NATIXIS_PILLAR_III_2017_EN

11 NON-COMPLIANCE RISK Financial security

HANDLING OF CUSTOMER COMPLAINTS

MARKET INTEGRITY

The system 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.

Natixis is equipped with a system to detect transactions that could constitute market abuse. Dedicated teams using a specialist surveillance tool process alerts and analyze potential market abuse. Transactions that could constitute market abuse are reported to the French Financial Markets Authority (AMF) and to local regulators, in accordance with the regulations in force. In 2017, the supervision processes and system underwent an in-depth review, and in 2018 the system will be updated to strengthen their analysis and detection capabilities.

Financial security 11.4

COMPLIANCE WITH FINANCIAL SANCTIONS AND EMBARGOES

Reporting to Compliance management, the role of the Financial Security Department is to manage the system dedicated to anti-money laundering and counter-terrorist financing (AML/CTF), anti-corruption and anti-fraud, and ensure the compliance of Natixis and its subsidiaries with financial sanctions and embargoes.

Natixis has implemented a framework to ensure compliance with regulations on applicable financial sanctions and embargoes. The framework draws on systems that verify client databases and filter transactions with a view to identify, on an ongoing basis, any person or entity subject to financial sanctions, specifically account freezes or restricted access to bank financing. It can apply account freezes aimed at Natixis clients in a timely manner, as well as prevent any transaction linked to sectors, goods or technologies that are subject to restrictions or bans pursuant to embargo measures. The jurisdictions subject to embargo undergo constant supervision and heightened diligence as part of a prudent and restrictive approach to prevent interpretation of regulatory scope. A team focused on financial sanctions provide assistance and advice to the Bank’s business lines and entities.

ANTI-MONEY LAUNDERING AND TERRORIST FINANCING

As part of the fight against money laundering and terrorist financing, and in accordance with regulations, Natixis has set up a framework that builds in: KYC and due diligence obligations, in line with a risk-based a approach, on customer onboarding, periodic reviews and throughout the business relationship; a transaction monitoring and control system based on a automated tools or requests that report alerts and suspicions to Natixis’ Financial Security Department; a procedure for reporting “suspicious” transactions to the a relevant financial intelligence unit in a timely manner; regular employee training and information to ensure a compliance with these obligations. As regards counter-terrorist financing, heightened vigilance measures have been implemented in the form of behavioral analysis tools. These measures identify risk factors and enable the application of in-depth and adapted due diligence procedures. Any transaction that is detected as potentially contributing to terrorist activities or potentially benefiting persons or entities linked to such activities warrants a suspicion report to the relevant financial intelligence unit.

ANTI-FRAUD MEASURES

The anti-fraud measures are steered by the Anti-Fraud Coordination Unit in collaboration with the concerned business lines. This unit is also in charge of drafting and implementing standards and principles for fraud risk management and of coordinating the anti-fraud officers’ network across the subsidiaries and branches of Natixis in France and abroad.

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NATIXIS Risk report Pillar III 2017