Attachment A

Commitments by BNP Paribas
to the Board of Governors of the Federal Reserve System

In connection with the request, dated October 22, 2014, to the Board of Governors of the
Federal Reserve System (the “Board”) for the Board’s approval under section 252.153(c)
of the Board’s Regulation YY for an exemption from Regulation YY’s requirement that
BNP Paribas (“BNP”), Paris, France, transfer its ownership interest in two U.S.
subsidiaries owned by Verner Investissments SAS (“Verner JV”), Exane, Inc., and Exane
Options, Inc. (together, the “Verner JV U.S. Subsidiaries”), and in four U.S. subsidiaries
owned by Impax Asset Management Group plc (“Impax”), Impax Asset Management
(US) LLC (“Impax U.S.”), Impax Fundamental Long-Term Opportunities in Water Fund
LP, Impax Global Resource Optimization Fund LP, and Kern USA, Inc. (collectively, the
“Impax U.S. Subsidiaries” and, together with the Verner JV U.S. Subsidiaries, the
“Verner JV and Impax U.S. Subsidiaries”), to an intermediate holding company
established by BNP for purposes of compliance with Regulation YY, BNP makes the
following commitments to the Board:

1. BNP will not, without the prior approval of the Board, directly or
indirectly, increase its ownership interest in Verner JV or Impax to
greater than 50 percent; and

2. BNP will provide written notice to the Board within 60 days of the end
of the calendar quarter in which the total assets of the Verner JV and
Impax U.S. Subsidiaries, individually or collectively, exceed $1 billion
or 1 percent of the total consolidated assets of BNP’s intermediate
holding company, whichever is smaller.

BNP agrees that the foregoing commitments are deemed to be conditions imposed in
writing by the Board in connection with its findings and decisions on BNP’s request, and
as such, may be enforced in proceedings under applicable law.


BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, DC 20551

FEB 12 2016
Mr. Bruno D’Tlliers
Deputy Chief Executive Officer and Chief Operating Officer
BNP Paribas North America

787 Seventh Avenue
New York, New York 10019

Mr. Thomas Mahoney

Managing Director and IHC Program Manager
BNP Paribas North America

787 Seventh Avenue

New York, New York 10019

Dear Messrs. D’Iliers and Mahoney:

This letter is in response to your request, dated October 22, 2014, that the
Board permit BNP Paribas (“BNP”), Paris, France, to hold its ownership interest in six
U.S. subsidiaries outside of the intermediate holding company (“IHC”) established by
BNP for purposes of compliance with Regulation YY.

Regulation YY requires a foreign banking organization with $50 billion or
more in total U.S. non-branch assets to establish an IHC and to transfer its ownership
interest in its U.S. subsidiaries to the IHC.! Under Regulation YY, the Board may permit
the foreign banking organization to hold its interest in a U.S. subsidiary outside of its
THC if circumstances warrant an exception based on the foreign banking organization’s
activities, scope of operations, structure, or similar considerations.’ BNP is a foreign
banking organization within total U.S. non-branch assets as of
June 30, 2015. Accordingly, BNP is required to establish an IHC under Regulation YY.

' 12 CFR 252.152. U.S. non-branch assets are measured as an average of the amount
reported for the four most recent consecutive quarters, as reported to the Board on the
FR Y-7Q.

2 12 CFR 252.153(c)(1)-(2).

www.federalreserve.gov


-2-

BNP has requested an exemption from the requirement to transfer its
ownership interest in six indirectly controlled U.S. subsidiaries to its IHC. BNP controls
two of the subsidiaries through its interest in a French joint venture, Verner
Investissments SAS (“Verner JV”), and four of the subsidiaries through its interest in a
publicly traded British asset management company, Impax Asset Management Group plc
(“Impax”).

