Certificados de depósito Argentinos (CEDEARs) General Guide

Transcription

1 Certificados de depósito Argentinos (CEDEARs) General Guide

2 General Guide Contents SECTION 1 INTRODUCTION TO CEDEARS... Certificados de Depósito Argentinos Defined... The Origin of the CEDEAR... Sponsored vs. Unsponsored CEDEARs... SECTION 2 CEDEAR CREATION AND FEATURES... Participants in the CEDEAR Market... Responsibilities of CEDEAR Market Participants... A. The Investor... B. The Argentine Broker... C. The Foreign Broker... D. The CEDEAR Issuer... E. The Custodian... F. The Clearing Agency in the Home Market of the Represented Shares... G. The Clearing Agency in the CEDEAR Home Market... H. The Argentine Market Regulators:... The Issuance and Cancellation Process... Trading CEDEARs in the Stock Market - The Settlement Cycle... Processing Corporate Actions... SECTION 3 A. Dividend Payment... B. Proxy Voting... CEDEAR BENEFITS... CEDEAR Benefits... Benefits to Brokers... Benefits to Investors... Transaction Costs... SECTION 4 MARKETING ANALYSIS... Investor Targeted Universe... Questions and Answers... Glossary of Terms... SECTION 5 EXHIBITS... Exhibit 1: CEDEARs Issuance Process... Exhibit 2: CEDEARs Cancellation Process... Exhibit 3: CEDEARs Dividend Payment... Exhibit 4: CEDEAR Group at Deutsche Bank...

3 Exhibit 5: CNV Resolution N.291 Section 1 Introduction to CEDEARs Certificados de Depósito Argentinos Defined A Certificado de Depósito Argentinos ("CEDEAR") is a negotiable depositary receipt that represents securities issued by a non-argentine entity. CEDEARs are issued by an Argentine institution ("CEDEAR Issuer") authorized by the Argentine regulators to issue and list CEDEARs in Argentina. CEDEARs evidence and are issued against the deposit of a single kind and class of securities ("Represented Shares") per program in a depository institution ("Depositary"), that holds in custody the underlying Represented Shares ("Custodian"). Similarly, CEDEARs are cancelled in the Argentine market against the release of the underlying securities held with a Depository in another jurisdiction. CEDEARs entitle their holders to similar rights as have holders of the Represented Shares. CEDEARs are freely transferable and may be issued in registered non-endorseable or book-entry form. Additionally, they may be freely exchanged for the Represented Shares at any time. CEDEARs are characterized for certain purposes as Argentine securities and are regulated as such under Argentine laws. CEDEARs are currently listed on and traded at the Buenos Aires Stock Exchange and cleared through Caja de Valores ("CDV"). As discussed below, CEDEARs are issued at a set ratio to the Represented Shares. CEDEARs may not be issued to or held by persons who are considered "United States persons" for purposes of U.S. tax law. For a definition of "United States persons" please see the Glossary of Terms at the end of this Guide and consult U.S. legal counsel if you have any questions. Nothing in this Guide is to constitute legal or tax advice. The Origin of the CEDEAR The CEDEAR was enabled by the General Resolution N. 291, promulgated in August, 1997, by the Comisión Nacional de Valores ("CNV"). Resolution 291 was approved by the Argentine regulators with the objective of: stimulating and revitalizing the local market encouraging investment portfolio diversification facilitating, for the local investor community, direct access to foreign securities, and

4 attracting foreign institutions to the Argentine capital market Resolution 291 authorizes CEDEAR programs with the "sponsorship" of the issuers of the Represented Shares "Sponsored Programs" or without such sponsorships "Unsponsored Programs". Sponsored vs. Unsponsored CEDEARs CEDEAR programs that are established by or at the behest of the issuer of Represented Shares are called "sponsored" and such issuer assumes the duties related thereto, including such matters as reporting to CNV, CDV and the financial community in general. In Sponsored CEDEAR programs, the issuer of Represented Shares appoints a CEDEAR Issuer in Argentina, which in turn engages a Depositary in the home market of the issuer of Represented Shares to hold such Represented Shares in custody. The issuer of Represented Shares and the CEDEAR Issuer enter into a CEDEAR Issue Agreement. Unsponsored CEDEAR programs do not include an agreement with the issuer of Represented Shares, and such issuer takes on no active responsibility for the CEDEARs. The CEDEAR Issuer is the de facto "sponsor" in an Unsponsored CEDEAR program, and therefore assumes all reporting responsibility. In both the Sponsored and the Unsponsored CEDEAR programs, the CEDEAR Issuer must be an authorized custodian, a commercial, or an investment bank or a financial institution licensed by the Central Bank of Argentina. Unsponsored CEDEAR programs may be "converted" to Sponsored form when the issuer of the Represented Shares assumes responsibility for the program, enters into a CEDEAR Issue Agreement with the Issuer of CEDEARs, and obtains proper approval of CNV.

