REGULATORY DEVELOPMENTS NEWSLETTER AMERICAS

Transcription

1 VOLUME REGULATORY DEVELOPMENTS NEWSLETTER AMERICAS This newsletter is dedicated to helping you stay informed about regulatory change. It summarizes the latest regulatory developments affecting Northern Trust s business and our clients in this region and provides updates on how we anticipate adapting and supporting our clients through this period. Readers can access regulatory insights from Northern Trust via the links below. 1. Regulatory calendar 2012 and beyond 2 2. The Dodd-Frank Act: The Volcker Rule 3 3. The Dodd-Frank Act: OTC Derivatives 4 4. The Dodd-Frank Act: Legal Entity Identifier (LEI) 6 5. Money Market Fund Reform 7 6. The Foreign Account Tax Compliance Act (FATCA) 8 7. Form PF 9 8. Fee Disclosures for U. S. Employee Retirement Income Security (ERISA) Plan Sponsors and Retirement Plan Service Providers 10 northerntrust.com Regulatory Developments Newsletter Americas 1 of 12

2 REGULATORY CHANGE TIMELINE AMERICAS: KEY MILESTONES Q1 Proposed rules published February 2012 Q Q3 Final rules expected summer/fall 2012 US Derivatives CFTC final rule on reporting and record keeping requirements for historical swaps. Effective August 13, 2012 Q4 Global G20 commitment for central clearing through CCPs and OTC derivative trading on exchanges US Derivatives CFTC/SEC joint final rule on swap product definitions. Effective October 12, 2012 FATCA regime effective from January 1, Phased implementation to 2017 US Systemic Risk FDIC/Fed/OCC Final rule on market risk capital effective January 1, Q1 Q2 Q3 Q4 Form PF Quarterly filers filing deadline with SEC (assuming standard quarter end months), February 28, 2013 FFIs to enter into agreement with IRS by June 30, 2013 Form PF Quarterly filers filing deadline with SEC (assuming standard quarter end months), 31 May, 2013 US Derivatives: Systemic Risk Effective date for prohibition against bailouts of swaps entities July 16, 2013 Form PF Quarterly filers filing deadline with SEC (assuming standard quarter end months), August 31, 2013 US Recovery and Resolution Plans Compliance date December 31, 2013 Form PF Quarterly filers filing deadline with SEC (assuming standard quarter end months), November 30, to 2015 Withholding tax starts for fixed, determinable, annual or periodical income only, January 1, 2014 Withholding starts for gross proceeds Q to 2019 Withholding starts for foreign passthru payment January 2017 US Capital Requirements Agencies issue guidance on large bank stress testing. May 14, 2012 US Capital Requirements Agencies finalise large bank stress testing guidance July 23, 2012 US Dodd-Frank Title XIV (Mortgage Reform) Proposed/final rules expected Form PF Annual filers filing deadline with SEC (assuming a 12/31 year end), April 30, 2013 Form PF Annual filers filing deadline with SEC (assuming a 12/31 year end), April 30, 2014 US Dodd-Frank Volcker Rule came into effect July 21, 2012 with two year conformance period US Dodd-Frank Title X (CFPB Consumer Protection) Proposed/final rules expected Conformance thru 2015 US Dodd-Frank Title VII Mandatory clearing Q1/Q2 US Dodd-Frank Title VII Agencies clarify effective date for swaps pushout provision (DFA716) June 16, 2013 US Dodd-Frank Volcker Rule conformance period ends July 21, 2014 Global LEI CFTC order published September 4, 2012 Global LEI CFTC effective date of reporting order October 12, 2012 Global LEI Central operating unit incorporated by March 2013 Global LEI CFTC effective reporting date for NT April 10, 2013 Erisa Rule 404 (a) (5) (participant disclosures) Effective August 30, 2012 Global LEI CFTC swap dealers and major swap participants start reporting swap using LEI December 31, 2012 US Exec Compensation, Corporate Governance SEC rule compliance date for shareholder approval of exec compensation January 21, 2013 Erisa Rule 408 (b) (2) (sponsor disclosures) Effective July 1, 2012 US Consumer Protection FRB Rule effective date for debit card interchange fees and routing October 1, 2012 US Consumer Protection CFPB Rule effective date for regulation E Remittance Transfer Rule February 7, 2013 US Consumer Protection CFPB final rule on electronic fund transfers effective February 7, 2013 US Consumer Protection FRB. Final rule on debit card interchange fees and routing effective April 1, 2013 LEGEND AND GLOSSARY US Regulatory Changes Global Regulatory Changes CFPB: CFTC: CRD: DFA: Consumer Financial Protection Bureau Commodity and Futures Trading Commission Capital Requirements Directive Dodd Frank Act ERISA: Employee Retirement Income Security Act FATCA: Foreign Account Tax Compliance Act FDIC: Federal Deposit Insurance Corporation FHFA: Federal Housing Finance Administration FRB: LEI: OCC: SEC: Federal Reserve Board Legal Entity Identifier Office of the Comptroller of the Currency Securities and Exchange Commission Q50243 (09/12)

