FEDERATED HERMES, INC.

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SEC Regulatory Flexibility Agenda. On September 4, 2025, the SEC published its Spring 2025 Regulatory Flexibility Agenda (SEC Spring 2025 Reg Flex Agenda). The SEC Spring 2025 Reg Flex Agenda focuses on deregulation and simplification of disclosure requirements to facilitate capital formation and reduce compliance burdens consistent with investor protection, and modernization to address marketplace challenges, including implementing a market-driven crypto oversight regime. Absent from the SEC Spring 2025 Reg Flex Agenda are various governance, environmental and social framework-related proposals, such as board diversity, disclosure of governance, environmental and social-related investment practices and human capital management disclosure. The SEC Spring 2025 Reg Flex Agenda identified 23 short-term agenda items, including 18 proposed rules and three final rules, and represents a significant shift in the SEC’s priorities following the change in Presidential Administration with direct implications for the asset management industry. For example, the SEC Spring 2025 Reg Flex Agenda carries over only four items from the SEC Fall 2024 Regulatory Flexibility Agenda, including final or proposed rules related to foreign private issuer eligibility, amendments to the Rule 144 safe harbor, Financial Data Transparency Act joint data standards and customer identification programs for registered investment advisors and exempt reporting advisors. Other proposed rulemaking initiatives in the SEC Spring 2025 Reg Flex Agenda relating to the asset management industry include, among others: (1) amendments to the Rule 17a-7 under the 1940 Act (the cross trading rule); (2) amendments to the custody rules under the Advisers Act and the 1940 Act; (3) amendments aimed at reducing disclosure burdens, such as amending Form N-PORT to address portfolio information disclosures; (4) a broad initiative to update the exempt offering pathways to facilitate private investment; and (5) certain crypto market structure amendments. Each of these proposals is categorized in the SEC Spring 2025 Reg Flex Agenda as a “deregulatory” rulemaking, in accordance with President’s Executive Order 14192 “Unleashing Prosperity Through Deregulation.”

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SEC Enforcement Trends Under the New Presidential Administration. It has been reported that during the first six months of the new Presidential Administration, only 56 SEC enforcement actions have been initiated, which represents an approximate 40% reduction from the 94 SEC enforcement actions that were initiated during the first six months of the prior Presidential Administration. It also has been reported that only 11 administrative actions have been publicly announced by the new Presidential Administration, compared to 55 such announcements during the first six months ofthe prior Presidential Administration. Many of the new enforcement actions have involved areas such as insider trading, market manipulation and offering fraud, which is consistent with the SEC Chairperson’s public statements that “[p]olicymaking will be done through notice and comment rulemaking, not through regulation-by-enforcement” and that the SEC’s enforcement focus will be on protecting investors from market fraud and manipulation.

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SEC Extends Compliance Date for Disclosure of Order Execution Information. On September 30, 2025, the SEC extended the compliance date for the amendments to Rule 605 of Regulation NMS from December 14, 2025 to August 1, 2026. On March 6, 2024, the SEC adopted amendments to the disclosure requirements of Rule 605 of Regulation NMS for executions on covered orders in national market system stocks, whichare stocks listed on a national securities exchange. The adopted rule amendments expand the scope of entities subject to Rule 605, modify thecategorization and content of order information reported under the rule and require reporting entities to produce a summary report of execution quality. The amendments expand the scope of reporting entities subject to Rule 605 to include broker-dealers who introduce or carry 100,000 or more customer accounts. The amendments also specify that broker-dealers operating single dealer platforms must prepare a separate report for activity specific to these platforms.

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SEC Issues Concept Release on Residential Mortgage-Backed Securities (RMBS) Disclosure and Enhancements to Asset-Backed Securities (ABS) Registration. On September 29, 2025, the SEC issued a concept release soliciting public comment on potential changes to its rules governing ABS, with particular focus on RMBS. RMBS and ABS play an important role in the U.S. capital markets and the U.S. economy, allowing companies and financial institutions to access lower-cost capital to make loans to borrowers and finance operations. In 2004, the SEC established a comprehensive registration, disclosure and ongoing reporting regulatory framework for RMBS and ABS offerings, with subsequent amendments in 2014. The SEC’s action is in response to the fact that there have been no registered RMBS offerings since the adoption of Regulation AB II in 2014, with all activity instead occurring in the registration-exempt private market, largely pursuant to Rule 144A under the 1933 Act. The concept release examines, and requests public comment on, any steps needed to facilitate more public RMBS offerings and increase liquidity in the public RMBS market, which could potentially lead to benefits for the U.S. housing

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market, while maintaining appropriate investor protections. The public comment period ends 60 days after the concept release is published in the Federal Register.

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SEC Approves Generic Listing Standards for Commodity-Based Trust Shares. On September 17, 2025, the SEC approved proposed rule changes by three national securities exchanges to adopt generic listing standards for exchange-traded products (ETPs) that hold spot commodities, including those that hold digital assets such as crypto assets. As a result, the exchanges may list and trade commodity-based trust shares, which are a type of ETP that allows investors to invest in commodities, that meet the requirements of the approved generic listing standards. This approval will allow national securities exchanges to list and trade qualifying ETPs holding spot commodities without requiring each product to undergo the previously mandatory, individualized SEC rule filing process under Section 19(b) of the 1934 Act. As a result, exchanges such as NYSE Arca, Nasdaq and Cboe BZX can now bring eligible commodity- and crypto-based ETPs to market more quickly. The approval signals a shift toward a more streamlined, transparent and efficient rules-based listing process that offers both clarity and opportunity for market participants.

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The approved rule changes follow the SEC’s Division of Corporate Finance issuing guidance, on July 1, 2025, on the application of certain federal securities law disclosure requirements to offeringsof crypto asset ETPs. The guidance represented a dramatic shift in how the SEC regulates the cryptocurrency sector.

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Extension of Compliance Date for Form PF; Reporting Requirements. On September 17, 2025, the Commodity Futures Trading Commission (CFTC) and SEC further extended the compliance datefor the amendments to Form PF that were adopted on February 8, 2024, from October 1, 2025 to October 1, 2026. Form PF is the confidential reporting form for certain SEC-registered investment advisors to private funds, including those that also are registered with the CFTC as a commodity pool operator or a commodity trading advisor.

