J.P. Morgan Emerging Markets Learning Forums

Transcription

1 J.P. Morgan Emerging Markets Learning Forums Forum 18: General Nuances Accessing Emerging Markets T I A L October 27, 2011 S T R I C T L Y P R I V A T E A N D C O N F I D E N

2 J.P. Morgan Emerging Markets Learning Forums J.P. Morgan Network Management has launched a series of Emerging Markets Learning Forums consisting of monthly client dial-in sessions covering key topics around investing in emerging and developing markets. Forums will address general nuances of emerging markets, such as market entry, account structure, trade settlement, foreign exchange and regulations. Alongside these general forums will be specific market forums, which will provide clients with the key characteristics on the mechanics of markets such as India and China along with expanding regions such as the Middle East and Africa. TODAY S FORUM October 27, 2011: General Nuances: Accessing Emerging Markets This forum will provide clients with the key nuances for Emerging Markets versus Developed Markets with a particular focus on market entry and challenges foreign investors face when accessing Emerging Markets. Topics will also include account structures and documentation requirements. UPCOMING FORUMS: November 30, 2011: General Nuances: Settlement in Emerging Markets This forum will provide clients with a summary of key nuances of market entry and account opening when entering emerging markets. Account structures and documentation requirements will also be discussed as well as case studies and regional nuances. PAST FORUMS: Market Entry, Account Structure & Regulations ; Key Nuances of the Middle East ; Trading, Settlements & FX in Emerging Markets ; Key Nuances of India ; Corporate Actions and Tax in Emerging Markets, Key Nuances of Sub-Saharan Africa & Market Expansion ; Key Nuances of China A ; Key Nuances of Brazil ; Key Nuances of Eastern Europe ; Key Nuances of LATAM ; Key Nuances of Russia ; Taxation in Emerging Markets ; Key Nuances of Middle East ; Key Nuances of Indonesia and Taxation ; Key Nuances of Taiwan ; Key Nuances of Ukraine ; Key Nuances of Brazil & Caribbean FUTURE FORUMS will cover the following topics: South East Asia Materials and conference numbers will be distributed approximately 1 week before each session. Sessions will be recorded and a replay will be available for 14 days after each forum. We welcome and encourage you to submit suggestions for future forum topics. Should you have any questions or suggestions, please contact network.client.consulting@jpmorgan.com. 1

3 Agenda Topic Page Key Nuances: Emerging Markets versus Established Markets 2 Market Entry Requirements 5 Account Structure 8 Market Entry Nuances: Asia, India, Middle East and Russia 14 Appendix 19 2

4 Emerging Markets Nuances vs. Established Markets Market Nuances Established Markets Emerging Markets Investor Considerations Pre-Investment Requirements Markets mainly operate with omnibus structure. Markets operate with segregated beneficial owner structure with documentation requirements. Review documentation requirements (Investor Kits) & prioritize by complexity; account name to be consistent with documentation. Lead Time for account opening Funding / FX Repatriation Trading Settlement Average 2-3 days Minimal or no currency restrictions Minimal or no issues Minimal or no issues Title vs Cash (DVP) is common with minimal settlement exposure. Varies from 1 week up to 3 months or more upon receipt of final completed documents by local markets. Due to varying currency restrictions, FX may require execution with subcustodian; some currencies require pre-funding prior to trade execution; balance and overdraft restrictions. Potential challenges ranging from documentation requirements and approval from central bank or sign off from client's appointed local tax consultant leading to delays. Restrictions on liquidity, type of instruments, limitation on OTC vs On Exchange and / or use of local brokers. Settlement exposure is higher with DVP not achieved leading to increased counterparty and settlement system exposures. 3 Prioritize markets by lead time and level of documentation requirements. Review Foreign Exchange Requirement Matrix to review restrictions and potential pre-funding procedures. Review Foreign Exchange Requirement Matrix for restrictions and procedures. Review Investor Kits and market profiles for nuances and applicable restrictions; review with fund manager, e.g. on local broker appointments. Review settlement risk analyses on Market Intelligence to understand exposure.

