Depository Receipts

Global Webinar Series

Depositary Receipts

Cross-Border Tax Withholding and Recovery

April 17, 2008

Globe Tax Services, Inc., and GlobeTax Data Services, Inc. (collectively “GlobeTax”) do not provide or offer tax, investment or legal advice and nothing provided in this presentation is intended to constitute the provision thereof. GlobeTax does not assume any, and disclaims all liability that may arise from reliance on, changes to, errors in, or omissions in the materials presented. Please note that this presentation is the exclusive and copyrighted property of Globe Tax Services, Inc. and only for viewing by the registered attendee. No redistribution rights are granted for the content of this presentation in whole or in part.

© 2008 Globe Tax Services Inc.

Introduction

Objective: Education

• • • • • • Depositary Receipts: Background and Features Cross-Border Investment Flows Dividend Processing Taxation and Recovery Solutions Benefits to the Marketplace

© 2008 Globe Tax Services Inc.

Depositary Receipts

What are they? • Depositary Receipts are:

• • • • • • • Issued by a Depositary Negotiable instruments Sponsored and unsponsored Book-entry or physical form Represent ownership in home market shares which Depositary holds in custody Outstanding DR amounts can rise or fall Pricing and arbitrage issues

© 2008 Globe Tax Services Inc.

Depositary Receipts

Why do they exist?

• Mutually beneficial to issuers and investors • Issuers

• • • • • Capital Raising Valuation Cost of capital Profile issues Diversification of shareholder base

• Investors

• • • Trade locally • Disclosure • Liquidity aspects • Priced in investors’ currency Low cost of custody Income processing

© 2008 Globe Tax Services Inc.

Depositary Receipts

Common Instrument Types • American Depositary Receipts (ADRs)

• • • • • • • • • Underlying shares held in custody in home market Issued and traded in the US Underlying shares held in custody in home market Issued on...