equity H 10 H Notes to the Financial Statements H 12 H Auditor s Report H 34 H Group Management Report 2004 I 1 I Annual Report 2005 (English language version) Consolidated Financial Statements for the financial year F 1 F ended 31 December 2005 Consolidated Income Statement F 2 51 Consolidated Balance Sheet F 3 51 Consolidated Statement of Changes in Equity F 4 51 Consolidated Cash Flow Statement F 5 F 6 51 Notes to the Financial Statements F 7 F Auditor s Report F 82 F Group Management Report 2005 G 1 G Annual Report 2005 (English language version) Non-consolidated Financial Statements for the financial J 1 J year ended 31 December 2005 Non-consolidated Profit-and-Loss Account J 38 J Non-consolidated Balance Sheet J 36 J Notes to the Financial Statements J 40 J Auditor s Certificate J 57 J For the avoidance of doubt, such parts of the annual reports of the Issuer for the financial years ended 31 December 2004 and 2005, respectively, which are not explicitly listed in the table above, are not incorporated by reference into this Prospectus. Any document incorporated by reference into this Prospectus, as specified in the table above under "Incorporated by Reference" will be available for inspection at the specified office of the Issuer. The annual report of the Issuer for the financial year ended 31 December 2004 and 2005, respectively, and the non-consolidated financial statements of the Issuer for the financial year ended 31 December 2005 have been filed with the BaFin in connection with the registration form of Sal. Oppenheim dated 3 July 2006.

4 - 4 - PART A: SUMMARY OF THE PROSPECTUS The Italian language version of this summary of the Prospectus is set out in a separate document to this Prospectus. Such separate document has not been reviewed and approved by the BaFin and is available free of charge at the registered office of the Issuer. The information in this section "Summary of the Prospectus" includes a summary of each of the following parts of this Prospectus: 1. the "Risk Factors"; 2. the "Terms and Conditions of the Protect Bonus Certificates (the "Terms and Conditions")"; and 3. the "Description of Sal. Oppenheim". The following summary is a summary of the Prospectus and is taken from, and qualified by, the remainder of the Prospectus and the Terms and Conditions of the Protect Bonus Certificates. The information in this section "Summary of the Prospectus" should be read and construed as an introduction to the Prospectus. Prospective purchasers of Protect Bonus Certificates should base any decision to invest in Protect Bonus Certificates not only on the following information but on all other information in this Prospectus irrespective of whether it is set out in, or incorporated into, this Prospectus. Any judicial proceedings in the Republic of Italy ("Italy") are subject to Italian Civil Procedural Law (diritto di procedura civile) as applied by Italian courts, which, inter alia and without limitation, might require the translation of foreign language documents into the Italian language, do not provide for discovery and might apportion the costs between the parties different from other jurisdictions and otherwise than as contemplated in any document pertaining to the Prospectus. Accordingly, where a claim relating to the information contained in a securities prospectus such as this Prospectus is brought before an Italian court or the court of any other Member State of the European Union (each a "EU Member State" and, together, the "EU Member States"), the plaintiff might, under Italian law as well as under the national legislation of any other relevant EU Member State, have to bear the costs of translating, to the extent necessary, this Prospectus into Italian and/or any other relevant language, as the case may be, before legal proceedings are initiated. The Issuer assumes liability for the contents of this section "Summary of the Prospectus", including any translation thereof, but only to the extent that this summary is misleading, inaccurate or inconsistent when read together with the other parts of, or other information incorporated into, this Prospectus. For the purpose of this summary the terms defined hereunder shall have the following meaning: "Agent" means BNP Paribas Securities Services, with registered office at Via Ansperto , Milan. For notification purposes the Agent has its offices at BNP Paribas Securities Services, Via Ansperto , Milan, - Ufficio Custody Services. To the kind attention of Mr. Raffaele Gaggiano or Mr. Paolo Salamoni, fax : , telephone: "Barrier Event" means that the Underlying level is, at any moment during the opening hours of the Relevant Stock Exchange (except for the after hours trading sessions and any other session outside the normal trading hours) and on any Trading Day of the Observation Period, equal to or lower than, the Protection Level. The event shall be promptly communicated to the Holders. "Bonus" means 130 %. "Business Day" means any day on which banks are open for business in Milan and Frankfurt.

