BPCE_PILLAR_III_2017

1 GENERAL STRUCTURE OF GROUPE BPCE’S INTERNAL CONTROL SYSTEM Participants in the control system

The Group control system relies on three levels of controls,in accordancewith banking regulationsand sound managementpractices:two levels of permanent controls and one level of periodic control, as well as the establishment of consolidated control processes in accordance with provisionsapproved byBPCE’sManagement Board.

Participants in the control system 1.1

Permanent Control by linemanagement (Level 1) Level 1 permanent control is the first link in internal control and is primarily performedby operationalor support departmentsunder the

implementing recommendations drawn up by Level ● functions onthe Level1 controlsystem; reporting to and alerting Level 2 control functions. ● Dependingon the situationsand activities,these Level 1 controls are performed, jointly if applicable, by a special-purpose Middle Office-type control unit or accounting control entity, by the operationalstaff themselves, or by line managers. Level 1 controls are formally reported to the relevant Permanent Control divisions or functions. 2 control

supervision of their linemanagement. These departmentsare responsible for:

implementingformalized,documented and reportable self-checks; ● documentingand verifying compliancewith transactionprocessing ● procedures, detailing the responsibility of those involved and the types of checkscarried out; verifying the compliance of transactions; ●

Permanent Control by dedicated entities(Level 2)

Level 2 permanent controls, within the meaning of Article 13 of MinisterialOrder A-2014-11-03on internalcontrol,are performedby entities dedicated exclusively to this duty within the Group’s Risk, Compliance and Permanent Control division.

Other central functions also contribute to the permanent control system: the Legal Affairs division,the Operationsdivision in charge of informationsystem security and the Group Human Resourcesdivision for certainissues affectingthe pay policy.

Periodic control(Level 3)

Periodiccontrol,within the meaningof Article 17 of MinisterialOrder A-2014-11-03 on internal control, is performed by the Group’s

InspectionGénérale division and implementedby the audit function across all entities and activities, including permanent control.

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Risk Report Pillar III 2017