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SEC No-Action Letter on Exxon’s Auto-Proxy Voting Program for Retail Investors. On September 15, 2025, the SEC staff issued a no-action letter stating that the SEC staff would not recommend enforcement action against Exxon Mobil Corporation for implementing an auto-voting program for its retail shareholders, subject to certain conditions. The proposed retail shareholder voting program would allow Exxon’s non-institutional investors to opt in to have their ballots automatically cast as recommended by the board of directors for proposals to be voted on at shareholder meetings, with the election to apply either to all matters or to all matters other than contested director elections and mergers and acquisitions. Under the program, shareholders are entitled at any time to override the standing election and vote their own shares or otherwise opt out of the program entirely. While the use of auto-voting in this manner has not been considered by courts, the SEC’s no-action relief may encourage other companies to try to utilize auto-voting to increase their retail investor turnout. Asset management industry participants are discussing with the SEC staff the ability to obtain similar SEC no-action relief that may be relied upon by open-end and closed-end investment companies, including exchange-traded funds (ETFs).

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SEC Investment Advisory Committee (IAC) Signals Support for Expanded Retail Access to Private Markets. On September 11, 2025, the SEC’s IAC issued a draft joint report titled Retail Investor Access to Private Market Assets, which supported reform of the eligibility criteria for investors in private offerings and reform of the regulatory framework applicable to pooled investment funds. The report recognized the increasing size and importance of private markets while emphasizing the need for enhanced investor protections if retail access to these markets expands. On September 18, 2025, the IAC met and adopted recommendations concerning the regulatory framework that should govern retail investors’ access to private market assets. The report recommended that registered funds are the best way for retail investors to obtain such access because registered funds (i) “were developed specifically for retail use” and (ii) offer numerous protections not found in non-public offerings, such as SEC review, audited financial statement requirements, professional fund management and other protections found in the 1940 Act. The report also made several recommendations intended to enhance the ability of registered funds to invest in private market assets and better protect retail investors who invest insuch registered funds. The IAC also recommended that the SEC open a request for comment process to obtain additional input on how to best expand retail investments in private markets, as many of the recommendations would require SEC rulemaking.

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SEC Adopts Amendments Regarding Broker-Dealer FOCUS Reports. On September 8, 2025, the SEC amended the Financial and Operational Combined Uniform Single Report, SEC Form X-17A-5 (FOCUS Report), to harmonize it with other rules, make technical corrections and provide clarifications. FOCUS Reports are filed by broker-dealers and are intended to ensure transparency regarding a broker-dealer’s financial condition, ensure financial accountability through compliance with capital requirements, support regulatory oversight, facilitate audits and examinations of broker-dealers, and protect investors. Among other things, the SEC also: (1) permitted the use of electronic signatures; (2) amended its rules to require the information currently contained in Form 19b-4(e), which is used by self-regulatory organizations (SROs) to notify the SEC about the listing and trading of a new derivative securities product, to be publicly posted on the SRO’s website and remove the

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manual signature requirements for SRO proposed rule change filings; (3) required that clearing agencies post supplemental material to their websites; and (4) amended its rules under the 1934 Act and 1933 Act torequire the electronic filing or submission, using structured data where appropriate, of certain other forms, reports and notices provided by broker-dealers, security-based swap dealers and major security-based swap participants.

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Federal Trade Commission (FTC) Ends Defense of its Noncompete Ban and Announces Enforcement Initiatives. On September 5, 2025, the FTC announced that it would no longer defend the rule it previously issued in May 2024 that would have banned most noncompete agreements. In doing so, the FTC effectively withdrew the rule, which had been blocked from taking effect through a nationwide injunction issued by the U.S. District Court for the Northern District of Texas. As a result, the legality of noncompete agreements at the federal level will now be governed by application of the law in effect prior to the promulgation of the rule and will be enforced on a case-by-case basis. The FTC has indicated that, while ending its defense of the rule, it remains committed to using its enforcement authority to crack down onnoncompete agreements that it views as anticompetitive, especially those targeting lower-wage or nonexecutive employees. To this end, on September 4, 2025, the FTC ordered the largest pet cremation company in the U.S. to stop enforcing noncompete agreements with nearly 1,800 employees, concluding that they unfairly restricted worker mobility and reduced competition in the labor market.

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Fifth Circuit Court of Appeals Requires Reconsideration of the SEC’s Securities Lending and Short-Sale Rules. On August 25, 2025, the U.S. Court of Appeals for the Fifth Circuit remanded the SEC’s Reporting of Securities Loans rule (Securities Lending Rule) and Short Position and Short Activity Reporting by Institutional Investment Managers rule (Short Sale Rule) to the SEC to allow the SEC to consider and quantify the cumulative economic impact of the rules. In doing so, the court concluded that the SEC acted arbitrarily and capriciously when it did not consider the economic impact of the Short Sale Rule when adopting the Securities Lending Rule. The decision gives the SEC the opportunity to consider both rules and possibly rescind one or both.

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Democratizing Access to Alternative Assets for 401(k) Investors. On August 7, 2025, the President issued an Executive Order, Democratizing Access to Alternative Assets for 401(k) Investors (EO), encouraging the inclusion of alternative assets in 401(k) and other defined contribution plans. The EO states as the current Presidential Administration’s policy “that every American preparing for retirement should have access to funds that include investments in alternative assets when the relevant plan fiduciary determines that such access provides an appropriate opportunity for plan participants and beneficiaries to enhance the net risk-adjusted returns on their retirement assets.” The EO directs the DOL within 180 days to: (1) reexamine prior DOL guidance on a fiduciary’s duties in connection with including alternative asset investments in asset allocation funds, including considering whether to rescind prior DOL guidance that could be read to limit certain investments in private equity by ERISA-covered individual account plans (such as 401(k) plans); (2) clarify its position both on alternative assets and on the appropriate fiduciary process for offering as plan investment options asset allocation funds which include alternative assets; and (3) consulting, as appropriate, with other regulators, such as the U.S. Department of Treasury and the SEC, to determine whether any other regulatory changes are needed to carry out the EO’s policy objectives. On August 15, 2025, the DOL’s Employee Benefits Security Administration rescinded a December 21, 2021, supplemental statement that discouraged fiduciaries from considering alternative assets in 401(k) retirement plan investment menus. On September 23, 2025, the DOL issued DOL Advisory Opinion 2025-04A allowing an investment manager to include a fixed allocation portfolio investment option as the qualified default investment option in participant-directed defined contribution plans. In an accompanying press release, the DOL stated that the DOL is “continuing to take swift steps to implement [the President’s] Executive Order” and that the DOL “intends to issue a notice of proposed rulemaking that clarifies the duties that a fiduciary owes to plan participants under ERISA when deciding to make available an asset allocation fund that includes investments in alternative assets, including potential safe harbors.” The EO also directs the SEC to facilitate access to alternative assets for participant-directed defined contribution plans by revising applicable SEC regulations and guidance, specifically referencing regulations and guidance related to accredited investor and qualified purchaser status.