5 Emerging Markets Nuances vs. Established Markets Market Nuances Established Markets Emerging Markets Investor Considerations Settlement Mechanisms Tax Foreign Ownership & Shareholder Disclosure Regulatory Framework Corporate Events One standard settlement mechanism; often the same across all asset classes. Regulations are established & structured. Very few Foreign Ownership Limits; Limited requirements for Disclosure. Developed regulatory regimes, which consistently and effectively apply market rules & oversight of market. Regulations on corporate governance are well established & structured. Certain markets may operate with more than one settlement mechanism, e.g. Chile (Vehicles), India (Margins), Malaysia (settlement options), Russia (settlement option). Tax regulations tend to be grey and / or complex with some markets requiring the appointment of local tax consultant. Capital Gains Tax tend to be more applicable. Stringent regulations and obligation of investors with consequences of non compliance impacting trading & settlement including fines. Regulations tend to evolve with sometimes ineffective, inconsistent supervision and clarity or the lack of regulatory oversight. Regulations are evolving. Entitlement & payment is a challenge & subject to change. 4 Review the different options and determine option at time of account opening; option to be agreed with fund manager as needs to be consistent. Review the J.P. Morgan tax profiles to understand the tax issues per market and ensure Tax documentation are submitted timely. Review foreign ownership and shareholder disclosure requirements and ensure holdings are monitored daily by relevant compliance teams. Review market profile and ensure relevant staff are signed up to Newsflashes to be prepared for regulatory changes. Review the corporate event restrictions in the market profiles.

6 Agenda Topic Page Key Nuances: Emerging Markets versus Established Markets 2 Market Entry Requirements 5 Account Structure 8 Market Entry Nuances: Asia, India, Middle East and Russia 14 Appendix 19 5

7 Market Entry Requirements Reasons market entry / pre-investment requirements exist: Regulatory requirement; Nominee Concept not recognised Prevent tax evasion (by local investors) Prevent capital speculation Money Laundering / Know Your Customer Foreign ownership monitoring at the beneficial owner level Foreign capital inflows and outflows are monitored Tax / Corporate Events / Proxy Voting Changes to market entry requirements occur as a result of: Lobbying efforts by foreign investors, global custodians, local subcustodians, local market participants Developments in the capital market infrastructure Stabilization of the economic environment in that it is less vulnerable to foreign investor inflows and outflows Increased interest in attracting foreign investment Changes in tax regulations 6

8 Standard Documentation Requirements Market Document Requirement: Standard While market documentation differs by market, below are some of the standard documents required by market. Example: Beneficial Owner Client A Establishing documentation of client Articles of Association / Incorporation, Declaration of Trust, Trust Agreement or equivalent for the beneficial owner are required to prove the establishment of the beneficial owner (in the name of Client A). Certificate of Incorporation or equivalent document for the beneficial owner (Client A) ideally showing registration with a regulatory authority from country of domicile of beneficial owner (UK: FSA, Luxembourg: CSSF, US: SEC). Power of Attorney Power of Attorney is required to enable our subcustodian to act on behalf of the beneficial owner (Client A) to fulfill its duties related to investment by the beneficial owner in the securities market. In many of the documentation markets, the nominee concept is not fully recognized, therefore clients are required to open segregated securities accounts in the full legal name of the beneficial owner. Authorized Signatory List Authorized Signature List is required to ensure that all signatures on the documentation are approved at the client level and will not pose any legal liability. The Authorized Signature List should detail the signatory's authority on behalf of the beneficial owner and their official position. The person signing the POA in name of beneficial owner (Client A) should have authorization to sign such document. Other: Certificate of Tax Residency (COTR) in the name of beneficial owner (Client A) issued by the country of domicile of Beneficial Owner s local tax authority. This is mainly required in order to benefit from tax treaty relief. 7

9 Agenda Topic Page Key Nuances: Emerging Markets versus Established Markets 2 Market Entry Requirements 5 Account Structure 8 Market Entry Nuances: Asia, India, Middle East and Russia 14 Appendix 19 8

