4 August 2017 Base Prospectus pursuant to 6 of the German Securities Prospectus Act (Wertpapierprospektgesetz - WpPG) Base Prospectus For the public offer of DZ BANK Bonus Certificates on [Shares] [Indices] and DZ BANK Express Certificates on [Shares] [Indices] and DZ Bank ZinsFix Certificates on [Shares] [Indices] of DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main ("DZ BANK") DZ BANK has requested the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, "BaFin") to provide the competent authority in Italy with a certificate of approval attesting that this Base Prospectus has been drawn up in accordance with 17 and 18 of the German Securities Prospectus Act, which implements Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 ("Notification"). While this Base Prospectus is in effect, DZ BANK may request BaFin to provide the competent authorities of other Member States of the European Economic Area with a Notification. The certificates ("Certificates" or "Securities") may be listed on security exchanges, e.g. also on an unregulated market, or may not be listed at all.
Note: The distribution and publication of this Base Prospectus and any Supplements, if any, and/or the respective Final Terms and the offer, sale and/or delivery of securities are subject to restrictions in certain countries. Persons who obtain this Base Prospectus or gain access to this Base Prospectus and any Supplements, if any, and/or the respective Final Terms are requested to inform themselves about such restrictions and to observe them. A description of the restrictions with regard to the Member States of the European Economic Area in general is contained later on in this Base Prospectus in the section "Selling restrictions". This Base Prospectus and any Supplements, if any, and/or the respective Final Terms may not be used by anyone for the purpose of an offer or advertising (a) in a country in which the offer or advertising is not permitted and/or (b) to a person to whom such an offer or advertising may not be lawfully made. Neither the Base Prospectus nor any Supplements nor the respective Final Terms present an offer or solicitation to any person for the subscription or purchase of securities and shall not be regarded as a recommendation by the Issuer for the subscription or purchase of securities. 2
Contents I. Summary... 6 II. Risk Factors... 25 1. Risk factors regarding the Issuer... 25 2. Risk factors regarding the Securities... 42 2.1 Risk in connection with the Payment Profiles of the Securities... 42 2.2 Risk factors associated with shares or indices as Underlying... 44 2.3 Other risks relating to the Securities... 45 III. DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main... 50 1. History, Development, BVR Institutssicherung GmbH and Protection System... 50 2. Business overview... 51 3. Organisational Structure... 55 4. Trend information / statement regarding "Significant changes in the Group's financial position"... 56 5. Management and supervisory bodies... 56 6. Major shareholders / Control... 60 7. Financial information regarding DZ BANK's assets and liabilities, financial and earnings position... 60 8. Material contracts... 65 9. Documents on display... 65 IV. General information on the Base Prospectus... 66 1. Responsibility for the Base Prospectus... 66 2. Structuring of the Securities by the Final Terms... 66 3. Form of publication... 66 4. Available documents... 66 5. Selling restrictions... 66 6. Incorporation by reference... 67 V. General Information on the Securities... 69 1. Consent to use of the Base Prospectus and any Supplements, if any, as well as the Final Terms... 69 2. Offer and listing of the Securities... 69 3. Pricing... 70 4. Type and category of the Securities and other classification criteria... 70 5. Paying agent and calculation agent... 70 6. Interests as well as conflicts of interest of natural persons and legal entities involved in the Issue/offer... 70 7. Use of proceeds... 70 8. Status of the Securities... 71 9. Authorization... 71 10. Responsibility for information from third parties... 71 11. Additional notices... 71 VI. General description of the Securities... 72 1. Payment Profile 1 (Bonus Certificates with Cap)... 72 2. Payment Profile 2 (Bonus Certificates without Cap)... 73 3. Payment Profile 3 (Express Certificates)... 73 4. Payment Profile 4 (Express Certificates Easy)... 73 5. Payment Profile 5 (ZinsFix Continuous Express Certificates)... 74 VII. Certificate Terms and Conditions... 75 1. [Certificate Terms and Conditions for [Bonus] [Express] [ZinsFix] Certificates on Shares with Payment [or Physical Delivery]... 75 1 Form, Transferability... 75 2 Payment Profile... 75 3 Issuance of Additional Certificates, Buyback... 87 3
4 Payments[, Deliveries]... 87 5 Market Disruption... 87 6 Adjustment, Substitution and Termination... 88 7 Replacement of the Issuer... 91 8 Publications... 92 9 Miscellaneous... 92 10 Status... 92 11 Presentation Period, Limitation... 92 12 Severability... 92 2. [Certificate Terms and Conditions for [Bonus] [Express] [Zinsfix] Certificates on Indices with Payment [or Physical Delivery]... 93 1 Form, Transferability... 93 2 Payment Profile... 93 3 Issuance of Additional Certificates, Buyback... 106 4 Payments[, Deliveries]... 106 5 Market Disruption... 107 6 Adjustment, Termination... 109 7 Replacement of the Issuer... 110 8 Publications... 111 9 Miscellaneous... 111 10 Status... 111 11 Presentation Period, Limitation... 111 12 Severability... 111 VIII. Sample Final Terms... 112 I. Information on the Issue... 114 1. [Subscription and] [initial] issue price... 114 2. [Distribution fee] [and] [placement] [subscription]... 114 3. Admission for trading and listing... 115 4. Information on the Underlying... 115 5. Risks... 115 6. General description of the Securities... 115 [7. Interests as well as conflicts of interest of natural persons and legal entities involved in the Issue/offer]... 115 II. Certificate Terms and Conditions... 116 Annex to the Final Terms (Summary)... 117 IX. Taxation... 118 1. International notification and payment requirements... 118 1.1 European Union Automatic exchange of information in the field of taxation... 118 1.2 Automatic exchange of account information - CRS... 118 1.3 Foreign Account Tax Compliant Act... 119 1.4 QI Qualified intermediary regime... 119 2. Taxation in the Federal Republic of Germany... 119 2.1 Taxation of private assets... 120 2.2 Taxation as business assets and in case of income from leasing and letting... 121 2.3 Taxation of foreign nationals... 122 3. Taxation in the Republic of Italy... 122 3.1 Italian tax treatment of the Certificates... 122 3.2 Atypical securities... 124 3.3 Inheritance and gift taxes... 124 3.4 Transfer tax... 125 3.5 Stamp Duty... 125 3.6 Wealth Tax... 125 3.7 Financial Transaction Tax (FTT) depending on the features of the Certificates... 125 4
