FEDERATED HERMES, INC.

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Electronic Delivery Rule Proposal. On July 16, 2026, the SEC proposed Regulation E-Delivery, a new rule that would: (1) expand the ability of issuers, market intermediaries, and others to use electronic delivery to satisfy requirements to deliver required regulatory information under the federal securities laws; (2) provide requirements and conditions for delivering regulatory information electronically to investors and others without first obtaining their affirmative consent; and (3) generally supersede the SEC’s decades-old, guidance-based e-delivery approach, which the SEC traces to a 1995 interpretive release. Under the proposal, investors would retain the ability to request paper delivery, and, if a recipient requests a paper copy of information during a specified period, it is required to be retained under the federal securities laws and an issuer would generally have to send a paper copy, free of charge, within three business days of the request. To facilitate this new e-delivery approach, the SEC also proposed to: (1) rescind 1940 Act Rule 30e-3, (which provides alternative means for registered investment companies to satisfy shareholder report transmission requirements); and (2) amend current rules addressing the dissemination of proxy materials and tender offer materials. The proposal is intended to modernize the delivery-method

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rulebook applicable across the SEC’s regulated entities, without altering the content or format requirements for existing disclosures. The public comment period for this proposal will end on September 21, 2026.

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SEC Publishes Agency Rule List – 2026 (2026 Reg. Flex Agenda). On July 3, 2026, the SEC released its 2026 Reg. Flex Agenda, which was originally produced on May 14, 2026, and included two pre-rule items, 36 proposed rule items, and no final rule items. In a July 7, 2026 statement regarding the 2026 Reg. Flex Agenda, the SEC Chairperson stressed that the SEC recognizes: (1) the importance of advancing the regulatory framework to reflect today’s operating environment by embracing innovation and technology; (2) the importance of reversing the decline of public companies and revitalizing public markets; and (3) the need to ensure a regulatory framework for private markets that is transparent and accessible while remaining safeguarded. Each item from the SEC’s Division of Investment Management is designated as “deregulatory,” reflecting the SEC Chairperson’s strategy for advancing regulatory frameworks into the modern era, clarifying jurisdictional lines, and transforming SEC rules by returning them to first principles. In addition to the electronic delivery rule proposal discussed above, the 2026 Reg. Flex Agenda includes a number of items relating to registered investment advisors and funds, including, among others: (1) proposed amendments to Advisers Act Rule 206(4)-5 (the Pay to Play Rule); (2) Advisers Act recordkeeping modernization; (3) Advisers Act and 1940 Act custody rule amendments, including proposals for crypto-assets; (4) proposed rules to facilitate retail and registered fund access to private markets; (5) 1940 Act Rule 17a-7 amendments to restore fixed income cross-trading; (6) a proposed exemptive rule to permit funds to use an affiliated securities lending agent that can be compensated via a share of securities lending revenue, subject to certain conditions; and (7) various proxy rule amendments. The 2026 Reg. Flex Agenda no longer includes a proposal for a registered investment advisor and exempt reporting advisor customer identification program.

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SEC Chairperson Announces Comprehensive Review of SEC Enforcement Processes. On July 1, 2026, the SEC Chairperson announced that the SEC will conduct a sweeping review of its enforcement processes, describing the review as only the second such comprehensive evaluation in the SEC’s history. Speaking at the Economic Club of New York, the SEC Chairperson stated that the SEC has “ended the regulation by enforcement approach of the past and recentered [its] enforcement program on the SEC’s core mission by prioritizing cases that provide meaningful investor protection and strengthen market integrity.” The announcement follows a period of significant change at the SEC’s Division of Enforcement, including the appointment of David Woodcock as Enforcement Director on May 4, 2026, who has emphasized a shift away from case volume in favor of prioritizing quality and “back-to-basics” principles. Effective May 21, 2026, the SEC also rescinded a long-standing (since 1972) policy codified in its rules of informal procedure that provided that, when the SEC chose to settle an enforcement action in which a sanction was imposed, the SEC would not settle unless the defendant or respondent also agreed not to publicly deny the allegations in the complaint or administrative order. The SEC Chairperson also previously articulated a four-year strategic blueprint highlighting his intentions to shift regulatory practices and enforcement and improve operational efficiency, with the SEC’s Division of Enforcement focusing on fraud and manipulation. These developments are consistent with the broader deregulatory direction of the current Presidential administration discussed in Federated Hermes’ prior public filings.

