Société Générale / Risk Report - Pillar III

12 COMPLIANCE RISK, LITIGATION COMPLIANCE

MARKET INTEGRITY Market integrity covers a number of regulatory topics, namely legislation on the separation of banking activities (Volcker Rule and French Banking Act), regulations on over-the-counter (OTC) derivatives (Dodd-Frank Act supervised by the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission Rules, the European Market Infrastructure Regulation (EMIR), market abuse and manipulation regulations, and laws governing market transparency and staff transactions, in particular, the MAD/MAR and MiFID II European Directives. Measures are in place to ensure compliance with the rules on the separation of banking activities and on derivatives swaps in order to meet systemic risk reduction and risk mitigation objectives. MARKET ABUSE The Group’s Market Abuse procedure was revised in 2019. The procedure related to the management of listed issuer privileged information was rounded out with a staff transaction procedure. The procedures specfically set out the measures to be implemented to prevent or detect market abuse practices that may threaten the integrity of financial markets, i.e.: insider trading (transmission and use of privileged information); p market manipulation (price manipulation and the spreading of false p information). Specific ongoing focus is placed on the modernisation of automated detection and analysis tools, in addition to the training of Compliance staff in charge of these controls. In 2019, these systems were reinforced with procedures and controls on the administration, contribution and use of benchmarks. TAX COMPLIANCE Societe Generale implements control measures to ensure its transactions comply with local laws and regulations, and with its Tax Code of Conduct. These controls are performed by the Tax Division and the Compliance Division. Accordingly, all new products require approval with respect to these texts; this also applies to complex transactions either within the Group or with customers. Societe Generale complies with tax transparency standards. It applies the Common Reporting Standard (CRS) to all its entities. This standard enables tax authorities to be systematically informed of income received abroad by their tax residents, including where the accounts are held in asset management structures. In 2019, this reporting concerned 58 countries in which Societe Generale operates. Moreover, Societe Generale complies with the requirements of the United States FATCA (Foreign Account Tax Compliance Act), which aims to combat tax evasion schemes involving foreign accounts or entities held by US taxpayers. Non-US financial intermediaries are thus responsible for identifying US taxpayers in their customer base in order to declare the income received by said taxpayers, directly or indirectly, to the US tax administration, thereby enabling an automatic reconciliation with their individual tax returns. The tax transparency objectives have been achieved by generating a tax report filed at national level and sharing tax information between partner countries on the basis of existing bilateral tax treaties and inter-governmental agreements (IGAs). Societe Generale Group's principles on combatting tax evasion are governed by the Tax Code of Conduct. The Code was updated in March 2017 and approved by the Board of Directors after review by the Executive Committee. It is a public document can be consulted on the Bank's institutional investor portal: https://www.societegenerale.com- /sites/default/files/documents/Code%20de%20conduite/tax_code_of_- conduct_of_societe_generale_group_uk.pdf.

The five main principles of the Code of Conduct are as follows: Societe Generale ensures that the tax rules applicable to its business p in accordance with internationalconventions and national laws are respected in all countries where the Group operates. In its relations with its clients, Societe Generale ensures that they p are informed of their tax obligations relating to transactions carried out with the Group and the Group complies with the reporting obligations, which are applicable as bookkeeper or in any other way. In its relations with Tax Authorities, Societe Generale is committed p to strictly respecting tax procedures and ensures that it maintains open and transparent relations to maintain its reputation. Societe Generale does not encourage or promote tax evasion for p itself or its subsidiaries or for its clients. Societe Generale has a tax policy in line with its strategy of p sustainable profitability and refrains from any operation, whether for its own account or for its clients, whose main purpose or effect is tax motivated, unless this is consistent with the intention of the legislation. The Board of Directors annually reviews the application of the Code and the procedures and systems in place within the Group to ensure that new products and new establishments comply with the Group's tax principles. Relationships with legislators and tax law policy makers are governed by the Charter for Responsible Advocacy with respect to Public Authorities and Representative Institutions (https://www.societe- generale.com/csr-report/files/Charter_responsible_advocacy_SG.PDF)- responsable%20SG.PDF). The Group is committed to a strict policy with regard to tax havens. No establishment of the Group is authorised in a state or territory on the official French list of ETNCs (1) (“États et Territoires Non Coopératifs” in French) and internal rules have been in place since 2003 to monitor a larger list of countries or territories. The Group follows OECD transfer pricing standards. However, local constraints may require deviations from OECD methodologies, in which case the local constraints must be documented. The Group publishes annual information on establishments and activities on a country-by-country basis (for more information, see Chapter 2.11 "Information about geographic locations and activities at 31 December 2019", p. 65 of the 2020 Universal Registration Document) and confirms that its presence in a certain number of countries is based exclusively on commercial reasons and not motivated by the transaction's tax set-up. The Group also complies with the tax transparency rules of the countries concerned. (CbCR - Declaration country by country). It is currently implementing the new European directive on administrative cooperation in the field of taxation (referred to as DAC 6) which will impose reporting of cross-border tax arrangements as of mid-2020. Importantly, the account-keeping entities of the Private Banking Business Unit are established exclusively in countries with the strictest tax transparency rules imposed by G20 member countries and the OECD. These countries ratified the Convention on Mutual Administrative Assistance in Tax Matters, introduced the automatic exchange of information in financial accounts (CRS) and obtained the "largely compliant" and "compliant" rating as part of the peer review process conducted under the aegis of the OECD. Assets deposited in Private Banking books are subject to enhanced scrutiny using comprehensive due diligence procedures to ensure they are tax compliant. In accordance with regulatory requirements, Societe Generale also includes tax fraud in its anti-money laundering procedures.

including the European Union blacklist (1)

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PILLAR 3 - 2020 | SOCIETE GENERALE GROUP |