EFTA01379399

22 December 2017 EM Currency Handbook 2018: Still Fuel in the Tank Non €:ht':iverable IRS Regulatory: No restrictions Avg. ticket size: USD 20 -50mn Tenor: 6M - 20 years Bid/ask spread: 1 - 2bps Avg. daily vol: USD 2-4bn Ref. source: Reuters page <IKRWIRS> <PYKRW> Floating Leg: 91 Korean Local Banks CD rate (KWCDC Index) Conventions: Act/365, Act/365 (Fixed/Float), Quarterly Fixed versus 91 D KRW CD Non-Deliverable CCS Regulatory: No restrictions Avg. ticket size: USD 10mn Tenor: 1 - 10 years Bid/ask spread: 10 - 20bps Avg. daily vol: USD 10-20mn Ref. source: Reuters page <PYKRW> <IKRWIRS> Floating Leg: 6M LIBOR Conventions: Semi-Annual KRW Fixed Act/365 versus 6M USD LIBOR Floating. Act/360 Clearing and settlement regulation The Korea Securities Depository (KSD), the country's sole central securities depository, conducts the clearing and settlement of securities. KSD is under the supervision of the Ministry of Strategy and Finance, the Financial Supervisory Commission (FSC), and the Financial Supervisory Service (FSS). Foreign investors need to register with the FSS and obtain an Investment Registration Number/Certificate (IRC) prior to opening accounts. In addition, prior to placing an order, foreign investors must also appoint (1) a standing proxy who will file for the IRC and open a trading account with a local securities company, (2) a custodian bank who will facilitate domestic settlement, and (3) a foreign exchange bank. However, for a resident foreign individual or corporation, a standing proxy is not needed. Securities purchases or sales by non-resident investors have to be settled physically at the KSD or at a custodian bank. The original order is placed with a local broker or standing proxy (https://www.ksd.or.kr/eng/static/EB1305000000.home?rnenuNo=86). Both exchange and OTC transactions typically settle T+1. However, when foreign investments are involved, T+3 settlement is common (https://www ksd or kr/eng/static/EB1006009000 home7menuNo=109). Taxation Effective January 2011. a withholding tax (WHT) of 14% on interest income plus 1.4% local tax (bringing total withholding tax to 15.4%, http://english.mostoo.kr/) on non-resident investments in KTBs and MSBs was reintroduced. This WHT rate may be reduced by applicable double tax treaty. A 22% net capital gains tax (including the local surtax), or 11% on gross sale proceeds, whichever is lower, was also introduced. Income double tax treaties do provide an exemption from capital gain tax on disposal of KTBs and MSBs by non-residents. Deutsche Bank is not a qualified tax advisor. Tax information may vary. Kindly seek formal tax guidance for details. Deutsche Bank Securities Inc. Page 45 CONFIDENTIAL - PURSUANT TO FED. R. CRI M. P. 6(e) DB-SDNY-0076848 CONFIDENTIAL SDNY_GM_00223032 EFTA01379399