5 - 5 - "Certificate" or "Certificates" means the Sal. Oppenheim Protect Bonus Certificates. "Closing Value" means the official closing value as recorded by the Underlying Equity Index. "Equity Index" or "Index" means the Nikkei 225 Stock Average Index. "Fair Market Value of the Protect Bonus Certificates" means the value of the Protect Bonus Certificates, as determined by the Expert appointed by the Issuer, taking into consideration the latest value of the Equity Index taken as Underlying registered prior to the occurrence of the Events referred to below and in any case, any element considered appropriate by the Expert. "Final Value of the Underlying" means the Closing Value of the Equity Index taken as Underlying, published by the Sponsor on the Valuation Day. If a Market Disruption Event has occurred on such day, the Final Value of the Underlying will correspond to the Closing Value recorded on the first Trading Day following the Valuation Date included in the Valuation Period; if the Market Disruption Event continues throughout the entire Valuation Period, the Final Value of the Underlying shall be determined, on the first Business Day following the Valuation Period, by the Third Party specifically appointed by the Issuer having regard to the last Closing Values of the Index taken as Underlying available before the occurrence of such event and any other element considered appropriate by the same Third Party. "Holder" or "Holders" means the person owning the Protect Bonus Certificates. "Initial Value of the Underlying" means the value published on the web site: on the Issue Date which shall be equal to the Closing Value of the Nikkei 225 Stock Average Index on 25 November 2005 and corresponding to 14, "Issue" means the Protect Bonus Certificates object of this Prospectus (ISIN Code DE 000 SBL 2BN9). "Issue Date" means 28 November "Issuer" means Sal. Oppenheim jr. & Cie KGaA, with registered office at Unter Sachsenhausen 4, D Cologne, Germany, and business address at Untermainanlage 1, D Frankfurt/Main, Germany. "Market Disruption Event" means a suspension or material limitation of trading: 1. on the market of the Relevant Stock Exchange, in respect of a significant number of shares included in the Underlying; 2. in respect of options contracts or futures contracts on the Underlying traded on the relevant derivatives exchange if, in any such case, such suspension or limitation is, in the determination of a Third Party appointed to the purpose by the Issuer, material. For the purposes of this definition, (i) a suspension from trading during the course of the day because of price fluctuations in excess of the limits set by the competent authorities, and (ii) a change in the trading hours, or in the trading days, which is communicated to the markets during trading, shall not imply a "Market Disruption Event". "Maturity Date" means 18 February "Minimum Exercise Lot" means the minimum number of Protect Bonus Certificates, and their round multiples, through which the exercise of Protect Bonus Certificates is allowed. The Minimum Exercise Lot is 1 Protect Bonus Certificate. "Multiplier" or "Parity Ratio" means the value which multiplied by the Initial Value of the Underlying gives as result the Nominal Value. The Multiplier is equal to

6 - 6 - "Nominal Value" means the amount equal to the Initial Value of the Underlying multiplied by the Multiplier. The Nominal Value is 100,00. "Observation Period" means all the Trading Days between the Issue Date, included, and the Valuation Date of the Protect Bonus Certificates, included. "Protection Level" means the level of the Underlying equal to 70% of the Initial Value of the Underlying and corresponding to 10, "Relevant Stock Exchange" means the relevant regulated market of listing of the shares that are included in the Underlying Equity Index. "Settlement Amount" means, the amount in Euro (if positive) to be paid to the Holder in respect of each Minimum Exercise Lot owned, calculated as follows: if a Barrier Event has never occurred during the Observation Period, the Settlement Amount shall be equal to the higher between: (i) Nominal Value x Bonus; (ii) Nominal Value x Final Value of the Underlying Initial Value of the Underlying in both cases multiplied by the number of Protect Bonus Certificates included in the Minimum Exercise Lot (as defined hereunder). If, on the contrary during the Observation Period a Barrier Event has occurred, the Settlement Amount shall be equal to: Nominal Value x Final Value of the Underlying Initial Value of the Underlying all multiplied by the number of Protect Bonus Certificates included in the Minimum Exercise Lot (as defined hereunder). "Settlement Date" means the date on which the Issuer is required to transfer the Settlement Amount directly or indirectly to the Holders. Such date must not under any circumstances fall beyond the fifteenth Business Day after the Valuation Date. "Sponsor" means Nihon Keizai Shimbun Inc. "Third Party" means the entity other than an entity controlling or controlled by the Issuer, appointed by the Issuer in order to perform the evaluation of the existence of a Market Disruption Event. "Trading Day" means any Business Day on which the trading systems of the Relevant Stock Exchanges are in operation and on which the values of the Equity Index considered as Underlying are duly published by the Sponsor. Should a Market Disruption Event occur on one of such days, the day in question shall not be considered a Trading Day. "Underlying" means the Equity Index taken as reference for the Issue, which is the Nikkei 225 Stock Average index. "Valuation Date" means the Maturity Date. The Final Value of the Underlying is considered as of the Valuation Date. If the Maturity Date is not a Trading Day, the Valuation Date shall be postponed to the first following Trading Day included in the Valuation Period on which the Final Value of the Underlying is

7 - 7 - available. In the event that none of the days comprising the Valuation Period is a Trading Day, the Valuation Date shall be the first Business Day immediately following the Valuation Period. "Valuation Period" means the period starting from the Maturity Date (such date representing the first Business Day of the Valuation Period) and lasting for 5 (five) Business Days. 1. Summary of the "Risk Factors" The purchase of the Protect Bonus Certificates may involve substantial risks and is suitable only for investors with the knowledge and experience in financial instruments necessary to evaluate the risks and the merits of an investment in the Protect Bonus Certificates. Before making an investment decision, prospective purchasers of the Protect Bonus Certificates should consider carefully, in the light of their own financial situation and investment objectives, all the information set forth in this Prospectus. Risks Relating to the Protect Bonus Certificates Potential Conflicts of Interest With regard to the market making activities, a potential conflict of interest exists since the Issuer directly acts as market maker. Liquidity Risks The Protect Bonus Certificates may experience temporary problems of liquidity, which might result in the price of these instruments being influenced by their limited liquidity. The investor shall not rely on the possibility to sell the Protect Bonus Certificates at any time during their term for a favourable price. For this reason the market maker undertakes to make available and/or restore buy/sell prices according to the instructions to the rules for the markets organised and managed by Borsa Italiana S.p.A. for at least the minimum trading lots set out by Borsa Italiana S.p.A. and with a spread between the bid/ask prices not higher than the maxim spread as set out in the above mentioned instructions. Effects of Hedging Transactions of the Issuer The Issuer may use hedging transactions in the corresponding Underlying as a safeguard and protection against the financial risks associated with the issuing of the Protect Bonus Certificates. These hedging transactions may have an effect on the market price of the Underlying. In particular, it is possible that entering into, or withdrawing from, such hedging transactions may have a relevant impact on the valuation of the Protect Bonus Certificates. Investments Minimizing or Excluding Risks Investors should never rely on their ability to conclude, at any time before the Maturity Date, any transactions that would limit or eliminate their risk exposure resulting from the Protect Bonus Certificates. The ability to conclude any such transactions depends on the development of the market and the conditions applicable to such transactions from time to time. Any such transactions that the investor may contemplate might be performed only at a disadvantageous market price such that a loss would result therefrom for the investor. Risks Relating to Drawing on Credit Investors may finance the purchase of the Protect Bonus Certificates with credit. In such case, where the market development falls short of the investor's expectations, the investor will not only have to accept the losses resulting from the investment, but will also have to re-pay the credit and pay interest on the credit.