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Scrutiny of Governance, Environmental and Social Initiatives by State Attorneys General and Financial Officers. Recent actions by state attorneys general in Texas and Florida, as well as other Democratic and Republican attorneys general and state financial officers, highlight continuing scrutiny of governance, environment and social framework-aligned investment strategies and climate disclosure groups.

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U.S. District Court for the Western District of Texas Enjoins Texas Senate Bill 2337. On August 29, 2025, the U.S. District Court for the Western District of Texas enjoined the September 1, 2025 effective date for Texas Senate Bill 2337 (SB 2337), which was signed by Texas’ governor on June 20, 2025, with respect to two large proxy advisory firms. Texas SB 2337 was enacted to regulate proxy advisory firms that provide recommendations involving governance, environmental and social factors or diversity, equity and inclusion factors. The court enjoined the effectiveness of Texas SB 2337 on the basis that the law violates the First Amendment of the U.S. Constitution by compelling speech and discriminating based on viewpoint, is

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preempted by ERISA, which governs fiduciary duties to retirement plans and is void for vagueness, making compliance unclear and legally risky. A trial has been scheduled for February 2, 2026.

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Letter from 17 Democratic State and Local Financial Officers. On August 15, 2025, 17 state and local Democratic financial officers sent a letter to at least eight large asset managers criticizing a letter dated July 29, 2025 (discussed below) previously sent to them by 26 Republican state financial officers. The August 15 letter expressed the views that the July 29 letter misrepresented the true meaning of fiduciary duty and would require asset managers to take a passive approach to oversight while ignoring the nature of long-term value creation in modern capital markets, and that fiduciary duty calls for active oversight, responsible governance and the full exercise of ownership rights on behalf of workers and retirees. The August 15 letter further stated: “Fiduciary duty, as properly understood, requires—not prohibits—investor consideration of material risks and long-horizon opportunities.” The August 15 letter urged asset managers “to focus on empowering institutional investors and uphold an approach to fiduciary duty grounded in transparency, accountability, and long-term value creation,” and invited them to reaffirm their commitment to responsible stewardship and build a constructive dialogue around this topic.

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Texas v. Blackrock. On August 1, 2025, the U.S. District Court for the Eastern District of Texas largely denied motions to dismiss in a case brought by a Texas-led coalition of state attorneys general against three asset managers for allegedly conspiring to reduce coal output. In this case, Texas and 10 other state attorneys general accused three asset managers of pressuring coal companies to reduce output because of alleged commitments to two climate change initiatives: the Net Zero Asset Managers (NZAM) initiative and Climate Action 100+ (CA100). In largely denying defendants’ motions to dismiss, the court concluded that the states had stated a claim under Section 7 of the Clayton Antitrust Act of 1914 and Section 1 of the Sherman Act and certain state laws. The court’s opinion is significant because of the effect it may have on ordinary investors that hold shares in competing firms and the implications it has for members of climate initiatives. A major point of contention among the parties was whether Section 7’s “investment only” safe harbor would immunize the asset managers for the ordinary activities of institutional investors, such as voting on governance matters. The court reasoned that merely casting proxy votes on governance matters should remain free from Section 7 scrutiny, but in this case, concluded the states had plausibly alleged that the asset managers had substantially lessened competition by joining climate initiatives where investors committed their assets to climate-based goals that naturally lead to decreased coal output, made public statements consistent with those goals, and proxy-voted or otherwise engaged with the coal companies to achieve those goals. The court concluded that those types of activities do not represent “typical asset manager behavior.”

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Letter from 26 Republican State Financial Officers. On July 29, 2025, a letter signed by 26 Republican state financial officers was sent to at least eight large asset managers to express their concern about the erosion of traditional fiduciary duty in American capital markets and criticize governance, environmental and social investment and engagement practices. In the letter, the asset managers were urged to: (1) stop framing speculative future risks (e.g., climate change) as justification for immediate corporate interventions; (2) avoid using passive investment vehicles (like index funds) for activist proxy voting or corporate engagement; (3) refrain from incorporating net-zero commitments, natural capital frameworks or EU sustainability directives into default investment strategies; and (4) disclose governance, environmental and social-related memberships and align proxy voting strictly with shareholder value. The letter reflected broader Republican-led efforts to push back against governance, environmental and social investing, including investigations and legislation in Republican states.

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Florida AG Investigation. On July 28, 2025, the Florida Attorney General announced an investigation into two prominent climate disclosure organizations—the Climate Disclosure Project (CDP) and the Science Based Targets initiative (SBTi)—for potential violations of state antitrust and consumer protection laws. The Florida Attorney General announced that Florida is scrutinizing whether these organizations “coerc[ed] companies into disclosing proprietary data and paying for access under the guise of environmental transparency.”

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These developments continue a broader trend of intensified legal and political scrutiny of governance, environmental and social frameworks, investing and engagement.

