NATIXIS - Universal registration document and financial report 2019

3 RISK FACTORS, RISK MANAGEMENT AND PILLAR III Risk management

Financial security 3.2.8.4 The Financial Security Department reports to Compliance and manages the anti-money laundering and counter-terrorist financing (AML/CTF), corruption and fraud prevention framework, and ensures that Natixis and its branches and subsidiaries comply with financial sanctions and embargoes. Natixis’ financial security was ramped up in numerous ways in 2019: stricter management was implemented for Financial Security’s V AML-CTF system; indicators used by the Financial Security Supervisory Committee V (AMLSOC) were enhanced and harmonized for the parent company, subsidiaries and branches, both in France and abroad; Natixis’ Financial Security teams continued to expand and a V Steering and Transformation team tasked with managing key projects, along with the Financial Security Supervisory Committee, was created; the international sanction compliance framework continued to be V enhanced, especially the system for screening transactions and client databases; an oversight Committee for first- and second-level controls that V contribute to the financial security risk management system was created; the control system was enhanced with the creation and execution V of a second-level permanent control plan for the activities of financial security teams in France and abroad. Anti-money laundering and counter-terrorist financing As part of its efforts to combat money laundering and terrorist financing, in 2019 Natixis enhanced its AML-CTF framework by integrating the new requirements from texts and reports issued by French, European and international authorities and public bodies. In accordance with the regulations in force, Natixis’ AML-CTF system primarily consists of the following items: in-depth and up-to-date information about the business V relationship, both before onboarding and throughout the relationship; a risk-based approach that categorizes clients based on identified V risks; a screening system for client databases and transactions that V uses automated tools or requests; an oversight system using permanent and periodic controls; V internal transmission of alerts and suspicions to the department V authorized to report suspicions to the relevant financial intelligence units; an employee training and information system. V In 2019, Natixis’ Financial Security enhanced steering tools.

Client information There is a client information procedure encompassing all the MiFID 2 obligations with respect to client onboarding, as well as the pre- and post-trade information due to clients based on their status as clients, professional clients or eligible counterparty as defined by regulations. There is also a specific procedure for cost and expense information, and key information documents for packaged products to be provided to non-professional clients, 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. The customer onboarding tool, known as Client Pass, has been rolled out across all Corporate & Investment Banking locations. It 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. Protection of client financial instruments and funds If financial instruments or funds belonging to clients are held, the clients’ ownership rights to these assets are maintained and guaranteed. The use of client-owned financial instruments for the institution’s own purposes is only permitted if clients have previously given their express consent. Similarly, regulations prohibit the signing of title transfer collateral arrangements with non-professional clients. Product governance MiFID 2 and IDD established the principle of product governance, which aims to define and regularly review a target market for all financial instruments and insurance products sold by Natixis and to ensure that the product was sold to the intended target. This includes ensuring that the distribution strategy is consistent with and appropriate for the target market. Product governance applies to all kinds of clients, regardless of their classification, and all products regardless of their level of complexity or trading venue. Adapting product governance, especially the definition and validation of the target market, to operations is handled through dedicated Committees. Handling of customer complaints This framework ensures that: customers receive transparent information on how their V complaints are being handled; complaints are handled effectively; and V corrective action is enforced to remedy any problems identified. V

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NATIXIS UNIVERSAL REGISTRATION DOCUMENT 2019

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