GLOBAL TRANSACTION BANKING GLOBAL EQUITY SERVICES Depositary Receipt Bulletin New Disclosure Requirements for Foreign Private Issuers ADR Fees and Payments February 2010
As a result of new disclosure provisions enacted by the United States Securities and Exchange Commission (the SEC ), foreign private issuers will now be required to disclose information about the fees and other charges payable by holders of American depositary receipts ( ADRs ) and about payments received from the ADR depositary. This information must be disclosed beginning with the issuers Form 20-F annual reports filed with the SEC for fiscal years ending on or after December 15, 2009. 1 Deutsche Bank has prepared this overview of the new disclosure provisions adopted by the SEC under Item 12 of Form 20-F and the practical implications for our current and prospective ADR issuer clients. We have also included sample language that we believe may potentially be helpful to an understanding of the new disclosure requirements. While each issuer, with the advice of its US counsel, must make its own determination as to the specific content and scope of disclosure that is appropriate for any particular filing, our examples may help clarify the nature of the information that is required. Please do not hesitate to contact one of the Deutsche Bank representatives listed below in the event that you have any further questions. Disclosure of Fees Payable by ADR Holders Commencing with fiscal years ending on or after December 15, 2009, foreign private issuers will be required to disclose all fees and charges payable by holders of ADRs on an annual basis, as a result of amendments to Item 12.D.3 of Form 20-F and the Instructions thereto. This requirement specifically relates to fees and charges imposed in connection with (i) the deposit or substitution of securities underlying the ADRs; (ii) the receipt or distribution of dividends; (iii) the sale or exercise of rights; (iv) withdrawal of an underlying security; (v) the transfer, splitting or grouping of ADRs; and (vi) general depositary services, particularly those charged on an annual basis. Issuers must provide information regarding the type of service covered by such fees and charges, the amount of the fees or charges and to whom paid. Issuers must also disclose any right the depositary may have to offset its fees and charges against dividend payments or the deposited securities. Exhibit A hereto sets out the text of Item 12.D.3 and the corresponding Instructions under Item 12 of Form 20-F, in each case as amended. Please refer to Exhibit B hereto for sample disclosure regarding fees payable by ADR holders. Disclosure of Payments Received from the ADR Depositary For fiscal years ending on or after December 15, 2009, foreign private issuers will be required to disclose all direct and indirect payments made to them by their ADR depositary pursuant to new Item 12.D.4 under Form 20-F. Issuers must provide this information on a per payment basis rather than stating an aggregate amount of payments received. The SEC has stated that per payment disclosure is intended to help investors understand the purpose of each payment received from the depositary. Please refer to Exhibit A hereto for the text of new Item 12.D.4 and to Exhibit C hereto for sample disclosure regarding payments made by an ADR depositary on a per payment basis. Please do not hesitate to contact Tom Murphy (at +44 20 7547 0416 or tom.murphy@db.com) or Laura Russell (at +44 20 7545 0731 or laura.russell@db.com) in the event that you have any questions regarding the matters discussed here. This overview is a summary presented for general informational purposes only. It is not a complete analysis of the matters discussed herein. Neither this overview nor any information provided by Deutsche Bank staff may be relied upon as legal advice. 1 Form 20-F specifies the information that must be disclosed by foreign private issuers in their annual reports under the Securities Exchange Act of 1934 (the Exchange Act ), and in certain registration statements filed by foreign private issuers.
Exhibit A Excerpt Text of Items 12.D.3 and 12.D.4 of Form 20-F, with corresponding Instructions (as amended effective as of December 5, 2008) 3. Describe all fees and charges that a holder of American Depositary Receipts may have to pay, either directly or indirectly. Indicate the type of service, the amount of the fees or charges and to whom the fees or charges are paid. In particular, provide information about any fees or charges in connection with (a) depositing or substituting the underlying shares; (b) receiving or distributing dividends; (c) selling or exercising rights; (d) withdrawing an underlying security; (e) transferring, splitting or grouping receipts; and (f) general depositary services, particularly those charged on an annual basis. Provide information about the depositary s right, if any, to collect fees and charges by offsetting them against dividends received and deposited securities. 4. In addition, describe all fees and other direct and indirect payments made by the depositary to the foreign issuer of the deposited securities. Instructions to Item 12: 1. You do not need to provide the information called for by this Item if you are using the form as an annual report for your fiscal years ending before December 15, 2009. For your fiscal years ending on or after December 15, 2009, except for Item 12.D.3. and Item 12.D.4, you do not need to provide the information called for by this Item if you are using this form as an annual report. Exhibit B Sample Response to Item 12.D.3 Persons depositing shares are charged a fee for each issuance of ADSs, including issuances resulting from distributions of shares, share dividends, share splits, bonus and rights distributions and other property, and for each surrender of ADSs in exchange for deposited securities. The fee in each case is US $5.00 for each 100 ADSs, or any portion thereof, issued or surrendered. The depositary also charges a fee of US $2.00 per 100 ADSs for distribution of cash proceeds pursuant to a cash distribution, sale of rights and other entitlements or otherwise. The depositary may also charge an annual fee of US $2.00 per 100 ADSs for the operation and maintenance costs in administering the facility. Persons depositing shares also may be charged