9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 1 See last pages for disclaimer.

Regulatory & Accounting Briefing

■ 1. European Central Bank reviews its risk control framework for collateral assets.

– Haircut schedules for assets used as collateral in monetary policy operations updated, with effect from 1 January 2017.

– Some additional adjustments to haircuts to take effect around the end of 2017.

– Measures aim to maintain adequate risk protection and improve consistency of framework with an overall minimal effect on aggregate collateral amount.

■ To maintain adequate risk protection, the European Central Bank (ECB) regularly adjusts its collateral eligibility rules and risk control measures applied when accepting collateral in Eurosystem monetary policy operations. The Governing Council of the ECB has decided on a number of measures to improve the overall consistency of the framework. The Governing Council decided in particular, with effect from 1 January 2017, to:

– 1. Update the haircuts for marketable and non-marketable assets;

– 2. Introduce graduated haircuts for eligible asset-backed securities (ABS) based on their Weighted Average Life (WAL) as calculated from expected cash flows.

– Moreover, the Governing Council decided to:

– 3. Introduce graduated haircuts depending on remaining maturity also for floating-rate assets, which are currently assigned a flat haircut irrespective of their maturities.

– 4. Adjust the risk control measures for retained covered bonds with extendible maturities (e.g. soft bullet and conditional pass-through covered bonds) to take into account the additional risk which results from the use of such securities by the issuer itself and to ensure a level playing field between securities with comparable risks.

■ As regards the first two measures, the new haircut schedules are defined in the new Guidelines ECB/2016/32 and ECB/2016/33 (amending Guideline ECB/2015/35 and Guideline ECB/2014/31, relating to the general and the temporary collateral framework, respectively). These guidelines have become available on the ECB's website. As regards the last two measures, they will become applicable at a date to be announced in the second half of 2017.

Contents 1. ECB reviews its risk control framework for collateral assets ____________________________ 1 2. IOSCO on implementation of G20/FSB recommen-dations to strengthen securities markets __________ 2 3. EBA recommends total liabilities as the target level of resolution financing arrangements ____________ 3 4. IE on the Insurance Capital Standard (ICS) _____ 5 5. PE on a potential EU personal pension framework _________________________________ 6 6. ISDA on variation margin requirements for non-cleared derivatives __________________________ 6 7. ESMA prepares for MiFID II systemic internalizer regime ____________________________________ 8 News Alert 8. EBA final guidelines on ICAAP and ILAAP (under SREP) ____________________________________ 9 9. ECB on harmonizing supervisory rules for banks supervised by NCAs ________________________ 10 10. EBA guidelines on internal governance _______ 12 11. EBA/ESMA guidelinjes on the assessment of suita-bility of the members of the management body ____ 13 Annex 12. EIOPA: Q&A on Insurance Regulation _______ 16 13. EBA: Single Rulebook Q&A _______________ 17 14. Regulatory Alerts/Notices __________________ 18 Regulatory & Accounting Briefing – 2 Nov 2016 Document Regulatory & Accounting Briefing – 26 Oct 2016 Document Regulatory & Accounting Briefing – 19 Oct 2016 Document Regulatory & Accounting Briefing – 12 Oct 2016 Document Regulatory & Accounting Briefing – 5 Oct 2016 Document Regulatory & Accounting Briefing – 28 Sep 2016 Document

Author Luis Maglanoc, CFA (UniCredit Bank) +49 89 378-12708 luis.maglanoc@unicredit.de Bloomberg UCCR Internet www.research.unicredit.eu

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 2 See last pages for disclaimer.

Regulatory & Accounting Briefing 1. ECB reviews its risk control framework for collateral assets 1. Remarks

■ Related documents/links:

■ ECB reviews its risk control framework for collateral assets.

■ ECB amends Guidelines relating to the Eurosystem’s monetary policy implementation.

■ ECB Guideline of 2.11.2016 relating to Eurosystem refinancing operations and eligibility of collateral.

■ ECB Guideline of 2.11.2016 on the valuation haircuts applied in the implementation of the Eurosystem monetary framework.

■ ECB Guideline of 2.11.2016 on the implementation of the Eurosystem monetary policy.

Remarks:

■ No further comments.

■ Refer also to our SF161011 Regulatory & Accounting Briefing, page 1.

Related Resources from UniCredit – Financials Credit Research:

■ SF161104 Sector Flash RAS - Regulatory Roundup.

■ SF160216 Sector Flash RAS - Regulatory Roundup.

■ SF150612 CRD IV and CRR - Overview.

■ SR160407 Sector Report RAS – Overview of Risk Weights under Basel II and CRR.

■ SF160421 Sector Flash RAS – Revisions to the Basel III Leverage Ratio Framework.

■ SF151014 Liquidity Coverage Ratio (LCR) – Special features.

■ SF141104 Net Stable Funding Ratio (BCBS).

■ SR160802 EBA 2016 EU-wide Stress Test – Resilient Outcome.

■ CF160730 EBA 2016 EU-wide Stress Test – Resilient Outcome.

2. IOSCO on implementation of G20/FSB recommendations to strengthen securities markets

2. International Organization of Securities Commissions reports on implementation of G20 / Financial Stability Board recommendations to strengthen securities markets.

■ The Board of the International Organization of Securities Commissions (IOSCO) published a report on the implementation of the G20/FSB post crisis recommendations aimed at strengthening securities markets.

■ The Implementation Report: G20/FSB Recommendations related to Securities Markets was prepared by IOSCO's Assessment Committee, as part of its G20 Markets Reform Review Project. This effort involved working with the Financial Stability Board (FSB) on analyzing the responses to the FSB's 2016 Implementation Monitoring Network (IMN) survey.

■ As the global standard setting body for securities regulation, IOSCO has worked closely with the FSB on previous IMN surveys. For the 2016 survey, IOSCO undertook the analysis for the following recommendations that relate to securities markets:

– Hedge funds;

– Structured products and securitization;

– Oversight of credit rating agencies (CRAs);

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 3 See last pages for disclaimer.

2. Remarks

– Measures to safeguard the efficiency and integrity of markets; and

– Supervision and regulation of commodity derivative markets.

■ Since 2010, the FSB has conducted the annual IMN survey on implementation of agreed G20/FSB recommendations. On 31 August, the FSB published its Implementation and Effects of the G20 Financial Regulatory Reforms, which reported on the high-level summary of jurisdictions' implementation status to the G20 Leaders' Summit in Hangzhou. On 22 September, the FSB published its Implementation of G20/FSB financial reforms in other (non-priority) areas, which provides a detailed analysis of the implementation status based on jurisdictions' responses in the 2016 FSB IMN survey.

■ Related documents/links:

■ For more information, please click here.

■ To read the full IOSCO Report (24 pages), please click here.

Remarks:

■ IOSCO's Implementation Monitoring Report finds that most responding jurisdictions have taken steps to implement the G20/FSB recommendations and IOSCO guidance in each reform area. Implementation is most advanced in relation to hedge funds, structured products and securitization, and the oversight of CRAs. Most jurisdictions had implemented these reforms by 2014, while implementation of G20/FSB recommendations in other areas continues to progress.

■ On hedge funds, all responding jurisdictions which permit or have hedge funds reported implementation of the G20 and IOSCO recommendations relating to registration, disclosure and oversight of hedge funds, with almost all reporting implementation of recommendations in relation to international information and enhancing counterparty risk management.

■ On structured products and securitization, most responding jurisdictions report the introduction of measures to strengthen supervisory requirements or best practices for investment in structured products and to enhance disclosure of securitized products as recommended by the Financial Stability Forum (now the FSB) in 2008 and IOSCO in a number of reports from 2009 onwards.

■ On CRAs, all responding jurisdictions have implemented G20/FSB recommendations to require registration and provide appropriate oversight of FSB jurisdictions in line with IOSCO’s Code of Conduct Fundamentals for Credit Ratings Agencies.

4

■ Implementation of G20/FSB recommendations in other areas is still progressing. A number of responding jurisdictions are progressing implementation of measures to safeguard the integrity and efficiency of financial markets and, where relevant, in relation to the regulation of commodity derivatives markets.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 4 See last pages for disclaimer.

3. EBA recommends a measure based on total liabilities as the target level of resolution financing arrangements 3. Remarks

3. European Banking Authority recommends a measure based on total liabilities as the target level of resolution financing arrangements.

■ The European Banking Authority (EBA) published its final report on the reference point for the target level of national resolution financing arrangements. In the report, the EBA recommends changing the basis from covered deposits to a total liabilities-based measure and, in particular, total liabilities (excluding own funds) less covered deposits. The proposed methodology would align the target level basis with the reference base used for the calculation of individual contributions to national resolution financing arrangements.

■ Based on the qualitative and quantitative assessment of various criteria, including historical data, the EBA report recommends that measures based on total liabilities, and 'total liabilities excluding own funds less covered deposits' in particular, are the most appropriate target level basis for resolution financing arrangements. The main reasons for such a recommendation are that this basis is consistent with the regulatory framework and calculation methodology for the individual contributions, and is simple and transparent.

