Translation: BaFin This translation is furnished for information purposes only. The original German text is binding in all respects.

1. Scope of application (section 31 (2) WpHG; section 4 WpDVerOV)

1.1 Scope of application / Scope of obligations

The provisions of section 31 (2) sentences 1, 3 and 4 WpHG as well as section 4 WpDVerOV apply as a rule without distinction to all information relating to financial instruments or (ancillary) investment services which investment services enterprises address to clients and/or retail clients, regardless of whether or not such information constitutes marketing material; by contrast, information addressed exclusively to eligible counterparties is exempted within the scope of application of section 31b WpHG. Moreover, section 31 (2) sentence 2 WpHG stipulates specifically for marketing information that the latter must be clearly recognisable as such. A marketing communication is information intended to induce the addressees to acquire a financial instrument or to commission an investment service (sales promoting aim). Information that is merely used in an advisory situation does not necessarily have a primarily sales promoting aim. Neutral product information made available in the fulfilment of obligations to provide advice appropriate to the client and the investment situation does not fall under the definition of marketing information. The Act provides for an obligation to expressly identify the information only when the marketing character of the information is not otherwise clearly recognisable. Such recognisability may result from the manner and form in which the information is presented or from the content of the information. On the whole, the assessment must be made on a case-by-case basis. Pure image marketing is not covered by the provisions.

Possible examples of marketing information that might be required to be indicated as such are:

• contributions in an investment services enterprise’s client magazines which appear to be objective but which primarily pursue a sales promoting aim;
• letters to clients (especially when addressed to them personally) suggesting the purchase of certain securities provided that this does not constitute investment advice^[1] or financial analyses in accordance with section 31 (2) sentence 4 no. 1 WpHG.

Such information is to be distinguished from the information that is required to be indicated as marketing communication pursuant to section 31 (2) sentence 4 no. 2 WpHG. This information must be indicated although it does not have any immediate marketing character but qualifies as financial analysis and is therefore precisely intended to be an objective and independent recommendation. This is a special form of financial analyses to which the provisions of section 34b WpHG as well as the Regulation governing the Analysis of Financial Instruments (Finanzanalyseverordnung – FinAnV) are applicable^[2]. These provisions are a self-contained framework which takes precedence over the provisions of section 31 (2) WpHG as well as section 4 WpDVerOV. That means that apart from fulfilling the requirements of the financial analysis rules, generally no further-reaching requirements under section 4 WpDVerOV are to be observed. That is because its material assessments are already covered by the requirements for financial analyses to be produced and presented in a fair manner pursuant to section 34b (1) sentence 2 WpHG. This concerns, in particular, the obligation to present data in a manner which is fair, clear and not misleading including a balanced analysis of the risks and rewards of a recommended financial instrument.

Clients within the meaning of section 31 (2) WpHG and section 4 WpDVerOV are any natural or legal persons for whom investment services enterprises provide or bring about investment services or ancillary services (cf. section 31a (1) WpHG). The concept of client thus encompasses not only existing clients but also all persons with whom no client relationship as yet exists but to whom an investments services enterprises addresses information with a view to acquiring them as clients.

Section 31 (2) WpHG applies to all information addressed to clients, i.e. information addressed to retail clients and professional clients alike and, to a limited extent (cf. 1.1), to eligible counterparties. The principles contained in section 31 (2) WpHG are specified in more detail in section 4 WpDVerOV for information addressed to retail clients. As a result, information for retail clients is primarily to be measured by section 4 WpDVerOV, information to professional clients or eligible counterparties solely by section 31 (2) WpHG.

1.2 Relationship to section 124 of the Investment Act (Investmentgesetz – InvG) and section 15 WpPG

The provisions of section 124 InvG and section 15 WpPG apply parallel to the provisions of section 31 (2) WpHG and section 4 WpDVerOV.