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DOL Submits Proposed Rule on Prudence and Loyalty in Plan Investments and Shareholder Rights. On June 30, 2026, the DOL submitted a proposed rule titled “Prudence and Loyalty in Selecting Plan Investments and Exercising Shareholder Rights” to the Office of Management and Budget (OMB) for review under the regulatory review process. While the title of the proposed rule does not use the term “ESG,” the rulemaking is expected to address the permissible factors that Employee Retirement Income Security Act (ERISA) plan fiduciaries may consider when making investment decisions or exercising proxy voting and other shareholder rights on behalf of retirement plans. The proposed rule follows the current administration’s broader efforts to revisit the prior administration’s 2022 rule, which facilitated the consideration of governance, environmental and social factors in ERISA-governed investment decisions, and is consistent with recent DOL enforcement signals and guidance - including Technical Release 2026-01 (discussed below) and Employee Benefits Security Administration (EBSA) head Daniel Aronowitz’s May 8, 2026 remarks (discussed below) - emphasizing that ERISA fiduciaries must act solely in the economic interest of plan participants and beneficiaries.

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Supreme Court Rules That Section 47(b) of the Investment Company Act of 1940 Provides No Private Right of Action. On June 11, 2026, the U.S. Supreme Court held 6-3 in FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd. that 1940 Act Section 47(b) does not create a private right of action for rescission of contracts that violate the 1940 Act. The Court held that Section 47(b)’s phrase “rescission at the instance of any party” does not imply that private parties may sue. The Court concluded that Section 47(b)’s provision is a “mandate directed to … courts” and does not confer a right to individuals. The Court’s decision reaffirms the SEC’s central role in enforcing - or exempting investment companies from - the 1940 Act and reduces the risk that private suits will undermine the SEC’s enforcement priorities. The decision is a setback for activist investors that are now foreclosed from suing for contract rescission under the 1940 Act to prevent exchange-listed closed-end funds and other issuers from adopting safeguards, like control share provisions, designed to protect the interests of long-term

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shareholders. The Court’s decision reduces the exposure of registered investment companies and their advisors to private litigation alleging violations of the 1940 Act, though the full implications will depend on how lower courts apply the decision.

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SEC Division of Examinations (DOE) Issues Risk Alert on Investment Adviser Conflicts of Interest. On June 9, 2026, the SEC’s DOE issued a Risk Alert describing observations related to SEC-registered investment advisors’ economic conflicts of interest. The Risk Alert, which echoes topics in the DOE’s 2026 Examination Priorities, emphasizes the fiduciary obligations of investment advisors to identify, disclose and manage economic conflicts of interest. The Risk Alert addresses five key areas of concern: (1) conflicts of interest associated with investment advisors’ cash management recommendations, including automatic sweeps of uninvested cash into interest-bearing accounts without enabling informed client consent and undisclosed revenue-sharing arrangements; (2) conflicts of interest associated with other revenue opportunities, including the selection of higher-cost mutual fund share classes when lower-cost share classes were available; (3) compensation-related misstatements or omissions in Form ADV brochures, including failures to disclose industry activities, affiliations and revenue-sharing arrangements; (4) advisory fee calculations that were inconsistent with agreements and disclosures, including charging for services not provided and failing to issue refunds upon early termination; and (5) compliance programs that did not fully address fee-related economic conflicts, including the lack of controls to ensure accurate billing. The SECs DOE noted that examination findings often resulted in investment advisors returning money owed to clients due to fee billing and calculation errors and encouraged investment advisors to routinely review and refine their billing policies, procedures, practices and conflict disclosures.

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SEC Proposes to Rescind Climate-Related Disclosure Rules. On May 29, 2026, the SEC proposed to rescind, in their entirety, the climate-related disclosure rules that the SEC had adopted in March 2024 but stayed pending litigation in the U.S. Court of Appeals for the Eighth Circuit. The SEC stated that the 2024 rules exceeded the SEC’s statutory authority and, independently, reflected unsound policy because they were inconsistent with a registrant-specific, materiality-based approach to disclosure. If adopted, the proposed rescission would eliminate the 2024 rules’ specific line-item climate disclosure requirements, (covering climate-related risks, governance, targets and certain greenhouse gas emissions) rather than replace them with an alternative climate-specific framework, reverting public companies to existing principles-based and materiality-based disclosure obligations regarding climate matters. The proposal does not affect separate, non-SEC climate-related disclosure obligations that may apply to public (and private) companies under California law (including SB 253 and SB 261, discussed below) or other state, federal or non-U.S. regimes. The public comment period on the proposed rescission ends on August 3, 2026 and, because a subsequent vote of the SEC’s Commissioners would be required, a final rule is not expected before late 2026 or early 2027.

