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<br /> Viewing Instructions<br /> Table of ConTenTs<br /> Each page of the publication is represented by a<br /> thumbnail. Simply click on the page you would like to visit.<br /> Image ClIppIng<br /> This icon enables you to select and email a particular<br /> area on a page as opposed to an entire page to your<br /> friend or client.<br /> prInT publICaTIon<br /> Print a selected page or the entire publication.<br /> DownloaD a pDf<br /> Download a selected page, multiple pages or the entire<br /> publication as a PDF file.<br /> searCh<br /> Search by keyword.<br /> publICaTIon page naVIgaTIon<br /> These icons will allow you to navigate through the pages<br /> of this publication by clicking on the left and right arrows<br /> or entering a page number.<br /> Global Regulatory Update<br /> Financial Institutions Edition<br /> July 2011<br /> <br /> Contents<br /> PART I: Issues affecting the banking industry and the broader market<br /> 1) Capital and liquid<a title="Global Regulatory Update - 841593 page 1" href="http://viewer.zmags.com/publication/e010f0f9?page=1"> Viewing Instructions Table of ConTenTs Each pag</a> <a title="Global Regulatory Update - 841593 page 2" href="http://viewer.zmags.com/publication/e010f0f9?page=2"> Global Regulatory Update Financial Institutions E</a> <a title="Global Regulatory Update - 841593 page 3" href="http://viewer.zmags.com/publication/e010f0f9?page=3"> </a> <a title="Global Regulatory Update - 841593 page 4" href="http://viewer.zmags.com/publication/e010f0f9?page=4"> Contents PART I: Issues affecting the banking in</a> <a title="Global Regulatory Update - 841593 page 5" href="http://viewer.zmags.com/publication/e010f0f9?page=5"> Contents continued... 5) Funds and fiduciaries a)</a> <a title="Global Regulatory Update - 841593 page 6" href="http://viewer.zmags.com/publication/e010f0f9?page=6"> Contents continued... 4) Issuer Services a) Domi</a> <a title="Global Regulatory Update - 841593 page 7" href="http://viewer.zmags.com/publication/e010f0f9?page=7"> </a> <a title="Global Regulatory Update - 841593 page 8" href="http://viewer.zmags.com/publication/e010f0f9?page=8"> Welcome This Global Regulatory Update is design</a> <a title="Global Regulatory Update - 841593 page 9" href="http://viewer.zmags.com/publication/e010f0f9?page=9"> </a> <a title="Global Regulatory Update - 841593 page 10" href="http://viewer.zmags.com/publication/e010f0f9?page=10"> PART I: Issues affecting the banking industry and</a> <a title="Global Regulatory Update - 841593 page 11" href="http://viewer.zmags.com/publication/e010f0f9?page=11"> The G20 Seoul meeting also confirmed that addition</a> <a title="Global Regulatory Update - 841593 page 12" href="http://viewer.zmags.com/publication/e010f0f9?page=12"> In terms of implementation, Basel III rules will </a> <a title="Global Regulatory Update - 841593 page 13" href="http://viewer.zmags.com/publication/e010f0f9?page=13"> The run-off rate for unsecured wholesale funding </a> <a title="Global Regulatory Update - 841593 page 14" href="http://viewer.zmags.com/publication/e010f0f9?page=14"> Banks will have to maintain a small risk charge (</a> <a title="Global Regulatory Update - 841593 page 15" href="http://viewer.zmags.com/publication/e010f0f9?page=15"> The elimination of the beneficial Credit Conversio</a> <a title="Global Regulatory Update - 841593 page 16" href="http://viewer.zmags.com/publication/e010f0f9?page=16"> In virtually all cases, holders of shorter-term d</a> <a title="Global Regulatory Update - 841593 page 17" href="http://viewer.zmags.com/publication/e010f0f9?page=17"> In addition to the priority of claims and the pro</a> <a title="Global Regulatory Update - 841593 page 18" href="http://viewer.zmags.com/publication/e010f0f9?page=18"> planning for its US operations would be integrate</a> <a title="Global Regulatory Update - 841593 page 19" href="http://viewer.zmags.com/publication/e010f0f9?page=19"> Firms are required to undertake an Individual Liq</a> <a title="Global Regulatory Update - 841593 page 20" href="http://viewer.zmags.com/publication/e010f0f9?page=20"> 2) Supervision a) The new supervisory framework f</a> <a title="Global Regulatory Update - 841593 page 21" href="http://viewer.zmags.com/publication/e010f0f9?page=21"> The implications The reform of the supervisory ar</a> <a title="Global Regulatory Update - 841593 page 22" href="http://viewer.zmags.com/publication/e010f0f9?page=22"> The six categories are as follows: 1. Size 2. </a> <a title="Global Regulatory Update - 841593 page 23" href="http://viewer.zmags.com/publication/e010f0f9?page=23"> to a more in-depth review, with a greater focus o</a> <a title="Global Regulatory Update - 841593 page 