2. Making information available (section 31 (2) sentence 1 WpHG)

Pursuant to section 31 (2) sentence 1 WpHG and section 4 (1) WpDVerOV, all information made available by investment services enterprises to clients falls under the scope of application of the provisions. On account of the broad definition of client (which also includes potential clients; see above), any marketing information of an investment services enterprise is covered.

Since the Act is based on the premise that the information is made available to the client by the investment services enterprise, it does not matter whether the information originally comes from the investment services enterprise. For this reason, information which is initially provided to the investment services enterprise by a third party and which is then made available to the clients by the investment services enterprise also falls under the scope of application of the provisions.

Example:

Marketing materials of an asset management company or an issuer

If an investment services enterprise makes available to clients information from third-party sources (for example by handing out information in print form or by making available information from third-party sources on its own website and/or by links to the websites of other providers), such investment services enterprise as a rule is initially fully responsible itself for ensuring compliance with the provisions of section 31 (2) WpHG and section 4 WpDVerOV. If the third party itself is an investment services enterprise, the provisions of section 31 (2) WpHG and section 4 WpDVerOV also apply to the third-party enterprise regardless of whether it makes the information available to its clients directly or – for example as issuer – provides such information to other investment services enterprises for marketing purposes.

Example:

X bank issues a bond which is (also) to be distributed through Y bank. For this purpose, X bank provides Y bank with marketing materials. In this case, X bank must ensure that this information satisfies section 31 (2) WpHG and, where applicable, section 4 WpDVerOV. Apart from obvious cases, Y bank does not itself have any obligation to check the information for compliance.

If the third-party source itself is an investment services enterprise from the EEA and the information is addressed to clients to whom identical requirements apply, the investment services enterprise that receives such information and then makes it available to clients may as a rule (except in the case of manifest violations) rely on the information supplied being in compliance with the law because the supplying investment services enterprise is itself under an obligation to comply with such requirements under section 31 (2) WpHG and section 4 WpDVerOV. However, this applies only to the extent the information is communicated without being changed and is clearly identifiable as information from the third-party investment services enterprise.

Other particularities may arise in such third-party scenarios. If the third-party source is not itself an investment services enterprise, an evaluative assessment of the overall circumstances must be made in order to decide whether such information is deemed to have been made available to clients by the investment services enterprise. In such cases, attributability depends on whether the client considers the information to originally come from the investment services enterprise and/or whether the third party itself has a sales interest and may therefore have to be attributed to the investment services enterprise. This is normally assumed to be the case not only for marketing materials but also particularly for product-specific information of issuers.

Example:

X bank makes product information of Y asset management company (Y-AMC) available to its clients. Since in the context of product distribution Y-AMC in this case is attributed to X bank, X bank must ensure that the information made available by it to its clients satisfies the provisions of section 31 (2) WpHG as well as section 4 WpDVerOV. If, on the other hand, X bank makes available in its sales premises daily newspapers containing information on the performance of financial instruments, X bank is not responsible for ensuring that such information satisfies the requirements of section 4 WpDVerOV, because daily newspapers do not typically have any marketing interest in respect of the financial instruments to which the price information contained therein relates, and as such are therefore not attributable to X bank.

Particularly in connection with information found on websites, investment services enterprises have an obligation to ensure that information exclusively intended for professional clients or eligible counterparties and therefore not satisfying all requirements of section 4 WpDVerOV is not additionally made available to retail investors. With regard to information provided over the Internet, it is also recommended to post on freely accessible web pages only information suitable for retail clients or such information which, whilst describing the information offering for professional clients or eligible counterparties, does not contain any information that does not satisfy the requirements of section 4 WpDVerOV. The latter may be made available to professional clients or eligible counterparties either in an access-protected section after such access has been duly granted (e.g. by a password) or separated from the other information by a clearly visible notice, to be confirmed by the website user, that the information was not posted for retail clients.

By contrast, when making available sales prospectuses which are provided to the investment services enterprise by the issuer and whose content satisfies the statutory provisions, the provisions of section 31 (2) WpHG and section 4 WpDVerOV do not give rise to any additional disclosure obligations on the part of the investment services enterprise^[3].