3.8 Tax monitoring obligations... 126 X. Names and addresses... 127 XI. Signatures... U 5
I. Summary The content, elements and the order of the elements of this summary comply with the provisions of Annex XXII of the Regulation (EC) No. 809/2004 (EC) No. 809/2004 ("EU Prospectus Regulation") as amended. The EU Prospectus Regulation stipulates that the required information is listed in Elements A - E (A.1 - E.7). This summary contains all of the elements, which are required by the EU Prospectus Regulation in a summary for derivative securities, which are issued by a bank. Since Annex XXII of the EU Prospectus Regulation not only applies to derivative securities which are issued by a bank, rather also to other types of securities, several of the elements contained in Annex XXII of the EU Prospectus Regulation are not relevant and are therefore omitted. Uncontinuous numbering of the elements in the following Elements A - E thereby results. Even if a section must be included in the summary for derivative securities which are issued by a bank, it is possible that no relevant information on this section may be given for the specific issuance or the Issuer. In this case, a short description of the section together with the remark "not applicable" is inserted. Section Section A - Introduction and warning A.1 Warning This Summary should be read and construed as an introduction to the Base Prospectus or the Final Terms. Any decision by an investor to invest in the relevant securities should be based on consideration of the Base Prospectus as a whole, including any documents incorporated by reference, any Supplements and the Final Terms. Where a claim relating to the information contained in the Base Prospectus, including documents incorporated by reference, any Supplements and the relevant Final Terms, is brought before a court, the plaintiff investor might, under the national legislation, have to bear the costs of translating the Base Prospectus including documents incorporated by reference, any Supplements and the relevant Final Terms before the legal proceedings are initiated. Civil liability attaches to the Issuer, who has tabled this summary, including any translations thereof, and applied for its notification or the person who has initiated the preparation of this summary, including any translations thereof, solely if it is misleading, inaccurate or inconsistent when read together with the other parts of the Base Prospectus, or if it does not provide, when read together with the other parts of the Base Prospectus, all key information. A.2 Consent for use of the Base Prospectus The Issuer consents to the use of the Base Prospectus and any Supplements, if any, together with the Final Terms for a subsequent resale or final placement of securities through all financial intermediaries, provided the Base Prospectus and the Final Terms are valid in accordance with 9 of the German Securities Prospectus Act (Wertpapierprospektgesetz - WpPG) (general consent). The subsequent resale and final placement of the securities through financial intermediaries in accordance with 9 of the German Securities Prospectus Act may occur while the Base Prospectus and the Final Terms are in effect. The consent to use the Base Prospectus and any Supplements, if any, as well as the Final Terms is subject to the conditions that (i) the Securities are offered to the public through a financial intermediary within the applicable selling restrictions and (ii) the consent to use the Base Prospectus and any Supplements, if any, as well as the Final Terms has not been revoked by the Issuer. 6
Further conditions on the use of the Base Prospectus and any Supplements, if any, as well as the Final Terms do not exist. In the event that a financial intermediary makes an offer, it shall inform the investors of the terms and conditions of such offer at the time it makes the offer. Section B - Issuer B.1 Legal name B.2 Seat Commercial name Legal form, legislation Place of registration DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main ("DZ BANK" or "Issuer") DZ BANK Platz der Republik, 60265 Frankfurt am Main, Federal Republic of Germany DZ BANK is a stock corporation (Aktiengesellschaft) established under German law and is supervised by the European Central Bank (Europäische Zentralbank) in collaboration with the German Central Bank (Deutsche Bundesbank) and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). DZ BANK is entered in the commercial register of the local court of Frankfurt am Main, Federal Republic of Germany, under the number HRB 45651. B.4b Trends affecting the Issuer and the industries in which it operates Not applicable There are no known trends affecting the Issuer and the industries in which it operates. B.5 Organisational structure / subsidiaries B.9 Profit forecast or estimate B.10 Audit report qualifications B.12 Selected significant historical financial information The consolidated financial statements as at 31 December 2016 include, in addition to DZ BANK as the parent company, further 28 (31 December 2015: 27) subsidiaries and 6 (31 December 2015: 5) subgroups comprising a total of 442 (31 December 2015: 534) subsidiaries. Not applicable No profit forecasts or estimates are made by the Issuer. Not applicable The annual financial statement and management report of DZ Bank for the year ended 31 December 2016 as well as the consolidated financial statements and the group management reports for the year ended 31 December 2016 and 31 December 2015 have been audited by Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft and respectively issued with an unqualified audit report. The following financial figures were taken in each case from the annual financial statements of DZ BANK AG prepared in accordance with the provisions of the German Commercial Code (HGB) and the disclosure rules in the German Accounting Regulation for Banks and Financial Services Institutions (Verordnung über die Rechnungslegung der Kreditinstitute und Finanzdienstleistungsinstitute, RechKredV) for the year ended 31 December 2016 or ended 31 December 2015, as the case may be. DZ BANK AG (in million EUR) pre-merger Assets (HGB) 31/12/2016 01/01/2016 DZ BANK 31/12/2015 Cash and cash equivalents 2,056 2,213 1,966 7
