Last checked at 18 Nov 2014 07:42
db x-trackers
Investment Company with variable capital
Registered office: 49, avenue J.F. Kennedy, L-1855 Luxembourg
R.C.S. Luxembourg B-119.899
(the "Company")
db x-trackers CSI300 UCITS ETF
1C: LU0779800910
(the "Sub-Fund")
17 November 2014
The board of directors of the Company hereby informs the shareholders of the Sub-Fund that material information concerning the taxation of China A shares (which are the constituent securities of the Reference Index) has been reported clarifying the taxation on A shares investments by qualified foreign institutional investors ("QFIIs").
Capitalised terms used in this notice shall have the meaning ascribed to them in the current Prospectus of the Company unless the context otherwise requires.
The Ministry of Finance (the "MoF") of the People's Republic of China ("PRC"), the State Administration of Taxation of the PRC ("SAT") and the China Securities Regulatory Commission (the "CSRC") issued the "Notice on the issues of temporary exemption from the imposition of capital gains tax arising from gains from the transfer of equity investment assets such as PRC domestic stocks by QFII and RQFII" Caishui [2014] No.79 on 14 November 2014 (the "Tax Announcement").
The Tax Announcement states that PRC corporate income tax will be imposed on gains obtained by QFIIs and renminbi qualified foreign institutional investors ("RQFIIs") from the transfer of equity investment assets (including PRC domestic stocks) realised prior to 17 November 2014 ("capital gains tax") in accordance with the relevant tax laws and regulations. The Tax Announcement also states that QFIIs and RQFIIs without an establishment or a place of business in the PRC will also be temporarily exempt from corporate income tax on gains derived from the trading of A shares effective from 17 November 2014.
As described in the Product Annex of thee Sub-Fund, the Sub-Fund does not invest directly in A shares which are the constituent securities of the relevant Reference Index, but seeks to obtain an exposure to the performance of the relevant Reference Index by way of OTC Swap Transaction(s) with the Swap Counterparty.
The OTC Swap Transaction(s) entered into between the Sub-Fund and the Swap Counterparty includes a provision according to the terms of which the Sub-Fund undertakes to keep the Swap Counterparty fully indemnified for any tax liability that may arise in a prospective or retrospective manner in connection with such OTC Swap Transaction(s) to the extent of the same level of tax that a hypothetical offshore investor having invested in the A shares (which are the constituent securities of the relevant Reference Index) would potentially sustain or incur.
On the basis of the information set out in the Tax Announcement, the Management Company has determined to do the following:
(a) Adjustment in respect of realised gains prior to 17 November 2014
On the basis of the information set out in the Announcement, the Management Company has determined that there are sufficient grounds to make a downward adjustment to the Net Asset Value of the Sub-Fund as of 17 November 2014 (expected to be published on 18 November 2014) to reflect the expected amount of tax-related liability to the Swap Counterparty which are attributable to gross realised capital gains derived from the trading of A shares since the date of inception of the Sub-Fund up to and including 14 November 2014. Shareholders who have sold or redeemed shares in the Sub-Fund prior to 17 November 2014 will not be affected by such negative impact.
The estimated and unaudited negative impact on the Net Asset Value of the Sub-Fund is as follows.
| Sub-Fund | Share Class | Negative impact (in USD) (estimated and unaudited) | Negative impact (in %, based on the NAV as of 14 November 2014 (estimated and unaudited) | ||||
| db x-trackers CSI300 UCITS ETF | 1C | 6,773,265.77 | 1.10 |
Due to the limited extent of the clarifications provided in the Tax Announcement, the Management Company, acting in the best interest of the Sub-Fund, takes a prudent approach to make a downward adjustment to the Net Asset Value to reflect the expected amount of tax-related liability to the Swap Counterparty which are attributable to gross capital gains realised before 17 November 2014 until further clarification is obtained. This means that the downward adjustment (in USD terms) is expected to be kept constant unless there is further material information regarding the tax position in the PRC. The Management Company has come to the decision after considering a range of factors including the Tax Announcement.
(b) No adjustment in respect of gains with effect from 17 November 2014
The Management Company has requested the Swap Counterparty not to make any adjustment to the valuation of any OTC Swap transaction(s) in respect of gross realised or unrealised gains from 17 November 2014 onwards.
If you have any queries or if any of the above is not clear, you should seek advice from your stockbroker, bank manager, legal adviser, accountant or other independent financial advisor.
Shareholders should also consult their own professional advisers as to the specific tax implications under the laws of the countries of their nationality, residence, domicile or incorporation.
Please note that a translation of this notice will be made available, where required, on the website of the Company, being www.etf.db.com. Further information in relation to the above may also be obtained from the legal entities mentioned under ‘Contact information’ below or by sending an email to info.dbx-trackers@db.com.
Neither the contents of the Company's website nor the contents of any other website accessible from hyperlinks on the Company's website is incorporated into, or forms part of, this announcement.
db x-trackers
The board of directors
Contact information
db x-trackers
49, avenue J.F. Kennedy, L-1855 Luxembourg, Grand Duchy of Luxembourg
DB Platinum Advisors
2, boulevard Konrad Adenauer, L-1115 Luxembourg, Grand Duchy of Luxembourg
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