3.Provisions relating to the presentation of information addressed to retail clients

For information addressed to retail clients, section 4 WpDVerOV contains various provisions relating to the manner in which such information is presented:

3.1 Sufficient and comprehensible presentation (section 4 (1) WpDVerOV)

Information that investment services enterprises make available to retail clients as a rule must be fair, clear and not misleading (cf. section 31 (2) sentence 1 WpHG). That means, among other things, that material statements must not be expressed in an ambiguous manner and that material information must not be omitted.

Example:

Product names such as "guarantee certificate" or similar, as well as references, for example, to "100% capital protection" or similar, do not make it sufficiently clear without further explanation who provides the guarantee (issuer, group affiliate or third party) or where the capital protection arises from. In the interest of ensuring clarity of the information, a clarifying reference to the person of the guarantor is therefore generally required (such as: "100% capital guarantee of X bank") or, for references to capital protection, an additional clarifying statement as to the origin of the capital protection. In this connection, further reference must be made, where applicable, to the risk of a capital or repayment guarantee lapsing as a result of extraordinary rights of termination being exercised, as well as to any conditions or (especially quantitative) restrictions existing in respect of a guarantee. Likewise, the product description must clearly set out whether a capital guarantee, for example, only applies on the maturity date or whether a deduction of charges for hedging transactions should be expected (e.g. in the case of early sale of products subject to capital guarantees).

Moreover, information must be sufficient for, and presented in a way that is likely to be understood by, the group of clients to whom it is made available, or by whom it is likely to be received^[4]:

The information must be sufficient so as to be understood by the average member of the group of clients to whom it is addressed^[5]. The necessary scope and depth of product descriptions therefore must be geared to the average knowledge of the target group. The more complicated a product or service (including its risks) is, the more explanations the related product information as a rule must contain. If information is addressed expressly and in a clearly recognisable way to only one clearly defined group of clients who can be expected to possess an advanced level of expertise, this may be duly considered when determining the scope and depth of the product description.

Furthermore, the information sufficient in scope for the average member of the client group addressed must be presented in a way that is comprehensible to such member. That means, among other things, that the way in which the information is worded must be all the more straightforward and generally comprehensible the less knowledgeable and experienced the addressed clients can assumed to be.

Example:

Whereas the reference to the "credit risk of X bank" in marketing material for a certificate is sufficiently comprehensible to a customer group with prior knowledge in financial matters, marketing material addressed to retail clients in general may call for a wording using less specialised terms (e.g.: "Risk of financial loss due to payment default or insolvency of X bank").

In particular, it must be ensured that the way in which the information is presented does not disguise, diminish or obscure important items, statements or warnings^[6].

Negative example:

Whereas the reader finds the rewards of a product expressly described in the information provided under the header "Benefits of the product", he/she has to deduce the product’s associated risks from the characteristics provided under the header "For whom is the product suitable?". In the first place, it is not clear from the heading "For whom is the product suitable?" that this section contains important information on the product’s risks that is of particular importance for the investor. Secondly, the risks must be clearly specified; it is not sufficient that the risks can be inferred or concluded from the product description.

Where information relating to the interest paid on the capital invested is provided, the question of whether the promised interest is subject to conditions must be considered. Whereas normally no particular mention has to be made regarding issuer default risk (e.g. for a corporate or government bond; unlike certificates, see above) provided that the risk premium and/or the default risk of the issuer is not unusually high, it is definitely necessary to provide a clarifying reference when the promised interest is subject to further conditions.

Example:

A certificate pays the specified interest only if no payment default of the reference company occurs.

In such cases, formulations such as "Chance of x% return p.a." or "Return of up to x% p.a." should be used instead of absolute statements such as "Return: x% p.a.".

