Frequently Asked Questions

How is the Final Reference Level Calculated?

The Final Reference Level will be the average of each of the Reference Levels on the last Trading Day of each calendar month beginning and including November 2012 and ending (and including) 30 May 2014 (the last Valuation Date). Deutsche Bank will therefore average 19 Reference Levels when calculating the Final Reference Level on the last Valuation Date. Monthly averaging in the final 18 months of the term of the investment means that the investor can lock in the final rate on an average basis rather than potentially see the return diminished if, in the final months of the investment, the ChinaOpportunity™ Euro Price Return Index falls significantly.

How Can I Get Exposure to Chinese Equities?

There are three types of shares that offer unrestricted exposure to China for international investors. H shares and Red Chips are listed in Hong Kong, and B shares are listed in Shanghai and Shenzhen. B and H shares are issued by Chinese incorporated companies while Red Chips are issued by Hong Kong incorporated companies which are majority owned and controlled by the Chinese government and do most of their business in mainland China.

What is the ChinaOpportunity Euro Price Return Index?

The ChinaOpportunity™ Euro Price Return Index is a proprietary index created by Deutsche Bank, reflecting the price return performance of thirty stocks selected and rebalanced quarterly from a broad tradable Chinese stock universe.

What Are the Fees?

When purchasing Capital Protected ChinaOpportunity Receipts, potential investors do not have to pay any application fees in order to invest. In addition, Holders will not have to pay any annual management fees to Deutsche Bank as the Issuer of the Receipts.

How Are The Stocks Within the ChinaOpportunity Euro Price Return Index Selected?

At the end of each quarter, the ChinaOpportunity™ Euro Price Return Index selects 30 stocks from the following five Selection Pool Indices:

• Hang Seng China Enterprise Index (H shares Index),
• Hang Seng China-Affiliated Corporations Index (Red Chips Index),
• Shanghai B-Share Stock Price Index (Shanghai B Index),
• Shenzhen B-Share Stock Price Index (Shenzhen B Index),
• MSCI China Index.

In the first screening phase, the market capitalisation and the average daily market turnover (over the previous four weeks) of the shares in the Selection Pool Indices are evaluated and approximately half of the shares from the Selection Pool Indices are selected.

In the second screening phase, the shares selected pursuant to the first screening phase are then ranked separately based on low price to book ratio, low price to earnings ratio and high dividend yield. The thirty shares with the best combined ranking are selected to constitute the ChinaOpportunity™ Euro Price Return Index until the next Index rebalancing.

The selection criteria are determined based on extensive research and analysis. For a complete explanation of the Index selection procedure, please refer to the information relating to the ChinaOpportunity™ Euro Price Return Index attached to the Preliminary Pricing Supplement dated 15 March 2004.

Can My Receipts be Repurchased?

Receipts are designed to be held until the Completion Date. However, in order to ensure as far as reasonably possible that Holders have an opportunity to liquify their investment in Capital Protected ChinaOpportunity Receipts, should their personal circumstances change unexpectedly during the life of the investment, Holders can have their Receipts repurchased, (subject to the discretion of Deutsche Bank). A repurchase of Receipts will be based on an indicative price on the last business day of every month, being a price that Deutsche Bank would pay on that Trading Day if it accepts an offer from a Holder to repurchase a Receipt. If a Holder seeks to liquify their investment within 24 months of the Issue Date, it is Deutsche Bank’s current intention that the indicative price will be reduced by 2%, to take account of break costs.

Can I Have My Capital Guaranteed?

Deutsche Bank will (assuming a valid Completion Notice is lodged and the Completion Amount together with any Holder Expenses are paid) effectively guarantee that the Physical Settlement Value will be at least equal to the Issue Price. However, this feature will only apply if the Capital Protected ChinaOpportunity Receipts are held until the last Valuation Date. In particular, it does not apply if there is an early termination.

What Are The Taxation Outcomes of Holding a Receipt?

The Capital Protected ChinaOpportunity Receipts should provide similar taxation outcomes to that of direct investment in the underlying securities. In particular, as with an investment in the underlying securities, there should be no tax payable until the securities resulting from completion of the Capital Protected ChinaOpportunity Receipt are sold. In addition, any subsequent sale of the securities (delivered upon completion of the Capital Protected ChinaOpportunity Receipt) should result in a capital gain or capital loss for the investor. The Information Memorandum dated 15 March 2004 provides further information regarding this outcome. However, investors are advised to seek their own independent advice.

What Sales Fees are Paid to Selling Agents?

The Preliminary Pricing Supplement states that Deutsche Bank may pay a commission to selling agents of up to 4% of the Issue Price per Receipt and that Deutsche Bank may also pay trailing commissions to selling agents (of up to 0.5% p.a.). For the current series of Receipts being offered, Deutsche Bank will pay selling agents commission of 3.5% of the Issue Price upfront and trailing commissions of 0.2% p.a. from the second anniversary of the Issue Date.