Securities Finance

Securities Finance Multi-faceted and customized securities finance solutions for a sophisticated market Securities Finance is a valuable tool for today’s financial markets. It can provide a new source of return and form a key part of your overall portfolio and risk management strategy. With multiple routes to market, Securities Finance understands your needs and provides support across a range of strategies and asset classes. We help you get the most out of your loans, optimize the value of your portfolio and support your investment strategy.

In a world of dynamic markets, investors Broad Choice continuously evaluate the role that Securities When you partner with us, you gain access to multiple Finance plays in their broader strategies. securities finance options from a single provider. We support your securities finance needs by You also benefit from specialized trading and providing an individualized service, advanced distribution through one of the market’s largest technology and an unwavering commitment supply channels. to the transparency you require. Superior Client Experience We know that you have specific financing Our team of professionals is committed to providing needs that can change daily. Our team can you with solutions that help to enhance and preserve help you capitalize on opportunities through the value of your portfolio. When you work with us, our flexible and risk-based approach. you benefit from a dedicated relationship management team, innovative risk management, and our presence We understand your objectives and draw on in more than 30 markets to make sure you are our innovative product suite to provide the always connected. optimal solution to minimize costs and maximize returns. With more than 40 years of industry A Partner You Can Trust experience, we have extensive industry knowledge As one of the longest-running and largest securities and a strong commitment to serving our clients. lending providers in the industry, we are committed to providing solutions that suit our clients’ unique Our Securities Finance product suite includes: needs. We use our local market knowledge to develop lending programs that help achieve your objectives. • Agency Lending An Award-Winning Organization • Enhanced Custody We have been recognized as a leader in securities finance, with our Agency Lending service placing • Alternative Financing Solutions first globally in the 2019Global Investor/ISF Beneficial Owners Survey. We have also been named Best • Direct Access Lending Securities Financing House since 2012 by Asia Asset Management and Best in Securities Lending for the fifth consecutive year atThe Asset Triple A Asset Servicing, Institutional Investor and Insurance Awards in 2019.

2 Securities Finance

Products and Services

Agency Lending Enhanced Custody We have a long track record of enabling clients Our Enhanced Custody offering is an alternative to enhance returns by lending securities in to traditional prime brokerage services, creating a collateralized transaction. Our Agency efficiencies and providing improved asset safety. Lending service provides you with tailored You are allowed to borrow and finance securities solutions that offer enhanced yield alongside directly from us within a segregated custody account. extensive risk monitoring and oversight. Enhanced Custody supports your investment We act as the agent by managing all trade strategies and eliminates the need for tri-party activities and related functions. arrangements. It has been designed to complement your prime brokerage relationship and provide Robust Risk Management alternative financing strategies that include: Our commitment to managing risk is at the heart of how we operate. We maintain consistent • Cash transactions and comprehensive risk management controls, including rigorous oversight and exceptional • Memo-pledge transparency to keep your assets secure. • Self-financing Collateral Management An increasingly sophisticated and volatile • Self-borrow investment world has made collateral management a priority. Depending on your Alternative to Prime Brokerage needs, we support both internally and As a custody-based solution, there is no need externally managed cash collateral for tri-party arrangements when using Enhanced investment strategies. Custody. You can borrow and finance securities directly from your custodial account, providing Breadth and Depth more visibility into and control over your assets. We are one of the largest agent lenders in the world, with over 40 years of experience and Diversified Financing more than 250 clients across multiple global Take advantage of a range of financing solutions that markets. Our depth of lendable assets and work for different client types, including memo-pledge, strong market position provide you with more self-financing, self-borrow and repledge. trading opportunities and competitive pricing. Safety and Efficiency Unlike a traditional prime broker, assets are not pooled with other client assets. As a result, there is less credit risk exposure. You gain operational and risk management efficiencies by holding assets and collateral in the same account.

3 Securities Finance

Products and Services (cont.)

Alternative Financing Solutions In a heightened regulatory environment, An Alternative to Traditional Credit Facilities our Alternative Financing Solutions provides Our solution helps to simplify client operations innovative leverage facilities to address your and manage all aspects of collateral management, financing needs. You can achieve stable, long-term exposure calculation, margin call movements and financing directly from us within a segregated daily pledging. Our goal is to allow you to focus custody account at competitive rates. on managing your portfolio instead of day-to-day operations. Long positions within your custody Alternative Financing Solutions provides leverage account are pledged to access cash from our through a hybrid of financial channels, enabling balance sheet. Securities are re-hypothecated you to memo-pledge the funds’ long positions. through agency lending, with the operational Securities are also re-hypothecated via agency safeguards of an established program. securities lending, a transparent and low-risk alternative to traditional re-hypothecation. Depth and Breadth Our global footprint provides you the support A Multi-Faceted Approach of seasoned agency lending professionals with Through our Alternative Financing Solutions, access to more than 30 markets. With an extensive you can access new ways to secure stable book of counterparties, we can facilitate off-balance sources of funding. We provide you with sheet financing and subsequent diversification of customized funding by using a traditional your counterparty exposure. committed credit facility, supplemented by agency lending and reverse repo.