Verner JV provides research, brokerage, and asset management services
predominantly offshore through its French subsidiary, Exane S.A. (“Exane”). BNP owns
50 percent of the equity and 40 percent of the voting rights in Verner JV, and the other
partners are the officers and managers of Exane. Exane has two U.S. subsidiaries, Exane
Inc. and Exane Options, Inc. (together, the “Verner JV U.S. Subsidiaries”). Exane Inc. is
a broker-dealer registered with the U.S. Securities and Exchange Commission that
conducts research, brokerage, asset management, derivative sales and trading, and
structured products activities in the United States. Exane Options, Inc., is inactive. The
assets of the Verner JV U.S. Subsidiaries are collectively, as of
June 30, 2015. The Verner JV U.S. Subsidiaries represent] of BNP’s pro-
forma IHC assets (as reported in BNP’s implementation plan, dated December 19, 2014).

BNP has a 25.2 percent equity and voting interest in Impax.? Impax has
four U.S. subsidiaries, including (i) Impax Asset Management (US) LLC, which provides
sales and marketing and other administrative support to the global asset-management
operations of the parent; (ii) two investment funds, Impax Fundamental Long-Term
Opportunities in Water Fund LP and Impax Global Resource Optimization Fund LP; and
(iii) Kern USA, Inc., an inactive corporation (collectively, the “Impax U.S. Subsidiaries”
and, together with the Verner JV U.S. Subsidiaries, the “Verner JV and Impax U.S.
Subsidiaries”). The assets of the Impax U.S. Subsidiaries roti‘ collectively,
as of June 30, 2015. The Impax U.S. Subsidiaries represent less than of
BNP’s pro-forma IHC assets (as reported in BNP’s implementation plan).

After consideration of all relevant facts, including BNP’s activities, scope
of operations, structure, and similar considerations, the Board has granted BNP’s request
for an exemption to hold its ownership interest in the Verner JV and Impax U.S.
Subsidiaries outside of the BNP IHC. Both Verner JV and Impax are foreign companies
without a banking presence in the United States, and the vast majority of their operations
are conducted outside of the United States. Without a majority ownership interest, BNP
does not have the power to force either Verner JV or Impax to divest the Verner JV and
Impax U.S. Subsidiaries or to transfer the Verner JV and Impax U.S. Subsidiaries to the
BNP IHC. Further, none of the other Verner JV partners or controlling shareholders of
Impax are required to establish an IHC; thus, these parties are not compelled to facilitate
the restructuring of BNP’s investment required by Regulation YY.

3 BNP has no employees or directors on the board of directors of Impax.


Further, the Verner JV and Impax U.S. Subsidiaries are very small, with
aggregate assets of approximately as of June 30, 2015. Exclusion of the
Verner JV and Impax U.S. Subsidiaries will not have a material impact on the regulatory
capital or liquidity requirements of the BNP IHC, and the Verner JV and Impax U.S.
Subsidiaries pose no discernable systemic risk. In order to limit BNP’s ownership
interest in the Verner JV and Impax U.S. Subsidiaries and the size and systemic footprint
of the Verner JV and Impax U.S. Subsidiaries going forward, BNP has entered into the
commitments listed in Attachment A.*

For the reasons stated above, the Board has granted BNP’s request for an
exemption from Regulation YY’s requirement to transfer its ownership interest in certain
US. subsidiaries to its JHC. This action is based on all the facts of record and on all the
representations and commitments made by BNP in its submissions to the Board in
connection with the request, including the commitments listed in Attachment A. These
representations and commitments constitute conditions imposed in writing in connection
with the findings and decisions herein and, as such, may be enforced in proceedings
under applicable law. Any material change in those facts or representations could affect
this approval and should be communicated promptly to Board staff.

Very truly yours,

‘sianed) Margaret MeCloskey Shanks
wie

Margaret McCloskey Shanks

Deputy Secretary of the Board

ce: Mr. S. Michael Koh
Federal Reserve Bank of New York

4 BNP has committed that it will not, without the prior approval of the Board, directly or
indirectly, increase its ownership interest in Verner JV or Impax to greater than 50
percent. BNP has also committed that it will provide written notice to the Board within
60 days of the end of the calendar quarter in which the total assets of the Verner JV and
Impax U.S. Subsidiaries, individually or collectively, exceed $1 billion or 1 percent of
the total consolidated assets of BNP’s IHC, whichever is smaller.