3 2. Update on the Volcker Rule Section 619 of the Dodd-Frank Act Banking entities that engage in proprietary trading or sponsor or invest in covered funds. Key takeaway The proposed rules would prohibit custody banks that sponsor or advise covered funds from providing credit to these funds, even in connection with routine payment and settlement services like intraday overdrafts, contractual settlement and contractual income payments. The definition of covered funds is so broad that substantially all non-u.s. funds and commodity funds would be included. The restrictions are also likely to have an adverse effect on the securities lending industry. The rules may prevent banks from providing routine and low-risk payment services and short-term cash investment for securities lending collateral pools that fall within the definition of covered fund, which would likely decrease market liquidity. The Volcker Rule attempts to limit perceived risks in the financial system associated with (i) proprietary trading operations of banks and their affiliated companies and (ii) investments by banks and their affiliated companies in private equity and hedge funds and relationships with such funds. Regulators issued a rule proposal in October Since regulators announced the proposed rule, there has been tremendous focus on the potential impact of the proposed rule, with more than 18,000 comment letters filed during an extended comment period, which ended on April 16, Northern Trust has filed comments individually, with peer custody banks and as part of industry groups to highlight our concerns about the adverse impact the proposed rules would have on the ability of U.S. financial institutions to remain competitive. On May 9, 2012, Northern Trust testified before the Senate Subcommittee on Financial Institutions and Consumer Protection on aspects of the proposed Volcker Rule that may have a significant impact on Northern Trust and our clients. While Northern Trust supports regulators efforts to strengthen the financial system, we continue to advocate for relief in areas that unnecessarily affect our business and our clients. NEXT STEPS The regulators have not indicated when the final rule will be issued. After the rule is final, a transitional period will give banks until July 21, 2014 to conform their activities to the rule, unless the period is extended. northerntrust.com Regulatory Developments Newsletter Americas 3 of 12

