This document summarizes various risks involved in investing in overseas markets, including legal, reputation, financial, operational, market practice, and ethical/enforcement risks. It provides two case studies on specific transactions involving Hong Kong and South Africa to illustrate these risks. It discusses issues related to differing legal interpretations across markets, securities lending, and uncertainty over tax regulations. The document concludes by emphasizing the need for risk awareness, management processes, and industry representation to help mitigate these risks.

1. Risks of In vesting in Overseas Market July 4 , 200 2 Ali H Kazimi Taxation Director Barclays Global Investors The views expressed in this presentation are the author's own and do not necessarily reflect those of Barclays Global Investors or its clients

2. Types of Risks Case Study 1 – Hong Kong Case Study 2 – South Africa Operational Risks Risk Mitigation Measures Discussion Topics

3. Types of Risks Legal Reputation Financial Operational Market Practice Ethical/ Enforcement

4. Case Study 1: Unit Trust to Lifeco Transfer Differing interpretations – over 20 markets, 8 charging UK Investor UK Unit Trust UK Life Company Assets Unit Redemption Unit-linked Policy

5. Case Study 1: Unit Trust to Lifeco Transfer HK legal construct Transaction 1: In-specie redemption Transaction 2: In-specie contribution UK Investor UK Unit Trust UK Life Company Unit-linked Policy HK Assets HK Assets Units

8. Case Study 2: South Africa UST Basis of Charging Local sub-custodian Offshore Local broker Un-certified Securities Tax (“UST”) Onshore Dematerialised Local sub-custodian Stamp Duty (unless satisfied by MST) All physical transfers Local broker Marketable Securities Tax (“MST”) On-exchange Physicals

12. Types of Risks Legal Reputation Financial Operational Market Practice Ethical/ Enforcement