8 - 8 - Taxation Potential purchasers and sellers of the Protect Bonus Certificates should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Protect Bonus Certificates are transferred or other jurisdiction. Risks relating to Uncertain Settlement Profiles In the event that the value of the Underlying on the Valuation Date is equal to zero, the value of the Certificates will be equal to zero. In this case the investor will suffer a total loss of its investment. The reimbursement of the purchase price paid by the investor for the Certificates is not guaranteed at maturity. Risks Relating to Early Redemption The Issuer may redeem the Protect Bonus Certificates prior to the Maturity Date in case of certain events. In such case investors will receive an amount equal to the Fair Market Value of the Protect Bonus Certificates, which could not correspond to the expected Settlement Amount at the Maturity Date. Risks Relating to the Issuer General The Issuer is exposed to certain risks in the context of its business activities which may, in extreme cases, lead to the Issuer being unable to meet its obligations relating to securities issues on time or at all. Market Risks The Issuer is exposed to market risks as a result of the fact that it trades financial products. The focus of activities on trading operations and the resulting classification as a trading-book institution mean that the market risks are of particular significance within the Sal. Oppenheim group's overall risk profile. They are the result of potential fluctuations by relevant valuation parameters and consequent changes in value of the portfolio. Key valuation parameters are interest rates, exchange rates, equity prices and equity index levels, as well as more complex factors such as implicit volatilities and dividend expectations. Credit spreads are also relevant parameters. Counterparty Risks Counterparty risks (credit risks) in relation to the Issuer may result in potential value losses suffered by loans, securities or derivatives. These are caused by a borrower, counterparty or an issuer defaulting or having their credit rating downgraded. Operational Risks The Issuer is exposed to operational risks. According to the Basel Committee on Banking Supervision, operational risks are defined as the risk of loss that is the result of inadequate or failed internal processes, people and systems related to the Issuer or of external events. Liquidity Risk For the Issuer, liquidity risk is the risk that it will be unable to meet current or future payment obligations on time or in full.

9 - 9 - Risks in the future development Risks in the future development are identified by the Issuer specifically in the continuing margin pressure which is due to the increased competition and the development in the capital markets. 2. Summary of the "Terms and Conditions of the Protect Bonus Certificates on the Nikkei 225 Stock Average Index" Preamble The currency of the Protect Bonus Certificates shall always be expressed in euro. In the event that the reference value of the underlying of the Certificates is different than euro, the reference value of the underlying will be conventionally expressed in euro and in the fixed ratio of 1:1 as the Certificates are "quanto" certificates. Transfer of the Protect Bonus Certificates The Protect Bonus Certificates are Italian law regulated securities deposited with Monte Titoli S.p.A. in accordance with the regime of centralised custody and circulation of dematerialised securities, as provided by Legislative Decree no. 58 of 24 February 1998, Legislative Decree no. 213 of 24 June, 1998 and CONSOB Resolution no of 23 December According to such regime, the Protect Bonus Certificates are transferred through accounts opened with Monte Titoli by intermediaries qualified to participate in the Monte Titoli system. Procedure for Exercise of the Protect Bonus Certificates; Waiver of Exercise The Protect Bonus Certificates are European style options and may only be exercised (automatically) on the Maturity Date. Each Holder is entitled to notify the Issuer of the waiver of its right to exercise the Protect Bonus Certificates before their Maturity Date. Calculation and Payment of the Settlement Amount The Protect Bonus Certificates shall be redeemed at their Settlement Amount. Market Disruptions If, in the opinion of the Third Party appointed by the Issuer, a Market Disruption occurs, the Issuer shall inform the Holder. Events Relating to the Underlying Equity Index Should the Equity Index be calculated and published by a party other than the Sponsor (the "Subsequent Sponsor") appointed by the latter for such purpose, the Sponsor shall be deemed replaced by the Subsequent Sponsor. If the Sponsor or the Subsequent Sponsor substantially modifies the calculation methodology for the Underlying, or if the Sponsor or any other appropriate market Authority replaces the Equity Index with a new index, the Issuer shall have the right to (i) replace (subject to the favourable opinion of a third party expert appointed by the Issuer (hereinafter the "Expert")) the Underlying with the Equity Index as modified or with the index that has replaced same, multiplied, where necessary, by a coefficient able to ensure continuity with the underlying asset for the Protect Bonus Certificates; or (ii) modify the characteristics of the Protect Bonus Certificates in the event that, notwithstanding the replacement of the Equity Index as per paragraph (i), continuity between the index as modified and the Underlying for the Protect Bonus Certificates is not ensured.