the following expenses n Expenses incurred by the depositary, the custodian or their respective agents in connection with inspections of the relevant share register maintained by the local registrar and/or performing due diligence on the central securities depository for [insert applicable jurisdiction]: an annual fee of U.S. $1.00 per 100 ADSs (such fee to be assessed against holders of record as at the date or dates set by the depositary as it sees fit and collected at the discretion of the depositary, subject to the Company s prior consent, by billing such holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions) n Taxes and other governmental charges incurred by the depositary or the custodian on any ADR or ordinary shares underlying an ADR, including any applicable interest and penalties thereon, and any share transfer or other taxes and other governmental charges n Cable, telex, electronic transmission and delivery expenses n Transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities including those of a central depository for securities (where applicable) n Expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars; n Fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to the shares, deposited securities and ADSs; and n Any other fees, charges, costs or expenses that may be incurred by the depositary from time to time. In the case of cash distributions, fees are generally deducted from the cash being distributed. Service fees may be collected from holders of ADSs in a manner determined by the depositary with respect to ADSs registered in the name of investors (whether certificated or in book-entry form) and ADSs held in brokerage and custodian accounts (via DTC). In the case of distributions other than cash (i.e., stock dividends, rights, etc.), the depositary charges the applicable ADS record date holder concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or in bookentry form), the depositary sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary may, if permitted by the settlement systems provided by DTC, collect the fees through such settlement systems (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients ADSs in DTC accounts in such case may in turn charge their clients accounts the amount of the service fees paid to the depositary.
In the event of refusal to pay the service fee, the depositary may, under the terms of the deposit agreement, refuse the requested service until payment is received or may set off the amount of the service fee from any distribution to be made to the ADS holder. If any tax or other governmental charge is payable by the holders and/or beneficial owners of ADSs to the depositary, the depositary, the custodian or the Company may withhold or deduct from any distributions made in respect of deposited securities and may sell for the account of the holder and/or beneficial owner any or all of the deposited securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) or charges, with the holder and the beneficial owner thereof remaining fully liable for any deficiency. Note: The text above is a sample disclosure in response to Item 12.D.3 based on fees payable by ADR holders pursuant to a standard ADR deposit agreement. The disclosure will need to be tailored if different fees are chargeable under the ADR program, as memorialized in the deposit agreement for the ADR facility. Exhibit C Sample Response to Item 12.D.4 Since the commencement of the Company s most recent fiscal year, the Company has received the following direct and indirect payments in the amounts of $[ ], $[ ], and $[ ] 2 for expenses incurred by the Company relating to the ADR program, including n Stock exchange listing fees in relation to the listing of the ADRs n Legal fees n Underwriting fees n Auditor fees n Roadshow expenses n Financial printer costs n Production of annual reports and Form 20-F filings n Production of investor targeting, peer analysis and shareholder identification reports n Postage for mailing annual and interim reports and other communications to ADR holders n Costs of retaining third party public relations, investor relations, and/or corporate communications advisory firms in the U.S. n Cost of hiring U.S.-based investor relations personnel n Subscription fees for CRM and other online electronic communications systems n Participation in retail investor shows and capital markets days n Issuer to describe any other expenses for which it received reimbursement or payments from the depositary, both direct or indirectly to third parties Note: The sample response above to Item 12.D.4 has been prepared for indicative and informational purposes only, and is not legal advice. Issuers should seek advice from their legal counsel as to appropriate disclosure in response to Item 12.D.4. 2 Issuer to list all payments it has received from the depositary and payments made by the depositary to third parties on its behalf, each on a per payment basis. Deutsche Bank Trust Company Americas, as a leading depositary bank for Depositary Receipts, is committed to providing clients with up-to-date information on issues that may affect them or their investors
www.adr.db.com adr@db.com www.tss.db.com tss.info@db.com The information contained herein does not constitute and shall not be construed to constitute legal and/or tax advice by Deutsche Bank AG or any of its affiliates. Individuals should consult with their advisors regarding their particular situation. This report is provided for informational purposes only. The information contained herein is based on data obtained from sources believed to be reliable but neither Deutsche Bank AG nor any of its affiliates warrant or in any way represent as to the accuracy or completeness of the details contained herein. The publication of this announcement shall be deemed not to constitute an offer or the solicitation of an offer to buy any Depositary Receipt or any security relating thereto in any jurisdiction in which such announcement would be deemed an unlawful offer. The views and opinions expressed herein or in any referenced document do not necessarily state or reflect those of Deutsche Bank AG or any of its employees, officers or affiliates. This communication has been approved and/or communicated by Deutsche Bank AG London. Copyright February 2010 Deutsche Bank AG. All rights reserved.