■ The report further recommends that if the European Commission issues a legislative proposal on amending the target level basis for national resolution financing arrangements it should consider adjusting the percentage of the target level, and whether a corresponding change to the target level basis would also be appropriate for the Single Resolution Fund.

■ Related documents/links:

■ For more information, please click here.

■ EBA Report (50 pages).

■ Report on the appropriate target level basis for resolution financing arrangements under BRRD

Remarks:

■ Article 102(4) of the Bank Recovery and Resolution Directive (BRRD) requires the EBA to submit to the European Commission a report with recommendations on the appropriate reference point for setting the target level for resolution financing arrangements, and in particular, whether ‘total liabilities' constitute a more appropriate basis than ‘covered deposits'. The deadline for the submission of the report was 31 October 2016.

■ The mandate of the report does not include recommendations on changing the absolute minimum amount of contributions to resolution financing arrangements at the EU level. As a result, for the purpose of the report, the overall level is assumed to be constant irrespective of a change to the basis for calculating the target level.

■ The European Commission will consider the recommendations of this report and decide whether to submit a legislative proposal to amend the target level basis for resolution financing arrangements by 31 December 2016.

Related resources from UniCredit – Financials Credit Research:

■ SF161104 Sector Flash RAS - Regulatory Roundup.

■ SF160216 Sector Flash RAS - Regulatory Roundup.

■ SF161018 Sector Flash RAS – Senior Bail-in and TLAC/MREL - Update.

■ SF161017 Sector Flash RAS – Deduction of TLAC Holdings.

■ SF160817 Sector Flash RAS – Bail-in hierarchy of structured products under German insolvency law.

■ SF160712 Sector Flash RAS – TLAC, MREL and Senior Bail-in.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 5 See last pages for disclaimer.

■ SF160519 Sector Flash RAS - TLAC implementation and MREL review.

■ SF160512 Sector Flash RAS – TLAC Deductions.

■ SF160127 Sector Flash RAS – Senior Bail-In: Overview of senior bail-in implementation according to country

■ SF160113 Sector Flash RAS - Update on Senior Bail-in, MREL and TLAC.

■ SF151110 Sector Flash RAS - BRRD and TLAC (Update).

4. IE on the Insurance Capital Standard (ICS) 4. Remarks

4. Insurance Europe: Response provided to IAIS consultation on ICS version 1.0.

■ Insurance Europe has responded to a consultation by the International Association of Insurance Supervisors (IAIS) on the Insurance Capital Standard (ICS) 1.0.

■ In its response, Insurance Europe stressed the need for the ICS to be developed and tested on a consistent basis across internationally active insurance groups (IAIGs). This would ensure that the ICS is a risk-based framework in which same risks are measured in the same way, no matter which jurisdiction a specific IAIG is based.

■ Therefore, Insurance Europe said that the valuation basis must be as comparable and convergent as possible, and able to generate the same outcomes for required and available capital.

■ Insurance Europe expressed support for the IAIS objective of avoiding excessive balance sheet volatility, caused by short-term market fluctuations. It also noted that asset liability management (ALM) practices are different across insurers and that they should have an impact on the valuation of the liabilities.

■ More specifically, for those assets and liabilities subject to the same ALM approach, a similar valuation is needed to ensure consistency. As such, Insurance Europe highlighted the need for a set of alternatives on valuation of liabilities that are, together, able to cover and reflect differences in ALM across companies.

■ Insurance Europe also reiterated its concerns on the introduction of a margin over current estimate (MOCE), as well as strong support for internal models to be considered as alternatives to the ICS standard method.

■ Related documents/links:

■ For more information, please click here.

■ Response to consultation on global Insurance Capital Standard version 1.0 (54 pages).

Remarks:

■ No further comments.

Related Resources from UniCredit – Financials Credit Research:

■ SF161104 Sector Flash RAS - Regulatory Roundup.

■ SF160216 Sector Flash RAS - Regulatory Roundup.

■ SF150331 Sector Flash RAS: Solvency II – finalized.

■ Bank & Insurance Watch – October 2016.

■ Bank & Insurance Watch – September 2016.

■ Bank & Insurance Watch – August 2016.

■ The Financials Chartbook – October 2016.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 6 See last pages for disclaimer.

■ The Financials Chartbook – September 2016.

■ The Financials Chartbook – August 2016.

5. PE on a potential EU personal pension framework 5. Remarks

5. Pensions Europe answer to the EC consultation on a potential EU personal pension framework.

■ Pensions Europe (PE) welcomes the European Commission's works on an EU initiative in the field of personal pensions as a way to increase the overall pension savings and also as one of the building blocks of the Capital Market Union.

■ PE promotes good pensions for the people in Europe in different shapes and forms. Most of the retirement income is and will continue to be provided by social security pensions and workplace pensions but voluntary personal pensions are particularly needed and useful for those who don't have access to workplace pensions or where personal pensions offered are not reliable or attractive.

■ PE believes that a standardized pan-European personal pension product regulated by a second regime - with a defined set of flexible elements - could contribute to the policy objectives of ensuring of high minimum standard of consumer protection. It appears as a much more feasible way and would promise superior outcomes than harmonizing regimes.

■ The impact of any EU initiative on personal pensions is likely to depend on the maturity of the markets: It would be particularly useful serving as a model for EU countries currently building up their complementary pension savings system and could also help enhancing the quality of products in more developed markets.

■ PE believes that a supportive tax treatment is essential for the attractiveness of personal pension products compared to other saving products available at national level and that a Personal Pension initiative must respect the exclusive competence of the Member States in the field of taxation and of statutory public pensions.

■ Related documents/links:

■ For more information, please click here.

■ Pensions Europe answer to the EC consultation on a potential EU personal pension framework (35 pages).

Remarks:

■ No further comments.

6. ISDA on variation margin requirements for non-cleared derivatives

6. International Swaps and Derivatives Association: Variation Margin Rules - Take Action Now (Blog Post by ISDA Chief Executive Officer Scott O'Malia).

■ It might only be November, but people already seem to be turning their minds to what's in store for 2017. There's likely to be a lot on the agenda, but one date looms large for the derivatives market: the 1 March 2017 implementation of variation margin requirements for non-cleared derivatives. That's not surprising: the scale of the task is massive, and firms need to take action now in order to stand a chance of being ready in time.

■ Many market participants already post collateral to cover price changes on their derivatives trades, so you'd be forgiven for asking what all the fuss is about. The answer is that the rules make variation margin posting compulsory on all non-cleared trades, and set strict requirements on the type of collateral that can be posted, the frequency of the margin calls, and the required timing for settlement, among other things.

■ Crucially, these regulatory changes mean derivatives users will have to modify their existing collateral support agreements. And seeing as the March 1 deadline captures a

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 7 See last pages for disclaimer.

6. Remarks

broad swath of financial institutions - asset managers, pension funds, insurance companies, hedge funds - it will mean thousands of counterparties will need to change or set up thousands of agreements in a very short space of time. This will represent a repapering exercise on a scale and under a timetable never before attempted.

■ So, what do firms have to do to get ready? An important first step is to understand whether and when each trading relationship will be subject to margin requirements, and what rules will apply. To help with that process, ISDA has developed a self-disclosure letter that enables market participants to exchange the necessary information, covering the US, European Union, Canada, Japan and Switzerland. In order to speed up the exchange of information, this was incorporated into ISDA Amend - an online tool developed by ISDA and IHS Markit - on October 28. This is something each firm could - and should - get started on now.

■ The next step is to start revising and/or setting up new documentation. ISDA has now published a variety of revised credit support documents under various legal regimes, but the real challenge is how to make those changes without the grueling task of having to bilaterally negotiate with every single counterparty.

■ In response, ISDA has developed a variation margin protocol that will enable firms to quickly and efficiently amend existing contracts or set up new agreements that comply with variation margin requirements. The protocol was published for the US, Japan and Canada in August, and ISDA expects to publish European Union provisions soon following publication of final European rules on 4 October 2016.

■ The protocol for those jurisdictions will be available on ISDA Amend later this month, which will eliminate much of the manual work of notifying counterparties and reconciling the various elections made. Once that is up and running, market participants will have a little more than three months to onboard all their counterparties.

■ The timeline is even more challenging for those jurisdictions that have yet to publish final rules. In an article published in Risk recently, ISDA estimated it would take four and half months to develop a protocol and build it into ISDA Amend from the point the rules are finalized. If regulatory timelines don't allow for the building of an automated industry solution, then firms will have to bilaterally negotiate changes with each counterparty - a hugely time-consuming and resource-intensive task.

■ Even with the protocol available, the variation margin deadline will pose a massive challenge for the industry. Over the past two months, ISDA held a series of conferences across the globe focusing on the margin rules. The comments from those who attended made clear that many firms are seriously worried about their capacity to agree the necessary changes with every one of their counterparties.

■ For more information, please click here.

Remarks:

■ ISDA Chief Executive Officer Scott O'Malia’s message is very clear: start to prepare for March 1 now. Understand what the rules will mean for you; look at your outstanding contracts; and start getting in touch with your counterparties. Any firm that leaves it much longer may find it is unable to trade from 1 March 2017.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 8 See last pages for disclaimer.