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SEC Proposes Sweeping Changes to Filer Status Framework and Executive Compensation Disclosure. On May 19, 2026, the SEC proposed a simplified two-classification system for public reporting companies, replacing the existing five filer categories with two: (1) non-accelerated filer (NAF); and (2) large-accelerated filer (LAF). Under this proposal, a public company will be categorized as an NAF unless it satisfies specified public float and time requirements (at least $2 billion and 60 consecutive months of Exchange Act reporting). The public float threshold would need to be satisfied for two consecutive fiscal years before transition to LAF status. Every company conducting an initial public offering, regardless of public float, will benefit from a minimum five-year on-ramp as an NAF. While Federated Hermes would not benefit from the proposal because it would continue to qualify as a LAF, if final rules are adopted as proposed, NAFs’ compensation disclosure obligations will be significantly reduced. NAFs would be required to provide compensation disclosure for only three (rather than five) executive officers, a summary compensation table for up to two (rather than three) fiscal years, an outstanding equity awards table and a director compensation table. The proposal would eliminate for NAFs the Compensation Discussion and Analysis (CD&A), the grants of plan-based awards table, the option exercises and stock vested table, pension benefits and non-qualified deferred compensation tables, pay ratio and pay versus performance disclosures, say-on-pay advisory votes, golden parachute tables, the compensation committee report and compensation committee interlock disclosures. The proposal follows the SEC Chairperson’s January 2026 statement instructing the SEC’s Division of Corporation Finance to undertake a comprehensive review of Regulation S-K, as discussed in Federated Hermes’ First Quarter 2026 Form 10-Q. The public comment period for this proposal ended on July 20, 2026.

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SEC Proposes Sweeping Reforms to the Registered Offering Process, Including for Closed-End Funds (CEFs) and Business Development Companies (BDCs). On May 19, 2026, the SEC proposed a broad package of rule and form amendments under the 1933 Act intended to modernize and expand issuer eligibility for shelf registration, well-known seasoned issuer (WKSI) benefits, and related communications safe harbors. As proposed, the amendments would extend enhanced registration and communication benefits - including short-form Form N-2 eligibility (without regard to the current $75 million public float requirement), automatic shelf registration for certain qualifying issuers, and an expanded Rule 139b research-report safe harbor without a minimum public float requirement - to BDCs and registered closed-end funds, including exchange-listed CEFs, that register securities on Form N-2. The public comment period for this proposal ended on July 27, 2026.

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DOL Signals Targeted Enforcement on ESG/DEI in 401(k)s. The DOL’s EBSA has signaled a more pointed enforcement approach toward retirement plan fiduciaries engaging in governance, environmental and social or diversity, equity and inclusion (DEI)-related investing. Speaking on May 8, 2026, EBSA head Daniel Aronowitz emphasized that the agency will prioritize action against “bad faith” actors who misappropriate plan assets or pursue “disloyal” objectives collateral to participant benefits, explicitly identifying governance, environmental and social and DEI motivations as potential red flags. The remarks build on recent agency guidance pivoting away from broad fiduciary-prudence inquiries and coincide with efforts to revisit prior administration rules that facilitated governance, environmental and social investment options in 401(k)s.

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SEC Proposes Optional Semiannual Reporting for Public Companies. On May 5, 2026, the SEC proposed rule and form amendments that would give public companies the option of filing semiannual reports on a new Form 10-S in lieu of quarterly reports on Form 10-Q. Companies that elect semiannual reporting would file one semiannual report and one annual report each fiscal year instead of three quarterly reports and one annual report. The election would be made annually on the cover page of Form 10-K; companies that do not affirmatively elect would continue to file quarterly. Form 10-S would require the same disclosures as Form 10-Q - including reviewed financial statements, management’s discussion and analysis (MD&A), legal proceedings, risk factor updates and executive officer certifications - but for a six-month period. Companies electing semiannual reporting could continue to issue quarterly earnings releases and hold quarterly earnings calls, though such information would not be subject to independent accountant review. The SEC Chairperson described the proposal as part of his agenda to incentivize companies to go and stay public. On July 6, 2026, Federated Hermes submitted a comment letter recommending that the SEC maintain mandatory quarterly reporting requirements and, instead, streamline Forms 10-K and 10-Q to focus on the most decision-useful, material disclosures - including financial statements and MD&A - by eliminating or reducing prescriptive and immaterial disclosure requirements that do not meaningfully inform investors. The public comment period for this proposal ended on July 6, 2026.

