1. Americas Markets in Focus Update 3: United States and Canada

2. North America Update ASLF 2016 Debbie Mercer-Miller Securities Country Manager deborah.mercermiller@citi.com +1 212-816-6861

3. Capital Market Foreign Holdings Fixed Income Market Capitalization Equity Market Capitalization Index Performance – MSCI World vs. S&P 500 Sources: SIFMA, World Federation of Exchanges, S&P 500, MSCI, U.S. Treasury Department

4. Recent Market Developments Microcap and Low Price Security Catalyst is forming a Custodian work group to apprise regulators of market challenges and present suggested enhance measures for the Custodian community - Citi will implement changes, if any, in an orderly, seamless model with timely communication to our clients, to avoid potential abrupt service changes DTC Settlement Finality – Match to Settle (July 2013 -Feb 2015) Catalyst for DTC to change its infrastructure model to ensure settlement finality and eliminate DKs; settlement is now final once the receiving counterparty approves the receipt of the security - Eliminates approx $1 trillion USD in risk per year across all counterparties in the U.S. - Significant improvement for Operational efficiency Shorter Settlement Cycle from T+3 to T+2 (May 2012 – Q3 2017) DTCC recommended to shorten the U.S. settlement cycle for equities, municipal and corporate bonds, and unit investment trusts (UIT) to from T+3 to T+2 - Reduced settlement, counterparty, and systemic risk - Increased efficiency in trade processing Key Development Change Client Impact

5. Service Update Key Development Change Client Impact Third Party Security Borrows and Borrow Rehypothecation Citi now supports a comprehensive and automated service which includes settlement, reporting, corporate action, income and tax on the 3rd party borrowed collateral - Additional investment option for clients to increase liquidity and leverage against risk Internal Transfer - Single Instruction Method (OWNI) Citi is expanding our settlement model to support a single instruction method for internal transfers between two Custody accounts. - Improve straight through processing and reduce Operational cost Link competing corporate action events Citi has implemented an asset services enhancement to link competing corporate action events for the same ISIN and or CUSIP - Improves operational efficiency, increases transparency and helps mitigates risk

6. Forthcoming Initiatives Key DevelopmentsClient Impact Expedite settlement by automatically amending pending settlement transactions to correspond with the corporate action transformation Increase Operation efficiency by eliminating the need for clients to cancel and reinstruct pending transactions Corporate Action Transformation impacting Pending Settlement Transactions Align with market standards Improve STP and reduce Operational cost Cash Stock Option and DRIP Events Increase transparency improve tax reporting Report securities which are deemed grandfathered hence exempted from FATCA treatment Grandfathered Obligations

7. Country Hot Topic – Shorter Settlement Cycle from T+3 to T+2  DTCC commissioned the Boston Consulting Group to conduct an industry survey –Performed cost-benefit analysis of moving from T+3 to T+2 versus T+1 as noted in the chart below –Industry leaning towards T+2 followed by reassessment of T+1 –DTCC is soliciting regulatory and industry working group endorsement  The T+2 Industry Steering Committee published an Implementation Playbook developed with Deloitte Advisory. –The Playbook provides a detailed timeline, milestones and dependencies that impacted market participants should consider in order to migrate to a two-day settlement cycle (T+2) –Financial services industry has expressed support for move to T+2 by Q3 2017  Two milestones are critical as they affect an organization’s ability to plan and execute the migration to T+2 and may delay the Q3 2017 “go-live” timeframe. They are: –Regulatory certainty (Q2 2016) –Industry-wide testing (Q3 2017)  Benefits may include: –Quicker access to capital and liquidity –Reduce counterparty risk exposure –Market efficiency and stability –Earlier funding of purchases –Quicker resolution of potential fails prior to settlement day

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