5 Section 2 CEDEAR Creation and Features Participants in the CEDEAR Market Several market participants play important roles in the trading, issuance and cancellation of CEDEARs The Investor The Argentine Broker The Foreign Broker The CEDEAR Issuer The Custodian ("Depositary" under Resolution 291) A Clearing Agency in the home market of the issuer of Represented Shares, e.g., The Depository Trust Company ("DTC") in the case of the U.S. A Clearing Agency in the home market of the CEDEARs, e.g., CDV The Argentine Market Regulators: Bolsa de Comercio de Buenos Aires (Buenos Aires Stock Exchange) and CNV. Responsibilities of CEDEAR Market Participants A. The Investor The investor places an order to purchase or sell CEDEARs with an Argentine broker. CEDEARs can be traded in any number of shares, but if the investor wishes to convert his CEDEARs to the Represented Shares, he must do so by accumulating such number of CEDEARs in multiples equal to the underlying Represented Shares. In order to obtain accurate results, the investor must consider the ratios established for the programs in use. For instance, where IBM has a ratio of 10 CEDEARS to 1 Represented Share, the investor must accumulate 10 CEDEARs to 1 IBM Represented Share. The potential investor in CEDEARs should thoroughly analyze the information stated in the respective Prospectus approved by the CNV, as well as the information related to the economic, financial and market

6 situation of the issuer of the Represented Shares. B. The Argentine Broker When the Argentine broker takes the [buy/purchase] order from the investor, he may settle the trade locally if CEDEARs are trading in the secondary market, or alternatively cause CEDEARs to be "created" by placing an order with a foreign broker who, in turn, purchases Represented Shares and deposits same with the Custodian. To avoid problems in trade settlement, the Argentine broker must be certain the following takes place: Properly place trade orders with the Foreign Broker. Represented Shares must be identified by the correct name, code number and quantity (e.g. IBM, CUSIP number , 100 shares). Provide accurate information to the Foreign Broker for the proper clearance of the Represented Shares. For example, where Represented Shares are issued by U.S. issuers, securities are usually delivered to the Custodian s account at DTC. Therefore, the settlement instructions should include the participant number of the Custodian at DTC, the CUSIP Number and the quantity of the delivered Represented Shares. (Note: Please refer to Exhibit 4 for related chart) Creation of CEDEARs provide the Custodian with the necessary information for proper delivery of CEDEARs in Argentina. Once CEDEARs are issued, the CEDEAR Issuer will deliver the CEDEARs to the beneficial owner, in accordance with instructions received by its Custodian. The following information will be essential: quantity of CEDEARs (considering ratio, if applicable), Common Code number (e.g., the Common Code for IBM is 8024), the participant number of the recipient at Caja de Valores, and the respective sub-account for such program, if applicable. Cancellation of CEDEARs provide the Custodian with the necessary information for proper delivery of Represented Shares. When CEDEAR cancellation has to be performed, the CEDEARs must be surrendered and delivered to the CEDEAR Issuer. The Argentine broker is required to provide the Custodian with information about the addressee to whom the Represented Shares are to be delivered upon their release from custody. (Note: Please refer to Exhibit 2 for related chart) Remit payment of issuance and cancellation fees to the Custodian account at DTC when the Represented Shares are received (CEDEAR issuance) or delivered (CEDEAR cancellation). (Note: Please refer to Exhibits 1/2 for related charts) Observe the cut-off times specified in the settlement cycle stated herein. (Note: Please refer to page 7 "Trading CEDEARs in the Stock Market The Settlement Cycle")

7 C. The Foreign Broker The Foreign Broker performs timely delivery of the Represented Shares to the Custodian. This delivery is free of payment and must be executed in accordance with standard delivery practices in the home country of the Represented Shares. (Note: Please refer to page 7 "Trading CEDEARs the Stock Market The Settlement Cycle") D. The CEDEAR Issuer Issues and cancels CEDEARs Coordinates the functions of the Custodian and, through the Custodian, the registrar and paying agent employed by the issuer of Represented Shares Maintains communications with CEDEAR investors and Argentine regulators Complies with information reporting requirements established by Resolution 291 Monitors corporate actions with the aid of the Custodian Coordinates dividend payments and proxy voting E. The Custodian Safekeeps the Represented Shares Receives and delivers Represented Shares to support CEDEAR issuance and cancellation activity Provides timely and accurate income collection (including dividends), and corporate action services Represents the CEDEAR Issuer in delivering proxy material at meetings of shareholders of Represented Shares Prepares with the CEDEAR Issuer the information required by CNV, and other Argentine regulators and market intermediaries F. The Clearing Agency in the Home Market of the Represented Shares Facilitates safekeeping of Represented Shares and settlement of Represented Shares transactions Maintains accounts for most brokerage firms and banks which are participants of the DTC system Debits or Credits accounts in connection with securities and cash settlement

8 Transmits dividend payments Performs tax withholding service Conveys corporate action notices G. The Clearing Agency in the CEDEAR Home Market Caja de Valores ("CDV") Performs the role of Registrar and Paying Agent Registers CEDEARs and the transfers of CEDEARs Maintains CEDEAR holders names, addresses and taxpayer identification numbers as required by Argentine tax law Calculates dividends and disburses dividend payments to CEDEAR holders Provides statement account reports to CEDEAR holders Provides certification of holdings H. The Argentine Market Regulators: Bolsa de Comercio (Buenos Aires Stock Exchange) and CNV Establish the regulatory framework for CEDEAR programs Monitor CEDEAR issuance and cancellation activity Regulate CEDEAR trading at the Buenos Aires Stock Exchange Verify and publish the corporate information reported by the CEDEAR Issuer at the Buenos Aires Stock Exchange Monitor the information related to the issuer of the Represented Shares Receive the information filed by the CEDEAR Issuer in connection with applications for new CEDEAR programs

9 The Issuance and Cancellation Process The issuance of CEDEARs takes place in direct response to market demand. Below are the series of steps generally followed in the issuance of CEDEARs. An investor places an order with an Argentine Broker to purchase a non-argentine company s shares. The Argentine Broker determines that the securities are available in CEDEAR form. The Argentine Broker may satisfy the trade in one of the following ways: 1. The Argentine Broker may deliver the securities (in CEDEAR form) from its own inventory. 2. CEDEARs may be available in the secondary market. 3. If the Argentine Broker determines that CEDEARs must be created, he will purchase the Represented Shares from a Foreign Broker and direct delivery to the Custodian of Represented Shares in the home market of the Issuer of such Represented Shares. (Note: Please refer to Exhibit 1 for related chart) The CEDEAR Issuer issues and delivers the CEDEARs as instructed by the Argentine Broker when the CEDEAR Issuer receives notification from its Custodian that the corresponding Represented Shares have been deposited. Trading CEDEARs in the Stock Market - The Settlement Cycle CEDEAR programs are created in order to satisfy cross-border market demand of investors trading on the Buenos Aires Stock Exchange. The settlement period for initial issuance or cancellation of CEDEARs is Trade Date + 3. In a typical purchase transaction where CEDEARs need to be created, the settlement cycle is as follows:

