The Role of the Depositary Bank

8 Issuer Services In order to establish any type of DR program, the issuer assembles a team of advisors that typically includes investment bankers, lawyers and accountants. The issuer also selects a depositary bank, a key partner that enlists the services of a local market custodian and other key support service providers to assist in the implementation of the program. Once the issuer and its advisors have evaluated the company’s unique needs, and have determined the type of DR program best suited to its objectives, the issuer and the depositary execute a deposit agreement, a contract which sets forth the terms of the DR program. Based upon the contract, the depositary performs certain specific services on behalf of the issuer and the DR holders. Many of these same parties may play key roles in the long-term development and day-to- day management of the issuer’s DR program; however, the depositary bank will remain a critical liaison between the issuer and brokers and investors, while the functions of lawyers and accountants become focused on periodic reporting. In addition, the investment bankers are typically not involved with a DR program unless the issuer is intending to go back to the market. Table 3: Roles in the Establishment of a DR program Table 4: Roles in the ongoing development of a DR program Roles and Relationships for the Issuer and the Depositary Role of depositary: Role of issuer: Issue and cancel DRs Provide required certificates to the DR bank and the issuance of DRs, if needed Serve as registrar and transfer agent for the DRs Communicate with depositary regarding the DR program including potential program changes Act as paying agent, processing dividend payments or other entitlements for DR holders Pay dividends to local custodian for transfer to the DR holders Process corporate actions Communicate with depositary on corporate actions Provide ongoing account management support to the issuer Ongoing regulatory reporting and filing Coordinate proxy process for DR holders Communicate with depository for shareholder services Offer value-added services such as investor relations counsel Develop an investor relations plan Role of depositary: Role of issuer: Consult on DR facility structure Determine corporate and financial objectives Appoint custodian Appoint depositary, legal counsel, investment bank and accountants Assist with DR requirements Determine program type Coordinate with lawyers and investment bankers to ensure that all the implementation steps are in place Obtain approval from board of directors, shareholders and regulators as needed Prepare and issue DRs Provide financial information to accountants and advisors Announce program establishment to investor community Develop an investor relations plan