3.2 Up-to-datedness of presentation

The requirements as to how up-to-date the information distributed must be are governed as a rule by the principle that the information must be fair and not misleading pursuant to section 31 (2) sentence 1 WpHG and by the general principle of proportionality. Whereas information distributed via online databases as a rule must be up-to-date and in some circumstances must be made available in real time, prospectus material made available for online downloading is subject to lower requirements as to how up to date the data are, and printed marketing materials intended to be made accessible at branches to still lower requirements. The decision always depends on the specific information as well as the product or service and their specific features. In individual cases, however, the aforementioned principles of presenting information in a way that is fair and not misleading may make it necessary, also in the case of materials for which the time elapsing between the editorial and publication date would normally be sufficient, either to refrain from distributing or to update such materials if significant changes occur shortly after the editorial deadline.

Example:

Whereas it may have been acceptable, until the 2008 financial crisis, to regard the risk of default of an issuer of certificates as being so negligible to justify foregoing a mention of such risk in the description of a product’s risks (see 3.3), the situation is now different. After such changes become known it may therefore be necessary to adjust the information materials accordingly or to withdraw them from circulation. The same applies, for example, with regard to performance data (see 3.4) after significant changes in value that have taken place within a short time.

Giving regard to the requirement to present information in a way that is clear, fair and not misleading, it is advisable and sensible in any case to provide an easily recognisable reference to the date of the information.

An exception to the general requirement for information made available online to be up-to-date is possible in cases where, for example, marketing materials relating to certificates are kept available on the website of the issuer or the disseminating investment services enterprise after expiry of the subscription period. This satisfies an interest in information on the part of the investors. At the same time it is not reasonable to continue requiring companies to keep such marketing materials up-to-date. However, particularly in this case it is indispensable to provide for a clear and recognisable reference to the date of the information.

3.3 Presentation of benefits and risks (section 4 (2) WpDVerOV)

Pursuant to section 4 (2) WpDVerOV, any benefits of an investment service or a financial instrument may only be emphasised if at the same time a clear reference is made to any related risks.

Unlike in securities sales prospectuses, reference to risks need only be made if the information emphasises at least one benefit of the presented product. In that case, however, the principle of proportionality applies, i.e. the scope and accuracy in which the benefits and risks are described must be in balanced proportion. The more extensively benefits are highlighted, the more extensively any risks must be addressed. That does not mean that the number of benefits and risks always has to be the same. Where a product has more benefits than risks, these may outnumber the risks in the presentation and vice versa. Also, benefits and risks do not always have to correspond to each other in substance, i.e. like "the two sides of a coin". It is decisive that where all material benefits of a product are specified, reference is also made to all material risks, and that where only particularly important benefits are mentioned, reference is also made to the particularly important risks.

A benefit may be given linguistic, typographical or any other prominence. It must not refer to a specific financial instrument (e.g. by means of a securities identification number). The rules governing the presentation of benefits and risks also apply if the information refers to a specific group of financial instruments having a similar structure.

Example:

In marketing material for a certain type of certificates (for example, leveraged certificates) emphasising their benefits (e.g. prospect of disproportionate gains versus the underlying), reference would also have to be made to their risks (e.g. disproportionate risks of losses being incurred versus the underlying; issuer risk).

As already mentioned above, it is particularly important when presenting the risks and rewards to keep in mind that the way in which such information is presented may not disguise, diminish or obscure important items, statements or warnings^[7]. It therefore has to be ensured that information is presented in a clear and straightforward manner in which not merely the circumstances giving rise to a risk but also the risk itself are pointed out.

Pursuant to section 4 (2) WpDVerOV, the risks must always be presented "concurrently" with the benefits. For information in printed form that means that the references to risks must be found in the same document as the benefits. It is not sufficient to make reference to other places (in particular a website or other information materials) or the possibility of having a client meeting. Although the presentation of the risks does not have to be provided in a place that is directly proximate to the presentation of the benefits, it does have to be made in a clear and prominent manner.

Example:

It is not possible to mention the risks only in the text of a footnote with the benefits being presented outside of the footnotes. Neither is it possible to describe in a letter to clients only the benefits whilst referring to other documents, e.g. a product information sheet, with regard to the risks. This also applies if the document presenting the risks is directly attached to or sent together with such letter.