4 Securities Finance

Products and Services (cont.)

Direct Access Lending Clients using our Enhanced Custody service can How it Works for Lenders benefit from Direct Access Lending, a means to The lender approves additional counterparties, which borrow directly from participating State Street are typically alternative funds. The collateral is held Agency Lending clients. This managed, peer-to-peer in the borrowing client’s custody account in the securities lending service offers an operationally name of the borrower and then directly pledged efficient program that provides benefits to both to the participating Agency Lending client. lenders and borrowers of United States equities. If applicable, the transactions are indemnified.

Peer-to-peer securities lending is part of the natural How it Works for Borrowers evolution of securities lending, providing beneficial Direct Access Lending provides borrowers with owners and alternative funds with new distribution access to financing and leverage using short-sale channels and the potential to enhance returns. proceeds. Grounded in our Enhanced Custody service, With its seamless peer-to-peer model, Direct Access clients benefit from an operational structure similar Lending benefits from the operational efficiency to that of a prime broker. Clients receive reports that and expertise of a managed lending program. separately display loans and collateral through the service, with transparency to the counterparty level.

5 To learn more about Securities Finance e-mail: [email protected]

Disclaimers and Important Risk Information

State Street Global MarketsSM is a registered trademark of JURISDICTION SPECIFIC INFORMATION: State Street Corporation used for its financial markets business and that of its affiliates (collectively “State Street”). Australia: This communication is being distributed in Australia by State Street Bank and Trust Company ABN 70 062 819 630, AFSL This document and information provided herein is for marketing and/ 239679 and is intended only for wholesale clients, as defined in the or informational purposes only and is not intended for retail clients, Corporations Act 2001. nor for distribution to, and may not be relied upon by, any person or entity in any jurisdiction or country where such distribution or use Brunei: State Street has a restricted bank license in Brunei and the would be contrary to applicable law or regulation. It is not intended activities described herein are conducted from off-shore and are in to constitute investment, legal, regulatory, tax or accounting advice relation to offshore, non-Brunei securities or futures. regarding any securities or futures and does not take into account any client’s particular investment or other financial objectives or strategies, BVI: The products and services described herein are offered from nor any client’s legal, regulatory, tax or accounting status, nor does it off-shore by State Street Bank and Trust Company, authorized and purport to be comprehensive, nor intended to replace the exercise of a regulated by the Federal Reserve Board. client’s own careful independent review regarding any corresponding investment or other financial decision. All information has been Cayman: The products and services described herein are offered obtained from sources believed to be reliable at the time of publication, from off-shore by either State Street Bank and Trust Company, but we make no representation or warranty as to its accuracy and you authorized and regulated by the Federal Reserve Board, or State Street should not place any reliance on this information. Bank International GmbH, London Branch, authorised by Deutsche Bundesbank and the German Federal Financial Supervisory Authority This document and information provided herein is not intended to and subject to limited regulation by the FCA and PRA. suggest or recommend any investment or investment strategy, and does not constitute investment research. These written materials Canada: The products and services outlined herein are offered by do not constitute, and should not be construed as constituting, (1) either State Street Bank and Trust Company, which is regulated a solicitation, offer or invitation to subscribe for, or purchase securities by the Federal Reserve Board, from offshore, or State Street Bank or futures or the making available of securities or futures for purchase and Trust Company, Canada Branch, a foreign bank branch of or subscription in any jurisdiction; (2) the provision of investment State Street Bank and Trust Company that is regulated by the Office of advice concerning securities or futures; or (3) an undertaking by State the Superintendent of Financial Institutions. Street to manage the portfolio of securities or futures contracts on behalf of other persons. This material is not intended to constitute any EMEA (ex-UK): The products and services are offered through either: binding contractual arrangement or commitment by State Street to (i) State Street Bank and Trust Company, London Branch, authorised provide securities services nor any other financial services. and regulated by the Federal Reserve Board and subject to regulation by the Financial Conduct Authority (FCA) and authorized and subject to Any market commentary provided by Securities Finance Trading Desks limited regulation by the Prudential Regulation Authority (PRA; and/or is not investment research. Performance data shown represents past (ii) State Street Bank International GmbH, London Branch, authorised by performance and is no guarantee of future results. Deutsche Bundesbank and the German Federal Financial Supervisory Authority and subject to limited regulation by the FCA and PRA. Details State Street hereby disclaims all liability, whether arising in contract, about the extent of regulation of these entities by the FCA and PRA are tort or otherwise, for any losses, liabilities, damages, expenses or costs available from us on request. State Street Bank and Trust Company, arising, either direct or consequential, from or in connection with the London Branch and State Street Bank International GmbH, London use of or any reliance placed upon any information provided. Branch are not licensed or doing business within these jurisdictions and the activities that are described are carried out from off-shore. Clients should be aware of the risks of participating in securities lending, which may include counterparty, collateral, loss of investment, Hong Kong: The activities described herein are undertaken by State tax and accounting risks. A securities lending program description and Street Bank and Trust Company/State Street Securities Hong Kong risks statement is available. The communication and information or Limited. any portion thereof may not be reprinted, sold or redistributed without the prior written consent of State Street Global Markets. Indonesia: State Street is not licensed within or carrying on business within Indonesia. The activities described herein are conducted from 免責聲明 off-shore. 以上資訊不應被視為為投資建議，並且不是購買或出售證劵的邀請。本新聞稿並未考慮任何投資者各自的投資目的、策略或稅務狀況。本稿 Japan: This communication is being distributed in Japan by State Street 資料均取自被認為可靠的來源，惟我們不能對該等資料之準確性作出 Trust and Banking Co., Ltd. (“SSTB”). SSTB is regulated by the Financial 陳述或保證，閣下不應依賴上述任何資訊。過去表現並不一定反映未 Services Agency of Japan (“FSA”). SSTB is licensed under Article 4 of 來的表現。 Banking Act and is registered as Registered Financial Institution with the FSA as Kanto Zaimu-kyokucho (Tokin) No. 648 under Article 33-2 of 上述產品及服務可能不會在所有司法管豁區提供。請聯絡閣下的營業 Financial Instruments and Exchange Act, and also is a member firm of 代表以獲取更多資訊。 Japan Securities Dealers Association and Japan Investment Advisers Association. ©道富集團, 2019 Malaysia: State Street has an unregulated entity in Malaysia. The Thailand: State Street has a foreign bank representative office in activities described herein are conducted from off-shore and are in Thailand. The activities described herein are conducted from off-shore relation to offshore, non-Malaysian securities or futures. and are in relation to offshore, non-Thai securities or futures.

