The Global Financial Markets Association (GFMA), which represents the common interests of the world’s leading financial and capital market participants, today announces a leadership change at the start of a busy year on the global regulatory agenda. On February 1st, Blythe Masters, Head of Global Commodities at JPMorgan Chase and member of the JPMorgan Chase Executive Committee, takes over as Chair of GFMA from Michele Faissola, Global Head of Rates and Commodities at Deutsche Bank. At the same time, Simon Lewis, chief executive at the Association for Financial Markets in Europe (AFME) takes over as chief executive of GFMA from Tim Ryan, who heads up the US-based Securities Industry and Financial Markets Association (SIFMA). Blythe Masters and Simon Lewis will serve in their respective roles for two years. Masters previously served as the Chair of SIFMA. GFMA brings together three of the world’s largest financial trade associations to address the increasingly important global regulatory agenda and to promote coordinated advocacy efforts: the Association for Financial Markets in Europe (AFME), the Asia Securities Industry & Financial Markets Association (ASIFMA) and, in North America, the Securities Industry and Financial Markets Association (SIFMA). In the coming months, GFMA will focus on the increasingly important global issues in financial market regulation, and, in particular, the position of the Global Systemically Important Banks (G-SIBs). In addition, GFMA’s Global FX Division represents over 90% of the global foreign exchange market. Blythe Masters, GFMA’s incoming Chair, commented: “Global financial markets are being regulated in different parts of the world at different speeds, so it’s vital that the industry has a unified voice. GFMA speaks for the industry on the most important global market issues and is a keen advocate of the free flow of capital and consistency of regulation across multiple jurisdictions. “As the global financial services industry enters its most critical year yet in terms of regulatory change, GFMA has an important role to play in helping shape the future framework.” Simon Lewis, GFMA’s chief executive, commented: “I look forward to continuing the great work Tim Ryan has performed over the last two years as head of GFMA. 2012 promises to be a defining year for the way global financial markets operate, with implementation of the Basel III reforms well under way and the Financial Stability Board active across a broad agenda. We expect to work with the FSB and other regulators to ensure policymakers adopt an evidence-based approach and that financial regulation is consistent and co-ordinated across all jurisdictions.” -ENDS-

LONDON, HONG KONG AND NEW YORK, January 20, 2012 -- GFMA today announced that it has posted a TEST file, created by the Depository Trust & Clearing Corporation (DTCC), and the Society for Worldwide Interbank Financial Telecommunication (SWIFT), of provisional legal entity identifiers, as well as a brief summary describing the provisional legal entity identifier attributes. This information can be found here. GFMA is making this information available so that member firms and other financial market participants can begin to evaluate, understand and test the operational implications for their businesses of recently enacted and impending regulatory reporting requirements that include legal entity identification. This new rulemaking is in accordance with mandates from the G20 for improved transparency around OTC derivatives activity as well as other regulatory initiatives. The provisional legal entity identifier TEST file is meant to assist firms in their preparation for compliance with new reporting requirements. GFMA notes that the posting of the provisional legal entity identifiers is in anticipation of a global LEI Solution that will be phased and sequenced according to regulatory requirements that are established regionally and globally, as well as implemented in accordance with an appropriate governance framework established in cooperation between the G20, Financial Stability Board (FSB), other regulatory bodies, and the financial services industry. A uniform, globally consistent LEI Solution will provide regulators with a powerful tool to better monitor systemic risk and enable individual firms to more effectively measure counterparty exposure. GFMA applauds the FSB’s statement of support for a global LEI Solution and the establishment of a private sector advisory group in its most recent work plan. We appreciate the work being done by the FSB, and regulators around the globe to determine the best approach for a global LEI Solution. GFMA remains committed to working with all stakeholders through this process. The Global Financial Markets Association (GFMA) joins together some of the world’s largest financial trade associations to develop strategies for global policy issues in the financial markets, and promote coordinated advocacy efforts. The member trade associations count the world’s largest financial markets participants as their members. GFMA currently has three members: the Association for Financial Markets in Europe (AFME), the Asia Securities Industry & Financial Markets Association (ASIFMA), and, in North America, the Securities Industry and Financial Markets Association (SIFMA). Contact: Liz Pierce, +1 (212) 313-1173, [email protected] James White, +44 (0)20 7743 9367, [email protected] Rebecca Terner, +852-2537-3246, [email protected]

A Financial Transaction Tax (FTT) levied across the European Union would seriously impact the foreign exchange market, increasing transaction costs by up to 18 times, according to Oliver Wyman research commissioned by GFMA’s1 Global FX Division2. The report findings suggest that, given the tight margins that exist in foreign exchange markets, this increase would, in turn, hit the real economy as these costs would largely be passed onto all endusers, such as Europe’s financial institutions, (pension funds, asset managers, insurers) and corporates. The global foreign exchange market is the most liquid in the world, with an average daily turnover of $4 trillion, according to the Bank for International Settlements, and is used extensively by corporates, as well as investors. The majority of FX trading volume (45%) takes place in the FX swaps market. The report, ‘Proposed EU Commission Financial Transaction Tax; Impact Analysis of Foreign Exchange Markets’, evaluates the impact of the European Union’s proposed FTT on European FX markets, estimating its impact on FX cash and derivatives users. The report not only recognises a primary impact of the tax – an increase in transaction costs, relocation of trading and reduction in notional turnover – but also a secondary impact, namely, a potential reduction in liquidity leading to a widening of bid/ask spreads. The research suggests that a proposed FTT would: Directly increase transaction costs for all transactions by three to seven times and by up to 18 times for the most traded part of the market; Potentially relocate 70‐75% of tax eligible transactions outside of the EU tax jurisdiction; combined with reduced transaction volumes (of approx 5%), this could reduce market liquidity and increase indirect transaction costs by up to a further 110%; Predominantly hit the real economy (pension funds, asset managers, insurers and corporates) as both direct and indirect costs are largely passed onto end‐users, who will be least able to move transactions to jurisdictions not subject to the tax; Have a limited impact on speculative trading as this activity will most likely relocate outside the EU tax jurisdiction; Inefficiently tax the economy as raising €1 of tax would likely cost the economy more than €1, due to the indirect costs associated with reduced and more fragmented liquidity. To reach this increase of 18 times, the report used the example of the most liquid swap product – the EUR/USD 1 week swap with a notional value of €25,000,000, as transacted between a bank and a financial institution (e.g. pension fund). The current cost to transact for the end‐user is €279. The additional taxation of this transaction at 0.01% is €2,500 to the dealer and an additional €2,500 to the financial institution, resulting in a total cost of €5,279 or an 18‐fold increase, assuming all costs are passed onto users. (FX swaps with maturity of less than one week account for over 50% of the tax eligible FX cash and derivatives market). James Kemp, managing director of GFMA’s Global FX Division commented: “It is essential to fully understand the impact of the proposed financial transaction tax and the Oliver Wyman study is an important contribution to the debate. “The foreign exchange industry is an essential part of a stable and sustainable economy, underpinning international trade and investing. This study shows that the proposed tax would in effect penalise Europe’s businesses for sensible risk management – by using FX products to manage currency fluctuations – and also threaten to impose further costs on the investment returns of pension funds and asset managers. “In addition, the combination of direct costs and indirect costs, arising from reduced market liquidity and wider bid/ask spreads, means that raising €1 in tax is likely to cost users more than the amount of the tax itself.” For the full report, click here ‐ENDS‐