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FINRA Proposes Amendments to Rules 5130 and 5131 to Exempt Collective Trust Funds (CTFs). On April 7, 2026, FINRA filed a proposed rule change to amend FINRA Rule 5130, (Restrictions on the Purchase and Sale of Initial Equity Public Offerings) and paragraph (b) (Spinning) of FINRA Rule 5131, (New Issue Allocations and Distributions) to exempt specified CTFs. The proposed amendments would modernize the new issue rules, which generally prohibit FINRA member firms from selling new issues to accounts in which certain “restricted persons” (such as broker-dealers, their employees, finders, and certain others) have a beneficial interest, unless an exemption applies, by extending an exemption to specified CTFs, consistent with the treatment of registered investment companies. As proposed, a CTF would be eligible for the exemption if: (1) it has investments from 1,000 or more plan participants and beneficiaries; and (2) it was not formed or maintained for the specific purpose of permitting restricted persons to invest in new issues. The public comment period for this proposal ended on May 1, 2026.

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DOL Clarifies Fiduciary Status of Proxy Advisory Firms and Reinforces ERISA Standards on Proxy Voting. On April 1, 2026, the DOL published Technical Release 2026-01, providing guidance to plan administrators and other fiduciaries of plans subject to ERISA that rely on proxy advisory services, as well as to state legislators regulating proxy advisory services. The Release addresses two key issues. First, the Release clarifies that proxy advisory firms that either exercise authority or control over shareholder rights attributable to shares that are ERISA plan assets, including the voting of proxies, or provide advice for a fee to ERISA plans about how such plans should exercise proxy voting rights, must meet ERISA’s functional fiduciary requirements. This appears to be the first time the DOL has explicitly stated that the exercise of discretionary authority over the management of proxy voting rights could, standing alone, render a person or entity a fiduciary under ERISA. Prior DOL guidance had long recognized that proxy voting itself is a fiduciary act because proxy rights are plan assets, which implied that a party exercising discretion over those rights could become a functional fiduciary, but the DOL had not previously issued guidance on the fiduciary status of proxy advisory firms. Indeed, in announcing the Release, the DOL described the guidance as “first-of-its-kind guidance” addressing circumstances in which proxy advisory firms may satisfy the test for fiduciary status under ERISA. Second, the Release addresses ERISA preemption, opining that where a state law mandates disclosure to investors by proxy advisory firms only when they make recommendations other than for the purpose of maximizing risk-adjusted return for the advisee, such laws are generally not preempted by ERISA. The DOL stated that “[a] proxy advisory firm covered by such a law is not permitted to come within its ambit when providing services to an ERISA plan because ERISA imposes even stronger consumer protections in the form of fiduciary protections, including a bar on taking into account anything other than the exclusive purpose of providing benefits to participants and beneficiaries by maximizing risk-adjusted returns - since such a law creates an obligation to provide disclosure only when offering nonfinancial advice (that is, advice based on considerations other than maximizing risk-adjusted returns).”

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State Actions Relating to Governance, Environmental and Social Factors and Proxy Advisory Firms.

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State Proxy Advisor Disclosure Laws. Several states have enacted laws modeled on Texas S.B. 2337 (2025) that regulate proxy advisor firms that provide certain recommendations involving governance, environmental and social factors or diversity, equity and inclusion factors. For instance, Indiana (H.B. 1273), Kentucky (S.B. 183), Kansas (S.B. 375), and Oklahoma (H.B. 4429), each enacted proxy advisor disclosure laws similar to Texas S.B. 2337. The two largest proxy advisory firms have filed federal lawsuits challenging the Indiana, Kansas, and Kentucky laws on First Amendment grounds, alleging the disclosure requirements constitute viewpoint discrimination because they impose burdens only when the proxy advisor’s recommendation disagrees with management’s position. On June 24, 2026 and June 26, 2026, two federal courts issued preliminary injunctions preventing the Kansas and Indiana laws, respectively, from going into effect on July 1, 2026. These injunctions follow a similar preliminary injunction issued in Texas in 2025. In July 2026, the Kentucky Attorney General agreed with one of the two largest proxy advisory firms not to enforce its proxy advisor disclosure law against it pending the outcome of an injunction hearing.