10 On trade date The investor delivers the CEDEARs purchase order to an Argentine broker. Argentine broker places a purchase order for Represented Shares with a Foreign Broker, and arranges payment. Trades are executed in foreign and local markets. (Note: Please refer to Exhibit 1 for related chart) On settlement date (T+3) Argentine broker settles the payment with a Foreign Broker (foreign exchange transaction is executed, if necessary). Represented Shares are delivered free of payment to the Custodian in its home market. e.g. U.S. shares are settled in New York through DTC. When the Custodian receives the Represented Shares, it instructs the CEDEAR Issuer to issue CEDEARs. CEDEARs are issued and delivered to the Argentine broker. Issuance and settlement of CEDEARs is conducted in Argentina through the CDV. The investor pays transaction fees to the Argentine broker. (Note: Please refer to Exhibit 1 for related chart) The CEDEARs may be presented to the CEDEAR Issuer for cancellation at the option of the CEDEAR holder who may wish to sell the securities and collect the sale proceeds or keep the Represented Shares and release the CEDEARs. In the latter case, the transaction neither involves a trade nor the intervention of a broker. The CEDEAR holder is required to surrender his CEDEARs to the CEDEAR Issuer account at CDV. The CEDEAR Issuer must notify its Custodian to release the deposited Represented Shares and deliver them to a broker party as instructed by the CEDEAR holder. Where such cancellation is the result of a brokered trade, the CEDEAR Issuer receives and cancels the CEDEARs and issues information to its Custodian to deliver the Represented Shares to or upon the order of a U.S. broker. In such event, the U.S. broker would initiate a trade with a local market broker who will purchase the underlying Represented Shares. When the CEDEAR Issuer receives the CEDEARs, it cancels them from its books and the Custodian is given instructions to release the deposited Represented Shares to or upon the order of the local broker who will settle the transaction. All CEDEARs issued, cancelled and delivered must conform to existing Argentine market conventions. Consequently, cut-off times in the home market of the Represented Shares have been established, in order to assure timely and safe settlement in Argentina. For CEDEARs issued against U.S. Represented Shares the following cut-off times apply:

11 CEDEAR ISSUANCE: The Custodian must receive the Represented Shares in New York no later than 12:30 P.M. (New York time) on settlement date in order for CEDEARs to be issued the same day. Represented Shares received after such time will be processed on a "best efforts" basis. Delays in the deposit of the Represented Shares into the Custodian s account at DTC may cause a fail in the settlement of the corresponding CEDEARs in Argentina, inasmuch as the CEDEAR certificates must be issued and delivered to the ultimate beneficial owner s account at CDV before the cash market closes in Argentina. CEDEAR CANCELLATION: CEDEARs must be received in Argentina by the CEDEAR Issuer before 3:00 P.M. (Bs. As. time) on settlement date in order for Represented Shares to be released the same day. CEDEARs received after such time will be processed on a "best efforts" basis. Delays in the deposit of the CEDEARs in the CEDEAR Issuer s account at CDV may cause a fail in settling the corresponding Represented Share transaction, inasmuch as the Represented Shares must be released and delivered to the ultimate beneficial owner account at DTC. Processing Corporate Actions A. Dividend Payment CEDEARs carry the same rights as the Represented Shares to receive dividend payments. The CEDEAR Issuer acts as a dividend disbursing agent for the issuer of Represented Shares. Working in coordination with its Custodian, the CEDEAR Issuer receives dividends and distributes such dividends to the CEDEAR holders. The CEDEAR Issuer also sets the dividend record and payment dates for the CEDEARs. Below are the steps involved in cash dividend payments: The issuer of the Represented Shares declares in its own market the record and payment dates for the distribution of dividends on its shares. The CEDEAR Issuer declares record date applicable to the CEDEARs. The CEDEAR Issuer notifies the appropriate entities (Buenos Aires Stock Exchange, CNV and CDV) of any dividend cumulative and ex-trading dates. The CEDEAR Issuer declares the Argentine payment date. The issuer of Represented Shares pays dividends in the local market in the local currency to the holders of record, including the Custodian, which is the registered holder holding on behalf of the CEDEAR Issuer. The dividend funds are remitted to the CEDEAR Issuer in U.S. Dollars less taxes withheld

12 at source. CEDEAR Issuer disburses payment in U.S. Dollars to CEDEAR holders. (Note: Please refer to Exhibit 3 for related chart) B. Proxy Voting CEDEAR holders may exercise voting rights with respect to Represented Shares upon following certain procedures and where permitted by law. The issuer of the Represented Shares announces the date of a meeting of its shareholders. The CEDEAR Issuer facilitates CEDEAR holders access to information related to shareholder meetings. CEDEAR Issuer sends a notification of the meeting to the Buenos Aires Stock Exchange, CNV and CDV. If the CEDEAR holder wishes to vote, he must present timely proof of CEDEAR holding to the CEDEAR Issuer. Such proof of holding will be issued by CDV. The CEDEAR Issuer will, on a "best efforts" basis, execute the voting rights according to the number of Represented Shares. CEDEARs are immobilized and the holders of CEDEARs deliver their proxies to the CEDEAR Issuer who instructs the Custodian to vote in accordance with the holder s instructions. Following the vote, the CEDEAR Issuer returns the CEDEARs to their registered holders accounts.