7. ESMA prepares for MiFID II systemic internalizer regime 7. Remarks

7. European Securities and Markets Authority prepares for MiFID II systematic internalizer regime.

■ The European Securities and Markets Authority (ESMA) has published an updated questions and answers (Q&A) document on the application of MiFID II/ MiFIR which clarifies when ESMA will publish the first set of data needed to implement the Systematic Internalizer (SI) regime and the date by when firms must comply with the SI regime for the first time.

■ The key dates are:

– 1 August 2018: ESMA will publish information on the total number and the volume of transactions executed in the European Union for the first time by 1 August 2018, covering the period from 3 January 2018 to 30 June 2018.

– 1 September 2018: investment firms must undertake their first assessment by and, where appropriate, comply with the SI obligations (including notifying their National Competent Authority) by 1 September 2018.

– Quarterly updates: for subsequent assessments, ESMA will publish data by the first calendar day of February, May, August and November. Investment firms are expected to perform the calculations and comply with the SI regime by the fifteenth calendar day of February, May, August and November.

■ Application date

■ The earliest mandatory deadline on which firms must comply with the SI regime, when necessary, is 1 September 2018 although MiFID II and MiFIR apply from 3 January 2018. However, ESMA stresses that investment firms can opt-in to the SI regime for all financial instruments from 3 January 2018 as a means of complying, for example, with the trading obligation for shares.

■ The purpose of the Q&A document is to promote common supervisory approaches and practices in the application of the MiFID II/ MiFIR and its implementing measures.

■ Related documents/links:

■ For more information, please click here.

■ ESMA Questions and Answers on MiFID II and MiFIR transparency topics (14 pages).

Remarks:

■ The purpose of this ESMA document is to promote common supervisory approaches and practices in the application of MiFID II and MiFIR in relation to transparency topics. It provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of MiFID II and MiFIR.

■ The content of this document is aimed at competent authorities and firms by providing clarity on the application of the MiFID II and MiFIR requirements.

■ The content of this document is not exhaustive and it does not constitute new policy.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 9 See last pages for disclaimer.

8. News Alert: EBA final guidelines on ICAAP and ILAAP (under SREP) 8. Remarks

8. News Alert: European Banking Authority publishes final guidelines on ICAAP and ILAAP information.

■ The European Banking Authority (EBA) published its final Guidelines on the collection of information related to the internal capital adequacy assessment process (ICAAP) and the internal liquidity adequacy assessment process (ILAAP). These Guidelines aim at facilitating a consistent approach to the supervisory assessment of ICAAP and ILAAP frameworks across the EU as part of the supervisory review and evaluation process (SREP).

■ These Guidelines introduce a common approach and specify what information regarding ICAAP and ILAAP Competent Authorities should collect from institutions in order to perform their assessments of ICAAP and ILAAP frameworks as well as the reliability of ICAAP and ILAAP capital and liquidity estimates in a consistent manner following the criteria specified in the EBA SREP Guidelines.

■ In particular, Competent Authorities should collect the following: (i) general information about ICAAP and ILAAP frameworks, business model and strategy, as well as governance arrangements, (ii) ICAAP-specific methodological, policy and operational information; (iii) ILAAP-specific methodological, policy and operational information, and (iv) management conclusions on ICAAP and ILAAP and quality assurance information.

■ In addition, these Guidelines set the criteria for Competent Authorities to organize the collection of ICAAP and ILAAP information taking into account the principle of proportionality, which is recognized in the Guidelines in relation to the frequency, reference and remittance dates, as well as the scope for the ICAAP and ILAAP information that should be determined in relation to the SREP categorization of institutions.

■ The Guidelines do not introduce any new ICAAP or ILAAP assessment criteria, nor any specific ICAAP/ILAAP 'report', but identify information items and their core content recognizing that such information can be provided either through a single report specifically prepared by an institution for the purposes of ICAAP/ILAAP submissions, or through separate documents that are already available at the bank.

■ According to the EBA's impact assessment, introducing greater convergence into the collection of ICAAP and ILAAP information across the EU by means of these Guidelines does not necessarily result in significant additional costs for the institutions, as information is already being collected by Competent Authorities.

■ Related documents/links:

■ For more information, please click here.

■ Final report on Guidelines on ICAAP ILAAP (EBA-GL-2016-10)

■ Guidelines on ICAAP and ILAAP information.

■ Supervisory Review and Evaluation Process (SREP) and Pillar 2.

Remarks:

■ These EBA Guidelines facilitate the consistent approach to the assessment of institutions’ internal capital adequacy assessment process (ICAAP) and internal liquidity adequacy assessment process (ILAAP) under the supervisory review and evaluation process (SREP) and should be read together with the EBA Guidelines on common procedures and methodologies for SREP1 (SREP Guidelines).

■ In particular, these Guidelines specify what information regarding ICAAP and ILAAP competent authorities should collect from the institutions in order to perform their assessments following the criteria specified in the SREP Guidelines.

■ Refer also to our SF161019 Regulatory & Accounting Briefing, page 11.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 10 See last pages for disclaimer.

Related Resources from UniCredit Financials Credit Research:

■ SF150210 Sector Flash RAS – Supervisory Review and Evaluation Process (SREP).

■ SF161104 Sector Flash RAS - Regulatory Roundup.

9. News Alert: ECB on harmonizing supervisory rules for banks supervised by national competent authorities

9. News Alert: European Central Bank launches consultation on harmonizing supervisory rules for banks supervised by national competent authorities.

■ ECB aims to harmonize certain options and discretions in Union law for banks under its indirect supervision to ensure a level playing field and limit compliance costs for banks.

■ Draft guideline and draft recommendation published for consultation with the public.

■ Consultation period runs from today until 5 January 2017.

■ The European Central Bank (ECB) launched a public consultation on a draft guideline and recommendation concerning the exercise of options and discretions (O&Ds) available in Union law for banks it does not directly supervise (less significant institutions or LSIs). The aim is to harmonize the way banks are supervised by national competent authorities (NCAs) in the 19 countries of the Single Supervisory Mechanism (SSM) and thereby ensure a level playing field and the smooth functioning of the euro area banking system as a whole.

■ The ECB decided in 2015 to harmonize the application of O&Ds for the direct supervision of the 129 significant institutions (SIs). For this purpose an ECB regulation, an ECB guide on the exercise of options and discretions available in Union law, an addendum to this guide and the ECB approach for the recognition of institutional protection schemes were adopted earlier this year. Today a consolidated version of the guide was published on the ECB's Banking Supervision website. In a second step, to ensure harmonization across all banks, the ECB decided as part of its responsibility for the oversight of the system to also harmonize the exercise of O&Ds for LSIs by adopting a guideline and a recommendation. Further explanations regarding the choice and nature of the legal instruments used to harmonize the exercise of O&Ds are provided in the Questions and Answers.

■ The draft guideline lays out how NCAs should exercise seven O&Ds of general application for LSIs. For these O&Ds a specific policy rationale justifies the adoption of a uniform approach for all credit institutions in the countries in which the SSM applies. The guideline will be legally binding once approved by the Governing Council. The draft recommendation - a non-legally binding act - aims to harmonize 43 O&Ds that are not of general application but are assessed on a case-by-case basis. It also provides guidance to NCAs on how to assess these O&Ds individually. In addition, the draft recommendation covers eight O&Ds for which a common approach specific to LSIs is warranted.

■ Inconsistent application of O&Ds in SSM countries could potentially affect the overall robustness of the supervisory framework and the comparability of prudential requirements across credit institutions. This would make it difficult for market participants and the general public to gauge the soundness and regulatory compliance of credit institutions. The high number of such provisions also adds a layer of regulatory complexity and further increases compliance costs for banks, especially for firms operating across borders. There is also the potential for regulatory arbitrage.

■ The proposed approach for harmonizing the exercise of O&Ds for LSIs was chosen following a careful analysis, focusing particularly on the principle of proportionality, i.e. to what extent specific policy recommendations may be warranted for the exercise of specific options. As a result, it is proposed that the NCAs should be able to take a flexible approach to a number of O&Ds where harmonization is not considered necessary to ensure the robustness of supervision or to attain a level playing field.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 11 See last pages for disclaimer.

9. Remarks

■ The consultation on the two documents starts today and ends on 5 January. The relevant documents, comprising the draft guideline, the draft recommendation, an explanatory memorandum and Questions and Answers are available on the ECB's Banking Supervision website.

■ The ECB will hold a public hearing as part of this consultation on 17 November 2016, at its premises in Frankfurt am Main. The hearing will be webcast live on the ECB's Banking Supervision website. Information on registering for the public hearing and on how to submit comments can also be found on the website. Following the public consultation, the ECB will publish the comments received, together with a feedback statement and an assessment of the comments.

■ Related documents/links:

■ For more information, please click here.

■ Public consultation on the exercise of options and discretions by NCAs in relation to less significant institutions

■ ECB Guide on options and discretions available in Union law Consolidated version.

