Deutsche Bank Trust Company Americas
Mr. Jonathan G. Katz
Re: SEC Release Nos. 33-8287; 34-48482
Dear Mr. Katz:
Deutsche Bank Trust Company Americas ("Deutsche Bank") is pleased to respond to the request by the Securities and Exchange Commission (the "Commission") for comments on its proposed rule referenced above. Deutsche Bank is a depositary bank for numerous American Depositary Receipt programs and our parent, Deutsche Bank AG, is one of a number of foreign issuers proud to maintain a global share traded globally, including on the New York Stock Exchange. As such, we have a strong interest in all efforts to maintain the integrity of the U.S. securities markets and make them attractive to foreign issuers. Deutsche Bank believes the revised Form F-6 eligibility requirements recommended by the Commission help promote these goals, and we therefore fully support the adoption of the proposed rule.
If enacted in its current form, the proposed rule will amend the eligibility requirements for Registration Statements on Form F-6 by prohibiting the registration of unsponsored ADRs if the issuer has listed its ordinary shares on a national securities exchange or automated quotation system of a national securities association.
We believe that the principle of equal treatment is of great importance to the foreign issuer community. Foreign companies that choose to enter the U.S. securities markets are generally subject to the same level of regulation as domestic issuers, and accordingly the benefits of a U.S. listing or quotation should be equally available to all participants. The Commission has properly pointed out the disparities that could occur if listed foreign companies were subject to the effects of a concurrent unsponsored ADR program. In our judgment, a key concern for foreign issuers would be the absence of full control over the markets on which their securities trade. Allowing third parties to create an alternative trading market would result in a highly anomalous situation, one that does not apply either to U.S. issuers or, in our experience, to foreign issuers in their home country markets. Additionally, the existence of unsponsored ADRs would raise the potential for disruptions to trading in global shares, shares of New York registry and other directly-listed shares of foreign issuers. We therefore commend the Commission's efforts in seeking to prevent such discrepancies and create a level playing field for all participants in the U.S. markets.
We also agree with the Commission that direct access to shareholders is an important benefit sought by foreign issuers who list in the U.S. This is another aspect in which foreign issuers could face issues that do not apply to U.S. companies. If unsponsored ADRs coexist with a U.S. listing or quoted ordinary share, the ADR holders would constitute a disadvantaged class of investors with whom the issuer could not directly communicate. Depending on the extent of ADR ownership, this could cause a foreign issuer to be in an unfavorable position relative to its U.S. counterparts in terms of maintaining an investor relations effort.
We wish to emphasize our strong belief that, in a context where a foreign issuer has not taken steps to enter the U.S. market, unsponsored ADR programs remain fully appropriate and play a valuable role in the financial markets. However, we also believe that deference should be given to those foreign issuers, such as Deutsche Bank AG, who chose and continue to choose to list their shares or otherwise establish a market presence in the U.S., as this promotes the broader goals of maintaining a fair and open trading environment and continuing the internationalization of our markets.
We thank you for the opportunity to comment on the proposed rule. We would be pleased provide any additional information the Commission may request or to answer any questions regarding our views.