13 Section 3 CEDEAR Benefits CEDEAR Benefits CEDEARs facilitate the trading and ownership of foreign securities in Argentina. Much of the success in reaching this objective lies in creating an active trading market with liquidity, transparency, fair pricing, sound execution and with adequate and timely flow of information. A CEDEAR program may lead to greater investor interest in the Represented Shares. Listed below are examples of the CEDEAR s advantages to brokers and investors. Benefits to Brokers Opportunity to expand services to retail and institutional investors at low transaction costs Increase in local commissions in foreign shares Participation in the development of a liquid market in Argentina Safe settlement identical with T+3 Argentine Convention Trading hours identical with domestic securities Greater selection of securities to offer customers Benefits to Investors Access to foreign securities Trades done in local market, in the same time zone, on local business days Elimination of the individual investor s foreign custody expense Corporate Actions distributed in a local market

14 CEDEARs priced in local currency Dividends may be paid in peso (or U.S. Dollars) in the local market CEDEARs exchangeable into Represented Shares at any time Benefits to Investors Transaction Costs Market participants engaged in the purchase, trading or brokerage of CEDEARs are charged with the following fees: CEDEAR Issuance CEDEAR Cancellation Dividend Payment Deutsche Bank charges the investor customary service charges for issuance and cancellation of CEDEARs at a rate normally not exceeding U.S. $ 0.01 per issued CEDEAR and U.S. $ 0.03 per cancelled CEDEAR. Dividend payment service charges are assessed not to exceed $0.02 per CEDEAR scaled at a rate of approximately 12% of the amount of the payment.

15 Section 4 Marketing Analysis Investor Targeted Universe Three categories of potential investors can be identified for the CEDEAR product: Retail market (directly being a Qualified Investor or through Mutual Funds) Institutional Investors Mutual Funds Mutual Funds are allowed to invest up to 100% in CEDEARs. CEDEARs are characterized as domestic securities under Argentine law.

16 Questions and Answers The following questions and answers were developed based on the most common inquiries received at Deutsche Bank as CEDEAR Issuer and Custodian. The answers should increase the understanding of the CEDEAR as a new Argentine security. 1. How is a CEDEAR issued? The CEDEAR is issued in Argentina by Deutsche Bank S.A. ("DBSA") when the Represented Shares are deposited with the Custodian, Deutsche Bank AG New York ("DBNY") in the U.S. (CEDEAR programs may also be established on the basis of Represented Shares in markets other than the U.S.). 2. What form do the CEDEARs take? The CEDEARs are issued in registered de-certificated form, and ownership is freely transferable and recorded at the Caja de Valores ("CDV"). The CEDEAR Issuer (DBSA), acting as de facto registrar, recognizes CDV as the registered holder of CEDEARs. CDV in turn maintains records of beneficial holders of CEDEARs. 3. Who sponsors the CEDEAR program? The CEDEAR Issuer (i.e., DBSA) currently runs Unsponsored CEDEAR programs. However, Resolution 291 permits sponsorship by the issuer of Represented Shares. 4. How does CEDEAR issuance work within the T+3 settlement framework? CEDEARs trade and settle as do any Argentine equity securities today. If CEDEARs must be created (i.e., against the deposit of Represented Shares), DBSA will issue CEDEARs against the timely deposit of the Represented Shares with DBNY. DBNY and DBSA are committed to issuing CEDEARs on a same-day basis if Represented Shares are received by DBNY no later than 12:30 P.M. New York time. 5. How are dividends paid and other corporate actions communicated to CEDEAR holders? Dividends The Custodian (DBNY) receives dividends in the currency of the Represented Shares. Cash dividends are then distributed in U.S. Dollars to CDV, the registrar of CEDEAR beneficial ownership. Stock dividends are paid on whole Represented Shares and on such number (round lots) of CEDEARs as is equal to whole shares. Cash-in-lieu of add points of CEDEARs is paid to CDV. The CEDEAR issuer sets dividend record and payment dates. The record date is the same as the one established by the issuer of the Represented Shares. DBNY and DBSA work together to reconcile dividend payment amounts. Corporate Actions Information supplied by an issuer of Represented Shares to its registered shareholders relating to

17 stock dividends, proxies and shareholder voting, special meetings and similar actions is received by the Custodian (DBNY) as the registered holder on the books of the issuer of Represented Shares, and this information is forwarded to DBSA for proper communication to the Argentine authorities in accordance with Argentine law. Rights in connection with offerings are normally liquidated in the home market, and the proceeds are distributed to holders of CEDEARs, again, by remittance to CDV. 6. What happens if the Represented Shares are delivered to the Custodian after cut-off time? The CEDEAR Issuer will use its best efforts to issue the respective CEDEARs before the closing of the cash market in Argentina. 7. What types of problems may occur in the settlement process of the Represented Shares in the U.S. and the CEDEARs in the Argentine market? Share trading settles in the U.S. through DTC. The DTC clears securities (receive free and deliver free) and cash (delivery vs. payment and receive vs. payment). CEDEARs settle in Argentina through CDV, which clears securities just as cash transactions are processed through the Central Bank (MEP system). Fails may occur if local and foreign brokers do not properly fund themselves to cover the portion of the trade that settles as DVP (please refer to Exhibit 1). The issuance and delivery of CEDEARs may fail if the Custodian does not receive the Represented Shares timely together with any issuance/cancellation fees payable. 8. What can the Argentine broker do in order to avoid fails and delays in the settlement of CEDEAR trades? Accurate and complete settlement information has to be presented to the Argentine broker s counter-party and the Custodian in the case of issuance. On cancellation, the timely contact with the CEDEAR Issuer and the delivery of the CEDEARs to its account at CDV will minimize the time it takes to release Represented Shares in the foreign market. 9. What about other alternatives to avoid fails in the settlement of CEDEAR trades? DTC provides a confirmation system denominated ID where the parties involved in a transaction would affirm their intent to settle their side of the trade. Therefore, on settlement date the trade would automatically settle within the DTC system. Additionally, under certain arrangements, the Custodian can be authorized to borrow shares to settle a trade. 10. How are issuance and cancellation fees paid by brokers? The issuance and cancellation fees are received by the Custodian in the U.S., at the time of receipt or release of the Represented Shares. The Argentine broker must include the issuance/cancellation fee in the purchase/sale of the U.S. securities. The U.S. broker provides the fees to the Custodian, crediting the corresponding amount