10 Account Structure and J.P. Morgan s Policy Account Structure Ring Fencing of Assets J.P. Morgan s policy is to maintain omnibus accounts with subcustodians where a Nominee concept exists and is legally recognised in the local market. Securities in omnibus accounts are held in J.P. Morgan s name for the benefit of its customers (i.e. the beneficial owner). Segregated accounts are used where required by law or when client s assets are deemed best protected by doing so and / or where the Nominee concept is not fully recognised. Omnibus Accounts Assets held in J.P. Morgan / J.P. Morgan Nominee / subcustodian nominee for benefit of its clients (Beneficial Owners) By Tax Status or Domicile or Instrument Type Quicker entry into markets (J.P. Morgan account linkages) More efficient processing and recordkeeping The manner in which securities are held is determined, in the first instance, by local market regulations. The legal ring fencing of client assets is established by obtaining local legal opinion on the account structures applied. The legal opinion is refreshed annually. How client assets are held: Assets are held by J.P. Morgan or its subcustodian(s) Securities do not form part of J.P. Morgan s proprietary assets Segregated from assets of J.P. Morgan and its local subcustodian(s) Assets are not subject to creditor claims Segregated Accounts By legal beneficial owner name (match to name on tax certificate) By Instrument Type For Tax purposes or Proxy Voting At depository level as well in some markets (depository IDs) NOTE: Market entry can be a challenge for foreign investors and impede their ability to invest, e.g. some markets do not understand non incorporated entities or struggle to understand European Pension structures. 9

11 Account Structures Examples (Equities) Local Market J.P. Morgan Chase Bank, N.A. Local Subcustodian Bank Central Depository GTI: ABC Account Japan Mizuho / BoTM Account Name: J.P. Morgan Chase Bank, N.A. Re: Omnibus UK Pension Funds Registration Name: JASDEC JASDEC Account Name: Mizuho Re: Clients or BoTM Re: Clients GTI: ABC Account GTI: ABC Account GTI: ABC Account United Kingdom Indonesia Brazil J.P. Morgan Chase Bank, UK Account Name: Chase Nominees Ltd. Registration Name: Chase Nominees Ltd. Deutsche Bank AG Account Name: JPMCB - ABC Account Registration Name: KSEI J.P. Morgan S.A. DTVM Account Name: ABC Account Registration Name: ABC Account 10 Euroclear UK Account Name: Chase Nominees Ltd. KSEI Account Name: Deutsche Bank AG Nominees CBLC Account Name: ABC Account

12 Market Examples B E S T P R A C T I C E Documentation Complexity Documentation Requirement & Segregated Securities Account No Documentation & Segregated Securities Account No Documentation & Omnibus / Nominee Account L E A R N I N G F O R U M: M A R K E T E N T R Y J..P. M O R G A N E M E R G I N G M A R K E T S China A * Russia** Ukraine** Venezuela* Vietnam Pakistan* (for equity & corporate debt) Serbia* Slovak Republic Slovenia* South Korea* Sri Lanka* Taiwan* India* Bahrain* Brazil* (for equities) Bulgaria* Chile Costa Rica** Japan J-BIEM Jordan* Kuwait* Lebanon Oman* Qatar* Palestinian Territories*/** Poland Egypt* Ghana* Iceland*/** Lithuania** Malawi** Nigeria WAEMU** Zimbabwe** Romania* for equity & corp debt Saudi Arabia* Turkey* for equity & corp debt United Arab Emirates* * Segregated securities accounts at subcustodian and securities depository ** Restricted Market *** Segregated for Proxy Voting Market Entry Lead Time 11 Argentina* Bangladesh* Botswana* China B* Colombia* Cyprus* Greece* for equity & corp debt Indonesia* Israel Kenya* Mauritius* Morocco Peru* Tunisia Uganda Uruguay Zambia* Australia Austria Belgium Canada Czech Republic Croatia Denmark*** Estonia Euroclear Finland France Germany Hong Kong Hungary Ireland Italy Japan Equities Kazakhstan Latvia Luxembourg Malaysia Malta Mexico Namibia Netherlands New Zealand Norway Philippines Portugal* for FI Singapore South Africa Spain Sweden Switzerland Thailand Trinidad and Tobago United Kingdom United States

