NATIXIS - 2018 Registration document and annual financial report

RISK FACTORS, RISK MANAGEMENT AND PILLAR III Risk management

The operating rules of the Compliance Department are set out in a charter approved by Natixis’ Senior Management Committee.

Pursuant to regulations in force, the entry of sensitive transactions into ODEON allows Compliance to rapidly identify issuers to be placed on the watchlist or on the prohibition list, as well as employees to be placed on the insider list. Customer protection 3.2.8.3 The protection of customers’ interests is a core concern for Natixis that is reflected in the policies of every entity in France and abroad. In all circumstances, employees are required to serve customers with diligence, loyalty, honesty and professionalism, and to offer financial products and services that are appropriate to customers’ abilities and needs. Accordingly, and in the interests of maintaining a high level of customer protection, at the end of 2017 Natixis began a cross-functional review of its permanent control system covering this theme. The review was completed in 2018 and resulted in the strengthening of procedures and the introduction of additional controls. The entry into force of MiFID 2, PRIIPS and IDD required adapting the various customer information and knowledge systems. To find out more about the protection of customers' personal information see section 3.2.8.6. Protection of personal data. Customer information There is a customer information procedure encompassing all the MiFID 2 obligations on customer onboarding, as well as the pre- and post-trade information due to customers according to their MiFID category. There is also a specific procedure on costs, expenses, and on key information documents for packaged products to be provided to non-professional customers pre-trade, thus ensuring Natixis’ compliance with PRIIPS obligations. Know Your Customer (KYC) The procedures for customer onboarding are in line with the various regulatory requirements governing the prevention of money laundering and terrorist financing and compliance with embargoes and sanctions (AML-CTF), the prevention of corruption (Sapin II) and the prevention of tax avoidance (FATCA and AIE). The onboarding procedures are also designed to protect customers (through compliance with MiFID, EMIR and the Dodd-Frank Act). In 2018, Natixis began the roll-out of a new customer onboarding tool named Client Pass. It is installed in all of Corporate & Investment Banking’s offices and is part of a program to digitize the onboarding process. This includes the introduction of an Internet portal that customers can use to enter information online. Handling of customer complaints This framework ensures that: customers receive transparent information on how their a complaints are being handled; complaints are handled effectively; and a corrective action is enforced to remedy any problems a identified.

Tools The Compliance Department is equipped with a set of tools to cover all the areas within its remit, namely: behavioral analysis tools, used in conjunction with KYC tools, a to detect money laundering and internal fraud and prevent terrorist financing; data-comparison systems to verify client databases and filter a transactions to ensure compliance with embargoes; tools to track sensitive transactions, keep insider lists, manage a conflicts of interest and detect instances of market abuse. Employees and professional ethics 3.2.8.2 Conflicts of interest Conflicts of interest are prevented by: using risk maps to identify situations posing a risk of conflict of a interest; setting up and monitoring of information barriers; a checking compensation policies; a being compliant with the rules of good conduct applicable to a Natixis staff; and staff training. a Conflict of interest is managed through: compliance with the conflict of interest prevention framework; a cooperation among the business lines, Compliance and a Management in order to identify and manage conflicts of interest; close monitoring by Compliance with the help of a a transactional conflict detection tool; and an escalation process for mediating unresolved conflicts of a interest if needed. Whenever the risk of compromising a customer’s interests becomes unavoidable in spite of the internal procedures in place, Natixis informs the customer of the nature of the conflict of interest before taking action on the customer’s behalf, allowing the customer to make an informed decision on whether to proceed with the transaction. Circulation of information Information barriers are put in place and reviewed each time the organizational structure changes in order to prevent the unwarranted circulation of confidential information. These barriers function as partitions between business lines and departments, setting limits to the circulation of information on a need-to-know basis. As such, information is transmitted only in the customer’s interest and only to employees who absolutely require the information to carry out their duties. These barriers may be organizational, physical or electronic and may be permanent or temporary. Natixis has set up a permanent information barrier separating its Asset Management business activities within Natixis Investment Managers from its other activities.

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Natixis Registration Document 2018