18 to the Custodian account at DTC, at the time of the settlement of the securities transaction. 11. How can brokers and investors find information about the issuer of the Represented Shares? Information about issuers of U.S. Represented Shares can be obtained through different sources. One such source of information is the Prospectus presented by the CEDEAR Issuer and approved by the CNV. Another source of information is a Research Handbook prepared by Deutsche Bank Securities in Argentina. A third means available to brokers is EDGAR. EDGAR ("Electronic Data Gathering and Retrieval") is an electronic database of certain public filings of U.S. public companies, filed with the U.S. Securities and Exchange Commission of the United States ("S.E.C"). Access to EDGAR on the Internet is possible at the following internet address: How is liquidity of CEDEARs assured? Is it true that the U. S. shares are more liquid? Buyers and sellers can be found in Argentina and in the U.S. Sometimes this creates an arbitrage situation, but as these securities are generally listed, there is a liquid U.S. market in most of the Represented Shares. Therefore, the Argentine broker with international resources or counter-parties should always be able to sell the CEDEARs or the underlying Represented Shares. 13. Why is it more attractive to invest in CEDEARs than in the respective Represented Shares issued in a foreign market? Investment in a local instrument relieves the investor of certain transaction costs and global custody fees. Also, CEDEARs are priced in a local currency and dividends may be distributed in pesos or U.S. Dollars and trading is executed under local regulations, customs and in the same time zone. Finally, investment funds can invest in foreign securities. For investment funds, CEDEARS are classified as domestic securities, while the Represented Shares are foreign. 14. Are there similarities between the CEDEAR and the American Depositary Receipt? There are many similarities, and some differences. Like ADRs, CEDEARs are issued, cancelled and traded in one market against the deposit of underlying securities in another market. The operating relationship formed between the CEDEAR Issuer in Argentina and the Custodian in the U.S. serves the market on both sides of a transaction (issuance/cancellation and deposit/release). 15. What are the major differences? Most ADR programs in the U.S. are now sponsored by the issuer of the Represented Shares. In the CEDEAR structure, the first programs were "unsponsored" in this regard and the CEDEAR Issuer undertakes to perform the actions that are specified in Resolution 291.

19 Glossary of Terms This glossary of terms is provided as an attachment for additional assistance in understanding the CEDEAR structure and dynamics. "BOLSA" Bolsa de Comercio de Buenos Aires (Buenos Aries Stock Exchange), a non-governmental association in charge of authorizing the listing and monitoring listed companies in compliance with Argentine law (the "Buenos Aires Stock Exchange"). "CDV" Caja de Valores, the main Argentine institution providing securities clearing and other services, including maintaining a registry for the securities for more than 100 corporations. The CDV acts as a government and corporate securities depository, which facilitates securities trade settlement. "CEDEAR" Certificado de Deposito Argentinos, the receipt issued and traded in Argentina representing ownership of Represented Shares. "BCRA" Banco Central de la República Argentina, the Central Bank of Argentina. "CNV" The Comisión Nacional de Valores of the Republic of Argentina (The Argentine Securities Commission). "MEP" The BCRA payment system used by the Argentine financial institutions for the settlement of cash related to securities transactions. "CEDEAR Issuer" or "Issuer of CEDEARs" The Argentine bank, trust company or other financial institution in Argentina empowered and authorized by the laws of Argentina to act as an Issuer of CEDEARs. "Custody Agreement" The agreement between the CEDEAR Issuer and the Depositary which holds the Represented Shares in custody.

20 "Custodian" The custodian of Represented Shares (i.e., the Depositary). "Dividend Payment Date" With respect to: (i) Represented Shares, the date set by the issuer of Represented Shares on which the registered holders of record are entitled to receive dividends payable upon such Represented Shares; (ii) CEDEARs, the date set by the Issuer of CEDEARs on which registered holders of record are entitled to receive dividends payable upon the CEDEARs. "Issuer of Represented Shares" The non-argentine issuer of the Represented Shares. "Listing" The admittance to quotation and trading on a foreign exchange, if referring to the Represented Shares, and to the Buenos Aires Stock Exchange, if referring to CEDEARs. "MERVAL" The corporation in Argentina, owned by broker/dealers, which is responsible for the settlement of transactions executed on the Buenos Aires Stock Exchange. "Record Date" With respect to: (i) Represented Shares, the date set by the Issuer of Represented Shares as of which registered holders are entitled to receive dividends payable on, or taking action with respect to, such Represented Shares. (ii) CEDEARs, the date set by the Issuer of CEDEARs, as of which registered holders of CEDEARs thereof are entitled to receive dividends payable on, or taking action with respect to, the Represented Shares. "Register" With respect to: (i) Represented Shares, the record of ownership of shares and of transfer of shares maintained by the agent of the Issuer of Represented Shares. (ii) CEDEARs, the record of such ownership of CEDEARs and of the transfer of CEDEARs maintained by the Issuer of CEDEARs.