The above principles apply regardless of the type of information medium used.

Examples of possible risks include:

• issuer default risk in the case of certificates
• guarantor default risk
• exchange rate risk
• market-induced price or rate fluctuations
• possibility of tradability being restricted or absent
• possible obligation to make additional contributions
• extraordinary termination rights of issuer

3.4 Presentation of performance

Where information addressed to retail clients contains statements on the performance of a financial instrument, a financial index or an investment service, it must be clearly stated to what period the information refers and that past performances, simulations or forecasts are no reliable indicator for future performance (section 4 (7) WpDVerOV).

The rules relating to performance information provided to retail clients in some cases distinguish between historical (section 4 (4) and (5) WpDVerOV) and forward-looking (section 4 (6) WpDVerOV) information:

3.4.1 Historical information (section 4 (4) and (5) WpDVerOV)

Historical data as a rule may not represent the most prominent aspect of the information (section 4 (4) sentence 1 WpDVerOV). That means that statements relating to past performance may not be given any special prominence, either typographically or in respect of the order they are placed in, the depth in which they are described or in any other way.

3.4.1.1 Suitable information

Pursuant to section 4 (4) no. 1 WpDVerOV, information on performance must be "suitable". Information that appears suitable is, as a rule, any absolute or relative percentage information such as:

• "50% increase in value between 10 January 2008 and 10 January 2009" or
• "Between 10 January 2008 and 10 January 2009, 50% greater increase in value compared with [comparison object]".

Within the meaning of section 4 (4) no. 1 WpDVerOV, however, absolute or relative performance statements may also be suitable, such as:

• "Price on 10 January 2008: €40.00 / price on 10 January 2009: €50.00" or
• "€1000.00 increase between 10 January 2008 and 10 January 2009" or
• "Between 10 January 2008 and 10 January 2009, increase in value €50.00 higher than [comparison object]".

The performance data must always reflect actual performance over a twelve-month period. That means that cumulative performance data relating to the entire period under review (e.g. "500% in 10 years") are not suitable because such data do not allow for any conclusions to be made with regard to the volatility and risk of the investment. For the same reason, annualised average values for multi-year periods (e.g. "5% p.a. on average over the past 5 years") are also unsuitable. Annualised data may be suitable by way of exception if the actual performance was nearly constant over the entire period under review.

3.4.1.2 Minimum period: as a rule, the immediately preceding five years

In respect of the period to which the performance data refer, the WpDVerOV provides for detailed requirements:

The performance data as a rule must refer to the immediately preceding five years (section 4 (4) no. 1 WpDVerOV), with "years" in this place being used to mean twelve-month periods and not calendar years.

In this regard, the requirements with regard to the criterion of immediateness, i.e. the length of the period permitted between the most up-to-date performance information and the date the information is distributed, are determined according to the principle of proportionality and the principle of presenting information in a fair way pursuant to section 31 (2) sentence 1 WpHG. This means that the information made available must be as up-to-date as is possible using reasonable efforts.

In individual cases, however, the requirement of presenting information in a way that is fair and the prohibition of providing misleading information (section 31 (2) sentence 1 WpHG) may make it necessary that materials which would normally be sufficiently up-to-date may either no longer be distributed or have to be updated if significant changes in value occur shortly after the editorial deadline (cf. also 3.2).

3.4.1.3 Exception: data available only for a shorter period

If for the financial instrument, financial index or investment service in question the performance data are available only over a period of less than five years, information must be stated for the entire available period.

3.4.1.4 Limit to exception: as a rule no information for periods of less than one year

As a rule, no statement of performance data would be permitted pursuant to section 4 (4) no. 1 WpDVerOV in cases where performance could be presented only over a period of less than twelve months (because the financial instrument was introduced to trading only less than twelve months ago, for example).