4 3. An Update on the Dodd-Frank Act and OTC Derivative Regulation Any investor trading in derivatives. Key takeaway December 31, 2012 Earliest date for required registration for swap dealers and major swap participants and reporting and record-keeping requirements for interest rate and credit swaps January 10, 2013 Swap dealers and major swap participants reporting and recordkeeping requirements for all swaps April 10, 2013 End users subject to reporting and recordkeeping requirements for all swaps The Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) have recently finalized much-anticipated rules, giving a clear compliance timeline for clearing over-the-counter (OTC) derivatives. On April 27, 2012, the CFTC finalized rules further defining swap dealer, security-based swap dealer, major swap participant and major security-based swap participant. These rules, in conjunction with the data recordkeeping and reporting requirements, created a hierarchy of parties responsible for reporting swap data to a trade repository. The CFTC product definitions were published in the in the Federal Register on August 13, 2012, and become effective on October 12, Product definition rules provide guidance on classification of several derivative instruments as either: Swaps Security-based swaps Mixed swaps None of the above An instrument s classification determines whether it is subject to regulation by the CFTC, the SEC or both agencies, or whether it falls outside the general regulatory authority of either agency. KEY IMPACTS The CFTC approved final regulations establishing a schedule to phase in compliance with new clearing requirements under the Dodd-Frank Act. Clearing requirements will be phased in based on the type of market participant entering into swaps subject to the clearing requirement. The compliance schedule identifies three categories of market participants and provides a compliance timeframe for each. Category 1 Entities Includes swap dealers, security-based swap dealers, major swap participants, major security-based swap participants and active funds Compliance schedule: 90 days after publication in the Federal Register. The compliance schedule provides these market participants with the least additional time to come into compliance based on, among other things, their level of activity, market experience, resources and their status as registrants with the CFTC or SEC. Category 2 Entities Includes commodity pools; private funds (other than active funds); or entities predominantly engaged in activities that are in the business of banking, or in activities that are financial in nature, provided the entity is not a third-party subaccount Compliance schedule: 180 days after publication in the Federal Register. The compliance schedule provides these market participants 90 more days than Category 1 entities because they are not be required to be registered with the CFTC, and are likely to be less experienced and less frequent users of the swap markets than those in Category 1. northerntrust.com Regulatory Developments Newsletter Americas 4 of 12

5 Category 3 Entities All other swaps, including those involving third-party subaccounts, ERISA plans and those not excepted from the clearing requirement Compliance schedule: Within 270 days after publication in the Federal Register. The compliance schedule provides third-party subaccounts the most additional time to bring their swaps into compliance because they are likely to require the most time for documentation, coordination and management. We continue to analyze the effects of all final rules on our clients and our business. On September 12, 2012, Northern Trust hosted a webinar for corporate and institutional clients on the Dodd-Frank Act relative to derivatives and its implication for buy-side firms. Click on the following link for the recording of the webinar: Derivatives Regulation: Dodd-Frank and Its Implications to the Buy-Side. We have also published an update on central counterparty clearing, please see: Central Clearing of Over-The-Counter Derivatives for more information. We are now supporting our investment operations outsourcing (IOO) clients with the post-trade support for swap clearing. Shortly, we will transition our custody clients cleared swap activity to a new model to improve transparency through daily reports available to our clients and their asset managers. Northern Trust will continue to invest in the support of the regulations affecting the derivatives industry, the most notable of which is the adoption to the cleared swap model. Simultaneously, we are continuing to evaluate new product ideas that would allow us to better serve our clients. northerntrust.com Regulatory Developments Newsletter Americas 5 of 12