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SEC Permits In-Kind Creations and Redemptions for Crypto ETPs. On July 29, 2025, the SEC approved exemptive orders to permit in-kind creations and redemptions by authorized participants for crypto-asset ETP shares. The orders reflected a departure from other recent SEC approved spot bitcoin and ether ETPs, which were limited to creations and redemptions on an in-cash basis. Under these July 29 orders, bitcoin and ether ETPs, consistent with other commodity-based ETPs approved by the SEC, are permitted to create and redeem shares on an in-kind basis. The SEC also approved other exemptive orders that advance a merit-neutral approach to crypto-based products, including exchange applications seeking to list and trade an ETP that would hold mixed spot bitcoin and spot ether, options on certain spot bitcoin ETPs, Flexible Exchange (FLEX) options on shares of certain BTC-based ETPs, and an increase of position limits up to the generic limits for options (up to 250,000 contracts) for listed options on certain bitcoin ETPs. The SEC also solicited comments in support of, or in opposition to, the

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SEC Division of Trading and Market’s approval, pursuant to delegated authority, of a national securities exchange’s proposals to list and trade two large-cap crypto-based ETPs.

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SEC Extends Date for Covered Securities Loan Reporting. On July 28, 2025, the SEC published an order postponing the initial reporting date of Rule 10c-1a under the 1934 Act (Rule 10c-1a), which would, for the first time, require persons entering into covered securities loans (or their intermediary or reporting agent, where applicable) to report specific terms of the loan to FINRA’s Securities Lending and Transparency Engine on the same day the loan is either effected or modified. FINRA had formally requested such an extension from the SEC on April 29, 2025. The initial reporting date for Rule 10c-1a, originally set for January 2, 2026, is now delayed until September 28, 2026. Additionally, the date on which FINRA would begin its public dissemination of covered securities loan information has been extended from April 2, 2026 to March 29, 2027.

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SEC No-Action Letter Regarding ETFs with Foreign Holdings. On July 22, 2025, the SEC staff issued a no-action letter that provides that broker-dealers acting as authorized participants for ETFs holding foreign securities do not have to take a net capital charge under Rule 15c3-1 under the 1934 Act, subject to the following conditions being satisfied: (1) for an ETF creation transaction, the broker-dealer must receive the return of its collateral by the fourth business day after the day on which the broker-dealer initially delivered the collateral in respect of the ETF portfolio securities; (2) for an ETF redemption transaction, the broker-dealer must receive both the ETF portfolio securities and the return of its collateral by the fourth business day after the day on which the broker-dealer initially delivered the collateral in respect of the ETF shares; (3) during any ETF creation or redemption transaction and until completion of the transaction, the ETF’s U.S. bank custodian must continue to hold any collateral of the broker-dealer; and (4) the amount of the unsecured receivable does not exceed (a) 10% of the broker-dealer’s tentative net capital with respect to any single ETF creation or redemption transaction and (b) 25% of the broker-dealer’s tentative net capital in the aggregate across all ETF creation and redemption transactions. This no-action letter permits broker-dealers in these circumstances to avoid deducting these receivables from their net capital, thereby removing an impediment to broker-dealers participating as authorized participants in the market for ETFs with foreign holdings.

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U.K. Overseas Funds Regime (OFR). The OFR sets the framework for marketing overseas investment funds to U.K. retail investors, as well as the marketing of overseas money market funds in the U.K. (whether to retail or non-retail investors). Following finalization of FCA rules pertaining to the OFR, on September 30, 2024, the FCA opened its ‘OFR gateway’ to EU UCITS to allow them to apply for OFR recognition. Starting July 1, 2025, Federated Hermes was eligible to apply for recognition under OFR. Following recognition in September 2025, the Federated Hermes’ Irish UCITS Funds that are eligible to be recognized under the OFR have now successfully transitioned to the U.K. OFR.

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U.K. Consumer Duty Requirements. The Consumer Duty refers to particular rules previously made by the FCA setting standards of consumer protection across regulated financial services. On September 29, 2025, the FCA announced its intention to consider streamlining the application of the Consumer Duty to firms primarily engaged in wholesale activity. The FCA plans to, among other things, provide further guidance on how the Consumer Duty should apply to firms within a distribution chain, assess whether additional exemptions are needed (e.g., for business-to-business activities), and consider removing businesses with non-U.K. customers from the scope of the Consumer Duty. Detailed proposals and consultations are scheduled to be published from the fourth quarter of 2025 through the end of 2026.

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T+1 Settlement. In relation to the EU, on June 18, 2025, the European Parliament and the Council of the EU reached political agreement on the necessary amendments to the Central Securities Depositaries Regulations to shorten the settlement cycle from T+2 to T+1. On September 17, 2025, the Council of the EU published the draft amendment legislation. The next step is for the Council to formally adopt the legislation which will subsequently be published in the Official Journal of the EU and apply effective October 11, 2027.

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U.K. Senior Managers and Certification Regime (SMCR). On July 15, 2025, the FCA published a consultation paper on measures to improve the efficiency and effectiveness of the SMCR. The SMCR refers to the rules previously made by the FCA setting standards of conduct and accountability for individuals who hold certain specified control functions at U.K. authorized firms. The consultation is Phase 1 of wider reforms to the SMCR intended to streamline processes and reduce the compliance burden on firms. The consultation focuses primarily on procedural requirements. Key proposals include, among others, streamlining the FCA approval process for the relevant control functions and providing further guidance on various aspects of the SMCR, including application of the FCA’s conduct rules. The consultation period ended on October 7, 2025. The FCA expects to finalize the Phase 1 rules in mid-2026.

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U.K. Sustainability Requirements for Corporations. While the consultation on the proposed U.K. Sustainability Reporting Standards (U.K. SRS) is ongoing, on July 15, 2025, the U.K. government stated in a response to its 2024 consultation on the U.K. green taxonomy framework that it will no longer move forward with the U.K. green taxonomy. As such, the U.K. SRS (if introduced) will not be accompanied by a U.K. specific taxonomy.

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U.K. Digital Gilt Instrument (DIGIT). On July 15, 2025, HMT published an update on the design of the DIGIT pilot to cover additional features including on-chain settlement, over-the-counter settlement and interoperability between traditional and Distributed Ledger Technology markets. On the same day, HMT published a policy paper setting out the digital strategy for the U.K.’s wholesale financial markets, which covers three broad areas: (1) market optimization, (2) market transformation and (3) market leadership.