In this connection it must be pointed out that the prohibition relates only to the presentation of the performance of the financial instrument, the financial index or the investment service over a period of less than one year. By contrast, statements relating to the current value only are of course permitted.

3.4.1.5 Exception to prohibition on statements for periods of less than one year

Given the purpose of the provision and the clients’ legitimate need for information, however, an exception appears to be permissible within narrow limits for non-marketing, unbiased information requested by clients (for example, information in automated Internet share price databases or in the case of information necessary as part of advice provided pursuant to the German Securities Trading Act) (cf. also 3.4.1.8).

3.4.1.6 Additional data

In addition to the statutory requirements, further performance data may be stated. However, such data may not be given greater importance than the legally required data in terms of content and form. In other words, at least equivalent emphasis must be given to the legally required data.

3.4.1.7 Impact of commissions, fees and other charges

Where the performance data are presented as gross values, it must be stated how such values are impacted by commissions, charges and other fees (cf. section 4 (4) no. 4 and (5) sentence 2 and (6) sentence 2 WpDVerOV).

In this connection, commissions, fees and other charges are understood to mean all financial expenditures necessarily arising for the client from the purchase, holding or sale of a financial instrument or use of an investment service, such as

• sales charge in the case of fund units;
• transaction costs such as order fees and brokerage fees;
• any securities account fees and other custody fees.

Section 4 (4) no. 4, (5) sentence 2 and (6) sentence 2 WpDVerOV require quantified data on the impact of commissions, fees and other charges. In this regard, it is by no means sufficient to provide an unquantified notice that commissions, fees and other charges have a diminishing impact on performance since this is already immediately clear from such terms by definition. However, it is very difficult to make an exact statement on adjusted performance giving due regard to the performance reducing factors specified by law because in each case the parameters to be taken into account vary significantly depending on the individual case: either the amount of the values to be applied is dependent on the institution that performs the respective service (example: transaction or custody costs) or on the client (example: total amount invested, which in turn influences the transaction and custody costs). As a result, it is practically impossible, in the form of general information in any case, to report values that apply to all clients. To nevertheless satisfy the statutory requirement of section 4 (4) no. 4, (5) sentence 2 and (6) sentence 2 WpDVerOV, the following approach is recommended:

Investment services enterprises present the performance as required by section 4 (4) no. 4, (5) sentence 2 and (6) sentence 2 WpDVerOV reflecting the impact of commissions, fees and other charges by applying the aforementioned charges in their amounts typically incurred, either in the amount of their own fee schedule or average customary market values when calculating the adjusted performance. It is irrelevant whether the investment services enterprise determines such average values itself or uses data provided by associations or by other third parties. An investment amount of €1000.00 is applied by the investment services enterprise as a standardised model value, and a period of five years as the investment period. In addition to this, the investment services enterprise may give clients the possibility of calculating individual adjusted performance using an online performance calculator provided on the institution’s website. Clients would then have to enter the values applicable to them with regard to the individual variable parameters including the investment amount.

3.4.1.8 Statement of simulated performances

Simulations of past performance or references to such simulation may relate only to a financial instrument, the underlying of a financial instrument or a financial index (cf. section 4 (5) sentence 1 WpDVerOV). This list of items that a simulation might contain is exhaustive. Consequently, client information may not contain, for example, simulations of the performance of a mere trading or investment strategy^[8].

Moreover, simulations of past performance must be based on the actual past performance of one or more financial instruments, underlyings or financial indices that correspond to the financial instrument in question or form the basis of the same, as well as satisfy all conditions stated under 3.4 above (cf. section 4 (5) sentence 2 WpDVerOV).

Example:

Simulation of the past performance of a basket certificate launched on 10 January 2009, which is based on the past performance of the individual basket components (which must be either financial instruments, or underlyings of such financial instruments or financial indices).

The prerequisite for such simulation is that the financial instruments, underlyings or financial indices used as a basis must be identical to the current basket components and their past performance must cover the entire simulation period. It is therefore not permissible to replace in the simulation one or more basket components not possessing such actual past performance by similar or comparable financial instruments, underlyings or financial indices.