6 4. Dodd-Frank Act: Legal Entity Identifier Any legal entity related to financial contracts, including banks, dealers/ brokers, corporations, pension funds and investment funds. Key takeaway Legal Entity Identifier (LEI) will act as a universal standard for uniquely identifying all entities related to a financial contract and will be implemented gradually across the industry First Phase affects any entity trading swaps instruments that are subject to the CFTC s jurisdiction To monitor systemic risk and manage financial stability, the U.S. Office of Financial Research (OFR) and other G20 regulators will require financial institutions to report on information such as exposure and market risk. As a result, a new global identification standard, the LEI, has been established to act as a universal standard for uniquely identifying all entities related to a financial contract. It will persist over an entity s lifetime regardless of corporate actions or other business or structural changes. As adoption evolves, LEI will enhance regulators ability to monitor and analyze threats to financial stability. It will also enable financial institutions to improve their internal credit and exposure risk management capabilities. LEI will be gradually implemented across the industry, driven by legislative and rulemaking processes in each jurisdiction. In the meantime, the Financial Stability Board is tasked with establishing, by March 2013, a Global LEI Central Operating Unit that will oversee global LEI utility implementation and issue implementation deadlines. KEY IMPACTS The CFTC is the first regulator to mandate the use of LEI for derivative swap contracts where one or more parties to the transaction is under the CFTC s jurisdiction. For more information on which entities are required to register as counterparties, visit the CFTC s website at A recent update from the CFTC on the timing of swap dealer registration clarifies that no entity will be deemed to be swap dealers, and therefore not required to register until a certain time as clarified in the CTFC s September 10 update. Learn more: CFTC Staff Responds to Questions on Timing of Swap Dealer Registration The CFTC has agreed to use an interim solution, the CFTC Interim Compliant Identifier (CICI) until a more global standard is determined. Learn more: Northern Trust s internal working groups are analyzing the effects of the new and emerging LEI-driven regulatory reporting requirements both on Northern Trust and on our clients. We continue to work closely with industry peers to develop best practices for implementing the standard and are a member of the Private Sector Working Group that advises and supports the FSB s global LEI Implementation Group. NEXT STEPS Although at the early stages of adoption, more regulators are beginning to include LEI in their draft technical specifications. Northern Trust continues to monitor developments closely and will communicate any impact to our clients. northerntrust.com Regulatory Developments Newsletter Americas 6 of 12

7 5. Update on the Potential Money Market Fund Reforms Investors in, and sponsors of, money market mutual funds, as well as issuers of securities that rely on money market mutual funds to help meet their short-term financing needs. Key takeaway The SEC Chairman announced the SEC will not be pursuing money market fund reforms in the near term. The FSOC or banking regulators may seek to impose their own requirements on money market funds. Since the 2008 market crisis, the SEC has focused considerable attention on systemic risk that it believes could be triggered by redemption runs on money market mutual funds. In 2010, the SEC amended the rules that govern how money market funds are invested in an effort to increase safety and liquidity for money market fund shareholders. While the 2010 changes tightened the requirements that pertain to the maturity, credit quality and liquidity of securities held in money market fund portfolios, the SEC has growing concerns about how money market funds would perform in a future significant financial crisis. Several industry groups have opposed imposing additional requirements on money market funds, citing the reforms implemented by the SEC in 2010 as sufficient. On August 22, 2012, SEC Chairman Mary Schapiro announced that the SEC was not going to pursue money market fund reforms due to opposition from three of the SEC s five commissioners. As a result, the Financial Stability Oversight Council (FSOC) may seek to assert control over money market funds by designating them systemically important financial institutions. In addition, banking regulators may attempt to indirectly regulate money market funds by changing capital requirements or by imposing additional requirements on banks that advise, or have affiliates that advise, such funds. This issue potentially affects a diverse group of clients in a variety of ways. Accordingly, Northern Trust is monitoring this situation very closely, and we are actively participating in several financial industry associations efforts, including those of the Investment Company Institute and the American Bankers Association. NEXT STEPS As regulators consider further money market fund reforms, fund managers are facing the possibility of the need to maintain a capital buffer, enforce redemption restrictions, and/or implement a floating NAV. These changes could have far-reaching implications on liquidity, choice and the future attractiveness of money market funds as investment vehicles. For further information, read Northern Trust s Point of View article Rethinking Cash Portfolios. northerntrust.com Regulatory Developments Newsletter Americas 7 of 12