10 If at any time the Sponsor or the Subsequent Sponsor should cease to calculate and publish the Underlying without proceeding to calculate and publish a replacement index, the Issuer may fulfil its obligations deriving from the Protect Bonus Certificates by paying to the Holders an amount representing the Fair Market Value of the Protect Bonus Certificates held by same based on the last available quotation of the Equity Index. Such Fair Market Value shall be determined by an Expert. Governing Law; Place of Jurisdiction The form and content of the Protect Bonus Certificates and all rights and obligations related hereto shall be governed by Italian law. Place of jurisdiction for any legal proceeding under the Protect Bonus Certificates is Milan, Italy. 3. Summary of the "Description of Sal. Oppenheim" Brief Description of the Issuer Name Sal. Oppenheim jr. & Cie. KGaA ("Sal Oppenheim" or the "Issuer"). Legal form Kommanditgesellschaft auf Aktien (partnership limited by shares) Relevant jurisdiction German law Registered office Headquarter Cologne (with branches or representative offices in Frankfurt/Main, Berlin, Düsseldorf, Hamburg, Munich, Stuttgart and Baden-Baden, and in Luxembourg, Vienna, Salzburg and Prague) Cologne Business activities Key events in the Issuer's recent activities Group structure All kinds of banking business with the exception of investment business. The Issuer's main areas of activity, besides the service division, are the two business divisions of Asset Management, which covers both Asset Management and Private Banking, and Investment Banking, which comprises Mergers & Acquisitions, Real Estate Transactions, Financing, Equity Capital Markets, Institutional Equity Advice, Trading and Derivatives, and Currency Management. Since the end of financial year 2005, three events of high significance for the Issuer have occurred, namely the acquisition of additionally around 10.0 per cent. of the shares in Fiancière Atlas, the acquisition of Attica Alternative Investments Limited, London, with 50.1 per cent. of the Attica group to be transferred to Integrated Management plc by way of a share exchange. The Issuer is the parent company of the Sal. Oppenheim Group (the "Group") which as at 31 December 2005 comprised 104 domestic and 52 foreign subsidiaries besides the Issuer. Of these, 40 domestic and 39 foreign subsidiaries were included in the scope of consolidation. The Group's significant shareholdings are held under the umbrella of a holding company, Sal. Oppenheim International S.A. Business address Untermainanlage 1, 60329, Frankfurt/Main. Tel.: +49 (0)

11 Internet Key Financial Figures The following table displays selected (audited) figures for the Sal. Oppenheim Group from the past two financial years ending 31 December 2004 and 31 December 2005 respectively m (audited) 2005 m (audited) Total assets 11,898 32,029 Risk assets 6,957 13,658 Equity 1,300 1,764 Net profit on ordinary activities Equity ratio (%) Cost/income ratio (%)

12 PART B: RISK FACTORS The Italian language version of the Risk Factors is set out in a separate document to this Prospectus. Such separate document has not been reviewed and approved by the BaFin and is available free of charge at the registered office of the Issuer. General Risks relating to the Protect Bonus Certificates The purchase of the Protect Bonus Certificates may involve substantial risks and is suitable only for investors with the knowledge and experience in financial instruments necessary to evaluate the risks and the merits of an investment in the Protect Bonus Certificates. Before making an investment decision, prospective purchasers of the Protect Bonus Certificates should consider carefully, in the light of their own financial situation and investment objectives, all the information set forth in this Prospectus. Potential Conflicts of Interest With regard to the market making activities, a potential conflict of interest exists since the Issuer directly acts as market maker. Liquidity Risks The Protect Bonus Certificates may experience temporary problems of liquidity, which might result in the price of these instruments being influenced by their limited liquidity. The investor shall not rely on the possibility to sell the Certificates at any time during their term for a favourable price. For this reason the market maker undertakes to make available and/or restore buy/sell prices according to the instructions to the rules for the markets organised and managed by Borsa Italiana S.p.A. for at least the minimum trading lots set out by Borsa Italiana S.p.A. and with a spread between the bid/ask prices not higher than the maxim spread as set out in the above mentioned instructions. Effects of Hedging Transactions of the Issuer The Issuer may use hedging transactions in the corresponding Underlying as a safeguard and protection against the financial risks associated with the issuing of the Protect Bonus Certificates. These hedging transactions may have an effect on the market price of the Underlying. In particular, it is possible that entering into, or withdrawing from, such hedging transactions may have a relevant impact on the valuation of the Protect Bonus Certificates. Investments Minimizing or Excluding Risks Investors should never rely on their ability to conclude, at any time before the Maturity Date, any transactions that would limit or eliminate their risk exposure resulting from the Protect Bonus Certificates. The ability to conclude any such transactions depends on the development of the market and the conditions applicable to such transactions from time to time. Any such transactions that the investor may contemplate might be performed only at a disadvantageous market price such that a loss would result therefrom for the investor.