Debt instruments from public-sector entities and bills of exchange eligible for refinancing by central banks 236 278 278 Loans and advances to banks 118,095 101,022 81,319 Loans and advances to customers 33,744 31,710 22,647 Bonds and other fixed-income securities 45,591 48,253 39,375 Shares and other variable-yield securities 68 56 55 Trading assets 38,187 45,929 39,192 Equity participating interest 380 1,630 363 Shares in affiliated companies 11,534 10,299 9,510 Trust assets 1,025 1,049 1,047 Intangible assets 66 65 45 Property, plant and equipment 439 407 363 Other assets 918 807 689 Deferred expenses 85 89 43 Deferred tax assets 891 844 844 Excess of plan assets over pension liabilities 0 - - Total assets 253,315 244,651 197,736 DZ BANK AG (in million EUR) pre-merger DZ BANK 31/12/2015 Equity and liabilities HGB) 31/12/2016 01/01/2016 Deposits from banks 120,150 119,986 91,529 Deposits from customers 27,938 22,720 17,985 Debt certificates issued including bonds 48,173 45,782 38,973 Trading liabilities 31,966 31,889 29,167 Trust liabilities 1,025 1,049 1,047 Other liabilities 1,428 670 496 Deferred income 77 105 56 Provisions 1,376 1,196 934 Subordinated liabilities 6,119 6,304 5,564 Profit-sharing rights 292 292 292 Fund for general banking risks 4,515 4,515 3,685 Equity 10,256 10,143 8,008 Total equity and liabilities 253,315 244,651 197,736 As at 1 January 2016 (effective merger date), WGZ BANK AG Westdeutsche Genossenschafts-Zentralbank, Düsseldorf ("WGZ BANK"), was merged into DZ BANK. On 29 July 2016, the merger was entered on the Commercial Register. The transfer of the assets of WGZ BANK in their totality, together with all rights and obligations, to DZ BANK was undertaken while continuing or rolling over the book values (predecessor accounting) pursuant to 24 of the Corporate Reorganization Act (Umwandlungsgesetz UmwG). In order to ensure that figures in the 2016 annual financial statements can be compared with the previous year s figures as at 31 December 2015, the comparison numbers are shown in an additional column of the balance sheet for the merger reference date of 1 January 2016. To this end, the prior year s figures on the basis of the totals for DZ BANK and WGZ BANK as of 31 December 2015 were calculated, while factoring in the capital and debt consolidation effect. The prior year figures for the former DZ BANK are shown in the balance sheet in the column "pre-merger DZ BANK 31.12.2015". The following financial figures were taken in each case from the audited consolidated financial statements of the DZ BANK prepared in accordance with Regulation (EC) No. 1606 / 2002 of the European Parliament and of the Council of 19 July 2002 and with the International Financial Reporting Standards (IFRS), as must be used in the European Union and in accordance with the additional requirements of 315 a para. 1 of the German Commercial Code, for the financial year ended 31 December 2016 or ended 31 December 2015. DZ BANK Group (in million EUR) Assets (IFRS) 31/12/2016 31/12/2015 Equity and liabilities (IFRS) 31/12/2016 31/12/2015 Cash and cash equivalents 8,515 6,542 Deposits from banks 129,280 97,227 Loans and advances to banks 107,253 80,735 Deposits from customers 124,425 96,186 Loans and advances to customers 176,532 126,850 Debt certificates issued including bonds 78,238 54,951 Allowances for losses on loans and advances -2,394-2,073 Derivatives used for hedging (negative fair values) 3,874 1,641 Derivatives used for hedging (positive fair values) 1,549 416 Financial liabilities held for trading 50,204 45,377 8
Financial assets held for trading 49,279 49,520 Provisions 4,041 3,081 Investments 70,180 54,305 Insurance liabilities 84,125 78,929 Investments held by insurance companies 90,373 84,744 Income tax liabilities 780 775 Property, plant and equipment, and investment property 1,752 1,710 Other liabilities 6,662 6,039 Income tax assets 1,280 902 Subordinated capital 4,723 4,142 Other assets 4,970 4,270 Liabilities included in disposal groups classified as held for sale 25 7 Non-current assets and disposal groups classified as held for sale 182 166 Fair value changes of the hedged items in portfolio hedges of interest-rate risk 180 257 Fair value changes of the hedged items in portfolio hedges of interest-rate risk -24 254 Equity 22,890 19,729 Total assets 509,447 408,341 Total equity and liabilities 509,447 408,341 Trend information / Statement regarding "No material adverse changes" Statement regarding "Significant changes in the Group's financial position" B.13 Description of any recent events in the Issuer's business which are relevant for the evaluation of the Issuer's solvency. B.14 Organisational structure / dependence upon other entities within the Group There have been no material adverse changes in the prospects of the Issuer since 31 December 2016 (date of the most recent and audited annual and consolidated financial statements). Not applicable There have been no significant changes in the financial position of the DZ BANK Group since 31 December 2016 (date of the most recent and audited annual and consolidated financial statements). Not applicable There have not been any recent events in the Issuer's business that are relevant for the evaluation of the Issuer's solvency. Not applicable The Issuer is not dependent upon other entities within the Group. B.15 Principal activities DZ BANK is acting as a central bank, corporate bank and parent holding company of the DZ BANK Group. The DZ BANK Group forms part of the German cooperative financial network ("Genossenschaftliche FinanzGruppe Volksbanken Raiffeisenbanken"), which comprises approximately 1,000 local cooperative banks and is one of Germany s largest financial services organisations measured in terms of total assets. DZ BANK is a central institution and is closely geared to the interests of the local cooperative banks, which are both its owners and its most important customers. Using a customized product portfolio and customer-focused marketing, DZ BANK aims to ensure that the local cooperative banks continually improve their competitiveness on the basis of their brands and - in the Issuer s view - their leading market positions. In addition, following the merger with WGZ BANK, DZ BANK - now in its function as central bank - serves approximately 1,000 cooperative banks and is responsible for the liquidity management within the Genossenschaftliche FinanzGruppe Volksbanken Raiffeisenbanken. As a commercial bank, DZ BANK serves companies and institutions that need a banking partner 9