21 "Registrar" With respect to: (i) Represented Shares, the agent of the Issuer of Represented Shares appointed to record the ownership and the transfer of shares; and (ii) CEDEARs, the CEDEAR Issuer. "Represented Shares" The non-argentine securities, the deposit of which supports the issuance of CEDEARs. "SEC" The Securities and Exchange Commission of the United States of America. "United States Person" Either (1) an individual that is a citizen or resident of the U.S., for this purpose, a person is a citizen of the U.S. even if he or she also is a citizen of another country (e.g., a dual national); for this purpose, a person is a resident of the U.S. even if he or she either is a permanent resident of the U.S. (e.g., holds a green card) or satisfies a "substantial presence" test in the U.S. (2) a corporation, partnership or other entity created or organized in or under the laws of the U.S. or any political subdivision thereof (including, e.g., individual states or Washington, D.C.) (3) an estate or trust (consult the administrator or trustee to determine if the estate or trust is a U.S. person under U.S. law. (4) the above definition is a summary only. U.S. legal counsel should be consulted for a fuller analysis.

22 Section 5 Exhibits Exhibit 1: CEDEARs Issuance Process An Investor places a purchase order for 100 Represented Shares of IBM or the equivalent 1000 CEDEARs. INVESTOR (1) Order (11) Investor gets the CEDEARs and pays the Argentine broker ARGENTINE BROKER (10) CEDEARs are delivered using Conformed Transference CAJA DE VALORES (9) Issuance of CEDEARs (2) Places order w ith Foreign Broker (8) Payment is made to Foreign Broker in a foreign currency (FX is executed) (5) Delivery of Shares to the Custodian (Free of Payment) (6) Issuance Fees are paid to the Custodian FOREIGN BROKER (3) Shares are purchased in the Non Arg. market (4) Share trade settles as DVP in a local currency STOCK EXCHANGE CEDEAR ISSUER CUSTODIAN IN US (7) Custodian notifies that shares are in the Custody Account Notes: Trade Date Settlement Date

23 Exhibit 2: CEDEARs Cancellation Process An Investor places an order to sell 100 IBM Represented Shares or the equivalent of 1000 CEDEARs. (2) Places order to sell (1) Places order to sell CEDEAR the Represented Shares ARGENTINE INVESTOR (5) Delivers CEDEAR BROKER (6) Payment is made to Investor (7) Delivers CEDEARs to CEDEAR Issuer (4) Trades settle as DVP in a foreign currency (FX is executed) (3) Shares are sold in the Non Arg. Market FOREIGN BROKER (9) Delivery of Shares to Foreign Broker (Free of Payment) (10) Cancellation fees are paid to Custodian (8) Instruct the release of the Ordinary Shares CEDEAR ISSUER CUSTODIAN (12) Instruct to Cancel CEDEARs (11) Release confirmation CAJA DE VALORES Notes: Trade Date Settlement Date

24 Exhibit 3: CEDEARs Dividend Payment ISSUER OF THE REPRESENTED SHARES (1) Declares Dividend Record / Payable date (3) Delivery Dividend CUSTODIAN (4) Delivers Dividend Dollar Payment less Withholding Tax CEDEAR ISSUER (2) Sets Record and Payment dates in Argentina (5) Pays CDV CAJA DE VALORES (6) Disburses to CEDEAR holders CEDEAR HOLDER Exhibit 4:

25 CEDEAR Group at Deutsche Bank Deutsche Bank CEDEAR professionals will be pleased to discuss with investors and their brokers the material contained herein and to answer any questions that may arise related to CEDEARs, their features, uses and requirements. CEDEAR ISSUER: DEUTSCHE BANK S.A. TUCUMAN 1 PISO CAPITAL FEDERAL ARGENTINA PHONE: (54 11) /2915/2989 FAX: (54 11) INTERNATIONAL CUSTODIAN: DEUTSCHE BANK AG NEW YORK DIRECT SECURITIES SERVICES ATTN. FLORIS VREEDENBURGH 60 WALL STREET 28TH. FLOOR (MAILSTOP:NYC ) NEW YORK, NY FOR PRODUCT INQUIRIES: FLORIS VREEDENBURGH PHONE: floris-j.vreedenburgh@db.com SETTLEMENT TEAM: ALEX HIDALGO JAVIER BRITOS LUPE VALDIVIEZO-SMALLS PHONE: FAX: dss.us@db.com

26 Exhibit 5: CNV Resolution N.291 CEDEAR REGULATIONS Ministry of Economy and Public Works and Services Argentine Securities Commission Buenos Aires, July 10th, 1997 CERTIFICADOS DE DEPÓSITO ARGENTINOS HAVING SEEN THESE PROCEEDINGS entitled CERTIFICADOS DE DEPOSITO ARGENTINOS in re Draft Resolution, pending under Dossier N. 587/97 and the opinions of the Gerencia de Emisoras and Subgerencia de Assoramiento Legal ( Issuers Management Department and Legal Office, respectively), and CONSIDERING THAT Section 5 of the Rules of this Commission (as amended 1987 and modified by General Resolution N. 214) established that securities issued by entities not authorized to make public offerings thereof within the Republic of Argentina could be accepted as underlying assets of negotiable depositary receipts. THAT such form of negotiation has been strongly accepted in other developed markets and is now in process of being implemented in some Latin American countries, such as Brazil and Mexico. THAT, without prejudice to the existence of the above referenced rule, up to this date no Depositary Receipts Issue Program has been actually created in our markets. THAT such circumstance would indicate the apparent need to introduce changes to the current regime. THAT the introduction of new instruments into the local markets seems thus advisable. THAT the current regulations, embodied in the RULES of the ARGENTINE SECURITIES COMMISSION, New Text 1997, require greater accuracy and flexibility as to create attractive and safe conditions in the development of these negotiations. THAT the introduction of this regulation was decided in the light of the great development experienced by our market as a means to further attract foreign investors. THAT in the inception of this new modality the role of the depositary receipts issuers as promoters thereof is