13 Risks Relating to Drawing on Credit Investors may finance the purchase of the Protect Bonus Certificates with credit. In such case, where the market development falls short of the investor's expectations, the investor will not only have to accept the losses resulting from the investment, but will also have to re-pay the credit and pay interest on the credit. Investors should thus never rely on their ability to repay the assumed credit and interest with the expected return from the investment in the Protect Bonus Certificates. Instead, investors should, before purchasing the Protect Bonus Certificates, evaluate their economic situation as to whether they would be able, even on short notice, to re-pay the credit and pay the respective interest in case the purchased Protect Bonus Certificates yield losses instead of the expected profits. Taxation Potential purchasers and sellers of the Protect Bonus Certificates should be aware that they may be required to pay taxes or other documentary charges or duties in accordance with the laws and practices of the country where the Protect Bonus Certificates are transferred or other jurisdiction. In some jurisdictions, no official statements of the tax authorities or court decisions may be available for innovative financial instruments such as the Protect Bonus Certificates. Potential investors are advised not to rely upon the tax summary contained in this document but to ask their own tax advisor's advice on their individual taxation with respect to the acquisition, sale and redemption of the Protect Bonus Certificates. Only these advisors are in a position to duly consider the specific situation of the potential investor. This investment consideration has to be read in connection with Part G Taxation. Specific Risks Relating to the Protect Bonus Certificates Risks Relating to the Market Value of the Protect Bonus Certificates The market price of the Protect Bonus Certificates will be affected by the creditworthiness of the Issuer and a number of additional factors, including, but not limited to, the level of the Underlying, the volatility, the expected dividend yield, the trend of interest rates and the time remaining to the Maturity Date of the Protect Bonus Certificates. Risks Relating to Uncertain Settlement Profiles In the event that the value of the Underlying on the Valuation Date is equal to zero, the value of the Protect Bonus Certificate will be equal to zero. In this case the Holder will suffer a total loss of its investment. The reimbursement of the purchase price paid by the investor for the Protect Bonus Certificates is not guaranteed at maturity. Risks Relating to Early Redemption The Issuer may redeem the Protect Bonus Certificates prior to the Maturity Date in case of certain events. In such case investors will receive an amount equal to the Fair Market Value of the Protect Bonus Certificates, which could not correspond to the expected Settlement Amount at the Maturity Date.

14 Risks Relating to the Issuer The Issuer is exposed to certain risks in the context of its business activities which may, in extreme cases, lead to the Issuer being unable to meet its obligations relating to securities issues on time or at all. The Issuer is exposed to market risks as a result of the fact that it trades financial products. The focus of activities on trading operations and the resulting classification as a trading-book institution mean that the market risks are of particular significance within the Group's overall risk profile. They are the result of potential fluctuations by relevant valuation parameters and consequent changes in value of the portfolio. Key valuation parameters are interest rates, exchange rates, equity prices and equity index levels, as well as more complex factors such as implicit volatilities and dividend expectations. Credit spreads are also relevant parameters. Counterparty risks (credit risks) with regard to the Issuer may result in potential value losses suffered by loans, securities or derivatives. These are caused by a borrower, counterparty or an issuer defaulting or having their credit rating downgraded. The Issuer is also exposed to operational risks. According to the Basel Committee on Banking Supervision, operational risks are defined as the risk of loss that is the result of inadequate or failed internal processes, people and systems or of external events. For the Issuer, liquidity risk is the risk that it will be unable to meet current or future payment obligations on time or in full. Risks in the future development are identified by the Issuer specifically in the continuing margin pressure which is due to the increased competition and the development in the capital markets. With respect to credit risk costs, the Issuer expects only marginal changes as compared to the previous year.

15 Part C: DESCRIPTION OF THE PROTECT BONUS CERTIFICATES For the purpose of this Prospectus terms defined with a capital letter, save as expressly indicated, shall have the same meaning assigned thereto in the Terms and Conditions. Category and Structure The Protect Bonus Certificates are option-like derivatives belonging to the category of "Certificates" and having as Underlying the Nikkei 225 Stock Average Index. The Protect Bonus Certificates are financial instruments that allow the investors to benefit from an increase in the level of the Underlying. The Protect Bonus Certificates offer furthermore a protection, within the limits and hypotheses set out here below, against the decreases in the level of the Underlying, as a pre established minimum return is provided for at maturity (equal to the Nominal Value multiplied by the Bonus) if the Underlying never reaches a predetermined level (Protection Level) during the Observation Period of the Protect Bonus Certificates. The Protect Bonus Certificates described in this Prospectus were issued by the Issuer on 28 November 2005 with the characteristics specified in the Terms and Conditions. The Issuer undertakes to file with Borsa Italiana S.p.A. an application for admission to listing of the Protect Bonus Certificate. The Issuer however does not warrant in any manner whatsoever that the Protect Bonus Certificates will be actually admitted to Listing. The reimbursement of the purchase price paid by the investor for the Protect Bonus Certificate is not guaranteed at maturity. Upon the (automatic) exercise on the Maturity Date of the Protect Bonus Certificates the Issuer shall transfer to the Holders, for each Minimum Exercise Lot, in accordance with the terms and modalities provided for in the relevant Terms and Conditions, an amount corresponding to the Settlement Amount (as defined in Article 2 of the Terms and Conditions). Characteristics The characteristics of the Protect Bonus Certificates are listed in the table A below. TABLE A PROTECT BONUS ON INDEX NIKKEI 225 STOCK AVERAGE ISIN Code DE 000 SBL 2BN9 Underlying Nikkei 225 Stock Average (ISIN Code XC ) Market Sponsor Nihon Keizai Shimbun Inc. Currency of the Euro Underlying Issue Date 28/11/2005 Maturity Date 18/02/2011 Price 25/11/2005 Determination Date Subscription from 31 October 2005, 9.00 a.m., to 24 November 2005, 3 p.m. Period Initial Value of the Initial Value of the Underlying shall be published on the web site: within the Issue Date and shall be equal to the Closing Value of the Nikkei Underlying 225 Stock Average Index on 25 November 2005 ("Price Determination Date") and corresponding to 14,