that operates at the national level. DZ BANK offers the full range of products and services of an international oriented financial institution with a special focus on Europe. DZ BANK also provides access to the international financial markets for its partner institutions and their customers. DZ BANK currently has seven branches (in Berlin, Düsseldorf, Hanover, Koblenz, Munich, Münster and Stuttgart) and also four foreign offices (in London, New York, Hong Kong and Singapore). The sub-offices in Hamburg, Karlsruhe, Leipzig, Oldenburg and Nuremberg are assigned to the seven German branches in the Federal Republic of Germany. DZ BANK and the key subsidiaries also referred to as management units - constitute the core of the financial services group. The management units each constitute their own segment and with respect to risk management are assigned to the following sectors: Bank sector - DZ BANK AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main - Bausparkasse Schwäbisch Hall Aktiengesellschaft, Schwäbisch Hall (Bausparkasse Schwäbisch Hall; sub-group designation: "BSH") - Deutsche Genossenschafts-Hypothekenbank AG, Hamburg ("DG HYP") - DVB Bank SE, Frankfurt am Main (DVB Bank; sub-group designation: "DVB") - DZ PRIVATBANK S.A., Luxembourg-Strassen, Luxemburg ("DZ PRIVATBANK") - TeamBank AG Nürnberg, Nürnberg ("TeamBank") - Union Asset Management Holding AG, Frankfurt am Main (Union Asset Management Holding; sub-group designation: "UMH") - VR-LEASING Aktiengesellschaft, Eschborn (VR-LEASING AG; sub-group designation: "VR LEASING") - WL BANK AG Westfälische Landschaft Bodenkreditbank, Münster ("WL BANK") Insurance sector - R+V Versicherung AG, Wiesbaden ("R+V"), The aforementioned companies of DZ BANK Group are therefore central pillars financial products and services of the Genossenschaftliche FinanzGruppe Volksbanken Raiffeisenbanken. On the basis of the four strategic business segments Retail Banking, Corporate Banking, Capital Markets and Transaction Banking, DZ BANK Group provides its strategy and range of services to the cooperative banks and their customers. B.16 Major shareholders / Control As of 6 June 2017, the subscribed capital of DZ BANK is EUR 4,926,198,081.75 and is divided into 1,791,344,757 no-par value shares. The group of shareholders consists of the following: Cooperative banks (directly and indirectly) 94.32% Other cooperative companies 4.83% Other 0.85% No person exercises control over DZ BANK. DZ BANK is also not aware of any agreement which, when implemented, could mean a change in control of DZ BANK at a later date. B.17 Issuer or securities rating DZ BANK is rated on her behalf by the rating agencies Standard & Poor's Credit Market Services Europe Limited ("S&P") 1, Moody s Deutschland GmbH ("Moody s") 2 and Fitch Ratings Limited 1 S&P is seated in the European Community and has been registered since 31 October 2011, pursuant to Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies, as amended ("CRA Regulation"). S&P is on the "List of registered and certified CRA's" which is published by the European Securities and Markets Authority on its website (www.esma.europa.eu), pursuant to the CRA Regulation. 10
("Fitch") 3, which have rated it. As of the date of the Base Prospectus, the ratings ascribed to DZ BANK are as follows: S&P: Issuer rating: AA-*, stable outlook short-term rating: A-1+* Moody's: Issuer rating: Aa3, positive outlook short-term rating: P-1 Fitch: Issuer rating: AA-*, stable outlook short-term rating: F1+* * joint rating of the German cooperative financial network Securities rating Not applicable The Issuer has not commissioned a rating for the Securities. Section C - Securities C.1 Type and class of securities being offered, including security identification number C.2 Currency of the securities issuance C.5 Restrictions on the free transferability of the securities C.8 Rights attached to the securities, including ranking and limitations on those rights The securities issued under the Base Prospectus ("Certificates" or "Securities") are bearer bonds in terms of 793 et seq. of the German Civil Code (Bürgerliches Gesetzbuch BGB). ISIN: The Securities are represented by a global bearer certificate. No definitive securities will be issued. Not Applicable The Securities are freely transferable in compliance with the applicable law and the rules and regulations [of Clearstream Banking AG, Mergenthalerallee 61, 65760 Eschborn, Federal Republik of Germany ("Clearstream Banking AG")] [ ]. [[Payment profiles 1 and 2 (Bonus Certificates with Cap and Bonus Certificates without Cap)] The Certificates are securities where the amount of the Exercise Amount depends on the performance of the Underlying. The Certificates are without capital protection. The term of the Certificates ends on the Exercise Date.] [[Payment profiles 3 and 4 (Express Certificates and Express Certificates Easy)] The Certificates are securities where the Exercise Date and the amount of the Exercise Amount depend on the performance of the Underlying. [Furthermore, independent of the performance of the Underlying, an Additional Amount will be paid for the [respective] [ ] Valuation Date on the relevant Payment Date.] The Certificates are without capital protection. The term of the Certificates ends on the Exercise Date. The Exercise Date and thus the term of the Certificates may vary due to the possibility of Early Exercise.] 2 Moody's is seated in the European Community and has been registered since 31 October 2011, pursuant to the CRA Regulation. Moody's is on the "List of registered and certified CRA's" which is published by the European Securities and Markets Authority on its website (www.esma.europa.eu), pursuant to the CRA Regulation. 3 Fitch is seated in the European Community and has been registered since 31 October 2011, pursuant to the CRA Regulation. Fitch is on the "List of registered and certified CRA's" which is published by the European Securities and Markets Authority on its website (www.esma.europa.eu), pursuant to the CRA Regulation. 11