13 Key Considerations for Segregated Markets Account registration should be in the beneficial owner name (taxable/legal entity) Considered to be the legal beneficial owner of assets in most segregated markets Structure may be impacted by home domicile regulations, tax implications, local market nuances Documentation requirements and renewals of such documentation: Name should match both tax residency documentation (where applicable) and constitutive documents Different requirements for Equities vs. Fixed Income (India, Russia, Taiwan) Impact of future activity of the investor (e.g. merger / restructure, name change, change of fund manager) Lead time prior to investment Renewal requirements for registration, KYC forms, Powers of Attorney Legalization requirements Notarization as well as consularization or apostille requirements Name Changes Documentation is required in most markets to change the account name including proof of name change Change in Foreign Investor Information Notification to subcustodian for KYC (Russia, Slovenia) or regulatory authorities (India, Vietnam) 12

14 Key Considerations for Segregated Markets Investor IDs (e.g. Brazil CVM, India FIIs, UAE - NIN) Trading IDs obtained by J.P. Morgan s subcustodian at time of account opening (e.g. Bahrain, Brazil, China B, India, Oman) Trading ID obtained by investor via their broker (Egypt, Lebanon) Tax ID number obtain by local tax advisor (India, Pakistan) J.P. Morgan Restricted Markets Costa Rica, Iceland, Jamaica, Lithuania, Malawi, Palestinian Territories, Russia Equities, Ukraine Equities, WAEMU, Zimbabwe Restricted Market Side Letter is required acknowledging the special risks of investing in these markets Internal approval required; to be obtained by RM Appointment of Local Tax Advisors / Consultants (appointed directly by client) Appointment of tax advisor / consultant is the responsibility of the client and the relationship is separate from J.P. Morgan as custodian (e.g. China A, India, Pakistan, Romania, Taiwan) Broker Accounts Appointment of broker and / or related account setup prior to investing e.g. Nigeria, Slovenia, Qatar, Russia (for fixed income),taiwan, UAE Standing instructions in some markets for settlement of sales (e.g. Bahrain, Jordan, Ghana, Nigeria, Oman, Qatar, UAE) Costs Documentation legalization and translation costs may be incurred Registration fee (India - SEBI) / Account Opening fee (Kuwait) 13

15 Agenda Topic Page Key Nuances: Emerging Markets versus Established Markets 2 Market Entry Requirements 5 Account Structure 8 Market Entry Nuances: Asia, India, Middle East and Russia 14 Appendix 19 14

16 Market Entry Nuances: Asia Account Structure Segregated securities accounts at subcustodian: Bangladesh, China A, China B, Indonesia, Pakistan, South Korea, Sri Lanka, Taiwan, Vietnam Segregated securities account at CSD: All of above except Indonesia Omnibus markets: Hong Kong, Japan (except for JGBs), Malaysia, Philippines, Singapore, Thailand (except for CGT service) Documentation Requirements POAs, Articles of Association, Certificate of Incorporation, Application forms None: China B and Hong Kong, Japan, Malaysia, Singapore, Thailand (except for CGT service) Investor IDs Taiwan FINI, South Korea IRC, Pakistan UIN, India - FII Lead Time Costs Ranging between days (China B, Singapore, Hong Kong, Malaysia) to weeks (Taiwan, South Korea) to months (India, Sri Lanka, Vietnam) to 1 year (China A) Account opening fees: USD 250 per STC code for Vietnam; PKR 200 per CDC number and annually for CDC account maintenance fee for Pakistan; SEBI Application Fees: USD 5,000 per FII, USD 1,000 per subaccount plus renewal every three years for India Translation costs for China A and Vietnam Costs for legalization of documents Tax advisor costs for Bangladesh, China A, India, Pakistan, Taiwan and Vietnam (recommended) 15