Remarks:

■ Although NCAs are primarily responsible for exercising the relevant options and discretions in relation to less significant institutions, the ECB’s overarching oversight role within the Single Supervisory Mechanism (SSM) enables it to promote the consistent exercise of options and discretions in relation to both significant and less significant institutions, where appropriate. This ensures that (a) the prudential supervision of all credit institutions in the participating Member States is implemented in a coherent and effective manner, (b) the single rulebook for financial services is applied consistently to all credit institutions in the participating Member States, and (c) that all credit institutions are subject to supervision of the highest quality.

■ With the aim of balancing the need for the consistent application of supervisory standards between significant and less significant institutions on the one hand with the application of the principle of proportionality on the other hand, the ECB has identified certain options and discretions among those it exercised in Regulation (EU) 2016/445 (ECB/2016/4) which should be exercised in the same way by NCAs in the supervision of less significant institutions.

■ Refer also to our SF160911 Regulatory & Accounting Briefing, page 5.

■ Refer also to our SF160706 Regulatory & Accounting Briefing, page 4.

■ Refer also to our SF160525 Regulatory & Accounting Briefing, page 11.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 12 See last pages for disclaimer.

10. News Alert: EBA guidelines on internal governance 10. Remarks

10. News Alert: European Banking Authority reviews its guidelines on internal governance.

■ The European Banking Authority (EBA) launched a public consultation on its revised Guidelines on internal governance. These draft Guidelines aim at further harmonizing institutions' internal governance arrangements, processes and mechanisms across the EU, in line with the new requirements in this area introduced in the Capital Requirements Directive (CRD) and also taking into account the proportionality principle. The consultation runs until 28 January 2017.

■ Weaknesses in corporate governance in a number of institutions have contributed to excessive and imprudent risk-taking in the banking sector, which has led to the failure of individual institutions and systemic problems in Member States and globally. In order to address the potentially detrimental effects of poorly designed corporate governance arrangements on the sound management of risk, and to take into account the new requirements introduced in the CRD in this area, the EBA is updating its Guidelines on internal governance, originally published on 27 September 2011.

■ These draft Guidelines put more emphasis on the duties and responsibilities of the management body in its supervisory function in risk oversight, including the role of their committees. They aim at improving the status of the risk management function, enhancing the information flow between the risk management function and the management body and ensuring effective monitoring of risk governance by supervisors.

■ The 'know-your -structure' and complex structures sections, especially following the 'Panama events', have been strengthened to ensure that the management body is aware of the risks that can be triggered by complex and opaque structures and to improve transparency. In addition, the framework for business conduct has been further developed and more emphasis is given to the establishment of a risk culture, a code of conduct and the management of conflicts of interest.

■ Finally, more guidance is provided on the risk management framework, on how internal control functions are organized and how internal controls are implemented.

■ Consultation process

■ Comments to this consultation can be sent to the EBA by clicking on the "send your comments" button on the consultation page. Please note that the deadline for the submission of comments is 28 January 2017.

■ A public hearing will take place at the EBA premises on 5 January 2017 from 14: 00 to 17:00 UK time. All contributions received will be published following the end of the consultation, unless requested otherwise.

■ Related documents/links:

■ For more information, please click here.

■ Consultation Paper on Guidelines on internal governance (EBA-CP-2016-16) (62 pages).

■ Guidelines on internal governance (revised).

■ Public hearing.

Remarks:

■ In recent years, internal governance issues have received increasing attention from various international bodies. Their main effort has been to correct the institutions’ weak or superficial internal governance practices as identified in the financial crisis. Recently more focus was given to conduct-related shortcomings and activities in financial offshore centers.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 13 See last pages for disclaimer.

■ Sound internal governance arrangements are fundamental if institutions, individually, and the banking system they form, are to operate well. Directive 2013/36/EU reinforces the governance requirements for institutions and, in particular, stresses the responsibility of the management body for sound governance arrangements and the importance of a strong supervisory function that challenges management decision-making and the setting and implementation of sound risk strategies and risk management frameworks.

■ To further harmonize institutions’ internal governance arrangements, processes and mechanisms within the EU in line with the requirements introduced by Directive 2013/36/EU, the EBA is mandated by Article 74 of Directive 2013/36/EU to develop Guidelines in this area.

■ The draft Guidelines complete the various governance provisions in Directive 2013/36/EU, taking into account the principle of proportionality, by specifying the tasks, responsibilities and organization of the management body, the organization of institutions and groups, including the need to create transparent structures that allow for a supervision of all their activities and specifies requirements for the three lines of defense and, in particular, the risk management, compliance and audit function.

■ The draft Guidelines update the existing set of Guidelines on internal governance and, in particular, introduce additional aspects that aim to foster a sound risk culture to be implemented by the management body, to strengthen its oversight over the institutions’ activities and their risk management framework. Additional guidelines have been provided to further increase the transparency of institutions’ offshore activities and the consideration of risks within institutions’ change processes.

11. News Alert: EBA/ESMA guidelines on the assessment of the suitability of the members of the management body and key function holders

11. News Alert: European Banking Authority/European Securities and Markets Authority: Joint Guidelines on the assessment of the suitability of the members of the management body and key function holders.

■ The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) launched a consultation on Guidelines on the Assessment of the Suitability of the Members of Management Body and Key Function Holders (the Guidelines). The draft Guidelines aim at further improving and harmonizing suitability assessments within the EU financial sectors and so ensure sound governance arrangements in financial institutions.

■ Weaknesses in corporate governance are widely acknowledged to have been one of the underlying causes of the financial crisis where inadequate oversight by, and challenge from, the management body in a number of credit institutions and investment firms contributed to excessive and imprudent risk-taking in the financial sector. In order to address those weaknesses, the EBA and ESMA have issued jointly these Guidelines in accordance with the new requirements introduced under the Capital Requirements Directive (CRD) and the Markets in Financial Instruments Directive (MiFID II).

■ The draft Guidelines:

– provide common criteria to assess the individual and collective knowledge, skills and experience of members of the management body as well as the good repute, honesty and integrity, and independence of mind of members of the management body;

– require members of the management body to commit sufficient time to perform their duties and specify how the number of directorships held by members of the management body should be counted, for significant institutions;

– set out how different aspects of diversity, educational and professional background, age, gender and geographical provenance should be taken into account in the recruitment process; and

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 14 See last pages for disclaimer.

11. Remarks

– highlight the importance of induction and training to ensure the initial and ongoing suitability of members of the management body, and call for institutions to establish training policies and to allocate appropriate financial and human resources to induction and training.

■ The consultation closes on 28 January 2017 and a public hearing in London will take place on 5 January 2017 from 14:00 to 17:00 UK time.

■ Related documents/links:

■ For more information, please click here.

■ Annex I - Template for the assessment of collective suitability.

■ Consultation Paper on Joint ESMA EBA Guidelines on suitability of management body (EBA-CP-2016-17) (89 pages).

■ Public hearing.

■ Joint ESMA and EBA Guidelines on the assessment of the suitability of members of the management body.

Remarks:

■ In accordance with the requirements introduced by Directive 2013/36/EU and Directive 2014/65/EU, ESMA and EBA issue jointly guidelines on the notions of suitability, as required by Article 91 (12) of the Directive 2013/36/EU and Article 9 (1) Directive 2014/65/EU1, and on the assessment of suitability by institutions and competent authorities.

■ The directives aim at remedying weaknesses that were identified during the financial crisis regarding the functioning of the management body and its members. The Guidelines aim at further improving and harmonizing the assessment of suitability within the EU financial sector and at ensuring sound governance arrangements in institutions.

■ The guidelines specify that all institutions have to assess the members of the management body. Institutions that are subject to Directive 2013/36/EU have also to assess all key function holders that have a significant influence over the direction of the institution under the overall responsibility of the management body. Competent authorities are required to assess all members of the management body and for significant institutions the heads of internal control functions and the CFO, when they are not a member of the management body.

■ The guidelines provide common criteria to assess the individual and collective knowledge, skills and experience of members of the management body as well as the good repute, honesty and integrity and independence of mind of members of the management body.

■ To ensure that members of the management body commit sufficient time to performing their duties, the guidelines set a framework for assessing the time commitment expected of members of the management body and specify how the number of directorships has to be counted, in the case of significant institutions.

■ It is important to improve the diversity of management bodies to overcome the risk of ‘group thinking’; to this end, the Guidelines determine how diversity is to be taken into account in the selection process for members of the management body.

■ Induction and training are key to ensure the initial and ongoing suitability of members of the management body; institutions are therefore required to establish training policies and to provide for appropriate financial and human resources to be devoted to induction and training.

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 15 See last pages for disclaimer.

Source ■ (Source: Regulatory & Accounting Briefing, Novares www.novares.com, Risk www.risk.net, Global Risk Regulator www.globalriskregulator.com, EurActiv www.euractiv.com, Reuters www.reuters.com, Bloomberg www.bloomberg.net).

<Luis Maglanoc, CFA> +49 89 378-12708 luis.maglanoc@unicreditgroup.de

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 16 See last pages for disclaimer.

ANNEX: 12. EIOPA: Q&A ON INSURANCE REGULATION

■ Q&A on Regulation

■ EIOPA's Question and Answer (Q&A) tool can be used by all parties, including financial institutions, supervisors and other stakeholders, for submitting questions on particular regulatory tools that have been published by EIOPA. These include Guidelines, but also particular (regulatory) processes such as the publication of the risk-free rate.

