The fixed point Dirac operator on the lattice has exact chiral zero mo
des on topologically non-trivial gauge field configurations independen
tly whether these configurations are smooth, or coarse. The relation n
(L) - n(R) = Q(FP) where n(L) (n(R)) is che number of left (right)-han
ded zero modes and Q(FP) is the fixed point topological charge holds n
ot only in the continuum limit, but also at finite cut-off values. The
fixed point action. which is determined by classical equations. is lo
cal, has no doublers and complies with the no-go theorems by being chi
rally non-symmetric. The index theorem is reproduced exactly, neverthe
less. In addition, the fixed point Dirac operator has no small real ei
genvalues except those at zero, i.e. there are no 'exceptional configu
rations' (C) 1998 Elsevier Science B.V. All rights reserved.