27 deemed of great importance. THAT a system has been therefore structured that contemplates the implementation of programs without the sponsorship (and, thus, without the cooperation) of issuers of underlying assets. THAT this has determined the creation of a more flexible regime as concerns reporting requirements in those programs that are not backed by issuers of underlying assets. THAT, anyhow, the foregoing does not impair the situation of investors willing to invest in those securities as compared to that of investors willing to directly invest in the country of origin of the underlying asset. THAT these reporting differences should be notified to the investor community. THAT as a consequence of the foregoing and among other aspects, it is deemed particularly in order to regulate in further detail the conditions and obligations to be satisfied by the issuer of negotiable depositary receipts. THAT these presents is issued pursuant to the powers vested by Sections 6 and 7 of Law THEREFORE, THE ARGENTINE SECURITIES COMMISSION RESOLVED SECTION 1 The following regulations applicable to the CERTIFICADOS DE DEPOSITO ARGENTINOS (hereinafter, individually, a CEDEAR and, collectively, the CEDEARs ) shall be incorporated to Chapter VI of the RULES of the ARGENTINE SECURITIES COMMISSION, New Text 1997, (the RULES ), as Sections 87 through 99 thereof. SECTION 87 The entities listed in Section 88 may apply for the approval of Argentine Depositary Receipts Issue Programs evidencing the deposit of securities of other entities which are not authorized for purposes of a public offering within the Republic of Argentina. The CEDEARs will be authorized for purposes of their public offering subject to the provisos hereof and to the rules applicable to the listing thereof to be therefor established by the stock exchanges within their jurisdiction.

28 SECTION 88 CEDEARs may be issued by: 1. permitted custodians of the Republic of Argentina, and 2. commercial or investment banks and financial institutions licensed to carry on business by the CENTRAL BANK OF THE REPUBLIC OF ARGENTINA. The issuer of the CEDEARs shall, in all cases, have a networth equal to or higher than THIRTY MILLION PESOS ($30,000,000). SECTION 89 The CEDEARs will evidence the deposit of a single kind and class of securities per program, all of which shall be freely available (except for the restrictions exclusively stemming from the program) and shall grant equal rights to the holders thereof. The securities whose deposit is represented by CEDEARs shall be issued by an issuer: (a) authorized to make public offerings and to list on any exchange supervised by a governmental regulatory entity with which the ARGENTINE SECURITIES COMMISSION has signed a Memorandum of Understanding providing for their mutual cooperation and information; or (b) authorized to make public offerings and to list on any of the stocks or securities exchanges of BRAZIL, URUGUAY, PARAGUAY or CHILE; or (c) whose securities, though not admitted for purposes of their public offering and listing on any of the above referenced stocks or securities exchanges, are accepted as underlying assets through a grounded resolution of this commission. At the result of their lawful holder, the CEDEARs may be freely exchanged for the securities represented by the CEDEAR to be so exchanged. Upon delivery of the securities the relevant CEDEARs shall be cancelled and (as applicable) destroyed. Delivery of the securities may be either physically certificated or duly registered according to the nature thereof and/or to the characteristics of the deposit. Pursuant to subsection (g) of Section 95 hereof, on the Program s expiration date all CEDEARs then outstanding shall be exchanged and, accordingly, cancelled, the pertinent securities being then delivered. New CEDEARs may be issued against deposit of the equivalent securities, provided the maximum permitted

29 amount under the Program is not exceeded. Issuers of CEDEARs shall at all times have, as from the issue thereof, as many unencumbered, unrestricted and freely available securities as CEDEARs of those securities are then outstanding (not having been cancelled by reason of the exchange). The Commission may authorize, on a case by case basis, the execution of agreements contemplating the provisional and temporary existence of CEDEARs unbacked by deposited securities, provided there are sufficient guaranties therefor. In these cases the Commission shall establish the maximum permitted term for the subsistence of this situation and the maximum percentage that the provisionally unbacked CEDEARs may bear the total issue. To such end, the interested party shall ground the petition for any such exception, accompanying the relevant contract for purposes of its revision by the Commission. SECTION 90 The securities may be deposited with: (a) the issuer of the CEDEARs or; (b) an eligible and permitted Custodian in the returns of Law , or (c) the common depositary of securities acting in the country of issue of the securities; or (d) a bank or custodian acting within the country of issue of the securities having a minimum networth of TWO HUNDRED MILLION PESOS ($200,00,000) or its equivalent in the currency of the country of issue. In all cases a provision shall be included to the effect that the depositary may not acquire any interest in not use the deposited securities, which shall be immobilized to the same extent of a regular deposit, only for purposes of counterbalancing the CEDEARs. The depositary of the securities may not be changed without the approval of the absolute majority of the holders of the CEDEARs of the relevant issue, prior notice thereof to the Commission evidencing the approval so obtained. Such approval may be given at a meeting of holders or, else, individually, provided it can be proved beyond any reasonable doubt the approximate simultaneity of the consultation to the holders of the CEDEARs. The meeting shall be governed by the rules established in the relevant CEDEAR issue agreement and, supplementally, by the Rules of Law applicable to extraordinary meetings. The anticipated and general approval of a changed depositary will in no case be permitted. The approval shall be in all cases expressed in respect of a specific proposal and upon identification of the prospective successor depositaries.