16 Nominal Value Equal to the Initial Value of the Underlying multiplied by the Multiplier and corresponding to 100,00. Multiplier / Parity Equal to 100%/Initial Value of the Underlying and corresponding to Ratio "Multiplier" or Parity Ratio" means the value which multiplied by the Initial Value of the Underlying gives as result the Nominal Value and corresponding to Protection Level Equal to 70% of the Initial Value of the Underlying and corresponding to 10, Minimum Exercise 1 Certificate Lot Bonus 130% Subscription Price The subscription price for each Protect Bonus Certificate shall be equal to 100% of the Nominal Value and published on the website: Maximum Quantity of offered Certificates No. 500,000 Certificates. Authorizations Sal. Oppenheim has approved, through resolution of the competent corporate body, the issue of the Protect Bonus Certificates on 25 May 2005 and the filing of the application for the granting of the resolution on admissibility to listing and admission to listing on 1 February On 21 September 2005 a communication pursuant to article 129 of Legislative Decree no. 385 of 1 September 1993 was sent to Banca d'italia. No objection has been raised by Banca d'italia in such regard. Circulation regime The Protect Bonus Certificates are Italian law regulated securities deposited with Monte Titoli S.p.A. in accordance with the regime of centralised custody and circulation of dematerialised securities, as provided for by Legislative Decrees no. 58 of 24 February, 1998 and 213 of 24 June, 1998 and CONSOB Resolution no of 23 December, According to such regime, the Protect Bonus Certificates are transferred through annotations on the accounts opened with Monte Titoli S.p.A. by the Agent on behalf of the Issuer and by intermediaries qualified to participate in the Monte Titoli system (each of these a "Qualified Intermediary"). The person from time to time appearing as the holder of the account held, directly or indirectly, with a Qualified Intermediary, and to which the Protect Bonus Certificates are credited, shall be treated as the holder thereof (each a "Holder") and, as a consequence, the person entitled to exercise the rights represented thereby. Maturity, Exercise and Expiry The maturity of the Protect Bonus Certificates on Indices will be the relevant Maturity Date. The Protect Bonus Certificates are European style options and can only be exercised (automatically) on the Maturity Date. Each Holder is entitled to communicate to the Issuer, in accordance with the procedures set forth in the Terms and Conditions, its waiver to the exercise of the Protect Bonus Certificates before their Maturity Date. Currency The Protect Bonus Certificates and the relevant Underlying are always conventionally expressed in Euros. As a consequence, with reference to the Protect Bonus Certificates offered to the public, the value and amount of the Settlement Amount are not affected by any variations of the exchange rate.

17 Indicative Prices and Modality of Determination The premium of a Protect Bonus Certificate represents the amount in Euros necessary for the purchase of a Protect Bonus Certificate. The price of the Protect Bonus Certificates is calculated taking into account various factors, such as the current market value of the Underlying, the volatility of the Underlying, the interest rates and the expected return on the Underlying. Therefore, the investor should pay attention to the price of the Protect Bonus Certificate at the time at which the investment is made. The updated prices for each series of Protect Bonus shall be available on The Issuer in its capacity as Market Maker, will constantly update the premium, as from the beginning of the trading of the Protect Bonus Certificates on the segment SeDeX. Commissions No application of any commission is to be applied by the Issuer. Other intermediaries may however apply commissions for the trading, in connection with the purchase or the sale of the Protect Bonus Certificates. Interest of Natural and Legal Person Other than the interests disclosed herein, there are no material interests in the issue of the Certificates. Use of Proceeds The net proceeds from the issue of the Certificates will be applied by the Issuer for its general corporate purpose. The reason for the issue of the Certificates is primarily the making of profit in accordance with the statutes of the Issuer and/or the hedging of certain risks. Clearing System The relevant clearing system is Monte Titoli S.p.A., Via Mantegna 6, Milan, Italy. Because the Protect Bonus Certificates may be held by or on behalf of Monte Titoli S.p.A., investors will have to rely on its procedures for transfer, payment and communication with the Issuer. Status of the Certificates The Protect Bonus Certificates constitute direct, unsecured and unsubordinated obligations of the Issuer, ranking pari passu among themselves and with all other present and future unsecured and unsubordinated obligations of the Issuer, other than obligations that are given a higher priority by mandatory provisions of law.

