Northern Trust Securities, Inc.

Allegations: THE NORTHERN TRUST COMPANY ("NORTHERN TRUST"), ACTING IN ITS CAPACITY AS A SWAP DEALER, WAS ORDERED TO PAY A $999,000 FINE BY THE NATIONAL FUTURES ASSOCIATION ("NFA"). THE DECISION BY THE NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") WAS BASED ON A COMPLAINT AND A SETTLEMENT OFFER SUBMITTED BY NORTHERN TRUST, IN WHICH IT NEITHER ADMITTED NOR DENIED THE ALLEGATIONS. THE BCC FOUND THAT NORTHERN TRUST COMMITTED THE ALLEGED RULE VIOLATIONS AND CONSIDERED RECENT NORTHERN TRUST REMEDIATION EFFORTS IN ACCEPTING THE SETTLEMENT OFFER. GENERALLY, IT WAS ALLEGED THAT NORTHERN TRUST DID NOT ESTABLISH AND IMPLEMENT ADEQUATE WRITTEN PROCEDURES REASONABLY DESIGNED TO ENSURE THAT NORTHERN TRUST PROVIDED COUNTERPARTIES WITH APPROPRIATE DOCUMENTATION AND DISCLOSURES PRIOR TO OR CONTEMPORANEOUSLY WITH ENTERING INTO SWAP TRANSACTIONS AND DID NOT ESTABLISH A SYSTEM TO DILIGENTLY SUPERVISE IT SWAP DEALER ACTIVITIES, INCLUDING THE REMEDIATION, RETESTING AND RESOLUTION OF NON-COMPLIANCE ISSUES. Status: Final Sanction Detail: NOT APPLICABLE. Summary: THE NORTHERN TRUST COMPANY ("NORTHERN TRUST"), ACTING IN ITS CAPACITY AS A SWAP DEALER, WAS ORDERED TO PAY A $999,000 FINE BY THE NATIONAL FUTURES ASSOCIATION ("NFA"). THE DECISION BY THE NFA'S BUSINESS CONDUCT COMMITTEE ("BCC") WAS BASED ON A COMPLAINT AND A SETTLEMENT OFFER SUBMITTED BY NORTHERN TRUST, IN WHICH IT NEITHER ADMITTED NOR DENIED THE ALLEGATIONS. THE BCC FOUND THAT NORTHERN TRUST COMMITTED THE ALLEGED RULE VIOLATIONS AND CONSIDERED RECENT NORTHERN TRUST REMEDIATION EFFORTS IN ACCEPTING THE SETTLEMENT OFFER. GENERALLY, IT WAS ALLEGED THAT NORTHERN TRUST DID NOT ESTABLISH AND IMPLEMENT ADEQUATE WRITTEN PROCEDURES REASONABLY DESIGNED TO ENSURE THAT NORTHERN TRUST PROVIDED COUNTERPARTIES WITH APPROPRIATE DOCUMENTATION AND DISCLOSURES PRIOR TO OR CONTEMPORANEOUSLY WITH ENTERING INTO SWAP TRANSACTIONS AND DID NOT ESTABLISH A SYSTEM TO DILIGENTLY SUPERVISE IT SWAP DEALER ACTIVITIES, INCLUDING THE REMEDIATION, RETESTING AND RESOLUTION OF NON-COMPLIANCE ISSUES.

