Compliance Report ISSA Recommendations 2000

ISSA - International Securtities Services Association

Compliance to the ISSA Recommendations 2000

Market: Germany

Status: November 5, 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? The "Bundesaufsichtsamt für das Kreditwesen", the local regulator of depository services, is auditing compliance with laws and regulations under German Depository law. This includes the audit and supervision of the so-called Three-Point-Declarations of foreign custodians, enforcing the ownership rights of investors under foreign jurisdictions in case of a custodian's insolvency.

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 treated the same after the privilege for "Körperschaftssteuergutschrift" for local investors has been lifted (Principle of equal treatment according to sec. 53a German Stock Corporation Law ("Aktiengesetz").

3. Can sales proceeds and income be repatriated without any restrictions? Yes (There are no restrictions in place).

4. Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments? As far as double tax agreements apply foreign investors receive their full entitlement of dividends and interest payments as soon as they are received by Clearstream Banking AG (CBF). Banks provide these services as well. Time lines depend on the co-operation with the German ministry of finance ("Bundesministerium der Finanzen").

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 "Bundesaufsichtsamt für das Kreditwesen", the local regulator of depository services, is auditing compliance with laws and regulations under German Depository law. This includes the audit and supervision of the so-called Three-Point-Declarations of foreign custodians, enforcing the ownership rights of investors under foreign jurisdictions in case of a custodian's insolvency.
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 treated the same after the privilege for "Körperschaftssteuergutschrift" for local investors has been lifted (Principle of equal treatment according to sec. 53a German Stock Corporation Law ("Aktiengesetz").
3.	Can sales proceeds and income be repatriated without any restrictions?	Yes (There are no restrictions in place).
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	As far as double tax agreements apply foreign investors receive their full entitlement of dividends and interest payments as soon as they are received by Clearstream Banking AG (CBF). Banks provide these services as well. Time lines depend on the co-operation with the German ministry of finance ("Bundesministerium der Finanzen").