NATIXIS_PILLAR_III_2017_EN

NON-COMPLIANCE RISK Employees and professional ethics

Employees and professional ethics 11.2

CONFLICTS OF INTEREST

interest before taking action on the customer’s behalf, allowing the customer to make an informed decision on whether to proceed with the transaction.

Conflicts of interest are prevented by: setting up and monitoring of information barriers; a using risk maps to identify situations posing a risk of conflict of a interest; checking compensation policies; a being compliant with the rules of good conduct applicable to a Natixis staff. 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

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 and complete information barrier separating its Asset Management business activities within Natixis Asset Management from its other activities. 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 11.3

Defending customers’ interests is a core concern of Natixis’ activities and is reflected in the policies of each 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 interest of maintaining a high level of customer protection, in the fourth quarter of 2017 Natixis began a cross-functional review of its permanent control system covering this area for completion in the first half of 2018.

There is also a specific procedure on costs, expenses, and on key information documents for packaged products to be provided to non-professional customers before 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 money laundering, terrorist financing, management, financial sanctions and international embargoes for the entities in question. In 2017, Natixis continued to implement the Automatic Exchange of Tax Information regulation across all its French and international operations concerned and located in a country that has implemented the Common Reporting Standard (CRS). This regulation requires the identification of non-residents who own assets, more specifically financial accounts in the books of Natixis.

11

CUSTOMER INFORMATION

There is a customer information procedure encompassing all the MiFID II obligations on customer onboarding, as well as pre- and post-trade information due to customers according to their MiFID category.

131

NATIXIS Risk report Pillar III 2017