THOMSON REUTERS ACCELUS The Future of Regulation The Cost of Compliance vs The Cost of non-Compliance

CHALLENGES FACED BY THE COMPLIANCE FUNCTION

COST OF COMPLIANCE SURVEY Thomson Reuters polled more than 600 practitioners across 70+ countries for our 2015 Cost of Compliance survey. 5

Organizations are squeezed in between a complex, dynamic regulatory environment and budget limitations 6 Market Conduct and Fraud Maintaining a Respectful Workplace Code of Conduct Risk Management Anti-Money Laundering and Counter-Terrorism Financing Prevention of Corrupt Practices Healthcare, Education and more Privacy, Confidentiality, and Information Security Conduct Risk (Organizational Integrity and Culture) RISK REQUIREMENTS Increasing gap between requirements and resources COMPLIANCE CHALLENGES

COMPLIANCE OFFICERS’ VIEW OF THE GREATEST CHALLENGES IN 2014

CONSEQUENCES OF NON-COMPLIANCE

A CHANGING WORLD

SCREENING FOR AML Verify the identity of vendors, suppliers, clients, partners and employees Protect against unlawful relationships based on sanction and enforcement activity Understand business risks associated with Politically Exposed Persons Monitor adverse media Gain deep intelligence on emerging markets or during acquisition and partnership activities through Enhanced Due Diligence Monitor transactions for suspicious activity or behavior

WORLD-CHECK DATABASE INCLUSION CRITERIA Named on an international or national sanctions site, arms or trade embargo Listed on a law or regulatory enforcement or other government or financial authority / wanted site Politically Exposed Person (PEP) and direct family member or close business associate of PEP 14 Global PEP Lists Asset freeze, investment or travel ban. Global sanctions lists. Global Enforcement and Warning Lists

CRIME COVERAGE Aircraft Hijacking / Aviation Crimes Environmental Crimes Illicit trafficking in stolen and other goods Price fixing / Illegal cartel information / Anti-trust violations ArsonExtortion Insider Trading & Market Manipulation Racketeering Arms Trafficking Falsifying information on official documents Migrant Smuggling / Slave Labor Robbery (only high value) Bribery & CorruptionForgeryMoney LaunderingSecurities Fraud Cheating Fraud / Embezzlement / Theft Narcotics Trafficking (production and distribution) Sexual Exploitation of Children (for financial benefit) Human Trafficking Counterfeiting and Piracy of Products Tax evasion / Tax fraud Organised CrimeSmuggling Currency counterfeiting Hostage Taking / Kidnapping (Political or Terror related or ransom demanded) Pharmaceutical Product trafficking / Illegal distribution / Illegal production / Banned / Fake medicines Terrorism / Terror Financing Cybercrime / Hacking / Phishing Wildlife CrimePiracy (sea)War Crimes

Number of TERRORISM profiles Terrorism Coverage

White Widow Samantha Louise Lewthwaite (Natalie Faye Webb) The widow of 7/7 suicide bomber Germaine Lindsay Fugitive from justice in Kenya and member of Al-Shabaab 4 January 2012 Kenyan arrest warrant – WC profiled the same day on media reports with fraudulent South African passport number Interpol Red Notice – Sept 2013 First Rand and Standard Bank client 17

Fines paid by the Banks to date

THANK YOU “ As KYC due diligence requirements continue to grow exponentially, banks and financial institutions (FIs) - and their customers - are facing wave after wave of increasingly complex regulations and must find new and efficient ways to integrate these regulations into their day-to-day processes. While compliance is a legal requirement, they must also define the crucial line between satisfying the regulator and delivering a positive customer experience. The complexity of this challenge should not be underestimated”. -Maureen McGuinness -Tel Cell: Accelus.thomsonreuters.com