Xetra-Gold®: Process description for exercising units
In the following, Clearstream Banking AG (CBF) describes the process for exercising Xetra-Gold units and outlines details which the investor's principal bank should provide to the intermediate custodian and how clients should place instructions. It also contains an overview of the delivery costs and the exercise form in the attachment.
Process description
Each Xetra-Gold unit gives the investor the right to delivery of one gram of gold, a right which can be exercised in three different ways:
- Exercise of delivery of retail gold bars with a fineness of 999.9/000 and weights from 1 g to 1 kg;
- Exercise of delivery of London Good Delivery gold bars with a fineness of minimum 995/000 and weights from 350 to 430 ounces (approx. 10.9 kg – 13.4 kg);
- Exercise of delivery against payment of the equivalent amount of gold deposited.
To exercise the right, the bearer of the bond should provide the following information:
- Name of applicant;
- Name of consultant and address of applicant's principal bank (custodian);
- Number of exercised Xetra-Gold units;
- Confirmation that the applicant is not prohibited by law, ordinance, articles of association or investment guidelines from owning physical gold (relevant to institutional investors).
If the latter could be confirmed (that is, gold may be delivered), the following details relating to the type of gold delivery should be provided to the bank:
- Required moulding (London Good Delivery gold bars or retail gold bars with a weight from 1g to 1000g) – London Good Delivery gold bars at 12.5 kg each can only be selected if 13,400 Xetra-Gold units or more are exercised.
- If the applicant selects retail gold bars, the required amount of bars with the following weight 1g, 5g, 10g, 20g, 50g, 100g, 250g, 500g and 1000g should be stipulated.
- If London Good Delivery gold bars were selected, the form the difference between the number of exercised Xetra-Gold® units and the weight in grams of the delivered London Good Delivery gold bars is to be made up should be stipulated. Applicants may choose either to receive the differential amount in retail gold bars or to have it transferred back in Xetra-Gold® units. In the latter case, they should stipulate the securities account to which the Xetra-Gold® units should be retransferred.
The investor's principal bank should supply the following details as well:
- Name of the branch willing to take delivery of the gold during normal business hours (point of delivery);
- Contact at branch with phone, fax and email address;
- The exercise form, which includes confirmation that any costs related to the exercise process will be borne by the bearer, should be signed by the bearer of the bond and the authorized signatory of his custodian bank.
Step-by-step description of exercise
Together with a representative of his principal bank, the investor creates the transaction and sends it to the principal bank's custodian with the relevant process data described above. The custodian in turn instructs its custodian, stipulating all process-relevant data, until a bank which is a client of Clearstream Banking is authorised.
The client may use the attached exercise form to instruct the designated sponsor (here Deutsche Bank AG, Frankfurt) to deliver a specified number of gold bars to the point of delivery. The process is similar to that for the delivery of physical certificates.
The client should send the original exercise form to the following address:
Deutsche Bank AG
„Ausübung Xetra-Gold“
CIB-Global Banking
Trust & Securities Services
Mainzer Landstraße 11-17
D-60329 Frankfurt am Main
To transfer the required amount of Xetra-Gold units to the blocked account of Deutsche Börse Commodities, the client should also place an FoP instruction via CASCADE or File Transfer/SWIFT. The instruction should contain the following details:
| Name of beneficiary: | Deutsche Börse Commodities GmbH |
| Bank: | Deutsche Bank AG, Frankfurt |
| BIC: | DEUTDEFFXXX |
| Settlement party: | REAG/DEAG (by SWIFT MT540 - MT543) |
| BIC: | DEUTDEFFCUS (by SWIFT MT540 - MT543) |
| Securities account: | 100 960 829 000 |
| IBAN: | DE39500700100960829000 |
| CBF account number: | 7015 (Deutsche Bank AG, Frankfurt) |
Delivery will be initiated if Deutsche Bank receives the securities and the application form by 10:00 CET. As a rule, it takes one to two weeks to deliver retail gold bars and four days for London Good Delivery gold bars from date of ordering. As soon as the delivered gold arrives at the point of delivery, the Xetra-Gold® units are removed and recovered from the "Ausübungskonto DBCo" (DBCo exercise account).
Due to the provisions of the Money Laundering Act (Geldwäschegesetz) only the branch of a bank may be used as point of delivery. Investors expecting a large delivery of gold should contact their principal bank to discuss the transfer of the gold to the point of delivery.
Delivery costs
The total price for exercising contains the costs charged by Umicore AG & Co. AG for refining, moulding, packing, and sending the gold to the point of delivery, as well as transport insurance and VAT. The investor shall bear these costs which will be collected through the custody administration fees levied by Clearstream Banking.
The following table is a guide for the cost of delivering gold within Germany and Switzerland, Austria and Luxembourg.
Germany
Amount delivered | Gold bars | Estimated delivery costs (EUR) |
1 kg | 1 x 1 kg | 325,00 |
1 kg | 10 x 100 g | 695,00 |
10 kg | 10 x 1 kg | 1.025,00 |
100 kg | 100 x 1 kg | 7.450,00 |
100 kg | 8 x 12.5 kg | 3.875,00 |
500 kg | 40 x 12.5 kg | 8.925,00 |
1000 kg | 80 x 12.5 kg | 16.275,00 |
Switzerland, Austria, Luxembourg
Amount delivered | Gold bars | Estimated delivery costs (EUR) | ||
Switzerland | Austria | Luxembourg | ||
1 kg | 1 x 1 kg | 2.175,00 | 2.675,00 | 1.575,00 |
1 kg | 10 x 100 g | 2.325,00 | 2.850,00 | 1.950,00 |
10 kg | 10 x 1 kg | 2.525,00 | 3.150,00 | 2.150,00 |
100 kg | 100 x 1 kg | 6.775,00 | 7.275,00 | 6.275,00 |
100 kg | 8 x 12,5 kg | 3.150,00 | 3.525,00 | 2.750,00 |
500 kg | 40 x 12,5 kg | 8.875,00 | 8.875,00 | 7.875,00 |
1000 kg | 80 x 12,5 kg | 15.475,00 | 15.475,00 | 14.150,00 |
Note: The prices listed above are exclusive of VAT and approximate values based on a gold price of EUR 72,00 per gram. The actual cost (including outside expenses) charged to the investor depends on the distance to the point of delivery and the current price of gold and the general cost of energy and transport, and increases with the amount of gold requested. Please note that the investor's principal bank may also levy further processing fees.
Alternative payment claim
Investors who are prohibited by law, ordinance, articles of association or investment guidelines from owning physical gold may return Xetra-Gold to the designated sponsor (Deutsche Bank AG) which will dispose of the gold deposited for the securities on the market. The sales proceeds will be paid to the investor after deduction of a small exercise fee of a current EUR 0.02 per Xetra-Gold unit. If the exercise instruction is placed by 10:00 CET on any London trading day, the gold will be sold same-day at the afternoon gold fixing price of the LBMA.
Further information
Further information is available on the Xetra-Gold website www.xetra-gold.com or from Clearstream Banking Client Services or your Relationship Officer.