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EU UCITS – Eligible Assets. The EU is considering changes to the requirements on the permissible investments for EU funds that are classified as UCITS. On June 26, 2025, ESMA published a final report containing ESMA’s technical advice following its review of the Eligible Assets Directive. Key proposals include: (1) applying a look-through approach to determine the eligibility of assets that UCITS may invest in with the aim to address divergent interpretations and market practices among EU member states; (2) requiring consideration of liquidity criteria when determining whether a security is an eligible transferable security; and (3) relaxing some aspects of the rule permitting up to 10% of assets to be invested in assets that do not meet the standard eligibility requirements in order to allow investment in derivatives and EU open-ended AIFs. The European Commission is considering ESMA’s technical advice and will decide whether to move forward with legislation.

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EU Changes to EU Market Infrastructure Regulation (EMIR). In relation to the regulation of over-the-counter derivatives markets, a legislative package amending the EU Market Infrastructure Regulation (known as EMIR 3) was published in December 2024, which comprises an amending Regulation ((EU) 2024/2987) and an amending Directive ((EU) 2024/2994). EMIR 3 introduces various changes including, among others, a requirement for EU entities that are subject to a clearing obligation and exceed the clearing threshold with respect to any product designated as being systemically important to maintain an active clearing account with at least one EU central counterparty. The amending Directive is required to be implemented by EU member states by June 26, 2026. While the amending Regulation (subject to certain exceptions) has technically applied since December 24, 2024 with certain requirements required to be complied with by June or July 2025 (depending on the requirement), various regulatory technical standards and implementing technical standards (together, Level 2 Materials) as well as regulatory guidelines (Level 3 Materials) have not yet been finalized. On March 6, 2025, ESMA, which is tasked with preparing the Level 2 and 3 Materials, stated that many of those materials, initially planned to be published by December 4, 2025, are to be delayed by six or 12 months.

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Nonoperating Income (Expenses). Nonoperating Income (Expenses), net was flat for the three-month period ended September 30, 2025, as compared to the same period in 2024.

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Management's Discussion and Analysis (continued)

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Investments—Affiliates and Other at September 30, 2025 increased $14.7 million from December 31, 2024 primarily due to the deconsolidation of two VIEs which reclassified Federated Hermes’ investments to Investments—Affiliates and Other.

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Prepaid Expenses at September 30, 2025 increased $11.7 million from December 31, 2024 primarily due to an increase in prepaid taxes as a result of federal tax law changes under the 2025 Spending and Tax Bill which resulted in the immediate expensing of previously capitalized research and development costs.

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Long-Term Deferred Tax Liability, net at September 30, 2025 increased $21.7 million from December 31, 2024 primarily as a result of federal tax law changes under the 2025 Spending and Tax Bill which resulted in the immediate expensing of previously capitalized research and development costs.

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Impact of New Administration. With the new Presidential administration taking office on January 20, 2025, there is a new Chairperson and other senior leadership at the SEC, and the SEC has experienced reductions in staff. During his confirmation hearings, the newly confirmed Chairperson of the SEC indicated that he plans to emphasize reducing unnecessary regulations to promote capital formation, particularly for public and small company securities offerings, developing a clear regulatory framework for digital assets to provide clarity and foster innovation, and focusing on market efficiency and retail investor protection, while moving away from politicized regulations. It also has been reported that the new SEC Chairperson has indicated that the SEC intends to provide relief from overlapping compliance deadlines. This emphasis on deregulation is consistent with the President’s January 20, 2025 executive order that implemented a regulatory freeze pending review of existing proposed regulations, which (among other directives) included instructions to: (1) immediately withdraw any rules that had been sent to the Office of the Federal Register but not published in the Federal Register; (2) consider postponing for 60-days the effective date for any rules that had been published in the Federal Register, or any rules that had been issued in any manner but had not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise; and (3) consider opening a comment period to allow interested parties to provide comments about issues of fact, law,

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and policy, and consider further delaying such rules beyond the 60-day period. While it is unclear as to the extent to which the SEC is covered by this executive order as an independent agency, industry trade groups have requested the SEC to delay, and the SEC has in certain cases delayed, the implementation of certain SEC promulgated regulatory requirements for which compliance was not yet required, such as: (1) amendments to Form PF; (2) the compliance date for the short sale reporting rule; and (3) the compliance dates related to the Names Rule.

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On April 16, 2025, the SEC extended the effective and compliance dates for the previously adopted Form N-PORT amendments by at least two years from November 17, 2025 to: (1) November 17, 2027, for fund groups with net assets of at least $1 billion or more as of the end of their most recent fiscal year end; and (2) May 18, 2028, for fund groups with less than $1 billion in net assets as of the end of their most recent fiscal year end. If the SEC does not repeal the Form N-PORT amendments, the extension is intended to provide funds with sufficient time to comply with the amendments after being notified that the SEC’s review is complete. The SEC did not change the effective and compliance dates for the Form N-CEN amendments, which take effect on November 17, 2025. On June 11, 2025, the Commodity Futures Trading Commission (CFTC) and the SEC further extended the compliance date for the amendments to Form PF that were adopted on February 8, 2024, from June 12, 2025, to October 1, 2025. On June 25, 2025, the SEC also extended the compliance date for adopted amendments that require certain broker-dealers to perform daily reserve computations and make required deposits into their reserve bank accounts daily rather than weekly by six months from December 31, 2025 to June 30, 2026.

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On July 21, 2025, the U.S. Department of the Treasury’s (Treasury Department) Financial Crimes Enforcement Network (FinCEN) announced its intention to postpone the effective date of the final rule establishing Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers (IA AML Rule) and to revisit the scope of the IA AML Rule at a future date. According to FinCEN, it anticipates delaying the effective date of the IA AML Rule from January 1, 2026, until January 1, 2028. FinCEN also announced that it intends to revisit the substance of the IA AML rule through a future rulemaking process, and that it intends to work with the SEC to revisit the proposed rule that would impose customer identification program rule requirements for investment advisors. In its announcement, FinCEN recognized the need to effectively tailor the IA AML Rule to the diverse business models and risk profiles of the investment advisor sector, and that extending the effective date of the IA AML Rule may help ease potential compliance costs for the investment advisor industry and reduce regulatory uncertainty.

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Given the executive orders and above developments, as well as the SEC’s withdraw of certain previously proposed regulations as discussed below, the timing of proposed and new regulation has been, and likely will continue to be, delayed and the pace of new SEC proposed and final regulations slowed.

