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?	There are more levels of monitoring in existence. Direct participants are subjects of monitoring procedures of the Bank of Slovenia (if they are banks) and the Securities Market Agency. In case of EU-based direct participants they are also subject to monitoring procedures of their home country regulators. In the latter case the supervision can be performed by the Slovenian Securities Market Agency (on request by their home monitor). For better understanding we briefly introduce the monitoring scheme in place in the Republic of Slovenia: Securities Market Agency The Agency is an independent institution, responsible directly to Parliament. Key responsibilities are: Licensing, regulation and surveillance of banks dealing with investment activities, brokerage houses, brokers, investment companies, investment management companies, Central Securities Clearing Corporation, LSE. Regulation and surveillance of public offerings, take-overs. Powers of enforcement include Investigation of all documentation relating to the investment activities of a subject of surveillance Issuing orders to change business practices to comply with the rules and regulations public warnings revoking licenses. Bank of Slovenia The Bank is an independent institution, responsible to Parliament. Key responsibilities are: Licensing, regulation and surveillance of banks dealing with investment activities, upon obtaining a confirmation from Securities Market Agency that a certain bank fulfils the requirements for dealing with investment activities. Supervision of all the other banks, banking and monetary policy and payment systems supervision. Powers of enforcement include revoking a license after obtaining a confirmation from Securities Market Agency that a bank no longer fulfils the requirements for dealing with investment activities. Ljubljana Stock Exchange (LSE) Self-regulatory organization, whose main responsibilities include: admitting members to the exchange and securities to the listing ensuring transparent and fair market fair price disclosure organizing free market surveillance of trading and conduct of members surveillance of reporting and disclosure requirements of listed securities' issuers. Powers of enforcement include the following: expelling a member from the exchange purging a security from listing publicly reprimand a member or an issuer investigate suspicious trade practices like price manipulation or insider trading. Central Securities Clearing Corporation (KDD) Key responsibilities include: admitting members to the clearing house keeping electronic shareholder books for all public companies depositing all publicly offered securities on owners' accounts transferring securities between the accounts ensuring safe clearing of stock exchange trades surveillance of clearing and settlement process surveillance of clearing members conduct and their financial condition surveillance of clearing members guarantee fund and liquidity reserve requirements. The main powers of enforcement include: expelling a member changing clearing member guarantee fund requirements imposition of fines.
2.	What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?	From July 1st 2001 there are no more such areas. The only remaining difference are the non-resident custodian accounts through which non-resident investors` funds should be brought into or out of the country (custodian accounts are in place for the purpose of conducting the exchange rate policy).
3.	Can sales proceeds and income be repatriated without any restrictions?	Repatriation of investment, dividends and profits is free after non-residents settle all domestic obligations.
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	Generally, yes. The primary market issue is free of tax. The sale and purchase of securities is tax-free as well. Dividend and interest payments to domestic investors and to investors in a country without a double tax treaty with Slovenia, are taxed at 25%. The tax is withheld at source. The existing double tax treaties generally reduce the tax to 15%. There is no established reclaim procedure. Double taxation agreements are in place with the following countries: Austria, Belgium, Canada, China, Cyprus, Czech Republic, Denmark,Egypt, Finland, France, Germany, Hungary, Italy, Macedonia, Malaysia, Netherlands, Norway, Philippines, Poland, Romania, Russian Federation, Slovak Republic, Sri Lanka, Sweden, Switzerland, UK, USA.