■ The objective of the Q&A tool is to ensure the consistent and effective application of the regulation in the EEA.

■ How to submit a question

■ Please fill in the form by clicking here. Before doing so, please read the guidance notes and, in particular, please check if your question has already been answered.

■ Answers should normally be provided within 6 weeks, stakeholders will be informed of any expected delays. In particular, stakeholders may experience some delay in receiving the answer to their question with regard to the Guidelines on the Submission of Information to NCAs due to the number of questions received. EIOPA thanks them for their understanding.

■ Questions can be asked and will be answered in all the official languages of the EU. Where questions are not asked in English, there may be a delay due to translation.

■ Answered questions

■ Answers to questions on Guidelines on Complaints-Handling by Insurance Undertakings

■Answers to questions on Guidelines on the System of Governance

■ Answers to questions on Guidelines on submission of information to NCAs (Preparatory phase)

■ Answers to questions on Guidelines on classification of own funds

■ Answers to questions on Guidelines on valuation of technical provisions

■Answers to questions on Guidelines on group solvency

■ Answers to questions on Guidelines on the loss-absorbing capacity of technical provisions and deferred taxes

■Answers to questions on Guidelines on the Forward looking assessment of own risks

■Answers to questions on Guidelines on reporting and public disclosure

■ Answers to questions on Guidelines on contract boundaries

■ Answers to questions on Guidelines on basis risk

■ Answers to questions on Guidelines on reporting for financial stability purposes

■ Answers to questions on Guidelines on recognition and valuation of assets and liabilities other than technical provisions

■ Answers to questions on Guidelines on the treatment of market and counterparty risk exposures in the standard formula

■ Answers to questions on the Guidelines on the supervision of branches of third-country insurance undertakings

■ Answers to questions on the Final report on the ITS on the templates for the submission of information to the supervisory authorities ■ Answers to questions on the Final report on the ITS on procedures, formats and templates of the solvency and financial condition report

■ Answers to questions on Risk-free interest rate – General

■ Answers to questions on Risk-free interest rate – Extrapolation

■ Answers to questions on Risk-free interest rate – Matching adjustment

■ Answers to questions on Risk-free interest rate – Volatility adjustment

■ Other

■ For more information, please click here.

Source: European Insurance and Occupational Pensions Authority (EIOPA); UniCredit Research

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 17 See last pages for disclaimer.

ANNEX: 13. EUROPEAN BANKING AUTHORITY (EBA): SINGLE RULEBOOK Q&A

■ Important note to users - Introduction of the DGSD to the Q&A tool

■ The EBA has recently introduced the DGSD to the Q&A tool. Stakeholders can now submit questions on the following legislative texts: CRD, CRR, BRRD, and DGSD.

■ General information

■ The overall objective of the Q&A tool is to ensure consistent and effective application of the new regulatory framework across the Single Market, and hence contribute to the building of the Single Rulebook in banking.

■ The process entails close and ongoing interaction between the EBA and the European Commission to ensure that the responses to the questions submitted remain consistent with the European legislative texts.

■ Institutions, supervisors and other stakeholders can use the Single Rulebook Q&A tool for submitting questions on Directive 2013/36/EU (the Capital Requirements Directive or CRD), and Regulation (EU) No 575/2013 (the Capital Requirements Regulation or CRR), Directive 2014/59/EU (Bank Recovery and Resolution Directive or BRRD); Directive 2014/49/EU (Deposit Guarantee Schemes Directive or DGSD; the related technical standards developed by the EBA and adopted by the European Commission (RTS and ITS), as well as the EBA guidelines.

■ The Q&As have no binding force in law, nor are they subject to "comply or explain". However their application will be rigorously scrutinized and challenged by the EBA and national supervisory authorities given their undoubted practical significance to achieve a level-playing field. Peer pressure and market discipline are also expected to play a driving force in ensuring adherence to and compliance with the answers provided in the Q&A process.

■ For questions that go beyond matters of consistent and effective application of the regulatory framework a Directorate-General of the Commission (Directorate General Financial Stability, Financial Services and Capital Markets Union) will prepare answers, albeit that only the Court of Justice of the European Union can provide definitive interpretations of EU legislation. These answers will be unofficial opinions of that Directorate General, which the EBA publishes on its behalf. These answers are not binding on the European Commission as an institution. Users should be aware that the European Commission could adopt a position different from the one expressed in such Q&A, for instance in infringement proceedings or after a detailed examination of a specific case or on the basis of any new legal or factual elements that may have been brought to its attention.

■ Final answers will be published on Fridays between 12pm and 1pm GMT, except if this coincides with an EU public holiday. In this instance answers will be published on the preceding working day between 12pm and 1pm GMT (or BST as appropriate).

■ IMPORTANT: Please note that the EBA only starts accepting questions on the application and implementation of technical standards related to the CRD; CRR; BRRD; and the DGSD, once these are published on the Official Journal of the European Union. An exception is made with respect to certain draft Implementing Technical Standards on Supervisory Reporting, as the EBA needs to address these on a timely basis in order to allow institutions to make the necessary preparations or changes to their reporting systems. The EBA has begun to publish the provisional answers to questions; however, it is important to note that these should not be considered final until the Implementing Technical Standards on Supervisory Reporting they refer to are endorsed by the European Commission and published on the Official Journal of the European Union.

■ Features to the Q&A tool

■ The EBA previously introduced some important changes to the way the Q&A tool is operated. Before posting a question, users should read the revised Additional background and guidance for asking questions to learn about the changes in the tool. The EBA recommends that users take a note of the following points in particular:

• Submitted questions will be published only after an answer has been finalized. • Rejected questions will be published for a period 2 months and with the purpose of illustrating the types of questions that are not suitable. The

rejections reflect the stricter criteria set out in the guidance mentioned above. • The Q&A pages have been reorganized in a way that encourages users to use the 'Search for Q&As' function and to refer to the guidance mentioned

above before submitting any questions. • A compilation (in pdf format) of all final Q&As, or subsets, can be obtained via the 'Search for Q&As' function. For additional information please refer to

point 17. of the Additional background and guidance for asking questions.

■ Submit a question

■ Search for Q&A

■ For more information, please click here.

Source: European Banking Authority (EBA); UniCredit Research

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 18 See last pages for disclaimer.

ANNEX: 14. REGULATORY ALERTS/NOTICES

Institution Topic Link 1. European Central Bank (ECB) ECB: Interview with Sabine Lautenschläger, Member of the Executive Board of the

ECB and Vice-Chair of the Supervisory Board of the ECB, for Süddeutsche Zeitung. Click here

2. European Commission (EC) EC: Implementing Regulation with regard to the format and frequency of trade reports to trade repositories.

Click here

3. International Financial Reporting Standards (IFRS)

IFRS: International Accounting Standards Board reveals its 'to-do list' for the next five years.

Click here

4. International Swaps and Derivatives Association (ISDA)

ISDA: Variation Margin Rules - Take Action Now (Blog Post by ISDA Chief Executive Officer Scott O'Malia).

Click here

5. Centre for European Policy Studies (CEPS) CEPS: Eliminating the cost of non-Europe in capital markets. Click here

6. European Central Bank (ECB) European Central Bank reviews its risk control framework for collateral assets.

Click here

7. European Central Bank (ECB) ECB amends Guidelines relating to the Eurosystem's monetary policy implementation.

Click here

8. European Banking Authority (EBA) EBA publishes final guidelines on ICAAP and ILAAP information.

Click here

9. Financial Stability Board (FSB) FSB: Chatham House Banking Revolution Conference - Global Regulatory Developments and their Industry Impact (Speech by Svein Andresen).

Click here

10. European Central Bank (ECB) ECB launches consultation on harmonizing supervisory rules for banks supervised by national competent authorities.

Click here

11. European Central Bank (ECB) ECB: Guide on options and discretions available in Union law.

Click here.

12. Centre for European Policy Studies (CEPS) CEPS: Towards a better European securitisation market.

Click here

13. Office of the Comptroller of the Currency (OCC)

OCC: Comptroller Discusses Banking Innovation and Regulation. Click here

14. European Banking Authority (EBA) EBA consults on Guidelines on authorisation and registration under PSD2. Click here

15. European Securities and Markets Authority (ESMA)

ESMA prepares for MiFID II systematic internalizer regime. Click here

16. European Central Bank (ECB) ECB: Sovereign debt in the euro area - too safe or too risky? (Speech by Benoit Coeure).

Click here

17. Chartered Financial Analyst Institute (CFAI)

CFAI: Global Inflation-Linked Bonds - A Primer (Article by Jason Voss, CFA). Click here

18. European Banking Authority (EBA) EBA seeks views on new prudential regime for investment firms. Click here

19. Organization for Economic Cooperation and Development (OECD)

OECD Core Principles of Private Pension Regulation. Click here

20. European Banking Authority (EBA) EBA issues recommendations on the implementation of new counterparty and market risk frameworks.

Click here

Source: Novares, UniCredit Research

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 19 .