Example:

A newly launched basket certificate tracks the performances of shares A, B, C and D, with shares A, B and C having already been quoted for more than six years, but share D only for five years. A simulation of the performance of this basket certificate with reference to the past six years would not be permissible because no past performance for the sixth year exists for share D and it would not be permissible to use the performance of a share similar or comparable to share D for simulation purposes. However, it is possible to simulate the performance of the basket certificate with reference to the past five years because for that period historical price data exist for all four shares.

Moreover, the financial instrument, the underlying or the financial index to be used in the simulation must have a clearly defined composition for a simulation to be possible at all. For this reason it is not permitted to simulate in client information the past performance of a financial instrument or a financial index whose respective composition depends on discretionary decisions.

Example:

For a newly launched fund, a certain investment strategy including certain weighting provisions is defined for the fund’s management. However, the actual choice of stocks and the decision on specific transactions is left to the discretion of the fund’s management. In this case it is not possible to determine what the fund’s exact composition would have been in the past because it is impossible to know what discretionary decisions the fund’s management would have taken in the past.

For the same reason it is impermissible as a rule to simulate the past performance of such structured products in client information for which, beyond the pure costs of the individual components, margins of the issuer that vary over the entire term are used in pricing, unless it is clearly prominently stated that the margins of the issuer assumed in the calculation of performance are notional and variable and therefore do not provide any reliable indication of the future impact of issuer margins on the performance of the product.

Example:

The structure of a guarantee certificate is made up of several components (e.g. securities and futures transactions). The issue price is formed by adding the prices of the individual components as well as a profit margin of the issuer. However, the amount of such margin changes constantly over the term as a result of the issuer’s pricing. In this case it is not possible to know how high the issuer would have calculated its margin at individual points in time in the past. It is therefore likewise not possible to determine what the price of the certificate would have been at times before the issue.

As a rule, it is permissible to present a combination of actual and simulated performance data. In this case, however, it must be clear and unambiguous from the presentation which data are of an actual nature and which ones are simulated.

Example:

A certificate launched six months ago tracks the performance of share A "1:1". Although it would not be permissible to present the performance data of the certificate only for the past six months given the prohibition of presenting performance information for periods of less than one year (see point 3.4.1.4), a reference to the actual performance of share A during the preceding four and a half years nevertheless makes it possible to present the performance of the certificate for the period of the past five years.

Lastly, in the case of simulated performance data it must as a rule be stated – as for the statement of actual performance data – what impact commissions, fees and other charges have.

Example:

A newly launched fund continuously tracks a certain index "1:1" as stated in the fund’s terms and conditions. For want of sufficient actual historical price data, a simulation of its past performance is to be presented. In this case the simulation has to take account of any sales charge and/or redemption fees as well as transaction costs in the same way as for the presentation of actual performance.

3.4.2 Forward-looking data

Data provided on future performance may not be based on simulated past performance or refer to such simulation. The statements must be based on reasonable assumptions supported by objective data and, if based on gross performance, clearly state the impact of commissions, fees and other charges (cf. section 4 (6) WpDVerOV).

4. Tax information

Information referring to a particular tax treatment must contain a clear reference that tax treatment depends on the individual circumstances of each client and may be subject to changes in future (cf. section 4 (8) WpDVerOV).

5. Consistency of marketing and product information

Information provided in marketing statements may not contradict information that the investment services enterprise makes available to the client when performing investment services and ancillary services (cf. section 4 (9) WpDVerOV). This means in particular that information provided in sales prospectuses or other information materials must be consistent with statements made as part of marketing.

6. Statements with reference to the supervisory authority

The name of any competent authority within the meaning of the Securities Trading Act shall not be mentioned in such a way that would indicate or suggest endorsement or approval by that authority of the products or services of the investment services enterprise (section 4 (11) WpDVerOV).