[[Payment Profile 5 (ZinsFix Continuous Express Certificates) The Certificates are securities where the Exercise Date and the amount of the Exercise Amount [or the Physical Delivery] [of the Reference Shares] [of the Reference Securities] depend on the performance of the Underlying. Furthermore, independent of the performance of the Underlying, an Additional Payment will be paid on the relevant Payment Date. The Certificates are without capital protection. The term of the Certificates ends on the Exercise Date. The Exercise Date and thus the term of the Certificates may vary due to the possibility of Early Exercise.] Adjustments, Termination, Market Disruption If certain events occur, the Issuer is entitled to adjust the Certificate Terms and Conditions or to terminate the Securities. If a Market Disruption occurs, the day affected by the Market Disruption will be postponed and, if applicable, the Issuer will determine the relevant price at its reasonable discretion ( 315 of the German Civil Code). [Such a postponement may, if applicable, lead to a postponement of [the relevant Payment Date] [or] [the Exercise Date] [ ].] Applicable law The Securities are subject to German law. Status of the Securities The Securities constitute unsecured and unsubordinated obligations of the Issuer, ranking pari passu among themselves and pari passu with all other present or future unsecured and unsubordinated obligations of the Issuer, save for such obligations of the Issuer as may be preferred by mandatory provisions of law. Restrictions on the rights attached to the securities Not applicable A restriction on the above-mentioned rights under the Securities does not exist. C.11 Admission to trading C.15 Influencing of the value of the security by the value of the Underlying [Not applicable An [exchange listing] [and an] admission of the Securities to trading is not intended.] [The Securities are [expected] to be admitted for trading on [the following exchange] [the following exchanges] [presumably at about the time of the value date] [on ] [("Beginning of the Public Offer")]: [- the regulated unofficial market (Open Market) (Freiverkehr) of the Frankfurt Stock Exchange (Frankfurter Wertpapierbörse)] [- regulated unofficial market (Open Market) (Freiverkehr) of the Stuttgart Stock Exchange (Börse Stuttgart)] [[Payment profile 1 (Bonus Certificates with Cap)] The amount of the Exercise Amount depends on the performance of the Underlying and is determined as follows: (a) If the Observation Price is always greater than the Barrier, the Exercise Amount corresponds to the Bonus Amount. (b) If the Observation Price is at least once lower than or equal to the Barrier, the Exercise Amount is calculated by multiplying the Reference Price by the Multiplier. The Exercise Amount is limited, however, to the Maximum Amount. The Exercise Amount is paid on the Exercise Date.] 12
[[Payment profile 2 (Bonus Certificates without Cap)] The amount of the Exercise Amount depends on the performance of the Underlying and is determined as follows: (a) If the Observation Price is always greater than the Barrier, the Exercise Amount is calculated by multiplying the Reference Price by the Multiplier. However, the Exercise Amount is at least equal to the Bonus Amount. (b) If the Observation Price is at least once lower than or equal to the Barrier, the Exercise Amount is calculated by multiplying the Reference Price by the Multiplier. The Exercise Amount is paid on the Exercise Date.] [[Payment profile 3 (Express Certificates)] Early Exercise and the amount of the Exercise Amount depend on the performance of the Underlying. [Additional Amount: The Holder will receive an Additional Amount for the [respective] [ ] Valuation Date on the relevant Payment Date, irrespective of the performance of the Underlying.] Early Exercise: An Early Exercise and payment of the Exercise Amount to the Holder will occur, if the Reference Price on the respectively relevant Valuation Date is greater than or equal to the [respective] Exercise Level. The Exercise Amount is paid on the Exercise Date. [The following Exercise Level and the following Exercise Amount apply to the relevant Valuation Date: "Exercise Level"[*] (percentage of the Starting Price) "Exercise Amount"[*] [in ] [First] [ ] Valuation Date [ Valuation Date] 4 [ ] 5 [ ] 6 [* final determination by the Issuer on the Starting Date and publication within [five] [ ] Banking Days pursuant to 8 of the Certificate Terms and Conditions]] If Early Exercise does not occur, the Exercise Amount will be determined as follows: (a) If the Reference Price on the Last Valuation Date is greater than or equal to [ ] [ % of the Starting Price], the Exercise Amount corresponds to. (b) If (a) has not occurred and if the Reference Price on the Last Valuation Date is greater than or equal to [at the most] [ ] [ % of the Starting Price] [(final determination by the Issuer on the Starting Date and publication within [five] [ ] Banking Days pursuant to 8 of the Certificate Terms and Conditions)], the Exercise Amount corresponds to the Base Amount. (c) If (a) and (b) have not occurred, the Exercise Amount is calculated by dividing the Reference Price on the Last Valuation Date (dividend) by [the Starting Price] [ % of the Starting Price] (divisor), multiplied by the Base Amount. The Exercise Amount is paid on the Exercise Date.] 4 This option may be applicable several times. 5 This option may be applicable several times. 6 This option may be applicable several times. 13