Disclaimer Our recommendations are based on information obtained from, or are based upon public information sources that we consider to be reliable but for the completeness and accuracy of which we assume no liability. All estimates and opinions included in the report represent the independent judgment of the analysts as of the date of the issue. This report may contain links to websites of third parties, the content of which is not controlled by UniCredit Bank. No liability is assumed for the content of these third-party websites. We reserve the right to modify the views expressed herein at any time without notice. Moreover, we reserve the right not to update this information or to discontinue it altogether without notice. This analysis is for information purposes only and (i) does not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any financial, money market or investment instrument or any security, (ii) is neither intended as such an offer for sale or subscription of or solicitation of an offer to buy or subscribe for any financial, money market or investment instrument or any security nor (iii) as an advertisement thereof. The investment possibilities discussed in this report may not be suitable for certain investors depending on their specific investment objectives and time horizon or in the context of their overall financial situation. The investments discussed may fluctuate in price or value. Investors may get back less than they invested. Changes in rates of exchange may have an adverse effect on the value of investments. Furthermore, past performance is not necessarily indicative of future results. In particular, the risks associated with an investment in the financial, money market or investment instrument or security under discussion are not explained in their entirety. This information is given without any warranty on an "as is" basis and should not be regarded as a substitute for obtaining individual advice. Investors must make their own determination of the appropriateness of an investment in any instruments referred to herein based on the merits and risks involved, their own investment strategy and their legal, fiscal and financial position. As this document does not qualify as an investment recommendation or as a direct investment recommendation, neither this document nor any part of it shall form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. Investors are urged to contact their bank's investment advisor for individual explanations and advice. Neither UniCredit Bank nor any of their respective directors, officers or employees nor any other person accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. This analysis is being distributed by electronic and ordinary mail to professional investors, who are expected to make their own investment decisions without undue reliance on this publication, and may not be redistributed, reproduced or published in whole or in part for any purpose. Responsibility for the content of this publication lies with: UniCredit Group and its subsidiaries are subject to regulation by the European Central Bank a) UniCredit Bank AG (UniCredit Bank), Am Tucherpark 16, 80538 Munich, Germany, (also responsible for the distribution pursuant to §34b WpHG). The company belongs to UniCredit Group. Regulatory authority: “BaFin“ – Bundesanstalt für Finanzdienstleistungsaufsicht, Lurgiallee 12, 60439 Frankfurt, Germany. b) UniCredit Bank AG London Branch (UniCredit Bank London), Moor House, 120 London Wall, London EC2Y 5ET, United Kingdom. Regulatory authority: “BaFin“ – Bundesanstalt für Finanzdienstleistungsaufsicht, Lurgiallee 12, 60439 Frankfurt, Germany and subject to limited regulation by the Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS, United Kingdom and Prudential Regulation Authority 20 Moorgate, London, EC2R 6DA, United Kingdom. Further details regarding our regulatory status are available on request. c) UniCredit Bank AG Hong Kong Branch (UniCredit Bank Hong Kong), 25/F Man Yee Building, 68 Des Voeux Road Central, Hong Kong. Regulatory authority: Hong Kong Monetary Authority, 55th Floor, Two International Financial Centre, 8 Finance Street, Central, Hong Kong d) UniCredit Bank AG Singapore Branch (UniCredit Bank Singapore), Prudential Tower, 30 Cecil Street, #25-01, Singapore 049712 Regulatory authority: Monetary Authority of Singapore, 10 Shenton Way MAS Building, Singapore 079117 e) UniCredit Bank AG Tokyo Branch (UniCredit Tokyo), Otemachi 1st Square East Tower 18/F, 1-5-1 Otemachi, Chiyoda-ku, 100-0004 Tokyo, Japan Regulatory authority: Financial Services Agency, The Japanese Government, 3-2-1 Kasumigaseki Chiyoda-ku Tokyo, 100-8967 Japan, The Central Common Government Offices No. 7.

POTENTIAL CONFLICTS OF INTERESTS Aareal Bank 3; ABN Amro Bank 3; Allied Irish Banks 3; Assicurazioni Generali 3; AXA 3, 8a; Banca P. Emilia Romagna 3; Banca Popolare di Milano 3, 8a; Banco de Sabadell 3; Banco Popolare Scarl 3; Banco Popular Espanol 3; Banco Santander 8a; Bank of America 3; Bank of Montreal 3; Bankinter 3; Barclays 3; BBVA 3, 8a; BNP Paribas 8a; Citigroup 3; Commerzbank 8a; Credit Suisse 2; Danske Bank 3; Deutsche Bank 3, 8a; Deutsche Postbank 3; DNB 3; Eika BoligKreditt 3; Exor 3; General Electric 3; Goldman Sachs 3; HSBC 3; HypoVereinsbank 3; ING 8a; Intesa Sanpaolo 3, 8a; Landesbank Berlin 3; Lloyds Banking Group 3; Mediobanca 1a, 3, 6a; Morgan Stanley 3; Münchener Hypothekenbank 3; Nord/LB 3; Nordea 3; PKO Bank 3; PZU 3; Raiffeisen Bank Int. 3; Royal Bank of Canada 3; SEB 3; Société Générale 3, 8a; Svenska Handelsbanken 3; Swedbank 3; UBI Banca 3; UBS 3; Unibail-Rodamco 8a; UniCredit 2, 3; UniCredit Bank Austria 3; Wells Fargo & Co 3 Key 1a: UniCredit Bank AG and/or any related legal person owns at least 2% of the capital stock of the analyzed company. Key 1b: The analyzed company owns at least 2% of the capital stock of UniCredit Bank AG and/or any related legal person. Key 2: UniCredit Bank AG and/or any related legal person has been lead manager or co-lead manager over the previous 12 months of any publicly disclosed offer of financial instruments of the analyzed company, or in any related derivatives. Key 3: UniCredit Bank AG and/or any related legal person administers the securities issued by the analyzed company on the stock exchange or on the market by quoting bid and ask prices (i.e. acts as a market maker or liquidity provider in the securities of the analyzed company or in any related derivatives). Key 5: The analyzed company and UniCredit Bank AG and/or any related legal person have concluded an agreement on the preparation of analyses. Key 6a: Employees or members of the Board of Directors of UniCredit Bank AG and/or any other employee that works for UniCredit Research (i.e. the joint research department of the UniCredit Group) and/or members of the group Board (pursuant to relevant domestic law) are members of the Board of Directors of the analyzed company. Members of the Board of Directors of the analyzed company hold office in the Board of Directors of UniCredit Bank AG (pursuant to relevant domestic law). The application of this Key 6a is limited to persons who, although not involved in the preparation of the analysis, had or could reasonably be expected to have access to the analysis prior to its dissemination to customers or the public. Key 6b: The analyst is on the Supervisory Board/Board of Directors of the company they cover. Key 8a: UniCredit Bank AG and/or any related legal person hold a net long position exceeding 0.5% of the total issued share capital of the issuer. Key 8b: UniCredit Bank AG and/or any related legal person hold a net short position exceeding 0.5% of the total issued share capital of the issuer.

RECOMMENDATIONS, RATINGS AND EVALUATION METHODOLOGY Company Date Rec. Company Date Rec. Company Date Rec. ACAFP 12/05/2016 Marketweight CBAAU 09/05/2016 Marketweight POPSM 02/05/2016 Marketweight ACAFP 07/04/2016 Restricted CBAAU 10/11/2015 Coverage in

transition POPSM 10/11/2015 Coverage in

transition AEGON 12/05/2016 Underweight CMZB 02/11/2015 Marketweight RABOBK 19/08/2016 Marketweight AIG 03/08/2016 Marketweight CRH 18/11/2015 Restricted RABOBK 10/11/2015 Coverage in

transition AIG 02/06/2016 Restricted CS 04/02/2016 Marketweight RBIAV 13/05/2016 Marketweight ANNGR 02/08/2016 Overweight CS 19/11/2015 Restricted RBIAV 10/11/2015 Coverage in

transition ANNGR 06/06/2016 Restricted DAA 12/05/2016 Marketweight RBS 08/08/2016 Underweight ANNGR 12/05/2016 Overweight DAA 10/11/2015 Coverage in

transition RBS 29/04/2016 Marketweight

ANNGR 03/03/2016 Marketweight DANBNK 02/05/2016 Marketweight RBS 31/03/2016 Restricted ANNGR 10/02/2016 No

recommendation DANBNK 10/11/2015 Coverage in

transition SNSBNK 19/08/2016 No

recommendation ANNGR 09/12/2015 Restricted DPB 10/11/2015 Coverage in

transition SNSBNK 10/11/2015 Coverage in

transition ANNGR 03/11/2015 Marketweight DWNIGY 10/11/2015 Marketweight SOCGEN 16/08/2016 Restricted

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 20 .

