NATIXIS - Universal registration document and financial report 2019

RISK FACTORS, RISK MANAGEMENT AND PILLAR III Risk factors

and relationships between investment service providers and clients or investors. These new regulations (including MiFID II, PRIIPs, Insurance Distribution Directive, Market Abuse regulation, Fourth Anti-Money Laundering and Counter Terrorist Financing Directive, Personal Data Protection Regulation, and the EU Benchmarks Regulation) have major impacts on the company’s business processes. Compliance risk includes, for example, the use of inappropriate means to promote and market the bank’s products and services, inadequate management of potential conflicts of interest, disclosure of confidential or privileged information, or failure to comply with new client or supplier due diligence procedures, particularly with respect to financial security (including anti-money laundering and counter terrorist financing, compliance with embargoes, anti-fraud and corruption). Natixis' Compliance Department oversees compliance risk prevention and mitigation (see section 3.2.8) . Natixis nevertheless remains exposed to the risk of fines or other major sanctions imposed by regulatory and supervisory authorities, as well as civil or criminal legal proceedings that could have a material adverse effect on its financial position, business and reputation. In the course of business, Natixis is exposed to employee or third-party actions and behaviors that are unethical or violate laws Applicable to all Natixis employees, Natixis’ Code of Conduct formalizes the general principles of conduct in force at Natixis, and establishes guidelines for all employees regarding expected behavior when carrying out their duties and responsibilities. Any person working at Natixis, or at an entity at least 50%-owned by Natixis, must comply with the Code of Conduct, whether working on a permanent or temporary basis. This requirement is in addition to commitments to comply with applicable internal rules, and with national and international laws and regulations. Natixis also requires its suppliers and contractors to comply with the key principles of the Code of Conduct. To implement the Code of Conduct on a day-to-day basis, Natixis has established a conduct framework with its own committee (the Global Culture and Conduct Committee) and training program. (For a detailed description of the Code of Conduct and the conduct framework, see section 6.2 of this universal registration document.) But even with the adoption of a Code of Conduct and the creation of a conduct framework, Natixis is exposed to potential actions or behaviors by employees, suppliers and contractors that are unethical or not in clients' interest, that do not comply with the laws and regulations on corruption or fraud, or that do not meet financial security or market integrity requirements. Such actions or behaviors could have negative consequences for Natixis, damage its reputation or shareholder value, and expose Natixis, its employees or stakeholders to criminal, administrative or civil sanctions likely to adversely affect its financial position and business. and regulations, and that could damage its reputation and expose it to sanctions

Natixis’ access to certain forms of financing may be adversely affected in the event of a financial crisis or downgrade of its rating or that of the group Since 2011, Natixis’ funding structure has relied on a Joint Refinancing Pool between Natixis and BPCE. Natixis secures a portion of funding for its activities from Groupe BPCE through the public and private issuance of medium- and long-term vanilla debt (senior and subordinate) by BPCE S.A. Natixis is the group's medium- and long-term issuer for structured private sector refinancing transactions. If the credit ratings of BPCE and therefore of Natixis were downgraded by major rating agencies, or were BPCE struggle to secure funding from the markets, the liquidity of Groupe BPCE, and thus of Natixis, and the corresponding cost of funding could be adversely affected. Moreover, another crisis affecting the financial markets and/or banking sector, or adverse trends in market conditions could adversely affect Natixis’ financial position in terms of CET1 (see glossary to the universal registration document) and leverage, its balance sheet, and its results. Fair value variations of Natixis-held shares due to changes to issuer credit quality may adversely affect Natixis’ equity and solvency This risk concerns Natixis-held shares in the banking book category which are designated at fair value to balance out other comprehensive income (OCI). Natixis is mainly exposed to this risk through the debt instruments it holds as part of its liquid asset buffer. This risk manifests as a decrease in the financial assets’ value resulting from changes to credit issuer quality for debt securities (CSRBB — credit spread risk in the banking book). At December 31, 2019, no material increase of the credit risk of the shares held for the purposes of liquidity reserves was observed (see Note 6.3 of Chapter 5) . Should Natixis fail to comply with applicable laws and regulations, it could be exposed to heavy fines and other administrative and criminal sanctions likely to have a material adverse effect on its financial position, business and reputation Compliance risk is defined as the risk of legal, administrative or disciplinary sanctions, but also of financial loss or reputational damage, resulting from a failure to comply with the legislative and regulatory provisions, codes of conduct and standards of good practice specific to banking and Insurance activities, whether national or international. The banking and insurance sectors are subject to increased regulatory oversight, both in France and abroad. In the last few years there has been a substantial increase in new regulations that have introduced significant changes affecting both the financial markets Non-financial risks

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019