8 6. An Update on the Foreign Account Tax Compliance Act (FATCA) Foreign financial institutions (FFIs) including non-u.s. banks, brokers, custodians, investment funds, retirement plans, insurance companies, and U.S. financial institutions that make payments to FFIs. Some governmentowned organizations, and retirement plans and insurance companies may be exempt from FATCA withholding Key takeaway FATCA requirements may cause fund managers to adjust their business models, including the nature of their investments, type of investors allowed and choice of distribution channels. The Foreign Account Tax Compliance Act of 2010 (FATCA) requires, among other things, foreign financial institutions (FFIs) to identify and report U.S. accountholders to the U.S. Internal Revenue Service (IRS). Those FFIs that do not comply will be subject to a 30% withholding tax on all U.S.-sourced payments they receive beginning in 2014 and this includes interest, dividends and proceeds from the sale of U.S. securities. FFIs also must obtain evidence of FATCA compliance from their accountholders and withhold certain payments to any accountholder that does not provide such evidence. Furthermore, FATCA requires U.S. individuals (and certain U.S. institutions) to report to the IRS their ownership of foreign financial assets if the value of such assets exceeds certain thresholds. Consistent with their earlier guidance, on February 8, 2012, the IRS and U.S. Treasury Department (Treasury) issued proposed regulations that reaffirm their phased implementation approach for FATCA withholding requirements. A Model Intergovernmental Agreement to Improve Tax Compliance and to Implement FATCA (the Model I IGA) was also published with a joint statement between the United States, France, Germany, Italy, Spain and the United Kingdom on July 26, Under the Model I IGA, FFIs would report directly to their local tax office instead of the IRS, and the United States would reciprocate in collecting and exchanging information on accounts held by residents of those countries. The United Kingdom and the United States signed the first intergovernmental agreement following this model on September 14, Joint statements were released on June 21, 2012, between Japan, Switzerland and the United States, announcing their commitment to explore the IGA approach. Other countries are also expected to adopt IGAs. There have been, however, no formal announcements to date with respect to Canada or Mexico. The proposed FATCA regulations and the joint statements indicate a general intent to move the FATCA rules in a direction that may be more practical for financial institutions to implement. However, the proposed regulations are complex and there are several outstanding issues on how FATCA will be implemented across jurisdictions. Northern Trust has organized a cross-disciplinary team to explore how we can help our clients meet their FATCA compliance objectives and also ensure that we are in compliance of FATCA. For clients, we are designing systems and operations to assist investment managers who choose to delegate FATCA operations (due diligence, withholding and reporting) to us as a transfer agent. We are also actively responding to the IRS s and Treasury s request for comments on the proposed guidance. Finally, we are committed to sharing knowledge with our clients such as our FATCA FAQs for Investment Managers. NEXT STEPS The Treasury and IRS have stated their intention to publish final FATCA rules by fall of 2012; and continue their efforts to obtain commitments from foreign governments to enter into IGAs. northerntrust.com Regulatory Developments Newsletter Americas 8 of 12

9 7. Form PF Update SEC-registered advisers, regardless of domicile, who offer private U.S. funds exempt from SEC registration, or privately placed non-u.s. domiciled funds to U.S. investors. Key takeaway This filing is tangible evidence that a new era in regulatory reporting affecting unregistered funds has begun. Advisers must create a thorough cross-functional oversight process to gather and validate the many data points required for the filing. Potential and existing investors will very likely begin to request insights into the nonpublic data used to create the filing. In late 2011, the SEC adopted a new regulatory filing requirement called Form PF. Similar in spirit to the Alternative Investment Fund Managers Directive in Europe, this filing will be used to review the activity of private fund advisers, i.e., SEC-registered advisers who operate and offer funds exempt from SEC registration through the use of two exemptions under the Investment Company Act of At the same time, the CFTC adopted new rules under the Commodity Exchange Act that require commodity pool operators and commodity trading advisors to utilize Form PF. The SEC and CFTC s stated goal in creating the new filing regulations is to aid in a more expeditious identification of system risk to the financial system, by assisting the newly created Financial Stability Oversight Council (FSOC). At a high level, Form PF includes the disclosure of information such as: Assets under management (AUM) Net asset value (NAV) Performance results on a monthly, quarterly and/or annual basis Investor information Usage of over-the-counter (OTC) and centrally cleared derivatives Exposure and monthly turnover by asset class Counterparties and posted collateral Liquidity of positions, financing and investors Risk measurements Valuation Weighted average maturity (WAM) Market-based NAV Percentage of the NAV due to mature in more than 397 days, along with maturity by instrument Portfolio concentration Investments in portfolio companies Creditors involved in financing private equity transactions KEY IMPACTS Form PF represents a new era in regulatory filing obligations to private fund advisors. The filing is detailed and affects individual advisers based on the composition and size of their private fund business. The form is divided into four sections: Section 1 Section 2 Should be filed by all private fund advisers with at least $150 million in regulatory assets under management (gross assets). Section 1 includes questions about the adviser and its private fund business, including details around its assets, financing, investors and performance. Should be completed by all filers who advise hedge funds with assets under management of $1.5 billion or more. This section specifically requests information regarding exposures and trading, risk metrics, financing, and investor information. northerntrust.com Regulatory Developments Newsletter Americas 9 of 12