18 Part D: REGOLAMENTO DEI PROTECT BONUS CERTIFICATES SULL INDICE NIKKEI 225 STOCK AVERAGE/ TERMS AND CONDITIONS OF THE PROTECT BONUS CERTIFICATES ON THE NIKKEI 225 STOCK AVERAGE INDEX REGOLAMENTO DEI PROTECT BONUS CERTIFICATES SULL'INDICE NIKKEI 225 STOCK AVERAGE Articolo 1 Introduzione Il seguente Regolamento (di seguito il "Regolamento") disciplina i "Sal. Oppenheim Protect Bonus Certificates sull'indice Nikkei 225 " (di seguito i "Protect Bonus Certificates") aventi come indice sottostante l'indice Nikkei 225 Stock Average emessi da Sal. Oppenheim jr. & Cie KGaA (di seguito "Sal. Oppenheim" o "l'emittente"). I Protect Bonus Certificates sono di tipo "Quanto". Pertanto, il Sottostante è convenzionalmente sempre espresso in Euro, qualunque sia l'effettiva valuta di denominazione del Sottostante sul mercato di riferimento, senza applicazione di alcun tasso di cambio. L'esercizio dei Protect Bonus Certificates, da effettuarsi secondo le modalità di cui al presente Regolamento, obbliga l'emittente a trasferire al soggetto detentore dei Protect Bonus Certificates (di seguito il "Portatore ovvero i "Portatori"), per ogni Lotto Minimo di Esercizio posseduto, un importo in denaro corrispondente all'importo di Liquidazione (come di seguito definito). Articolo 2 Definizioni Ai fini del presente Regolamento, i termini sotto elencati, ordinati in ordine alfabetico, hanno il seguente significato: "Agente" indica BNP Paribas Securities Services, con sede in Via Ansperto , Milano. Ogni comunicazione dovrà essere inviata al seguente indirizzo: BNP Paribas Securities Services, Via Ansperto , Milano, Ufficio Custody Services. Alla c.a. del dr. Raffaele Gaggiano o del dr. Paolo Salomoni Fax: Tel: "Bonus" indica il 130%. "Borsa Valori di Riferimento" indica per l'indice preso come Sottostante, il relativo mercato regolamentato di quotazione delle azioni che lo TERMS AND CONDITIONS OF THE PROTECT BONUS CERTIFICATES ON THE NIKKEI 225 STOCK AVERAGE INDEX Article 1 Introduction These Terms and Conditions (hereinafter the "Terms and Conditions") govern the "Sal. Oppenheim Protect Bonus Certificates on the Nikkei 225 Stock Average index" (hereinafter the "Protect Bonus Certificates"), issued by Sal. Oppenheim jr. & Cie KGaA (hereinafter "Sal. Oppenheim" or the "Issuer") and having as their underlying the Nikkei 225 Stock Average Index. The Protect Bonus Certificates contain a "Quanto" feature. Therefore, the Underlying is always conventionally expressed in Euro, regardless of the actual denomination of the Underlying on the relevant exchange, without the application of any exchange rate. Upon valid exercise of the Protect Bonus Certificates, according to these Terms and Conditions, the Issuer shall transfer to the holder of the Protect Bonus Certificates (hereinafter the "Holder or the "Holders") for each Minimum Exercise Lot owned, a sum equal to the Settlement Amount (as defined hereunder). Article 2 Definitions For the purposes of these Terms and Conditions, the terms defined hereunder shall have the following meaning: "Agent" means BNP Paribas Securities Services, with registered office at Via Ansperto , Milan. For notification purposes the Agent has its offices at BNP Paribas Securities Services, Via Ansperto , Milan, - Ufficio Custody Services. To the kind attention of Mr. Raffaele Gaggiano or Mr. Paolo Salamoni, fax : , telephone: "Bonus" means 130%. "Relevant Stock Exchange" means the relevant regulated market of listing of the shares that are included in Equity Index taken as the Underlying.

19 compongono. "Data di Emissione" indica il 28 Novembre "Data di Scadenza" indica il 18 Febbraio "Emissione" indica i Protect Bonus Certificates oggetto del presente Prospetto (codice ISIN DE 000 SBL 2BN9). "Emittente" indica Sal. Oppenheim jr. & Cie KGaA, con sede a Unter Sachsenhausen 4, D Colonia Germania, recapito a Untermainanlage 1, D Frankfurt/Main, Germania. "Equo Valore di Mercato dei Protect Bonus Certificates" indica il valore dei Protect Bonus Certificates come determinato dall'esperto nominato dall'emittente, tenendo in considerazione l'ultimo valore dell'indice Azionario preso come Sottostante registrato prima del verificarsi degli Eventi di cui all'articolo 7 del presente Regolamento e, in ogni caso, qualsiasi elemento ritenuto utile dall'esperto stesso. "Evento Barriera" indica che il livello del Sottostante sia, in un qualsiasi momento compreso nell'orario di apertura della relativa Borsa Valori di Riferimento (ad esclusione delle sessioni di negoziazione after hours ed ogni altra sessione di negoziazione che sia al di fuori del normale orario di negoziazione) ed in qualsiasi Giorno di Negoziazione del Periodo di Osservazione, pari o inferiore al Livello di Protezione. L'evento verrà tempestivamente comunicato ai Portatori secondo le modalità di cui all'articolo 10 del presente Regolamento. "Giorno di Liquidazione" indica il giorno nel quale l'emittente è tenuto ad effettuare, direttamente o indirettamente, il pagamento dell'importo di Liquidazione ai Portatori. Tale giorno non potrà in alcun modo cadere oltre il quindicesimo Giorno Lavorativo successivo al Giorno di Valutazione. "Giorno di Negoziazione" indica un qualsiasi Giorno Lavorativo in cui i sistemi di negoziazione delle Borse Valori di Riferimento sono operativi ed in cui i valori dell' Indice Azionario Sottostante sono regolarmente pubblicati dallo Sponsor. Laddove in uno di tali giorni abbia luogo uno Sconvolgimento di Mercato, tale giorno non potrà essere considerato un Giorno di Negoziazione. "Giorno di Valutazione" indica la Data di "Issue Date" means 28 November "Maturity Date" means 18 February "Issue" means the Protect Bonus Certificates object of this Prospectus (ISIN Code DE 000 SBL 2BN9). "Issuer" means Sal. Oppenheim jr. & Cie KGaA, with registered office at Unter Sachsenhausen 4, D Cologne Germany, and business address at Untermainanlage 1, D Frankfurt/Main, Germany. "Fair Market Value of the Protect Bonus Certificates" means the value of the Protect Bonus Certificates, as determined by the Expert appointed by the Issuer, taking into consideration the latest value of the Underlying Equity Index registered prior to the occurrence of the Events referred to in Article 7 of these Terms and Conditions and in any case, any element considered appropriate by the Expert. "Barrier Event" means that the Underlying level is, at any time during the opening hours of the Relevant Stock Exchange (except for the after hours trading sessions and any other session outside the standard trading hours) and on any Trading Day of the Observation Period, equal to or lower than, the Protection Level. The event shall be promptly communicated to the Holders in accordance with Article 10 of these Terms and Conditions. "Settlement Date" means the date on which the Issuer is required to transfer the Settlement Amount directly or indirectly to the Holders. Such date must not under any circumstances fall beyond the fifteenth Business Day after the Valuation Date. "Trading Day" means any Business Day on which the trading systems of the Relevant Stock Exchanges are in operation and on which the values of the Equity Indices considered as Underlying are duly published by the Sponsor. Should a Market Disruption Event occur on one of such days, the day in question shall not be considered a Trading Day. "Valuation Date" means the Maturity Date. The