17 Market Entry Nuances: India Market Entry Considerations: Foreign Institutional Investors (FIIs) are required to register with the Securities and Exchange Board of India (SEBI), the agency responsible for the regulation of the Indian capital markets. As the nominee concept is not fully recognized in India at this time, clients are required to open securities accounts in the full legal name of the beneficial owner at the subcustodian and at the NSDL. Cash accounts are opened at the Foreign Institutional Investor (FII) level for stand-alone FIIs or at subaccount level for FII subaccounts. Foreign investors must meet certain criteria including entity type to be eligible to apply for a FII licence Foreign investors must determine account structure: FII Structure / FII with subaccounts / Multi-Managed Subaccount (MMA) structure Documentation: Form A for FII application & Form AA for subaccount application Articles of Association & Certificate of Incorporation Audited financial statements and annual reports for the previous year (one year) SEBI Letter for FII and/or FII subaccount Registration FII Compliance Officer appointment Tax Consultant appointment PAN card Power of Attorney Declarations and Undertakings IPC Pre-Funding / J.P. Morgan Client Agreement Lien Language Costs: FII registration: USD 5,000 per FII for every 3 years Subaccount registration: USD 1,000 per account for every 3 years Tax consultant fees Lead time: From when completed documentation is received by the regulators FII registration: 4-5 weeks Subaccount registration: 3-4 weeks Unique Client Code (UCC), Clearing House Codes for BSE and NSE: 3 business days PAN: up to 3 weeks (Permanent Account Number (PAN) card obtained by tax consultant) Depository account: 2-3 business days after receipt of PAN 16 Material changes to FII application information must be advised to SEBI as soon as possible (possible fines & reputation damage for late disclosure).

18 Market Entry Nuances: Middle East Account Structure As the nominee concept is not fully recognized in all markets at this time, clients are required to open securities accounts in the full legal name of the beneficial owner at the subcustodian as well as at the CSDs. Trading and Custody Account structure in Bahrain, Jordan, Qatar and UAE Securities settle in the trading account either at the broker (Bahrain and Jordan) or at the subcustodian (Qatar and UAE). The local broker has control of assets held in the trading account. J.P. Morgan has a standing instruction in place with our subcustodian so that when securities are purchased and settled into the trading account, they are transferred to the client's custody account. In order to sell the securities, the shares need to be transferred back to the client's trading account prior to trade execution. Clients have the option of pre-advice and broker authorization standing instructions Documentation Requirements Articles of Association, Certificate of Incorporation, POA and ASL Documentation must be notarized Investor IDs For all markets e.g. UIN for Bahrain, NIN for Qatar and UAE, SDC for Jordan Lead Time: Between 1 and 3 weeks once completed documentation is received Costs None except Kuwait (50 KWD) Legalization costs 17

19 Market Entry Nuances: Russia J.P. Morgan has deemed Russia as a restricted market for Equities. All clients that are deemed eligible must understand the special risks and considerations of the market outlined in the Market Profile and the briefing memo on Equity Securities Settlement. An amendment / side letter to the GCA must be signed by the client prior to investment. As the foreign nominee concept is not fully recognized in Russia at this time, clients are required to open securities accounts in the full legal name of the beneficial owner at the subcustodian. As the local nominee concept is legally valid in Russia, securities are registered at the registrars and the securities depositories in the name of J.P. Morgan Bank International (Limited Liability Company) as nominal holder. The securities account holder on the books of the subcustodian, however, is recognized in the market as the beneficial owner. Cash accounts are maintained at the omnibus level. Documentation requirements include Articles of Association, Certificate of Incorporation, Certificate of Tax Residency, POAs, KYC questionnaire, ASL, Passport copies, Prospectus (if applicable), License (if applicable) The Account name must match legal documentation (Articles of Association and Certificate of Incorporation) and CoTR. POAs are required to be renewed every 3 years. All documentation must be notarised and apostilled. Note: Notarized and apostilled / consularized documents not issued in English must be accompanied by a certified English translation. Lead Time: 4 to 6 weeks to open account Translation Costs: A notarized translation in Russian of the Power of Attorney and constitutive documents is required in order to open the account at our subcustodian who must have copies in Russian on file for various purposes including corporate actions, taxation, etc. Translation costs and turnaround timeframes also vary depending on document volume, but are approximately USD 25 per standard page for translation from English into Russian. (Please note that translation from other languages is more expensive.) For the trading of government debt in accordance with Central Bank of Russia regulation No. 219-P of March 25, 2003 "On servicing and circulation of the federal government securities issues"), the brokerage arm of the subcustodian is appointed as the broker for the investor. Documentation requirements for the opening of the brokerage account include POAs, brokerage agreement and standing instructions. 18

