Recommendation 1 Recommendation 2 Recommendation 3 Recommendation 4

Recommendation 5 Recommendation 6 Recommendation 7 Recommendation 8

Market selection

Recommendation 7

Investor compliance with the laws and regulations in the home countries of their investments should be part of their regulators' due diligence process. They, in turn, should be treated equitably in the home country of their investments especially in respect to their rights to shareholder benefits and concessionary arrangements under double tax agreements.

1.	Do domestic regulators monitor the procedures in place at their locally based cross-border custodians to assure compliance with the laws and regulations of the home countries of their investments?	The custody relationship between local custodians and overseas clients is governed by the Custody Agreement entered by them. Generally, this Agreement includes terms that reflect the laws and regulations of the home country of the investments.
2.	What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?	Foreign investors are generally treated in the same way as local investors under Australia law. However, there are specific areas where foreign investors may be subject to special rules: Voluntary corporate actions in Australia may not be acceptable securities for certain investors due to their local country regulations (eg, Canada and US) Certain stocks are subject to foreign ownership limitations Withholding tax may be applicable on interest and dividends Brokerage and custodian fees may be GST free for foreign investors
3.	Can sales proceeds and income be repatriated without any restrictions?	Generally speaking, there are no restrictions on the movement of funds into or out of Australia. Remittances may be effected through any authorised foreign exchange dealer. However, in terms of United Nations Security Council resolutions, certain transactions involving Iraq, the Federal Republic of Yugoslavia, Libya, the Taliban and the National Union for the Total Independence of Angola (UNITA) are prohibited without prior approval from the Reserve Bank.
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	Australia has concluded double taxation agreements with several countries. There are no formalities involved in obtaining the benefit of reduced rates of withholding tax applicable under double taxation treaty arrangements as withholding tax is applied 'at source' using the relevant treaty / non treaty rate. These withholding tax amounts can be recovered/reclaimed from the Australian Taxation Office if the tax was withheld in error (for example if the beneficial owner of the securities has been granted an exemption from the Australian Taxation Office).