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SEC Reduces Regulatory Agenda and Withdraws Numerous Proposed Rules. On June 12, 2025, the SEC announced the withdrawal of 15 pending rule proposals that were issued as far back as February 2022 and would have impacted, among others, public companies, investment advisors, investment companies and broker dealers. As a result, while it is likely that the SEC will issue new proposed rules to replace certain withdrawn proposals, such as the proposed amendments to Rule 206(4)-2 under the Advisers Act (Custody Rule), any future rulemaking related to the subject matter of such proposals will need to start over with a new proposed rulemaking and opportunity for public comment. In addition to the withdraw of the proposed amendments to the Custody Rule, other key rule proposals that were withdrawn by the SEC included proposed rules on: (1) cybersecurity risk management for investment advisors, registered investment companies, business development companies, broker-dealers and transfer agents; (2) enhanced disclosures by certain investment advisors and investment companies of governance, environmental and social investment practices; and (3) outsourcing by investment advisors. The releases for all 15 withdrawn proposals, which signal a move towards less prescriptive and more pragmatic regulation, are included on the SEC’s website at www.sec.gov/rules-regulations/rulemaking-activity.

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Crypto Asset Exchange-Traded Products. On July 1, 2025, as part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets, the SEC provided its views on the application of certain disclosure requirements under the federal securities laws to offerings and registrations of securities by issuers of crypto asset exchange-traded products (Crypto Asset ETPs). Crypto Asset ETPs are investment products that are registered under the 1933 Act and 1934 Act and listed and traded on national securities exchanges. The guidance represents a dramatic shift in how the SEC regulates the cryptocurrency sector and marks the first step toward approval of dozens of exemptive applications for Crypto Asset ETPs. It has been reported that industry experts also expect the SEC’s Division of Trading and Markets to streamline the application process for Crypto Asset ETPs, which should accelerate the pace for new products. However, the guidance did not address products registered as investment companies under the 1940 Act.

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DOL Fiduciary Rule; Cryptocurrency Guidance. On May 28, 2025, the DOL took two actions that signal a shift in its approach to fiduciary oversight under the Employee Retirement Income Security Act of 1974, as amended (ERISA). First, the DOL notified the Court of Appeals for the Fifth Circuit that it would stop defending its 2022 regulation addressing the consideration of governance, environmental and social factors by fiduciaries in connection with investment decision-making. The DOL stated “that it will engage in new rulemaking” and adopt it “as expeditiously as possible.” Although it will be a new rulemaking, it has been reported that it could return to the DOL’s previous stance under the President’s first administration of broadly discouraging governance, environmental and social factors as investment considerations.

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On the same day, the DOL took a second action related to previously issued guidance regarding investments in cryptocurrency. In 2022, the DOL issued guidance warning against including cryptocurrency investment options in participant-directed retirement plans. On May 28, 2025, the DOL rescinded its 2022 guidance. By rescinding its prior guidance, the DOL has ceased to discourage plan sponsors and other fiduciaries from including cryptocurrency in their plans’ investment options. Instead, the DOL expressly takes the view that cryptocurrencies should be evaluated under the same fiduciary standards that apply to any other asset class.

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SEC Reconsiders 15% Limit on Private Fund Investments in Closed-End Funds. On May 19, 2025, the SEC Chairperson stated that the SEC is evaluating lifting the 15% private fund limit for closed-end funds. Since 2002, the SEC staff has taken the position that closed-end funds investing 15% or more of their assets in private funds should impose a minimum initial investment requirement of $25,000 and restrict sales to investors that satisfy the accredited investor standard. In his remarks, the SEC Chairperson acknowledged that, as a result, many retail investors have missed out on opportunities to invest in closed-end funds that invest in private investment funds, like hedge funds and private equity funds. The SEC Chairperson further stated that lifting the limit “could increase investment opportunities for retail investors seeking to diversify their investment allocation in line with their investment time horizon and risk tolerance.” On May 20, 2025, the SEC’s Director of the Division of Investment Management followed the SEC Chairperson’s remarks and stated that: “While the Division continues its day-to-day work, we are also adapting to an ever-changing industry. As [the SEC Chairperson] mentioned in his remarks yesterday, for example, the staff as of yesterday [Monday, May 19, 2025], will no longer provide comments limiting the ability of retail investors to invest in registered closed-end funds that invest in private funds. This decision was made based on the ever-evolving industry, and we hope that the shift will provide investors with new investment opportunities to the extent they align with their risk tolerance and investment objectives.”

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SEC Crypto Asset-Related FAQs. On May 15, 2025, the SEC’s Division of Trading and Markets released Frequently Asked Questions (FAQs) clarifying how certain broker-dealer and transfer agency rules related to crypto asset activities. The FAQs provide guidance on crypto asset custody by broker-dealers’ and transfer agents’ use of the blockchain to maintain master securityholder files. On the same day, the SEC and FINRA’s Office of General Counsel withdrew their July 8, 2019 joint statement on broker-dealer custody of digital asset securities. The withdrawn joint statement had previously outlined

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significant challenges and risks associated with broker-dealers custodying crypto asset securities, noting difficulties in complying with certain federal securities laws. The FAQs provide clarity for broker-dealers and transfer agents on the application of various laws and rules to crypto asset securities. The issuance of the FAQs and withdrawal of the joint statement follow statements made by the SEC staff that it intends to move away from ad hoc enforcement and guidance and toward implementing a more formal, structured, and rational regulatory landscape for crypto assets.