10 Section 3 Section 4 Should be completed by filers who advise liquidity funds with gross assets of $1 billion or more. Questions in Section 3 relate to assets, financing and investor information. Should be filed by advisers who oversee private equity funds with gross assets of $2 billion or more. Section 4 requests information about financing and investments of the private equity funds. In determining filing thresholds, private fund advisers are required to aggregate similarly run, or parallel strategies. As such, separately managed accounts, and non-u.s. domiciled funds (if marketed or owned by U.S. persons) may fall into the scope of the filing. Northern Trust has been involved in aiding clients with their initial filings as of June 30, The majority of advisers will need to begin annual or quarterly filings as of December 31, Northern Trust is prepared to help adviser clients meet their filing obligations. 8. Fee Disclosures U.S. ERISA plan sponsors and retirement plan service providers. As part of the U.S. Department of Labor (DOL) initiative to require greater transparency for retirement plan fees and expenses, it issued two sets of regulations regarding the disclosure of fees and other plan-related information. The first set of regulations, known as 408(b)(2) (Sponsor Disclosures), provides that a contract or arrangement with a retirement plan service provider will not be considered reasonable under Section 408(b)(2) of ERISA unless the service provider discloses certain information about its services, fees and other compensation. The second set of regulations, known as 404a-5 (Participant Disclosures), requires administrators of plans that allow participants to direct investments to provide disclosure of certain fee, expense and investment performance information to participants and beneficiaries to meet the fiduciary requirements under Section 404(a) of ERISA. northerntrust.com Regulatory Developments Newsletter Americas 10 of 12

11 KEY IMPACT 408(b)(2) Why did the DOL create this regulation? 404(a)(5) To ensure plan fiduciaries receive information to determine the reasonableness of their arrangements with providers To ensure participants and beneficiaries receive sufficient information to make informed investment decisions What plans are covered? Defined benefit and defined contribution Defined contribution When does it take effect? July 1, 2012 August 30, 2012 Who is responsible? Covered service providers, like Northern Trust, must furnish information to plan fiduciaries Plan sponsors must issue disclosures to all eligible participants, including those eligible to participlate but not yet enrolled, and beneficiaries who can direct account investments Northern Trust provided updates on these regulations during the first half of 2012 to ensure our clients were aware of the new regulatory requirements. In addition, in order to comply with the 408(b)(2) regulations, Northern Trust prepared and distributed its required disclosures to all ERISA clients. The 408(b)(2) disclosures included a consolidated fee schedule and additional documents that compiled the required information. Going forward, Passport notification will be used to distribute updated 408(b)(2) disclosures that will now be required in connection with fee increases or other changes to Northern Trust s compensation for services provided to an ERISA plan. With respect to Section 404(a), Northern Trust can provide additional investment-fund data that some clients may need in order to comply with the 404a-5 regulations. The information we are able to provide will vary depending on the nature of the investments and the services Northern Trust is performing. For example, expenses accrued and incorporated into the net asset values (NAV) can be summarized and provided via a reporting/file as an additional service for clients for whom Northern Trust calculates NAVs via our UVRS service. For additional details, clients may contact their relationship manager. northerntrust.com Regulatory Developments Newsletter Americas 11 of 12