[[Payment Profile 4 (Express Certificates Easy)] Early Exercise and the amount of the Exercise Amount depend on the performance of the Underlying. [Additional Amount: The Holder will receive an Additional Amount for the [respective] [ ] Valuation Date on the relevant Payment Date, irrespective of the performance of the Underlying.] Early Exercise: An Early Exercise and payment of the Exercise Amount to the Holder will occur, if the Reference Price on the respectively relevant Valuation Date is greater than or equal to the [respective] Exercise Level. The Exercise Amount is paid on the Exercise Date. [The following Exercise Level and the following Exercise Amount apply to the relevant Valuation Date: "Exercise Level"[*] (percentage of the Starting Price) "Exercise Amount"[*] [in ] [First] [ ] Valuation Date [ Valuation Date] 7 [ ] 8 [ ] 9 [* final determination by the Issuer on the Starting Date and publication within [five] [ ] Banking Days pursuant to 8 of the Certificate Terms and Conditions] If Early Exercise does not occur, the Exercise Amount will be determined as follows: (a) If the Reference Price on the Last Valuation Date is greater than or equal to [ ] [ % of the Starting Price], the Exercise Amount corresponds to. (b) If (a) has not occurred, the Exercise Amount is calculated by dividing the Reference Price on the Last Valuation Date (dividend) by [the Starting Price] [ % of the Starting Price] (divisor), multiplied by the Base Amount. The Exercise Amount is paid on the Exercise Date.] [[Payment Profile 5 (ZinsFix Continuous Express Certificates)] Early Exercise[, the amount of the Additional Amount] and the amount of the Exercise Amount [or the Physical Delivery] depend on the performance of the Underlying. [Additional Amount: The Holder will receive[, subject to an Early Exercise,] an Additional Amount on the [respective] Payment Date. Early Exercise: An Early Exercise and payment of the Exercise Amount to the Holder will occur, if the Reference Price on the respectively relevant Valuation Date is greater than or equal to the [respective] Exercise Level. The Exercise Amount is paid on the Exercise Date. [The [following Exercise Level] [and] [the following Exercise Amount] apply to the relevant Valuation Date: 7 This option may be applicable several times. 8 This option may be applicable several times. 9 This option may be applicable several times. 14
"Exercise Level"[*] (percentage of the Starting Price) "Exercise Amount"[*] [in ] [First] [ ] Valuation Date [ Valuation Date] 10 [ ] 11 [ ] 12 [* final determination by the Issuer on the Starting Date and publication within [five] [ ] Banking Days pursuant to 8 of the Certificate Terms and Conditions] If Early Exercise does not occur, [the Exercise Amount] [the settlement method] will be determined as follows: (a) If the Observation Price is always greater than or equal to the Barrier, [the Exercise Amount will be [Euro] [ ].] [the Holder will receive the Exercise Amount.] (b) If the Observation Price is at least once lower than the Barrier, [the Exercise Amount is calculated by dividing the Reference Price on the Last Valuation Date (dividend) by [the Starting Price] [ ] (divisor), multiplied by the Base Amount. [The Exercise Amount is limited, however, to.]] [the Holder will receive the number [of Reference Shares] [of Reference Securities] corresponding to the Multiplier ("Physical Delivery"). Fractional amounts [of the Reference Shares] [of Reference Securities] will not be delivered. A corresponding Compensatory Amount will be paid. The payment of the Exercise Amount [or the Physical Delivery] shall take place on the Exercise Date.] Definitions: ["Additional Amount".] ["Banking Day".] ["Barrier".] ["Base Amount".] ["Bonus Amount".] ["Exercise Amount".] ["Exercise Date" [ ] [is the date defined under section C.16].] ["Exercise Level".] ["Index Reference Basis Product[s]".] ["Index Reference Securities".] ["Index Sponsor".] ["Maximum Amount" is.] ["Multiplier".] ["Observation Date" [ ] [is any Ordinary Trading Day from the to the Valuation Date (each including)].] ["Observation Price" is [each price of the Underlying on the Relevant Exchange on an Observation Date] [ ].] ["OptiStart Date[s]".] ["OptiStart Period" is [ ] [any Ordinary Trading Day from (including) to (including) (each an "OptiStart Date")].] ["Ordinary Trading Day".] ["Payment Date[s]" [ ] [[is the] [are the] date[s] defined under section C. 16].] ["Reference Price" [ ] [is the price of the Underlying defined under section C. 19].] ["Reference Securities".] ["Relevant Exchange".] ["Relevant Related Exchange".] [ ] ["Starting Date".] ["Starting Price" is [the closing price of the Underlying on the Relevant Exchange on the Starting Date] [ ].] ["Threshold".] ["Underlying" [or "Reference Share"] is.] ["Valuation Date[s]" [ ] [[is the] [are the] date[s] defined under section C.16].] C.16 Valuation Date[s][,] [and] Exercise Date [and] [Payment Date[s]] [Valuation Date is.] [The Valuation Dates are [the ("First Valuation Date") [, the (" Valuation Date")] 13 and the ("Last Valuation Date")] [ ].]. [The Exercise Date depends on the performance of the Underlying. [First] [ ] Valuation Date [ Valuation Date] ] [Exercise Date is.] Exercise Date [First] [ ] Payment Date [ ] Payment Date 10 This option may be applicable several times. 11 This option may be applicable several times. 12 This option may be applicable several times. 13 This option may be applicable several times. 15
[Payment Date is.] [ ] [Payment Dates are the ("First Payment Date")[, the (". Payment Date") 14 ] and the ("Final Payment Date")] [ ].] C.17 Settlement procedure The securities are represented by a global certificate without interest coupon, which is deposited with [Clearstream Banking] [ ]. The delivery of definitive certificates is excluded throughout the entire term. The Securities are transferable as co-ownership rights to the global certificate in accordance with the rules and regulations [of Clearstream Banking AG] [ ]. All Certificates shall be deemed automatically exercised on the Exercise Date without any prior notice being delivered by the relevant Holder. Holders are not required to complete an exercise notice. However, Holders shall be entitled to waive the automatic exercise by submission of a written Renouncement Notice. In case a Holder does submit a duly completed Renouncement Notice he shall not be entitled to receive the Exercise Amount and the term of the Certificates shall automatically end on the Exercise Date without any payments being made by the Issuer. C.18 Return of the securities The Issuer is obliged to pay all amounts payable [or deliver all Securities deliverable] pursuant to these terms and conditions on the [respective] date of maturity in the currency mentioned in section C.2. Insofar as that day is not a Banking Day, the payment [or the delivery] shall be made on the next Banking Day. All amounts payable [or Securities deliverable] shall be paid [or delivered] by the Issuer to [Clearstream Banking AG] [ ] or to its order for credit to the accounts of the relevant depositary