BPCE_PILLAR_III_2017

NON-COMPLIANCE RISKS, SECURITY AND OPERATIONAL RISKS French Banking Separation and Regulation Act (SRAB)

French Banking Separation and Regulation 11.3 Act (SRAB)

Groupe BPCE regularly updates the mapping of its market activities. In doing so, it determined that it needed to set up internal units subject to an exemptionwithin the meaning of Act No. 2013-672of July 26, 2013 onthe separation andregulationof banking activities. Since May 2015, the Group has used the mapping of its market activities to calculate, on a quarterly basis, the required indicators referred to in Article 6 of the MinisterialOrder of September 9, 2015. It also calculates additional annual indicators for the purpose of documentationand quantitativeindicatorssuch as the economicNBI or VaR of the internal units. Based on the work carriedout by the Group, it has not been necessary to create a ring-fenced subsidiary, and mandates have been implemented at the institutions in order to handle the various activities. In July 2017, the AMF and the ACPR published directives on market-making indicators aimed at harmonizing the calculation methodologiesof banking institutions in the French marketplace.At the end of 2017, Groupe BPCE had taken more than 80% of these recommendationsinto account.

Moreover, the Banque Populaire banks and the Caisses d’Epargne rolled out theSRAB system at June 30, 2017. In conjunction with the calculations and other work done in accordance with this act, an enhanced compliance program was adopted and implemented as from July 2015 in response to the Volcker Rule (a sub-section of the US Dodd-Frank Act) within the scope of BPCE SA and its subsidiaries.Taking a broaderapproachthan that of the French Banking Separation and Regulation Act, this program aims to map out all the financial and commercialactivities of BPCE SA group, notably to ensure that they comply with the two major bans imposed by the Volcker Rule: the ban on proprietary trading and oncertainactivitiesrelated to covered funds. In March 2017, the Group certified its compliance with the Volcker Rule with the US regulator, as it has every year since July 2015. In early 2017, Groupe BPCE appointed a SRAB-Volcker officer, responsible for the security of the banking segregation mechanisms.

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Risk Report Pillar III 2017