NATIXIS -2020 Universal Registration Document

RISK FACTORS, RISK MANAGEMENT AND PILLAR III Basel 3 Pillar III disclosures

Basel 3 Pillar III disclosures 3.3

Regulatory framework for the Pillar III report

Policy, validation and approval Throughout the financial year ended December 31,2020, and to date, Natixis has implemented a framework for controls and disclosure procedures to ensure the completeness and accuracy of the information provided in Natixis’ Pillar III.

The Pillar III report is prepared in accordance with the Capital Requirements regulation and the Capital Requirements Directive (CRR and CRD IV). In particular, Articles 431 to 455 of the CRR specify the framework requirements for Pillar III. The CRD IV legislative package entered into force on January 1, 2014. The information required under Pillar III has also been prepared in accordance with the “European Banking Authority Guidelines on materiality, proprietary ownership and confidentiality and frequency of disclosuresunder Articles 432(1),432(2) and 433 of the CRR” and the EBA. “Guidelines on the disclosureobligationsunder Part Eight of Regulation (EU) No. 575/2013” as amended by Regulation (EU) 2019/876 in force at the time of declaration.

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Capital management and capital adequacy 3.3.1 Regulation (EU) No. 575/2013 of the European Parliament and Council of June 26, 2013 (Capital Requirement Regulation or CRR) requires reporting companies (notably lending institutions and investment firms) to publish quantitative and qualitative information on their risk management activities. The framework in place to manage Natixis’ risks and risk exposure is described in this section and in the “Risks Management” section of this registratiodnocument. Natixis has chosen to provide information in respect of Pillar III disclosures in a separate section to that on risk factors and risk management in order to single out items concerning regulatory publication requirements.

a systemic risk buffer, i.e. an additional requirement for global V systemically important banks (G-SIBs), such as BPCE. Natixis is not subject to this buffer; in addition, other mechanisms have been introduced, including V mechanisms to limit dividend payouts, interest on Additional Tier One (AT1) subordinated debt and variable compensation (Maximum Distributable Amount, or MDA). All of these new provisions were accompanied by a phase-in mechanism, with the aim of gradually implementing the new requirements. As under Basel 2, the Basel 3 regulatory provisions are divided into three pillars: Pillar I: a set of rules defining the measurementof risks and capital V based on various possible methodologies and minimum observable requirements; Pillar II: a mechanism governing the role of the banking supervisory V authorities, allowing them to define specific regulatory capital requirementsfor each institution in accordancewith their risks and internal governance and oversight systems; Pillar III: requires institutions to disclose a large number of items V highlighting the level of risks incurred, capital adequacy and the adequacy of their management. This mechanism was considerably enhanced in 2016 with the publication of new guidelines by the EBA. Finally, as of November 2014, the European Central Bank is directly responsible for supervising significant European banks. The implementation of this new supervisory framework has continued since then. Drawing on the Supervision Review and Evaluation Process (SREP), the ECB is setting ratio levels for each institution to observe. Each institution under its purview is assigned a Pillar II Requirement (P2R) as well as Pillar II Guidance (P2G).

Regulatory framework 3.3.1.1 Since January 1, 2014, the Capital Requirements Directive (CRD) IV and the Capital Requirements regulation (CRR) have applied Basel 3 regulations in Europe. The CRD IV was enacted into French law by the French Ministerial Order of November 3, 2014. This regulatory framework, aimed at reinforcing the financial strength of banking institutions, has resulted in: a stricter definition of the capital items eligible to meet regulatory V capital requirements; reinforced regulatory capital requirements, in particular for V counterparty risk on derivatives; higher ratios to observe, specifically regarding CET1 capital and V capital buffers: a capital conservationbuffer, which represents 2.5% of total risk V exposures, a countercyclical capital buffer, i.e. the average of the V countercyclical capital buffer of each country in which Natixis holds risk exposures,weightedby the amount of said exposures. The rate applied in France has been zero since Q2 2020,

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2020