for transfer to the Holder. The Issuer shall be released from its payment obligation [or duty to deliver] to the Holder by making such payment to [Clearstream Banking AG] [ ] or to its order. C.19 Reference Price [The closing price of the Underlying on the Relevant Exchange on the [respective] Valuation Date.] [The closing price of the Underlying on the [respective] Valuation Date, as calculated as such and published by the Index Sponsor.] [Is for the Underlying, the closing settlement price for options contracts on the Underlying, as calculated and published by the Relevant Related Exchange on the [respective] Valuation Date, which is deemed to be the value of the Underlying currently determined on the basis of the prices for Index Reference Securities in the intra-day auction on XETRA.] [ ] [Is for the Underlying, the closing settlement price for options contracts on the Underlying, as calculated and published by the Relevant Related Exchange on the [respective] Valuation Date, which is deemed to be the value of the Underlying currently determined on the basis of the average of the underlying calculations on the [respective] Valuation Date between 11:50 a.m. to 12:00 a.m. (local time Frankfurt am Main).] C.20 Type of the Underlying and place where information on the Underlying can be obtained Type: [share[s]] [indices] Name: [(ISIN )] Information regarding the past and future performance of the Underlying is published on a publicly accessible website. It is available as at the Beginning of the Public Offer on [www.onvista.de] [ ]. 14 This option may be applicable several times. 16
Section D - Risks Purchase of the Securities involves various risks. The Issuer expressly points out that the information given only presents the key risks associated with an investment in the Securities and those which were known to the Issuer as of the date of the Base Prospectus. D.2 Information on the key risks of the Issuer Risks emerge when there are adverse developments with respect to the net assets, financial condition or results of operation and when they threaten to cause future losses or future liquidity needs. In this regard, a distinction must be made between liquidity resources and capital resources. As a rule, manifesting risks could affect both resources will stop. Issuer Risk and possible total loss of the invested capital Investors are exposed to the risk of insolvency, i.e., over-indebtedness or inability to pay of DZ BANK. Total loss of the invested capital is possible. The following general risk factors are significant for DZ BANK: - The DZ BANK Group and DZ BANK are exposed to market and industry-related risk factors that could affect capital adequacy and liquidity adequacy. - Significant risks associated with changes in (consolidated) accounting standards arise for the DZ BANK Group as a consequence of the adoption of IFRS 9 Financial in European Union law. - The regulatory environment for the banking industry has been marked by constantly tightening regulatory standards related to equity capital and liquidity as well as more stringent procedural and reporting requirements. These developments have had, above all, an impact on business risk. - The most significant macroeconomic risk factors impacting the DZ BANK Group involve the developments in the general economy, the European sovereign debt crisis and the difficult market environment in the ship financing business. The macroeconomic risk factors could potentially have an adverse effect specifically on credit risk, investment risk, market price risk, business risk and the reputational risk in the bank sector and on market risk and counterparty default risk in the insurance sector. The continued low interest rates will be a drag on earnings. - In addition, the DZ BANK Group is exposed to company-specific risk factors that affect numerous types of risk. This relates to potential inadequacies of the risk management system, possible downgrades in the rating of DZ BANK or its subsidiaries, and the invalidity of hedging relationships. Such risks are generally taken into account as part of management. The management of liquidity adequacy is an integral component of the corporate management at the DZ BANK Group and DZ BANK. Liquidity adequacy is understood to mean that there is an adequate supply of liquidity reserves. The liquidity adequacy is considered from both an economic and regulatory perspective. Whereas the economic perspective implements the requirements of MaRsik, the regulatory perspective applies the Basel III requirements. Economic liquidity adequacy is managed on the basis of the internal liquidity risk model, which takes account of the impact on liquidity of other risks when measuring liquidity risk. The regulatory liquidity adequacy requirements are met by managing economic liquidity adequacy. Liquidity risk arises from a mismatch in the timing and amount of cash inflows and outflows. The following key factors affect the level of liquidity risk: - the funding structure of lending transactions; - the uncertainty surrounding liquidity tied up in the funding of structured issues and investment certificates with termination rights and obligation acceleration; - changes in the volume of deposits and loans, in which the cash-pooling function in the cooperative financial network is a significant determining factor; 17
- the funding potential in money markets and capital markets; - the fluctuations in fair value and marketability of securities, and the eligibility of such securities for use in collateralized funding arrangements, such as bilateral repos or transactions in the tri-party market; - the potential exercise of liquidity options, such as drawing rights in irrevocable loan or liquidity commitments, and termination or currency option rights in lending business; - the obligation to pledge collateral in the form of cash or securities (for example, for derivative transactions or to guarantee payments as part of intraday liquidity). Liquidity risk also arises from changes to an entity s own rating if contractual requirements to provide collateral depend on the rating. The management of capital adequacy is an integral component of business management in the DZ BANK Group and DZ BANK. DZ BANK and all other management units are included in the group wide management of capital adequacy. Active management of economic capital adequacy on the basis