Company Date Rec. Company Date Rec. Company Date Rec. ANZ 09/05/2016 Marketweight EXOIM 26/09/2016 Overweight STANLN 27/04/2016 Marketweight ANZ 10/11/2015 Coverage in

transition EXOIM 12/02/2016 Marketweight STANLN 10/11/2015 Coverage in

transition ANZNZ 09/05/2016 No

recommendation EXOIM 20/11/2015 Restricted SWEDA 02/02/2016 Marketweight

ANZNZ 10/11/2015 Coverage in transition

EXOIM 12/11/2015 Marketweight SWEDA 10/11/2015 Coverage in transition

ASBBNK 09/05/2016 No recommendation

GARAN 30/05/2016 Coverage in transition

UBS 03/05/2016 Marketweight

ASBBNK 10/11/2015 Coverage in transition

GARAN 18/12/2015 Hold UBS 14/03/2016 Restricted

ASSGEN 12/05/2016 Restricted LBBER 10/11/2015 Coverage in transition

UBS 13/10/2015 Marketweight

AXASA 04/05/2016 Marketweight MONTE 06/05/2016 Underweight UOBSP 26/02/2016 Marketweight AXASA 23/03/2016 Restricted NAB 09/05/2016 Marketweight UOBSP 10/11/2015 Coverage in

transition BFCM 10/11/2015 Coverage in

transition NAB 10/11/2015 Coverage in

transition VAKBN 30/05/2016 Coverage in

transition BNP 30/10/2015 Marketweight NDB 26/09/2016 Restricted VAKBN 18/12/2015 Sell BPCEGP 11/05/2016 Marketweight NDB 27/11/2015 Marketweight WSTP 09/05/2016 Marketweight BPCEGP 10/11/2015 Coverage in

transition NYKRE 13/05/2016 Marketweight WSTP 10/11/2015 Coverage in

transition BPEIM 05/08/2016 No

recommendation NYKRE 10/11/2015 Coverage in

transition

BPEIM 13/05/2016 Marketweight PBBGR 03/03/2016 Marketweight BZLNZ 09/05/2016 No

recommendation PBBGR 19/01/2016 Restricted

BZLNZ 10/11/2015 Coverage in transition

PMIIM 11/05/2016 Marketweight

CAIXAB 07/10/2015 No recommendation

PMIIM 10/11/2015 Coverage in transition

Overview of our ratings You will find the history of rating regarding recommendation changes as well as an overview of the breakdown in absolute and relative terms of our investment ratings on our website www.disclaimer.unicreditmib.eu/credit-research-rd/Recommendations_CR_e.pdf. Note on the evaluation basis for interest-bearing securities: Recommendations relative to an index: For high grade names the recommendations are relative to the "iBoxx EUR Benchmark" index family, for sub investment grade names the recommendations are relative to the "iBoxx EUR High Yield" index family. Marketweight: We recommend having the same portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is equal to the total return of the index. Overweight: We recommend having a higher portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is greater than the total return of the index. Underweight: We recommend having a lower portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is less than the total return of the index. Outright recommendations: Hold: We recommend holding the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is equal to the yield. Buy: We recommend buying the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is greater than the yield. Sell: We recommend selling the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is less than the yield. We employ three further categorizations for interest-bearing securities in our coverage: Restricted: A recommendation and/or financial forecast is not disclosed owing to compliance or other regulatory considerations such as a blackout period or a conflict of interest. Coverage in transition: Due to changes in the research team, the disclosure of a recommendation and/or financial information are temporarily suspended. The interest-bearing security remains in the research universe and disclosures of relevant information will be resumed in due course. Not rated: Suspension of coverage. Trading recommendations for fixed-interest securities mostly focus on the credit spread (yield difference between the fixed-interest security and the relevant government bond or swap rate) and on the rating views and methodologies of recognized agencies (S&P, Moody’s, Fitch). Depending on the type of investor, investment ratings may refer to a short period or to a 6 to 9-month horizon. Please note that the provision of securities services may be subject to restrictions in certain jurisdictions. You are required to acquaint yourself with local laws and restrictions on the usage and the availability of any services described herein. The information is not intended for distribution to or use by any person or entity in any jurisdiction where such distribution would be contrary to the applicable law or provisions. If not otherwise stated daily price data refers to pre-day closing levels and iBoxx bond index characteristics refer to the previous month-end index characteristics. Coverage Policy A list of the companies covered by UniCredit Bank is available upon request. Frequency of reports and updates It is intended that each of these companies be covered at least once a year, in the event of key operations and/or changes in the recommendation.

SIGNIFICANT FINANCIAL INTEREST UniCredit Bank AG and/or other related legal persons with them regularly trade shares of the analyzed company. UniCredit Bank AG and/or other related legal persons may hold significant open derivative positions on the stocks of the company which are not delta-neutral. UniCredit Bank AG and/or other related legal persons have a significant financial interest relating to the analyzed company or may have such at any future point of time. Due to the fact that UniCredit Bank AG and/or any related legal person are entitled, subject to applicable law, to perform such actions at any future point in time which may lead to the existence of a significant financial interest, it should be assumed for the purposes of this information that UniCredit Bank AG and/or any related legal person will in fact perform such actions which may lead to the existence of a significant financial interest relating to the analyzed company. Analyses may refer to one or several companies and to the securities issued by them. In some cases, the analyzed companies have actively supplied information for this analysis.

INVESTMENT SERVICES The analyzed company and UniCredit Bank AG and/or any related legal person concluded an agreement on the provision of investment services in the previous 12 months, in return for which the Bank and/or such related legal person received a consideration or promise of consideration or intends to do so. Due to the fact that UniCredit Bank AG and/or any related legal person are entitled to conclude, subject to applicable law, an agreement on the provision of investment services with the analyzed company at any future point in time and may receive a consideration or promise of consideration, it should be assumed for the purposes of this information that UniCredit Bank AG and/or any related legal person will in fact conclude such agreements and will in fact receive such consideration or promise of consideration.

ANALYST DECLARATION

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 21 .

The author’s remuneration has not been, and will not be, geared to the recommendations or views expressed in this study, neither directly nor indirectly.

ORGANIZATIONAL AND ADMINISTRATIVE ARRANGEMENTS TO AVOID AND PREVENT CONFLICTS OF INTEREST To prevent or remedy conflicts of interest, UniCredit Bank has established the organizational arrangements required from a legal and supervisory aspect, adherence to which is monitored by its compliance department. Conflicts of interest arising are managed by legal and physical and non-physical barriers (collectively referred to as “Chinese Walls”) designed to restrict the flow of information between one area/department of UniCredit Bank and another. In particular, Investment Banking units, including corporate finance, capital market activities, financial advisory and other capital raising activities, are segregated by physical and non-physical boundaries from Markets Units, as well as the research department. Disclosure of publicly available conflicts of interest and other material interests is made in the research. Analysts are supervised and managed on a day-to-day basis by line managers who do not have responsibility for Investment Banking activities, including corporate finance activities, or other activities other than the sale of securities to clients.