12 LEGAL, INVESTMENT AND TAX NOTICE: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. Client should under no circumstances rely upon this information as a substitute for obtaining specific legal or tax advice from their own legal or tax advisors. OPINIONS EXPRESSED are those of the author, do not necessarily reflect the opinions of Northern Trust Corporation, and are subject to change without notice. Information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed. Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois U.S.A., incorporated with limited liability in the U.S. The Northern Trust Company, London Branch (reg. no. BR001960), Northern Trust Global Investments Limited (reg. no ) and Northern Trust Global Services Limited (reg. no ) are authorised and regulated by the Financial Services Authority. The material within and any linked material accessed via this communication is directed to eligible counterparties and professional clients only and should not be distributed to or relied upon by retail investors. For Asia Pacific markets, it is directed to institutional investors, expert investors and professional investors only and should not be relied upon by retail investors. Northern Trust (Guernsey) Limited, Northern Trust Fiduciary Services (Guernsey) Limited, and Northern Trust International Fund Administration Services (Guernsey) Limited are licensed by the Guernsey Financial Services Commission. Northern Trust International Fund Administrators (Jersey) Limited and Northern Trust Fiduciary Services (Jersey) Limited are regulated by the Jersey Financial Services Commission. Northern Trust International Fund Administration Services (Ireland) Limited, Northern Trust Securities Services (Ireland) Limited and Northern Trust Fiduciary Services (Ireland) Limited are regulated by the Central Bank of Ireland. Northern Trust Global Services Limited has a Luxembourg Branch, which is authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Luxembourg Management Company S.A. is regulated by the Commission de Surveillance du Secteur Financier (CSSF). Northern Trust Global Investments Limited has a Netherlands branch, which is authorised by the Financial Services Authority and subject to regulation in the Netherlands by the Autoriteit Financiële Markten. Northern Trust Global Services Limited has a Netherlands Branch, which is authorised and regulated in the Netherlands by De Nederlandsche Bank. Northern Trust Global Investments Limited has a Sweden branch, which is authorised by the Financial Services Authority and subject to regulation in Sweden by the Finansinspektionen. Northern Trust Global Services Ltd (UK) Sweden Filial is authorised by the Financial Services Authority and subject to regulation by the Finansinspektionen. Northern Trust Global Services Limited operates in Abu Dhabi as a Representative Office. Our registered office is authorised and regulated by the Central Bank of the United Arab Emirates. The Northern Trust Company operates in Australia as a foreign authorised deposittaking institution (foreign ADI) and is regulated by the Australian Prudential Regulation Authority. The Northern Trust Company has a branch in China regulated by the China Banking Regulatory Commission. The Northern Trust Company of Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission. Northern Trust Global Investments Japan, K.K. is regulated by the Japan Financial Services Agency. The Northern Trust Company has a Singapore Branch, which is a foreign wholesale bank regulated by the Monetary Authority of Singapore. The Northern Trust Company operates in Canada as The Northern Trust Company, Canada Branch, which is an authorised foreign bank branch under the Bank Act (Canada). Trustee related services in Canada are provided by the wholly owned subsidiary The Northern Trust Company, Canada, an authorised trust company under the Trust & Loans Companies Act (Canada). Deposits with The Northern Trust Company and its affiliates and subsidiaries are not insured by the Canada Deposit Insurance Corporation. IRS CIRCULAR 230 NOTICE: To the extent that this message or any attachment concerns tax matters, it is not intended to be used and cannot be used by a taxpayer for the purpose of avoiding penalties that may be imposed by law. For more information about this notice, see northern trust 2012 the northern trust company northerntrust.com Regulatory Developments Newsletter Americas 12 of 12 Q52286 (10/12)