of both internal risk measurement methods and regulatory capital adequacy requirements aims to ensure that the assumption of risk is always consistent with the DZ BANK Group s capital resources. In addition to the management of economic capital, regulatory solvency requirements for the DZ BANK financial conglomerate, the DZ BANK banking group and R+V Versicherung AG insurance group are also observed. The following risks are significant for the bank sector: - Credit risk is defined as the risk of losses arising from the default of counterparties (borrowers, issuers, other counterparties) and from the migration of the credit ratings of these counterparties. - Equity risk is the risk of losses arising from negative changes in the fair value of that portion of the long-term equity investments portfolio for which the risks are not included in other types of risk. - Market risk in the bank sector comprises market risk in the narrow sense of the term, and market liquidity risk. - Technical risk of a home savings and loan company is subdivided into two components: new business risk and collective risk. New business risk is the risk of a negative impact from possible variances compared with the planned new business volume. Collective risk refers to the risk of a negative impact that could arise from variances between the actual and forecast performance of the collective building society operations caused by significant long-term changes in customer behaviour unrelated to changes in interest rates. - Business risk denotes the risk of losses arising from earnings volatility for a given business strategy and not covered by other types of risk. In particular, this comprises the risk that, as a result of changes in material circumstances (for example, the regulatory environment, economic conditions, product environment, customer behaviour and market competitors), corrective action cannot be taken at an operational level to prevent the losses. - Reputational risk refers to the risk of losses from events that damage confidence, mainly among customers (including the local cooperative banks), shareholders, the labour market, the general public, and the supervisory authority, in the entities of the Bank sector or in the products and services that they offer. - DZ BANK defines operational risk as the risk of loss from human behaviour, technological failure, weaknesses in process or project management, or external events. This closely resembles the regulatory definition. Legal risk is included in this definition. 18
In the meantime, the following risks are of relevance for the insurance sector: - Actuarial risk is the risk that the actual cost of claims and benefits deviates from the expected cost as a result of chance, error or change. It is broken down into the following categories defined by Solvency II: - life actuarial risk - health actuarial risk - non-life actuarial risk - Market risk describes the risk arising from fluctuations in the level or volatility of market prices of assets, liabilities and financial instruments that have an impact on the value of the assets and liabilities of the entity. It suitably reflects the structural mismatch between assets and liabilities, in particular with respect to their duration. - Counterparty default risk reflects possible losses due to unexpected default or deterioration in the credit standing of counterparties and debtors of insurance and reinsurance companies over the following twelve months. It covers risk-mitigating contracts, such as reinsurance arrangements, securitizations and derivatives, and receivables from intermediaries, as well as any other credit risk that is not otherwise covered by risk measurement. Counterparty default risk takes account of collateral or other security that is held by or for the insurance or reinsurance company and any associated risks. - Operational risk is defined as the risk of loss arising from inadequate or failed internal processes, personnel, or systems, or from external events. It includes legal risk. Legal risks could arise, in particular, from changes in the legal environment (legislation and decisions by the courts), changes in official interpretations, and changes in the business environment. R+V includes in the risk assessment the holding in a Spanish insurance company as noncontrolled insurance company. For the relevant company, the R+V calculations have factored in the prorated risk capital and the prorated equity capital in accordance with Solvency II. At R+V, non-controlled insurance companies and entities in other financial sectors consist mainly of pension funds and occupational pension schemes. D.6 Key risks relating to the securities Risk in connection with the Payment Profile of the Securities [[Payment Profiles 1 and 2 (Bonus Certificates with Cap and Bonus Certificates without Cap)] The risk of the structure of the Certificates is that the amount of the Exercise Amount is linked to the performance of the Underlying. The performance of the Underlying may vary over time or not develop in accordance with the investor's expectations. This structure involves the risk for the investor that the invested capital will not be fully recovered in all cases. The capital loss may assume considerable dimensions and the entire investment may be lost. Loss of the entire investment would result if the Reference Price has declined to zero. Even if the invested capital is not lost, there is a risk that the returns will not be comparable to those of an investment of comparable term at the standard market rate of interest. [Moreover, the investor participates [due to the structure only to a limited extent in a positive performance of the Underlying] [and] [generally not in normal distributions (e.g. dividends) from the Underlying] [or] [from the securities on which the Underlying is based.] There is no guarantee that the Underlying will develop in accordance with the investor's expectations.] [[Payment Profiles 3 and 4 (Express Certificates and Express Certificates Easy)] The risk of the structure of the Certificates is that the Exercise Date and the amount of the Exercise Amount are linked to the performance of the Underlying. The performance of the Underlying may vary over time or not develop in accordance with the investor's expectations. This structure involves the risk for the investor that the invested capital will not be fully 19