AmazonScience/document-haystack

1results of operations as well as the competitive environment generally. This risk may 2adversely impact our medium-term targets.3Depending on the changes to the existing retail investment framework implemented as part 4of the EU Commission’s retail investment strategy with possible changes to e. g. MiFID, 5UCITS or PRIIPS, the product landscape and the structure of the financial industry as a whole 6(including the design and distribution of financial products) could be impacted. In particular, a 7full inducement ban may significantly affect the financial sector in the EU, including us as 8asset manager. For asset managers, a full ban could lead to a significant shift in product 9demand, increased pressure on margins, and potential changes to the value chain for retail 10investment products.11Litigation, Regulatory Enforcement Matters and Investigations12Deutsche Bank and we operate in a highly and increasingly regulated and litigious 13environment, potentially exposing us to liability and other costs, the amounts of which may 14be substantial and difficult to estimate, as well as to legal and regulatory sanctions and 15reputational harm. Deutsche Bank and we are involved in various litigation proceedings, as 16well as regulatory proceedings and investigations by both civil and criminal authorities in 17jurisdictions around the world.18Among other matters:19— On 19 July 2023, Deutsche Bank, Deutsche Bank AG New York Branch, and other US 20affiliates including DWS USA Corporation entered into a consent order and written 21agreement with the Federal Reserve Board. The 2023 consent order alleges insufficient and 22tardy implementation of the post-settlement sanctions and embargoes and anti-money 23laundering control enhancement undertakings required by prior consent orders Deutsche 24Bank entered into with the Board in 2015 and 2017. The 2023 consent order further 25provides that the material failure to remediate the unsafe and unsound practices or 26violations described therein may require additional and escalated formal actions by the 27Board against Deutsche Bank, including additional penalties or additional affirmative 28corrective actions. If Deutsche Bank is unable to timely complete the control enhancement 29undertakings required, the damages could be substantial and the impact on Deutsche 30Bank’s results of operations, financial condition and reputation would be material. Such 31failures may also have material adverse consequences for us.32— The Public Prosecutor's office in Frankfurt continues its investigation into ESG related 33topics. We are engaged in discussions with the Public Prosecutor's office to resolve the 34matter, although the outcome is yet to be concluded. 35— With respect to civil litigation, DWS Group entities have been sued regarding investments 36made by individual fund investors in German and Luxembourg funds. These actions are 37among several actions also brought against other asset managers. The claims seek to 38challenge the validity and effectiveness of certain fund terms and conditions and in 39particular the individual fee clauses. We and our peers are defending against the claims 40which have not yet been resolved. Should the outcome of any individual court proceeding 41be adverse this may have wider implications for the Group and its peers. At present, a 42sufficiently reliable estimate of the amount of obligations cannot be made.43Guilty pleas by or convictions of us or our affiliates (including members of the Deutsche Bank 44Group) in criminal proceedings, or regulatory or enforcement orders, settlements or 45agreements to which Deutsche Bank, we or our affiliates become subject, may have 46consequences that have adverse effects on all or certain parts of our businesses. Moreover, if 47these matters are resolved on terms that are more adverse to us than we expect, the 48consequential costs, necessary changes to our businesses, and/or reputational impact may 49impact the achievement our strategic objectives or require us to change them. For example, 50due to Deutsche Bank’s past criminal convictions, we had to seek an individual exemption to 51avoid disqualification from relying on the Qualified Professional Asset Manager exemption 52under the US Employee Retirement Income Security Act. In April 2021, the US Department of 53Labor extended our exemption, which is now scheduled to expire on 17 April 2024, but which 54may terminate earlier if, among other things, we or our affiliates including Deutsche Bank 55were to be convicted of crimes in other matters. As this disqualification period extends until 5617 April 2027, we have submitted an application to the US Department of Labor for such 57further three-year exemption. On 21 February 2024 the US Department of Labor issued a 58proposed exemption which is now subject to public comment prior to the US Department of 59Labor’s consideration of final approval. Further on 28 February 2022, after a finding by the 60Department of Justice that Deutsche Bank violated a deferred prosecution agreement due to 61Deutsche Bank’s untimely reporting of the allegations made by a former employee of the 62Group in relation to ESG matters, Deutsche Bank agreed with the US Department of Justice to 63extend an existing monitorship and abide by the terms of a prior deferred prosecution 64agreement until February 2023 to allow the monitor to certify to Deutsche Bank’s 65implementation of the related internal controls. The US Department of Justice has reserved all 66rights to take further action regarding the earlier deferred prosecution agreement if it deems 67necessary, which may impact us.68Overall Assessment 69We believe that the asset management industry will continue to grow over the longer term 70and managers able to offer a wide range of Active, Passive, and Alternative strategies will be 71able to benefit from opportunities in the market.72        73To our Shareholders Summarised 74Management Report75Consolidated 76Financial Statements Compensation Report Corporate Govern-77ance Statement78Supplementary 79Information DWS 2023 Annual Report80 81Outlook8224 DWS Group