24" href="http://viewer.zmags.com/publication/e010f0f9?page=24"> • The core principles for systemically import</a> <a title="Global Regulatory Update - 841593 page 25" href="http://viewer.zmags.com/publication/e010f0f9?page=25"> Following the publication of the final consultativ</a> <a title="Global Regulatory Update - 841593 page 26" href="http://viewer.zmags.com/publication/e010f0f9?page=26"> Part II: Regional regulatory and market changes </a> <a title="Global Regulatory Update - 841593 page 27" href="http://viewer.zmags.com/publication/e010f0f9?page=27"> Additionally the draft proposal which proposes se</a> <a title="Global Regulatory Update - 841593 page 28" href="http://viewer.zmags.com/publication/e010f0f9?page=28"> 2) The Treatment of ‘niche’ schemes? The Commissi</a> <a title="Global Regulatory Update - 841593 page 29" href="http://viewer.zmags.com/publication/e010f0f9?page=29"> Overall, Citi has been playing a leading role in </a> <a title="Global Regulatory Update - 841593 page 30" href="http://viewer.zmags.com/publication/e010f0f9?page=30"> 3. The maximum execution cycle times are limit</a> <a title="Global Regulatory Update - 841593 page 31" href="http://viewer.zmags.com/publication/e010f0f9?page=31"> Citi continues to be instrumental in promoting a </a> <a title="Global Regulatory Update - 841593 page 32" href="http://viewer.zmags.com/publication/e010f0f9?page=32"> The implications Even though the primary objectiv</a> <a title="Global Regulatory Update - 841593 page 33" href="http://viewer.zmags.com/publication/e010f0f9?page=33"> European Directive 2002/47/EC on financial collate</a> <a title="Global Regulatory Update - 841593 page 34" href="http://viewer.zmags.com/publication/e010f0f9?page=34"> All Global Transaction Services clients with a GB</a> <a title="Global Regulatory Update - 841593 page 35" href="http://viewer.zmags.com/publication/e010f0f9?page=35"> Together with the ECB’s T2S initiative, it is lik</a> <a title="Global Regulatory Update - 841593 page 36" href="http://viewer.zmags.com/publication/e010f0f9?page=36"> instead of its current status as an ancillary ser</a> <a title="Global Regulatory Update - 841593 page 37" href="http://viewer.zmags.com/publication/e010f0f9?page=37"> The above changes and restrictions will apply to </a> <a title="Global Regulatory Update - 841593 page 38" href="http://viewer.zmags.com/publication/e010f0f9?page=38"> the specification to the development stage. Follow</a> <a title="Global Regulatory Update - 841593 page 39" href="http://viewer.zmags.com/publication/e010f0f9?page=39"> The new European supervisory body, ESMA, will pro</a> <a title="Global Regulatory Update - 841593 page 40" href="http://viewer.zmags.com/publication/e010f0f9?page=40"> Through the provisions within EMIR dealing with t</a> <a title="Global Regulatory Update - 841593 page 41" href="http://viewer.zmags.com/publication/e010f0f9?page=41"> However, one of the main concerns, which has led </a> <a title="Global Regulatory Update - 841593 page 42" href="http://viewer.zmags.com/publication/e010f0f9?page=42"> • Transaction reporting: currently, transacti</a> <a title="Global Regulatory Update - 841593 page 43" href="http://viewer.zmags.com/publication/e010f0f9?page=43"> • Customer classification: the text proposes t</a> <a title="Global Regulatory Update - 841593 page 44" href="http://viewer.zmags.com/publication/e010f0f9?page=44"> The legislative approach There is currently a pat</a> <a title="Global Regulatory Update - 841593 page 45" href="http://viewer.zmags.com/publication/e010f0f9?page=45"> Citi is engaged in listening to clients’ views on</a> <a title="Global Regulatory Update - 841593 page 46" href="http://viewer.zmags.com/publication/e010f0f9?page=46"> The main provisions are as follows. 1. Notifica</a> <a title="Global Regulatory Update - 841593 page 47" href="http://viewer.zmags.com/publication/e010f0f9?page=47"> 3. CCP buy-in procedures CCPs providing clearin</a> <a title="Global Regulatory Update - 841593 page 48" href="http://viewer.zmags.com/publication/e010f0f9?page=48"> 5) Funds and fiduciaries a) The European Alternati</a> <a title="Global Regulatory Update - 841593 page 49" href="http://viewer.zmags.com/publication/e010f0f9?page=49"> The AIFMD also has significant impacts on deposito</a> <a title="Global Regulatory Update - 841593 page 50" href="http://viewer.zmags.com/publication/e010f0f9?page=50"> 2) Conduct of business rules of UCITS managemen</a> <a title="Global Regulatory Update - 841593 page 51" href="http://viewer.zmags.com/publication/e010f0f9?page=51"> Derivatives reforms The derivative reforms endeav</a> <a title="Global Regulatory Update - 841593 page 52" href="http://viewer.zmags.com/publication/e010f0f9?page=52"> Insurance reforms A new Federal Insurance Office (</a> <a title="Global Regulatory