20 Agenda Topic Page Key Nuances: Emerging Markets versus Established Markets 2 Market Entry Requirements 5 Account Structure 8 Market Entry Nuances: Asia, India, Middle East and Russia 14 Appendix 19 19

21 J.P. Morgan Network Management - Market Intelligence Key Market Developments and Changes NewsFlashes Fast-breaking news that impacts clients portfolios in local markets. Customized distribution by region, market or category Weekly Flash Summary Summary of NewsFlashes issued during that particular week Investor Kits Pre-Investment documentation required by certain local markets in order to approve foreign investors prior to trading Pre-Investment Requirements Market Profiles Settlement Risk Tools Subcustodian Information Market Entry Requirements Reference guide by market on whether documentation is required or segregated securities or cash accounts need to be opened prior to client investment Global Network Expansion Plan List of markets that J.P. Morgan is researching in order to determine the feasibility of offering custody services Country-by-country profiles containing detailed information on trading and settlement practices, taxation and investment regulations Settlement System Market Practice Assessment sm (SSMPA sm ): Tool that enables clients to assess risks for all instrument types and settlement systems Agent and Cash Network List of J.P. Morgan subcustodians and cash correspondent banks including addresses Global Custody Network BIC Codes This list provides the SWIFT BIC codes of all subcustodian sand cash correspondent banks in J.P. Morgan custodial network. Annual Review of Global Custody Network Annual package that details general and financial information relating to the subcustodians in the J.P. Morgan custodial network (Upon request) All information tools available on Market Intelligence at For ID & Password to J.P. Morgan ACCESS, please contact your Client Relationship Team 20

22 J.P. Morgan Network Management - Market Intelligence Securities Depository Information Securities Depository List A list of the names of all depositories in markets where J.P. Morgan provides custodial services Depository Safekeeping Assessments sm (DSA sm ) Tool that enables client to assess risk of securities depositories Trading Costs Equity Transaction Costs is a reference guide providing clients with the estimated costs associated with equity trades imposed on all investors, both resident and foreign, including broker commission, stock exchange and clearing charges, stamp duties, transaction cost, sales/vat, and securities exchange commission taxes. Trading Holidays Buy-in Practices and Penalties Foreign Exchange Restrictions Foreign Ownership Restrictions Shareholder Disclosure Requirements International Trading Schedule On J.P. Morgan ACCESS Market Intelligence, provides a search engine to review holidays by market and date range Document captures the main variable associated with buy-ins imposed to all investors in the local market. Key considerations are: standard trade settlements, buy-in timeframes, type (automatic or arbitrary) and the entity authorized to begin the buy-in process. Finally, specific fines and replacement costs charged to the failing party are also outlined An analysis examines alternatives, risks, issues and best practices when engaging in a securities-related foreign exchange transaction in global markets. Recommendations are made based on market specific risks and regulations. Emphasis is placed on structural, documentary and convertibility restrictions The analysis identifies foreign ownership limits imposed by local regulators that are unique to non-resident investors in global markets The analysis identifies for markets where applicable, shareholders' investment thresholds which require reporting to local regulators All information tools available on Market Intelligence at For ID & Password to J.P. Morgan ACCESS, please contact your Client Relationship Team 21

23 S T R I C T L Y P R I V A T E A N D C O N F I D E N T I A L This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client s subsidiaries, the Company ) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are accordingly subject to change. J.P. Morgan s opinions and estimates constitute J.P. Morgan s judgment and should be regarded as indicative, preliminary and for illustrative purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant valuation and other effects. Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target, to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors. IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. taxrelated penalties. J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities Inc., J.P. Morgan plc, J.P. Morgan Securities Ltd. and the appropriately licensed subsidiaries of JPMorgan Chase & Co. in Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by JPMorgan Chase Bank, N.A. J.P. Morgan deal team members may be employees of any of the foregoing entities. This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services.