20 Scadenza. Rispetto a tale giorno è rilevato il Valore del Sottostante Finale. Nel caso in cui la Data di Scadenza non sia un Giorno di Negoziazione, il Giorno di Valutazione sarà posticipato al primo Giorno di Negoziazione successivo compreso nel Periodo di Valutazione in cui sia rilevabile il Valore del Sottostante Finale. Nell'ipotesi in cui durante i giorni che compongono il Periodo di Valutazione non vi fosse un Giorno di Negoziazione, Giorno di Valutazione sarà considerato il primo Giorno Lavorativo immediatamente successivo all'ultimo giorno del Periodo di Valutazione. "Giorno Lavorativo" indica un qualsiasi giorno in cui le banche sono aperte a Milano e Francoforte. "Importo di Liquidazione" indica l'importo in Euro (se positivo) da riconoscere al Portatore per ciascun Lotto Minimo di Esercizio da questi posseduto, calcolato come segue: se non si è mai verificato un Evento Barriera durante il Periodo di Osservazione, l'importo di Liquidazione sarà pari al maggiore tra: Valore Nominale x Bonus; e Valore Nominale x Valore del Sottostante Finale Valore del Sottostante Iniziale in entrambi i casi moltiplicato per il numero di Protect Bonus Certificates compresi nel Lotto Minimo di Esercizio (come di seguito definito). Se, invece, durante il Periodo di Osservazione, si è verificato un Evento Barriera, l'importo di Liquidazione sarà pari al Valore Nominale x Valore del Sottostante Finale Valore del Sottostante Iniziale il tutto moltiplicato per il numero di Protect Bonus Certificates compresi nel Lotto Minimo di Esercizio (come di seguito definito). "Indice Azionario" o "Indice" indica l'indice Nikkei 225 Stock Average. "Livello di Protezione" indica il livello dell'indice Azionario preso come Sottostante pari al 70% del Valore del Sottostante Iniziale e pari a ,00. "Lotto Minimo di Esercizio" indica il numero minimo di Protect Bonus Certificates e relativi multipli interi, per i quali è consentito l'esercizio dei Final Value of the Underlying is considered as of the Valuation Date. If the Maturity Date is not a Trading Day, the Valuation Date shall be postponed to the first following Trading Day included in the Valuation Period on which the Final Value of the Underlying is available. In the event that none of the days comprising the Valuation Period is a Trading Day, the Valuation Date shall be the first Business Day immediately following the last day of the Valuation Period. "Business Day" means any day on which banks are open for business in Milan and Frankfurt. "Settlement Amount" means, the amount in Euro (if positive) to be paid to the Holder in respect of each Minimum Exercise Lot owned, calculated as follows: if a Barrier Event has never occurred during the Observation Period, the Settlement Amount shall be equal to the higher between: Nominal Value x Bonus; and Nominal Value x Final Value of the Underlying Initial Value of the Underlying in both cases multiplied by the number of Protect Bonus Certificates included in the Minimum Exercise Lot (as defined hereunder). If, on the contrary during the Observation Period a Barrier Event has occurred, the Settlement Amount shall be equal to: Nominal Value x Final Value of the Underlying Initial Value of the Underlying all multiplied by the number of Protect Bonus Certificates included in the Minimum Exercise Lot (as defined hereunder). "Equity Index" or "Index" means the Nikkei 225 index. "Protection Level" means the level of the Underlying equal to 70% of the Initial Value of the Underlying and corresponding to 10, "Minimum Exercise Lot" means the minimum number of Protect Bonus Certificates, and their round multiples, through which the exercise of