30 SECTION 91 The CEDEARs will be freely transferable and may be issued in registered non endorseable or book-entry form. Each CEDEAR will evidence one or more securities of the same class, kind, and issuer. In exceptional cases, the ARGENTINE SECURITIES COMMISSION may authorize the issue of CEDEARs evidencing fractions of securities, provided the relevant agreements reasonably guarantee the exercise of the rights stemming therefrom and the redemption contemplated under Section 89 by the participants in each unit security. The general provisos governing registered or book-entry securities, as the case may be, as current on each occasion, will apply. The registered CEDEARs shall contain at least: (a) the name and main domicile of the issuer of the represented securities; (b) the place of authorization of the issue of the securities represented by the CEDEARs, with the relevant identification of the said authorization by the applicable regulatory authority; (c) the number of securities represented by each CEDEAR; (d) the name and main domicile of the issuer of the CEDEAR; (e) the number of authorization of the issue or program under which the CEDEAR was issued; (f) the conspicuous legend to the effect that the said instrument does not evidence securities but a certificate of the existence of the deposited securities therein referred to in favor of the issuer of the CEDEAR; and (g) the place of deposit of the securities so represented. Records kept in respect of book-entry CEDEARs shall contain the data indicated in subsections (a), (b), (d), (e), and (g), as applicable. The CEDEARs will grant their holders the benefit to all rights inherent in the securities represented by the said CEDEARs, without prejudice to the exercise thereof through the issuer of the CEDEARs.

31 SECTION 92 Either programs sponsored or unsponsored by the issuer of securities represented by the CEDEARs may be issued. Unsponsored programs may either include or not an agreement concerning the program between the issuer of the CEDEARs and the issuer of the securities represented by the CEDEARs, yet the issuer of the CEDEARs shall comply with the reporting requirements of Section 93. Sponsored programs shall, in addition, comply with the provisos specified in Section 94 of this Chapter. Whenever the securities represented by the CEDEARs correspond to an initial public offering, only sponsored programs will be accepted. The issue of a CEDEAR in respect of the same security will not be permitted if there already exists an authorized and outstanding program of the said security by an issuer other than the initially authorized issuer, with such exception as the Commission may grant under a grounded resolution. SECTION 93 As concerns unsponsored programs, the reporting requirements shall be limited to the issuer of the CEDEARs and will exclusively establish: (a) that the issuer of the CEDEARs shall file with the ARGENTINE SECURITIES COMMISSION and at the same time make available to the investors through the stocks or exchanges where the CEDEARs are traded: (1) within TEN calendar (10) days from its publication, a copy of any information and documentation filed by the issuer of the securities whose deposit is represented by the CEDEARs vis à vis the stocks or exchanges where same are traded and any information and documentation published by any of same or by the issuer itself, when the information is not included in subsection (iii) of this Section; being required, within like term, to submit all publicly available even though not yet published data and documents theretofore filed with the regulatory authorities, in which case the term will be computed as from the relevant filing with the regulatory authority; (2) Upon the Issuer of the CEDEARs being informed thereof in its capacity as shareholder (and in no case after TWENTY FOUR (24) hours as from receipt from the Issuer or published in the country where the issue of the represented securities was authorized or where the said

32 securities are traded) any information or documentation relevant to the Issuer of the securities whose deposit is represented by the CEDEARs; (3) within TEN (10 calendar days as from the filing vis-à-vis the regulatory authorities or exchanges or stocks where the securities are traded, the financial, accounting and/or income statements whether annual, quarterly or interim, as well as any other accounting information about the issuer of the securities represented by the CEDEARs. If the information so filed is not reconciled as required by the current accounting standards of this Commission, such omission shall be conspicuously notified in the Information made available to investors. The notice to be so included shall specify the bases used to prepare the information and, as applicable, shall also indicate that, if applied to those statements the rules of this Commission, certain differences could result in respect of the Information being furnished. (b) furthermore, that the issuer of CEDEARs is subject, whenever applicable, to the provisos of Chapter XVII of the RULES, both in respect of facts or acts that effect or are connected with the Issuer of the CEDEARS or of facts or acts that effect or are connected with the issuer of the securities represented by the CEDEARs, of which it might have become aware either in its capacity as shareholder or upon their publication by the regulatory authority of the country of origin of the issuer of the securities represented by the CEDEARs or by the stocks or exchanges where same are traded. The submission by the issuer of the CEDEARs of the information and/or documentation about the issuer of the securities represented by the CEDEARs, shall qualify as an affidavit to the effect that it is true and accurate information published by or received from the issuer of the securities represented by the CEDEARs and that no other information has been obtained by the Issuer of the CEDEARs in its capacity as shareholder. SECTION 94 Under CEDEARs sponsored issue programs, the issuer of the evidenced securities shall apply vis-à-vis the ARGENTINE SECURITIES COMMISSION for their acceptance into the public offerings regime under CEDEARs programs, therefore following the procedure indicated in Section 96 hereof. Once accepted to join this regime, the issuers of securities represented by CEDEARs shall comply with the periodic reporting requirements of Chapter XVII of the RULES. This information should be filed jointly with a certificate issued by an Argentine chartered accountant with any relevant adjustment resulting upon applying thereto the relevant rules of this Commission, of the stock exchange or market where the CEDEARs are traded and the then current Generally Accepted Accounting Principles of the Republic of Argentina. The information shall, in all cases, be filed and published in the Spanish language. SECTION 95 In addition to the provisions of Section 93 hereof, the issuer of the CEDEARs shall in all cases within THIRTY (30) days as from the close of each calendar quarter inform the ARGENTINE SECURITIES COMMISSION and the stock or exchange where the CEDEARs are being then traded: