1. How is a CEDEAR issued?

The CEDEAR is issued in Argentina by Deutsche Bank S.A. ("DBSA") when the Represented Shares are deposited with the Custodian, Deutsche Bank AG New York ("DBNY") in the U.S. (CEDEAR programs may also be established on the basis of Represented Shares in markets other than the U.S.)

2. What form do the CEDEARs take?

The CEDEARs are issued in registered de-certificated form, and ownership is freely transferable and recorded at the Caja de Valores ("CDV"). The CEDEAR Issuer (DBSA), acting as de facto registrar, recognizes CDV as the registered holder of CEDEARs. CDV in turn maintains records of beneficial holders of CEDEARs.

3. Who sponsors the CEDEAR program?

The CEDEAR Issuer (i.e., DBSA) currently runs Unsponsored CEDEAR programs. However, Resolution 291 permits sponsorship by the issuer of Represented Shares.

4. How does CEDEAR issuance work within the T+3 settlement framework?

CEDEARs trade and settle as do any Argentine equity securities today. If CEDEARs must be created (i.e., against the deposit of Represented Shares), DBSA will issue CEDEARs against the timely deposit of the Represented Shares with DBNY. DBNY and DBSA are committed to issuing CEDEARs on a same-day basis if Represented Shares are received by DBNY no later than 12:30 P.M. New York time.

5. How are dividends paid and other corporate actions communicated to CEDEAR holders?


The Custodian (DBNY) receives dividends in the currency of the Represented Shares. Cash dividends are then distributed in U.S. Dollars to CDV, the registrar of CEDEAR beneficial ownership. Stock dividends are paid on whole Represented Shares and on such number (round lots) of CEDEARs as is equal to whole shares. Cash-in-lieu of add points of CEDEARs is paid to CDV.

The CEDEAR issuer sets dividend record and payment dates. The record date is the same as the one established by the issuer of the Represented Shares. DBNY and DBSA work together to reconcile dividend payment amounts.

Corporate Actions:

Information supplied by an issuer of Represented Shares to its registered shareholders relating to stock dividends, proxies and shareholder voting, special meetings and similar actions is received by the Custodian (DBNY) as the registered holder on the books of the issuer of Represented Shares, and this information is forwarded to DBSA for proper communication to the Argentine authorities in accordance with Argentine law. Rights in connection with offerings are normally liquidated in the home market, and the proceeds are distributed to holders of CEDEARs, again, by remittance to CDV.

6. What happens if the Represented Shares are delivered to the Custodian after cut-off time?

The CEDEAR Issuer will use its best efforts to issue the respective CEDEARs before the closing of the cash market in Argentina.

7. What types of problems may occur in the settlement process of the Represented Shares in the U.S. and the CEDEARs in the Argentine market?

Share trading settles in the U.S. through DTC. The DTC clears securities (receive free and deliver free) and cash (delivery vs. payment and receive vs. payment). CEDEARs settle in Argentina through CDV, which clears securities just as cash transactions are processed through the Central Bank (MEP system).

Fails may occur if local and foreign brokers do not properly fund themselves to cover the portion of the trade that settles as DVP (please refer to Exhibit 1). The issuance and delivery of CEDEARs may fail if the Custodian does not receive the Represented Shares timely together with any issuance/cancellation fees payable.

8. What can the Argentine broker do in order to avoid fails and delays in the settlement of CEDEAR trades?

Accurate and complete settlement information has to be presented to the Argentine brokers counter-party and the Custodian in the case of issuance. On cancellation, the timely contact with the CEDEAR Issuer and the delivery of the CEDEARs to its account at CDV will minimize the time it takes to release Represented Shares in the foreign market.

9. What about other alternatives to avoid fails in the settlement of CEDEAR trades?

DTC provides a confirmation system denominated ID where the parties involved in a transaction would affirm their intent to settle their side of the trade. Therefore, on settlement date the trade would automatically settle within the DTC system.

Additionally, under certain arrangements, the Custodian can be authorized to borrow shares to settle a trade.

10. How are issuance and cancellation fees paid by brokers?

The issuance and cancellation fees are received by the Custodian in the U.S., at the time of receipt or release of the Represented Shares.

The Argentine broker must include the issuance/cancellation fee in the purchase/sale of the U.S. securities. The U.S. broker provides the fees to the Custodian, crediting the corresponding amount to the Custodian account at DTC, at the time of the settlement of the securities transaction.

11. How can brokers and investors find information about the issuer of the Represented Shares?

Information about issuers of U.S. Represented Shares can be obtained through different sources. One such source of information is the Prospectus presented by the CEDEAR Issuer and approved by the CNV. Another source of information is a Research Handbook prepared by Deutsche Bank Securities in Argentina. A third means available to brokers is EDGAR. EDGAR ("Electronic Data Gathering and Retrieval") is an electronic database of certain public filings of U.S. public companies, filed with the U.S. Securities and Exchange Commission of the United States ("S.E.C"). Access to EDGAR on the Internet is possible at the following internet address: http:/www.sec.gov.

12. How is liquidity of CEDEARs assured? Is it true that the U. S. shares are more liquid?

Buyers and sellers can be found in Argentina and in the U.S. Sometimes this creates an arbitrage situation, but as these securities are generally listed, there is a liquid U.S. market in most of the Represented Shares. Therefore, the Argentine broker with international resources or counter-parties should always be able to sell the CEDEARs or the underlying Represented Shares.

13. Why is it more attractive to invest in CEDEARs than in the respective Represented Shares issued in a foreign market?

Investment in a local instrument relieves the investor of certain transaction costs and global custody fees. Also, CEDEARs are priced in a local currency and dividends may be distributed in pesos or U.S. Dollars and trading is executed under local regulations, customs and in the same time zone. Finally, investment funds can invest in foreign securities. For investment funds, CEDEARS are classified as domestic securities, while the Represented Shares are foreign.

14. Are there similarities between the CEDEAR and the American Depositary Receipt?

There are many similarities, and some differences. Like ADRs, CEDEARs are issued, cancelled and traded in one market against the deposit of underlying securities in another market. The operating relationship formed between the CEDEAR Issuer in Argentina and the Custodian in the U.S. serves the market on both sides of a transaction (issuance/cancellation and deposit/release).

15. What are the major differences?

Most ADR programs in the U.S. are now sponsored by the issuer of the Represented Shares. In the CEDEAR structure, the first programs were "unsponsored" in this regard and the CEDEAR Issuer undertakes to perform the actions that are specified in Resolution 291.

Terms and Conditions

The following Terms and Conditions of Use apply to use of the "Deutsche Bank AG CEDEAR Website" (the "Website"). more

The following questions and answers were developed based on the most common inquiries received at Deutsche Bank as CEDEAR Issuer and Custodian. The answers should increase the understanding of the CEDEAR as a new Argentine security. more


This glossary of terms is provided as an attachment for additional assistance in understanding the CEDEAR structure and dynamics. more


Deutsche Bank CEDEAR/CEVA professionals will be pleased to discuss with investors and their brokers the material contained herein and to answer any questions that may arise related to CEDEARs/CEVAs, their features, uses and requirements. more

Agente de Liquidación y Compensación Integral y Agente de Negociación – Integral registrado bajo el N° 38 de la Comisión Nacional de Valores
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Last Update: January 27, 2012
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