ADDITIONAL REQUIRED DISCLOSURES UNDER THE LAWS AND REGULATIONS OF JURISDICTIONS INDICATED You will find a list of further additional required disclosures under the laws and regulations of the jurisdictions indicated on our website www.cib-unicredit.com/research-disclaimer. Notice to Austrian investors: This analysis is only for distribution to professional clients (Professionelle Kunden) as defined in article 58 of the Securities Supervision Act. Notice to investors in Bosnia and Herzegovina: This report is intended only for clients of UniCredit in Bosnia and Herzegovina who are institutional investors (Institucionalni investitori) in accordance with Article 2 of the Law on Securities Market of the Federation of Bosnia and Herzegovina and Article 2 of the Law on Securities Markets of the Republic of Srpska, respectively, and may not be used by or distributed to any other person. This document does not constitute or form part of any offer for sale or subscription for or solicitation of any offer to buy or subscribe for any securities and neither this document nor any part of it shall form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. Notice to Brazilian investors: The individual analyst(s) responsible for issuing this report represent(s) that: (a) the recommendations herein reflect exclusively the personal views of the analysts and have been prepared in an independent manner, including in relation to UniCredit Group; and (b) except for the potential conflicts of interest listed under the heading “Potential Conflicts of Interest” above, the analysts are not in a position that may impact on the impartiality of this report or that may constitute a conflict of interest, including but not limited to the following: (i) the analysts do not have a relationship of any nature with any person who works for any of the companies that are the object of this report; (ii) the analysts and their respective spouses or partners do not hold, either directly or indirectly, on their behalf or for the account of third parties, securities issued by any of the companies that are the object of this report; (iii) the analysts and their respective spouses or partners are not involved, directly or indirectly, in the acquisition, sale and/or trading in the market of the securities issued by any of the companies that are the object of this report; (iv) the analysts and their respective spouses or partners do not have any financial interest in the companies that are the object of this report; and (v) the compensation of the analysts is not, directly or indirectly, affected by UniCredit’s revenues arising out of its businesses and financial transactions. UniCredit represents that: except for the potential conflicts of interest listed under the heading “Potential Conflicts of Interest” above, UniCredit, its controlled companies, controlling companies or companies under common control (the “UniCredit Group”) are not in a condition that may impact on the impartiality of this report or that may constitute a conflict of interest, including but not limited to the following: (i) the UniCredit Group does not hold material equity interests in the companies that are the object of this report; (ii) the companies that are the object of this report do not hold material equity interests in the UniCredit Group; (iii) the UniCredit Group does not have material financial or commercial interests in the companies or the securities that are the object of this report; (iv) the UniCredit Group is not involved in the acquisition, sale and/or trading of the securities that are the object of this report; and (v) the UniCredit Group does not receive compensation for services rendered to the companies that are the object of this report or to any related parties of such companies. Notice to Canadian investors: This communication has been prepared by UniCredit Bank AG, which does not have a registered business presence in Canada. This communication is a general discussion of the merits and risks of a security or securities only, and is not in any way meant to be tailored to the needs and circumstances of any recipient. The contents of this communication are for information purposes only, therefore should not be construed as advice and do not constitute an offer to sell, nor a solicitation to buy any securities. Notice to Cyprus investors: This document is directed only at clients of UniCredit Bank who are persons falling within the Second Appendix (Section 2, Professional Clients) of the law for the Provision of Investment Services, the Exercise of Investment Activities, the Operation of Regulated Markets and other Related Matters, Law 144(I)/2007 and persons to whom it may otherwise lawfully be communicated who possess the experience, knowledge and expertise to make their own investment decisions and properly assess the risks that they incur (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on by persons who are not relevant persons or relevant persons who have requested to be treated as retail clients. Any investment or investment activity to which this communication related is available only to relevant persons and will be engaged in only with relevant persons. This document does not constitute an offer or solicitation to any person to whom it is unlawful to make such an offer or solicitation. Notice to Hong Kong investors: This report is for distribution only to “professional investors” within the meaning of Schedule 1 to the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong) and any rules made thereunder, and may not be reproduced, or used by or further distributed to any other person, in whole or in part, for any purpose. This report does not constitute or form part of an offer or solicitation of any offer to buy or sell any securities, nor should it or any part of it form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. By accepting this report, the recipient represents and warrants that it is entitled to receive such report in accordance with, and on the basis of, the restrictions set out in this “Disclaimer” section, and agrees to be bound by those restrictions. Notice to investors in Ivory Coast: The information contained in the present report have been obtained by UniCredit Bank AG from sources believed to be reliable, however, no express or implied representation or warranty is made by UniCredit Bank AG or any other person as to the completeness or accuracy of such information. All opinions and estimates contained in the present report constitute a judgement of UniCredit Bank AG as of the date of the present report and are subject to change without notice. They are provided in good faith but without assuming legal responsibility. This report is not an offer to sell or solicitation of an offer to buy or invest in securities. Past performance is not an indicator of future performance and future returns cannot be guaranteed, and there is a risk of loss of the initial capital invested. No matter contained in this document may be reproduced or copied by any means without the prior consent of UniCredit Bank AG. Notice to New Zealand investors: This report is intended for distribution only to persons who are “wholesale clients” within the meaning of the Financial Advisers Act 2008 (“FAA”) and by receiving this report you represent and agree that (i) you are a “wholesale client” under the FAA (ii) you will not distribute this report to any other person, including (in particular) any person who is not a “wholesale client” under the FAA. This report does not constitute or form part of, in relation to any of the securities or products covered by this report, either (i) an offer of securities for subscription or sale under the Securities Act 1978 or (ii) an offer of financial products for issue or sale under the Financial Markets Conduct Act 2013. Notice to Omani investors: This communication has been prepared by UniCredit Bank AG. UniCredit Bank AG does not have a registered business presence in Oman and does not undertake banking business or provide financial services in Oman and no advice in relation to, or subscription for, any securities, products or financial services may or will be consummated within Oman. The contents of this communication are for the information purposes of sophisticated clients, who are aware of the risks associated with investments in foreign securities and neither constitutes an offer of securities in Oman as contemplated by the Commercial Companies Law of Oman (Royal Decree 4/74) or the Capital Market Law of Oman (Royal Decree 80/98), nor does it constitute an offer to sell, or the solicitation of any offer to buy non-Omani securities in Oman as contemplated by Article 139 of the Executive Regulations to the Capital Market Law (issued vide CMA Decision 1/2009). This communication has not been approved by and UniCredit Bank AG is not regulated by either the Central Bank of Oman or Oman’s Capital Market Authority. Notice to Pakistani investors: Investment information, comments and recommendations stated herein are not within the scope of investment advisory activities as defined in sub-section I, Section 2 of the Securities and Exchange Ordinance, 1969 of Pakistan. Investment advisory services are provided in accordance with a contract of engagement on investment advisory services concluded with brokerage houses, portfolio management companies, non-deposit banks and the clients. The distribution of this report is intended only for informational purposes for the use of professional investors and the information and opinions contained herein, or any part of it shall not form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. Notice to Polish Investors: This document is intended solely for professional clients as defined in Art. 3.39b of the Trading in Financial Instruments Act of 29 July 2005 (as amended). The publisher and distributor of the document certifies that it has acted with due care and diligence in preparing it, however, assumes no liability for its completeness and accuracy. This document is not an advertisement. It should not be used in substitution for the exercise of independent judgment. Notice to Serbian investors: This analysis is only for distribution to professional clients (profesionalni klijenti) as defined in article 172 of the Law on Capital Markets. Notice to UK investors: This communication is directed only at clients of UniCredit Bank who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations, etc.”) of the United Kingdom Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. CR e 10

9 November 2016 Credit Research

Regulatory & Accounting Briefing

UniCredit Research page 22 .

UniCredit Research* Erik F. Nielsen Group Chief Economist Global Head of CIB Research +44 207 826-1765 erik.nielsen@unicredit.eu

Dr. Ingo Heimig Head of Research Operations +49 89 378-13952 ingo.heimig@unicredit.de

Credit Research

Luis Maglanoc, CFA, Head +49 89 378-12708 luis.maglanoc@unicredit.de

Credit Strategy & Structured Credit Research

Dr. Philip Gisdakis, Head Credit Strategy +49 89 378-13228 philip.gisdakis@unicredit.de

Dr. Christian Weber, CFA, Deputy Head Credit Strategy +49 89 378-12250 christian.weber@unicredit.de

Dr. Tim Brunne Quantitative Credit Strategy +49 89 378-13521 tim.brunne@unicredit.de

Holger Kapitza Credit Strategy & Structured Credit +49 89 378-28745 holger.kapitza@unicredit.de

Dr. Stefan Kolek EEMEA Corporate Credits & Strategy +49 89 378-12495 stefan.kolek@unicredit.de

Manuel Trojovsky Credit Strategy & Structured Credit +49 89 378-14145 manuel.trojovsky@unicredit.de

Financials Credit Research

Franz Rudolf, CEFA, Head Covered Bonds +49 89 378-12449 franz.rudolf@unicredit.de

Dr. Tilo Höpker Banks +49 89 378-12960 tilo.hoepker@unicredit.de

Luis Maglanoc, CFA Regulatory & Accounting Service +49 89 378-12708 luis.maglanoc@unicredit.de

Natalie Tehrani Monfared Regulatory & Accounting Service +49 89 378-12242 natalie.tehrani@unicredit.de

Dr. Michael Teig Banks +49 89 378-12429 michael.teig@unicredit.de

Emanuel Teuber Covered Bonds +49 89 378-12961 emanuel.teuber@unicredit.de

Robert Vielhaber Sub-Sovereigns & Agencies, Green Bonds +49 89 378-12004 robert.vielhaber@unicredit.de

Dr. Martina von Terzi Banks, Financial Services, Insurance +49 89 378-14245 martina.vonterzi@unicredit.de

Corporate Credit Research

Stephan Haber, CFA, Co-Head Telecoms, Technology +49 89 378-15192 stephan.haber@unicredit.de

Dr. Sven Kreitmair, CFA, Co-Head Automotive & Mobility +49 89 378-13246 sven.kreitmair@unicredit.de

Jana Arndt, CFA Industrials +49 89 378-13211 jana.arndt@unicredit.de

Christian Aust, CFA Industrials +49 89 378-12806 christian.aust@unicredit.de

Mehmet Dere Oil & Gas, EEMEA Energy, Consumer +49 89 378-11294 mehmet.dere@unicredit.de

Michael Gerstner Utilities, Hybrids +49 89 378-15449 michael.gerstner@unicredit.de

Jonathan Schroer, CFA Media/Cable, Logistics, Business Services +49 89 378-13212 jonathan.schroer@unicredit.de

Dr. Silke Stegemann, CEFA Health Care & Pharma, Food & Beverage, Personal & Household Goods +49 89 378-18202 silke.stegemann@unicredit.de

Publication Address

UniCredit Research Corporate & Investment Banking UniCredit Bank AG Arabellastrasse 12 D-81925 Munich globalresearch@unicredit.de

Bloomberg UCCR Internet www.research.unicredit.eu

*UniCredit Research is the joint research department of UniCredit Bank AG (UniCredit Bank), UniCredit Bank AG London Branch (UniCredit Bank London), UniCredit Bank AG Milan Branch (UniCredit Bank Milan), UniCredit Bank New York (UniCredit Bank NY), UniCredit Bulbank, Zagrebačka banka d.d., UniCredit Bank Czech Republic and Slovakia, Bank Pekao, ZAO UniCredit Bank Russia (UniCredit Russia), UniCredit Bank Romania. CR 25