Consequently, when advertising for a financial instrument it is not permitted, for example, to inform of BaFin’s approval of the prospectus published as part of the issue in such a way as to give clients the impression that BaFin has explicitly endorsed or approved the financial instrument as such. Neither is it permitted to make reference to the fact of existing supervision by BaFin in such a way as to give rise to the impression that the services or products offered by the investment services enterprise have been explicitly endorsed or approved by BaFin.

7. Documentation of marketing communications

Apart from the requirement of keeping one copy of the marketing communication no further record-keeping obligations apply to marketing communications provided that it is clear from the marketing communication to which client group the communication is addressed (cf. section 14 (7) WpDVerOV). To the extent that the marketing communication is issued periodically by using a particular standard template, retention of one sample copy of such standardised information, marketing communication or financial analysis is sufficient if the creation of the individual documents can be reconstructed from the additional documentation.

Appendix

The following are some non-binding examples suggesting possible ways of presenting performance for the past 5 years:

A. Bar chart (return expressed as a percentage)

Bar chart (return expressed as a percentage)

Bar chart (return expressed as a percentage) BaFin

Jan. 04-Jan. 05: net = minus sales charge / order fee / brokerage fee / securities account fee for investment amount of [1/4 average securities account]

Jan. 05-Jan. 07: gross minus securities account fee for investment amount of [1/4 average account]

Jan. 08-Jan. 09: net = minus redemption fee / order fee / brokerage fee / securities account fee for investment amount of [1/4 average securities account]

Note: The specific return for the investment amount contemplated by you can be calculated using a return calculator available on our website (www.a-bank.de/renditerechner).

B. Line chart (return expressed as a percentage)

Line chart (return expressed as a percentage)

Line chart (return expressed as a percentage) BaFin

Jan. 04-Jan. 05: net = minus sales charge / order fee / brokerage fee / securities account fee for investment amount of [1/4 average securities account]

Jan. 05-Jan. 07: gross minus securities account fee for investment amount of [1/4 average account]

Jan. 08-Jan. 09: net = minus redemption fee / order fee / brokerage fee / securities account fee for investment amount of [1/4 average securities account]

Note: The specific return for the investment amount contemplated by you can be calculated using a return calculator available on our website (www.a-bank.de/renditerechner).

C.Curve chart (performance of 100 euro investment expressed in euros)

Curve chart (performance of 100 euro investment expressed in euros)

Curve chart (performance of 100 euro investment expressed in euros) BaFin

Jan. 04-Jan. 05: net = minus sales charge / order fee / brokerage fee / securities account fee for investment amount of [1/4 average account]

Jan. 05-Jan. 07: gross minus securities account fee for investment amount of [1/4 average account]

Jan. 08-Jan. 09: net = minus redemption fee / order fee / brokerage fee / securities account fee for investment amount of [1/4 average securities account]

Note: The specific return for the investment amount contemplated by you can be calculated using a return calculator available on our website (www.a-bank.de/renditerechner).

______________________________________________________________________________________________

^[1] This presupposes that the addressee’s individual financial situation is taken into consideration (cf. Joint information sheet issued by BaFin and the Deutsche Bundesbank on the new statutory definition of investment advice of 12 November 2007).

^[2] Cf. in this regard my letter of 21 December 2007 on the interpretation of individual terms of section 31 (2) sentence 4, section 34b WpHG in conjunction with the Regulation governing the Analysis of Financial Instruments.

^[3] Cf. recitals 52, 55 and 56 of Directive 2006/73/EC of 10 August 2006.

^[4] Cf. Article 27 (2) Directive 2006/73/EC.

^[5] Cf. Article 27 (2) Directive 2006/73/EC.

^[6] Cf. Article 27 (2) Directive 2006/73/EC.

^[7] Cf. Article 27 (2) Directive 2006/73/EC.

^[8] Unlike section 4 (4) sentence 1 WpDVerOV, section 4 (5) sentence 1 WpDVerOV does not permit investment services as an item of presentation.

______________________________________________________________________________________________