People’s Republic of China (“PRC”): State Street Bank and Trust UK: The products and services are offered only to Eligible counterparties Company is not licensed to carry on business in the PRC in respect of and Professional clients through either: (i) State Street Bank and Trust any activities described herein and any such activities are conducted Company, London Branch, authorised and regulated by the Federal outside of the PRC. Reserve Board and subject to regulation by the Financial Conduct Authority (FCA) and authorised and subject to limited regulation Singapore: This communication is being disseminated by State Street by the Prudential Regulation Authority (PRA; and/or (ii) State Street Bank and Trust Company, Singapore Branch (“SSBTS”), which holds Bank International GmbH, London Branch, authorised by Deutsche a wholesale bank license by the Monetary Authority of Singapore. Bundesbank and the German Federal Financial Supervisory Authority In Singapore, this communication is only distributed to accredited, and subject to limited regulation by the FCA and PRA. Details about the institutional investors as defined in the Singapore Financial Advisers extent of regulation of these entities by the FCA and PRA are available Act (“FAA”). Note that SSBTS is exempt from Sections 27 and 36 of the from us on request. FAA. When this communication is distributed to overseas investors as defined in the FAA, note that SSBTS is exempt from Sections 26, 27, 29 US: The products and services described herein are offered by and 36 of the FAA. State Street Bank and Trust Company, authorized and regulated by the Federal Reserve Board. South Korea: State Street is not licensed to carry on this business within South Korea. The activities described herein are undertaken by Products and services may not be available in all jurisdictions. Please State Street Bank and Trust Company/State Street Securities Hong contact your sales representative for further information. Kong Limited in an offshore capacity and are not provided within South Korea.

Taiwan: State Street is not licensed to carry on this business within Taiwan. The activities described herein are undertaken by State Street Bank and Trust Company/State Street Securities Hong Kong Limited in an offshore capacity and are not provided within Taiwan.