Compliance Report ISSA Recommendations 2000

ISSA - International Securtities Services Association

Compliance to the ISSA Recommendations 2000

Market: Switzerland

Status: March 9, 2001

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? No, Swiss regulators do not directly monitor the procedures in place at the local custodians employed by SIS. SIS is regulated as a bank and the same provisions are applied by the regulator as for any other bank in Switzerland (due diligence, orderly conduct of the business, internal and external audit etc.).
SIS only uses the services of "best of breed" custodians in the local markets. These custodians are selected through a very stringent RFP and Due Diligence Process and are bound by contracts and service level agreements.

2. What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?
There is no discrimination under Swiss law of foreign investors. There are specific issues where problems may arise:

Rights issues in Switzerland may not be exercisable for certain investors due to their local country regulations (USA is a key example)
A few companies maintain foreign ownership limitations

3. Can sales proceeds and income be repatriated without any restrictions? There are no restrictions on repatriation of sales proceeds and income.

4. Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments? Double tax agreements are never and nowhere simple to apply. The prompt receipt of payments is different according to the double tax agreement involved. SIS offers tax reclaim services.

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?	No, Swiss regulators do not directly monitor the procedures in place at the local custodians employed by SIS. SIS is regulated as a bank and the same provisions are applied by the regulator as for any other bank in Switzerland (due diligence, orderly conduct of the business, internal and external audit etc.). SIS only uses the services of "best of breed" custodians in the local markets. These custodians are selected through a very stringent RFP and Due Diligence Process and are bound by contracts and service level agreements.
2.	What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?	There is no discrimination under Swiss law of foreign investors. There are specific issues where problems may arise: Rights issues in Switzerland may not be exercisable for certain investors due to their local country regulations (USA is a key example) A few companies maintain foreign ownership limitations
3.	Can sales proceeds and income be repatriated without any restrictions?	There are no restrictions on repatriation of sales proceeds and income.
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	Double tax agreements are never and nowhere simple to apply. The prompt receipt of payments is different according to the double tax agreement involved. SIS offers tax reclaim services.