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U.S. Supreme Court to Decide Whether Section 47(b) of 1940 Act Creates Private Right of Action. On June 30, 2025, the U.S. Supreme Court agreed to hear a case that will determine whether Section 47(b) of the 1940 Act creates a private right of action for shareholders of registered investment companies to bring lawsuits for alleged violations of the statute. The Second Circuit Court of Appeals has recognized such a right of action since 2019, allowing litigation claims by private plaintiffs for alleged 1940 Act violations, despite Congress having granted the SEC sole regulatory authority to enforce the 1940 Act. Other circuit courts of appeal have rejected a Section 47(b) private right of action. The U.S. Supreme Court granted certiorari and agreed to hear a case to resolve the circuit split. The outcome of the appeal, to be heard in the Supreme Court’s October 2025 term, will have broad implications for registered funds governed by the 1940 Act (including mutual funds, exchange-traded funds (ETFs) and closed-end funds). Under the 1940 Act, Congress granted fund shareholders a single express private right of action to bring lawsuits – namely, a claim for allegedly excessive advisory fees under Section 36(b), which was added to the statute by amendment in 1970. Applying key Supreme Court precedent from 2000, lower courts have uniformly declined to read into the statutory language implied private rights of action to enforce other 1940 Act provisions. The sole outlier was the Second Circuit’s 2019 decision in Oxford University Bank v. Lansuppe Feeder, LLC, recognizing an implied private right of action under Section 47(b). Since that case, certain so-called “activist” investors have repeatedly seized upon Section 47(b) as an entry point to challenge closed-end fund bylaws as violating other provisions of the 1940 Act regarding fund capital structure and board elections. These lawsuits have been in support of such “activist’s” closed-end fund “arbitrage strategy” seeking to force liquidity events in such funds, such as tender offers, reorganizations into open-end funds, or fund liquidations, to obtain short-term profits at the expense of other longer-term shareholders.

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The Investment Company Institute (ICI) and the Asset Management Group of the Securities Industry and Financial Markets Association (SIFMA AMG) submitted an amicus brief in the case to be heard by the U.S. Supreme Court in which they explained that the threat posed by a Section 47(b) private right of action extends well beyond the closed-end fund “activist” strategy, noting the consequences of a potential flood of litigation claims by the plaintiffs’ bar via Section 47(b) go beyond

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wasteful litigation expense. For example, according to the ICI and SIFMA AMG, private litigation claims, in which courts would not necessarily be bound by the SEC’s interpretation of the 1940 Act, could risk contradictory interpretation and significant regulatory uncertainty, dampening investment management industry innovations and ultimately harming shareholders. The Supreme Court’s decision could have a significant impact on all facets of the registered fund industry. Federated Hermes agrees with the ICI and SIFMA AMG, and believes that a private right of action should not exist under Section 47(b) of the 1940 Act.

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Generating Retirement Ownership Through Long-Term Holding Act of 2025 (GROWTH Act) Introduced in Congress. After being previously introduced in the U.S. House of Representatives, on May 21, 2025, the GROWTH Act was introduced in the U.S. Senate, with the stated aims of empowering investors by allowing automatic reinvestment of capital gain distributions in mutual funds and other registered funds and eliminating unexpected tax bills for reinvested capital gains outside of tax-preferred accounts. If enacted as introduced, the GROWTH Act would incentivize reinvestment and compounding growth in such funds by deferring annual taxes on capital gains distributions until an investor sells their shares or redeems/exits from a fund. In doing so, the GROWTH Act would address the disparity that exists between mutual fund investors and investors in other types of vehicles, such as ETFs, who are taxed only when gains are realized. The ICI, Federated Hermes, and other mutual fund companies support the enactment of the GROWTH Act.

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Bill Introduced to Enact U.S. Financial Transactions Tax. On June 18, 2025, The Wall Street Tax Act (H.R. 4035) was introduced into the U.S. House of Representatives. The Wall Street Tax Act purportedly, if enacted as proposed, would levy a financial transaction tax (FTT) of 0.1% – phased in over five years–on the sale of stocks, bonds, and derivatives to discourage certain risky and unproductive trading practices. The tax would apply to the fair market value of assets. Initial public offerings and short-term debt would be exempted from the tax.

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U.K. Reform of AIFMD regime. HMT and the FCA published a consultation paper and call for input respectively on April 7, 2025, on the reform of the U.K. alternative investment funds regime which is derived from the EU Alternative Investment Fund Managers Directive (AIFMD). Key proposals include the removal of the distinction between the existing registration regime for sub-threshold AIFMs and the authorization regime for full-scope AIFMs so that all AIFMs will be subject to a single authorization regime. Consequently, on the removal of the sub-threshold AIFM concept, it is proposed that the requirements for AIFMs would be based on a proportionate application depending on the size of the AIFM, with larger firms subject to more onerous requirements. For these purposes, AIFMs will be categorized into three tiers based on the size of their assets under management (AUM). The proposed tiers are: (i) large – AUM of £5bn or more, (ii) mid-sized – AUM of £100m to £5bn, and (iii) small – AUM of £100m or less. The deadline for responses to the publications closed on June 9, 2025. The FCA intends to consult on detailed rules in the first half of 2026.

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U.K. New Disclosure Regime for Consumer Composite Investments. The FCA published on April 16, 2025 a further consultation paper (CP25/9) on the CCI regime. Further proposals include a revised approach to the calculation of transaction costs, revisions to simplify the current cost disclosure rules under the U.K. MiFID framework, and transitional provisions to allow firms flexibility to move across to the new regime as soon as they are ready. The consultation closed on May 28, 2025. The FCA plans to issue a Policy Statement with final rules in late 2025.

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U.K. and EU Changes to Rules on Payment for Investment Research. In the U.K., the FCA has extended the ability to ‘bundle’ payment for third party research with trade execution costs from FCA-regulated MiFID investment firms to FCA-regulated investment fund managers including UCITS management companies and AIFMs. Fund managers’ ability to do so is subject to guardrails largely similar to those outlined in the Federated Hermes’ 2024 Annual Report. The extension entered into force on May 9, 2025.

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In the EU, ESMA subsequently published on April 8, 2025 its final report on technical advice in relation to the EU initiative permitting combination of investment research with execution costs for EU MiFID investment firms. Specifically, ESMA’s technical advice focuses on proposed changes to certain legislative provisions in the EU MiFID regulatory framework. These proposals include a requirement for an EU MiFID investment firm to enter into a joint payment agreement which prevents it from paying substantially more for the research component than it would have paid for it without the bundling, and does not impede its ability to provide best execution.

