1. Market Update ASLF 2016 Maria Fernanda Gonzalez Direct Custody and Clearing LATAM Product Manager

2. Market Update ASLF 2016

3. Capital Market Stock Exchange Index Trading Activity Source: Panama Stock Exchange Trading by Security Type Transaction Volumes Strategic Plan of Government for 2015-2019 includes capital expenditures of $19.5 Continued government spending in Infrastructure is expected to sustain high levels of economic growth

4. Key Development Change Client Impact Euroclear I-Link Phase 2 & 3 Link between Euroclear and Latinclear for Government Securities Investors can get access to Panamanian government debt through Euroclear Phase 2 & 3 of this project due to began as Panama is out of the FATF Gray List El Salvador – Panama Stock Market Integration Agreement signed on September 2015 Remote Operator model for market intermediaries in both countries who will have direct access and operate trading platforms provided by both Stock Exchanges, prior compliance with minimum requirements of each market Facilitate transactions between those markets Bring transparency, control and supervision Expected to generate additional investment capital flows Panama removed from the Financial Action Task Force (FATF) Grey List February 2016 Panama was placed into the grey list on June 2014, due to shortcomings in the legal structure of the country to combat illegal activities Regulatory changes in financial and non financial sectors to strengthen AML environment were completed New requirements for account openings in place due to new regulations Recent Market Developments

5. Service Update Key Development Change Client Impact Account Opening Package Update Changes on the Panamanian AML laws required to adjust the Account Opening Documents New procedures help our clients comply with existing local regulations Centralized email address for trade processing and settlement inquiries Automated tracking of client inquiries by creating a unique reference on the subject line Improved quality control, response time and client management Organizational Changes on our Product Team Consolidation of the Product Team focused on DCC products Faster responses to client needs

6. Forthcoming Initiatives Key Development Client Impact Support Government promotion activities for Panama as a Capital Markets Hub Ongoing active involvement in CAPAMEC as market participant Market Advocacy Changes of financial and non-financial sector regulations to strengthen the AML environment AML Driven Regulatory Changes

7. New Anti-money laundering law –New and strong, anti-money laundering legislation has been implemented Panama has been removed from the grey list –Panama was deemed compliant with FATF standards and was removed from the list of non-cooperative countries with regard to the prevention of money laundering and terrorism financing. The Minister of Economy and Finance confirmed that Panama has been removed following the FATF plenary meeting FATCA –The implementation of the Intergovernmental agreement between Panama and the United States under the Foreign Account Tax Compliance Act (FATCA) has been postponed until September 30, 2016 Panama Canal Expansion –Third Set of Locks for the Panama Canal expansion project has reached 96% completion. –The installation of the gates for the new locks of the Panama Canal was successfully completed. The tests of Atlantic and Pacific Locks are the steps that follow Country Hot Topic

8. Market Update ASLF 2016

9. Recent Market Developments Key Developmen t Change Client Impact High Financial Transactions Tax Decree 2169 Effective February 1 0.75% Tax on Special Tax Contributors for cash debits and custody transfers Exemptions apply on: i) Government or Central Bank securities ii) Transfers between the same beneficial owner Special Tax Contributors are the main subject of this tax Clients should consult their tax advisor and advise Citi immediately if their classification changes Adjustment of the Tax Unit Tax unit was raised from VEF 150 to VEF 177 for the tax year 2016 Annual tax return in March 2016 must be done according to Tax Unit of VEF 177 New Capital Markets Law Decree 2176 Brokers may trade on national debt securities Increased the capital requirements for brokerage houses and set new rules on ownership structure Increased market transparency and liquidity

10. Service Update Key Developmen t Change Client Impact Rule 119-10 enforcement by SUDEBAN 1. Statement of Publicly Exposed person (PEP) 2. Certification of Interview 3. Sworn Statement of Origin and use of funds 4. Know you Customer Statement 5. Client File (fingerprint and passport copy) Clients should provide documents required according to Rule 119-10 Tax Classification According to SENIAT Citi was able to obtain information from SENIAT of investors considered as Special Tax Contributors Clients should inform Citi of any changes on their tax status according to SENIAT via MT599 addressed to our product team Organizational Changes on our Product Team Consolidation of the Product Team focused on DCC products Faster responses to client needs

11. Recent announcements from President Maduro –Changes to the Foreign Exchange regime  CENCOEX: Official Rate change from VEF 6.30 to VEF 10 per USD (applicable to food and medicine)  SICAD elimination  SIMADI transformation into a new floating market  No official Gazette has been issued to rule the new FX mechanisms –Increase on oil prices (VEF 1 from VEF 0.07 and VEF 6 from VEF 0.097) –Salary and pension increase by 20% Upcoming Debt Payments –Payment of the Feb 2016 sovereign bond (USD 1.5bn) –Additional payments in October and November Country Hot Topic

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