Update - 841593 page 53" href="http://viewer.zmags.com/publication/e010f0f9?page=53"> Through the provisions of Dodd-Frank that are int</a> <a title="Global Regulatory Update - 841593 page 54" href="http://viewer.zmags.com/publication/e010f0f9?page=54"> b) The FRB’s Payment System Risk Policy A summary</a> <a title="Global Regulatory Update - 841593 page 55" href="http://viewer.zmags.com/publication/e010f0f9?page=55"> • The reporting and dissemination of swap tra</a> <a title="Global Regulatory Update - 841593 page 56" href="http://viewer.zmags.com/publication/e010f0f9?page=56"> 4) The investment industry a) Investor protection</a> <a title="Global Regulatory Update - 841593 page 57" href="http://viewer.zmags.com/publication/e010f0f9?page=57"> The study recommends that the SEC consider the fo</a> <a title="Global Regulatory Update - 841593 page 58" href="http://viewer.zmags.com/publication/e010f0f9?page=58"> b) Credit rating agencies and securitisation A su</a> <a title="Global Regulatory Update - 841593 page 59" href="http://viewer.zmags.com/publication/e010f0f9?page=59"> 5) Funds and fiduciaries a) Hedge fund reforms A s</a> <a title="Global Regulatory Update - 841593 page 60" href="http://viewer.zmags.com/publication/e010f0f9?page=60"> other private funds to report information for use</a> <a title="Global Regulatory Update - 841593 page 61" href="http://viewer.zmags.com/publication/e010f0f9?page=61"> Sections 403 and 404 of the Dodd-Frank Act genera</a> <a title="Global Regulatory Update - 841593 page 62" href="http://viewer.zmags.com/publication/e010f0f9?page=62"> The implications To avoid this new withholding ta</a> <a title="Global Regulatory Update - 841593 page 63" href="http://viewer.zmags.com/publication/e010f0f9?page=63"> In the interest of regulators a common LEI will b</a> <a title="Global Regulatory Update - 841593 page 64" href="http://viewer.zmags.com/publication/e010f0f9?page=64"> LATAM 1) Payments A summary of the issue and curr</a> <a title="Global Regulatory Update - 841593 page 65" href="http://viewer.zmags.com/publication/e010f0f9?page=65"> The integration seeks a development of capital ma</a> <a title="Global Regulatory Update - 841593 page 66" href="http://viewer.zmags.com/publication/e010f0f9?page=66"> 3) The investment industry a) Colombia: changes o</a> <a title="Global Regulatory Update - 841593 page 67" href="http://viewer.zmags.com/publication/e010f0f9?page=67"> In addition to the above, Resolution 36 also incl</a> <a title="Global Regulatory Update - 841593 page 68" href="http://viewer.zmags.com/publication/e010f0f9?page=68"> 4) Issuer Services a) Dominican Republic A summar</a> <a title="Global Regulatory Update - 841593 page 69" href="http://viewer.zmags.com/publication/e010f0f9?page=69"> institutions that operate in Brazil (Citibank, De</a> <a title="Global Regulatory Update - 841593 page 70" href="http://viewer.zmags.com/publication/e010f0f9?page=70"> CBRC Notice Section 11 states: “Banks shall stren</a> <a title="Global Regulatory Update - 841593 page 71" href="http://viewer.zmags.com/publication/e010f0f9?page=71"> 3) Securities infrastructure a) A snapshot of key</a> <a title="Global Regulatory Update - 841593 page 72" href="http://viewer.zmags.com/publication/e010f0f9?page=72"> However political factors may influence the pace o</a> <a title="Global Regulatory Update - 841593 page 73" href="http://viewer.zmags.com/publication/e010f0f9?page=73"> 4) Funds and fiduciary services a) The Asia Region</a> <a title="Global Regulatory Update - 841593 page 74" href="http://viewer.zmags.com/publication/e010f0f9?page=74"> b) China/Hong Kong/Taiwan: fund developments Chin</a> <a title="Global Regulatory Update - 841593 page 75" href="http://viewer.zmags.com/publication/e010f0f9?page=75"> bank, the PBOC, to finalise the rules. This proces</a> <a title="Global Regulatory Update - 841593 page 76" href="http://viewer.zmags.com/publication/e010f0f9?page=76"> c) Pension developments and reforms Asia-Pacific p</a> <a title="Global Regulatory Update - 841593 page 77" href="http://viewer.zmags.com/publication/e010f0f9?page=77"> The Employee Retirement Security Act (ERSA) of 20</a> <a title="Global Regulatory Update - 841593 page 78" href="http://viewer.zmags.com/publication/e010f0f9?page=78"> third-party asset managers. The increased demand </a> <a title="Global Regulatory Update - 841593 page 79" href="http://viewer.zmags.com/publication/e010f0f9?page=79"> carefully positioned Hong Kong as the first offsho</a> <a title="Global Regulatory Update - 841593 page 80" href="http://viewer.zmags.com/publication/e010f0f9?page=80"> 73</a> <a title="Global Regulatory Update - 841593 page 81" href="http://viewer.zmags.com/publication/e010f0f9?page=81"> Global Transaction Services www.transactionservic</a>