Allegations: WITHOUT ADMITTING OR DENYING THE FINDINGS OR CONCLUSIONS OF THE COMMODITY FUTURES TRADING COMMISSION ('CFTC'0, THE NORTHERN TRUST COMPANY ('TNTC"0 CONSENTED TO ENTRY OF AN ORDER FINDING THAT FROM 2013 THROUGH AT LEAST 2018 TNTC FAILED TO REPORT CERTAIN SWAPS TO A SWAP DATA REPOSITORY CONSISTENT WITH THE REQUIREMENTS OF THE COMMODITY EXCHANGE ACT AND CFTC REGULATIONS, AND THAT THOSE SWAP REPORTING FAILURES WERE A DIRECT RESULT OF TNTC'S FAILURE TO ADEQUATELY SUPERVISE ITS SWAP DEALER, INCLUDING FAILING TO HIRE QUALIFIED SUBJECT MATTER EXPERTS TO ENSURE SWAP DEALER COMPLIANCE. THE CFTC'S ORDER REQUIRES THAT TNTC PAY A CIVIL MONETARY PENALTY OF $1 MILLION, AND THAT IT ENHANCE ITS SUPERVISORY PROGRAM, POLICIES, PROCEDURES AND CONTROLS, AND PROVIDE ADDITIONAL TRAINING TO RELEVANT PERSONNEL. TNTC WILL PROVIDE STATUS REPORTS TO THE CFTC CONCERNING ITS REMEDIATION PROGRESS. ADDITIONALLY, TNTC HAS RETAINED OUTSIDE CONSULTANTS TO REVIEW ITS SWAP DEALER PROCESSES AND PROCEDURES, HAS HIRED NEW PERSONNEL TO OVERSEE COMPLIANCE AT ITS SWAP DEALER AND HAS TAKEN SUBSTANTIAL STEPS TO IMPROVE ITS PROCESSES FOR SWAP REPORTING GOING FORWARD. Status: Final Sanction Detail: THE CIVIL MONETARY PENALTY OF $1 MILLION WILL BE PAID IN FULL WITHIN THE TEN DAYS OF THE ORDER DATE. Summary: WITHOUT ADMITTING OR DENYING THE FINDINGS OR CONCLUSIONS OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"), THE NORTHERN TRUST COMPANY ("TNTC") CONSENTED TO ENTRY OF AN ORDER FINDING THAT FROM 2013 THROUGH AT LEAST 2018 TNTC FAILED TO REPORT CERTAIN SWAPS TO A SWAP DATA REPOSITORY CONSISTENT WITH THE REQUIREMENTS OF THE COMMODITY EXCHANGE ACT AND CFTC REGULATIONS, AND THAT THOSE SWAP REPORTING FAILURES WERE A DIRECT RESULT OF TNTC'S FAILURE TO ADEQUATELY SUPERVISE ITS SWAP DEALER, INCLUDING FAILING TO HIRE QUALIFIED SUBJECT MATTER EXPERTS TO ENSURE SWAP DEALER COMPLIANCE. THE CFTC'S ORDER REQUIRES THAT TNTC PAY A CIVIL MONETARY PENALTY OF $1 MILLION, AND THAT IT ENHANCE ITS SUPERVISORY PROGRAM, POLICIES, PROCEDURES AND CONTROLS, AND PROVIDE ADDITIONAL TRAINING TO RELEVANT PERSONNEL. TNTC WILL PROVIDE STATUS REPORTS TO THE CFTC CONCERNING ITS REMEDIATION PROGRESS. ADDITIONALLY, TNTC HAS RETAINED OUTSIDE CONSULTANTS TO REVIEW ITS SWAP DEALER PROCESSES AND PROCEDURES, HAS HIRED NEW PERSONNEL TO OVERSEE COMPLIANCE AT ITS SWAP DEALER AND HAS TAKEN SUBSTANTIAL STEPS TO IMPROVE ITS PROCESSES FOR SWAP REPORTING GOING FORWARD.

Allegations: THE SEC ALLEGED THAT THE MUNICIPAL SECURITIES DEALERS CONDUCTED INADEQUATE DUE DILIGENCE EFFORTS IN THE ISSUANCE OF SECURITIES BY CERTAIN MUNICIPAL ISSUERS, AND THEREFORE VIOLATED SECTION 17(A)(2) OF THE SECURITIES ACT OF 1933. Status: Final Sanction Detail: $60,000 FINE WAS PAID ON 6/22/15. Summary: NORTHERN TRUST, WITHOUT ADMITTING OR DENYING ANY FINDINGS, CONSENTED TO A $60,000 CIVIL PENALTY IN CONNECTION WITH THREE MUNICIPAL SECURITIES OFFERINGS THAT TOOK PLACE IN 2010. THE SEC FURTHER ORDERED NORTHERN TRUST AND THE OTHER DEALERS TO RETAIN AN INDEPENDENT CONSULTANT TO REVIEW THEIR POLICIES AND PROCEDURES RELATED TO MUNICIPAL SECURITIES UNDERWRITING DUE DILIGENCE AND TO ADOPT RECOMMENDATIONS MADE BY THE INDEPENDENT CONSULTANT WITHIN ONE YEAR OF THE ISSUANCE OF THE ORDER.