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Liquidity Risk Management for EU UCITS and Open-ended Funds. ESMA published on April 15, 2025 two final reports setting out the draft regulatory technical standards (RTS) and guidelines on the selection and calibration of liquidity management tools (LMTs) by EU UCITS and open-ended AIFs. Factors to consider in accessing the suitability of LMTs include: (i) the fund’s legal structure and any specific structuring features; (ii) the fund’s investment strategy and investment policy; (iii) the dealing terms of the fund including, inter alia, lock-up period, settlement period, redemption policy, and dealing frequency; (iv) the liquidity profile of the fund and its underlying assets, including anticipated liquidity demands; (v) the results of liquidity stress testing; (vi) the characteristics of the fund’s investor base; and (vii) the fund’s distribution policy. The draft RTS has been submitted to the European Commission which has three months to make a decision.

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Global Liquidity Risk Management. On May 27, 2025, the IOSCO published a final report (FR/10/2025) and guidance (FR/11/2025) on its revised recommendations for liquidity risk management (LRM) for collective investment schemes. The final report sets out 17 revised recommendations including, inter alia: (i) general recommendations about the LRM process, (ii) setting liquidity thresholds at the portfolio level, and (iii) consistency of open-ended funds asset liquidity and redemption terms. National and supra-national regulators of financial services regulators are expected to take into consideration the IOSCO recommendations in their regulation of asset managers’ LRM arrangements.

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EU Savings and Investments Union (SIU). On April 15, 2025, the European Commission launched a targeted consultation on obstacles to capital markets integration across the EU. This encompassed a wide-ranging set of initiatives aiming to develop the EU capital and banking markets, and to boost the EU’s economic competitiveness by improving the way the EU financial system mobilizes savings towards productive investments. The targeted consultation covers proposed changes affecting fund distribution and asset managers, including a proposed simplification of regulations and reduction of overall compliance burden, facilitating integration of liquidity pools, and addressing identified post-trading issues. The consultation closed on June 10, 2025, with a comprehensive package of measures expected in the fourth quarter of 2025.

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U.K. Sustainability Requirements for Corporations. The U.K. government published on June 25, 2025 a consultation on the U.K. Sustainability Reporting Standards (U.K. SRS) which are based on IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures. The U.K. government also created two committees to assist with the implementation of the U.K. SRS – a Technical Advisory Committee and a Policy and Implementation Committee. The final U.K. SRS are expected in the fall of 2025 for voluntary use. The U.K. government and the FCA will consider subsequently whether to make the U.K. SRS mandatory for certain entities.

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EU and U.K. Sustainability Requirements for Asset Managers and Investment Offerings. In the EU, the European Commission launched on May 2, 2025 a Call for Evidence relating to the review of the Sustainable Finance Disclosure Regulation (SFDR). This Call for Evidence was part of the review process for the SFDR, and identified certain areas of improvement. The proposed changes to the SFDR are expected in the fourth quarter of 2025.

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In the U.K., the FCA announced on April 29, 2025 that it had decided not to finalize at this stage the rules it had previously consulted on regarding extending the Sustainability Disclosure Regime to asset managers providing individual portfolio management services.

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EU and U.K. Regulation of Governance. Environmental and Social Ratings. In the EU, ESMA published on May 2, 2025 its consultation paper on the draft regulatory technical standards (RTS) under the governance, environmental and social rating regulation setting out proposed requirements on (i) application for authorization and recognition of governance, environmental and social ratings providers; (ii) measures and safeguards to mitigate conflicts of interest; and (iii) disclosures to be made by governance, environmental and social rating providers. ESMA is expected to publish a final report on the RTS in the fourth quarter of 2025.

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Due to a decrease in projected cash flows, primarily driven by a decrease in AUM as a result of net redemptions for the quarter ended June 30, 2025, management concluded that an indicator of potential impairment existed for the indefinite-lived intangible asset related to the FHL right to manage public fund assets, which had a carrying value of £72.2 million ($99.1 million) at June 30, 2025. A discounted cash flow analysis was prepared which resulted in the estimated fair value exceeding the carrying value by less than 5%. The key assumptions in the discounted cash flow analysis include revenue growth rates, pre-tax profit margins and the discount rate applied to the projected cash flows. The risk of future impairment increases with a decrease in projected cash flows and/or an increase in the discount rate.

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of required regulatory documents to shareholders as the default option for delivery, unless a shareholder affirmatively elects to receive mailed copies of such documents.

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Outside the U.S., Federated Hermes’ and its offerings’ primary regulators include the U.K. Financial Conduct Authority (FCA), the Central Bank of Ireland, the Luxembourg Commission de Surveillance du Secteur Financier, the Cayman Island Monetary Authority, the Monetary Authority of Singapore and the Australian Securities and Investments Commission. Federated Hermes and its offerings are subject to various non-U.S. regulatory requirements, and may be impacted by regulatory developments by or involving those primary regulators, as well as, among others, the European Commission, European Securities and Markets Authority (ESMA), Bank of England (BoE), His Majesty’s Treasury in the U.K. (HMT), Financial Stability Board (FSB) and the International Organization of Securities Commission (IOSCO).

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Federated Hermes has monitored, reviewed, assessed and implemented changes in response to, and will continue to monitor, review, assess and implement changes in response to, regulatory developments and requirements, as applicable, and their impact on its business, offerings and Financial Condition. Federated Hermes actively participates, either individually or with industry trade groups (such as the Investment Company Institute), in the public comment process regarding regulatory

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of Financial Condition and Results of Operations (unaudited)

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of Financial Condition and Results of Operations (unaudited)

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For additional information on risks related to geopolitical or other unexpected events, see Item 1A - Risk Factors included in Federated Hermes’ Annual Report on Form 10-K for the year ended December 31, 2024.

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Nonoperating Income (Expenses). Nonoperating Income (Expenses), net increased $11.8 million for the three-month period ended June 30, 2025, as compared to the same period in 2024. This increase is primarily due to a $12.1 million increase in Gain (Loss) on Securities, net due to an increase in the market value of investments.

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Long-Term Debt. On March 17, 2022, pursuant to the Note Purchase Agreement, Federated Hermes issued unsecured senior Notes in the aggregate amount of $350 million at a fixed interest rate of 3.29% per annum, payable semiannually in arrears in March and September in each year of the agreement. The entire principal amount of the $350 million Notes will become due

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Other Current Assets at June 30, 2025 increased $11.1 million from December 31, 2024 primarily due to deposits made on a fixed asset to be acquired in the next year.