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Separately, on May 20, 2026, four Republican state Attorneys General - Texas, Nebraska, Iowa, and West Virginia -filed state court consumer protection lawsuits against one of the two largest proxy advisory firms alleging the firm failed to disclose that its voting recommendations prioritize governance, environmental and social policies over clients’ financial interests. These lawsuits follow a similar suit filed by Florida in November 2025. On May 26, 2026, the state Attorneys General also announced the formation of a 16-state “Multistate Proxy Advisor Coalition” to coordinate enforcement efforts against the proxy advisory firm.

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California Climate Corporate Data Accountability Act Update. On June 24, 2026, the California Air Resources Board (CARB) announced that the first reporting deadline under the Climate Corporate Data Accountability Act (SB 253) would be extended from August 10, 2026 to November 10, 2026, providing covered entities, including certain investment advisors and fund complexes doing business in California (such as Federated Hermes), additional time to prepare Scope 1 and Scope 2 greenhouse gas emissions disclosures. Enforcement of the related Climate-Related Financial Risk Act (SB 261) remains stayed

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pending the United States Court of Appeals for the Ninth Circuit’s ongoing review of a preliminary injunction against that statute.

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State Attorneys General Probe Governance, Environmental and Social Factor Influence in Credit Rating Practices. On April 22, 2026, a coalition of 23 Republican state Attorneys General, co-led by Alaska, Florida, Nebraska, and Texas, sent letters to Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings alleging that the agencies’ downgrades of fossil fuel companies were based on speculative governance, environmental and social predictions that “materially contravened” their stated methodologies and reflect undisclosed conflicts of interest tied to their commitments to United Nations-backed initiatives. The coalition demanded that the agencies explain or reverse the downgrades, withdraw from or disclose their governance, environmental and social commitments, revise methodologies to remove transition-risk factors, and cease offering governance, environmental and social advisory services to entities they also rate. The coalition warned that failure to act could result in enforcement under state unfair and deceptive acts or practices laws, antitrust investigations, or referral to the SEC and Department of Justice. On May 20, 2026, a group of eight Democratic state and local finance officials - including the state treasurers of Connecticut, Massachusetts, Rhode Island, and Colorado - sent a counter-letter urging the agencies to maintain “independent, forward-looking” risk frameworks, arguing that the Republican demands would “narrow risk analysis in ways inconsistent with sound credit practice and the needs of investors and issuers.”

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Oklahoma Fossil Fuel Boycott Law Found Unconstitutional. On April 7, 2026, the Oklahoma Supreme Court ruled 5-3 in Keenan v. Russ that the Oklahoma Energy Discrimination Elimination Act of 2022 is “unconstitutional in its entirety when applied to the Oklahoma Public Employees Retirement System” (OPERS), upholding a 2024 district court injunction. The law required the Oklahoma Treasurer’s Office to maintain a list of financial companies that boycott energy companies and directed state entities to divest from them. The court held that the law violated Article 23, Section 12 of the Oklahoma Constitution by creating an impermissible “dual purpose” for investment decisions that interfered with OPERS’s constitutional duty to act solely in the interest of participants and beneficiaries, noting that companies on the restricted list controlled approximately 64% of the system’s assets. The Chief Justice of the Oklahoma Supreme Court dissented on the merits, arguing the Constitution expressly delegates to the Legislature the authority to prescribe investment conditions. The ruling is part of a broader pattern of judicial resistance to state anti-governance, environmental and social boycott laws, following a February 2026 federal court decision striking down a similar Texas law on First and Fourteenth Amendment grounds, with potential implications for comparable statutes in other states.

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U.K. Reform of Alternative Investment Fund Manager Directive (AIFMD) regime, and reform of reporting and remuneration requirements for U.K. asset managers (including Alternative Investment Fund Managers (AIFMs)). On July 14, 2026, HM Treasury published a draft Statutory Instrument and Policy note setting out a new, simplified legislative framework for governing AIFMs, repealing existing legislation governing AIFMs, and providing for the detailed regulation of AIFMs to be addressed in FCA rules. On July 14, 2026, the FCA also published a consultation paper on the new regime for AIFMs (CP26/28 - The U.K. AIFM Regime), as well as consultation papers impacting asset managers generally on reporting requirements (CP26/26 - Fund Reporting for Asset Management Entities (FRAME)) and remuneration requirements (CP26/27 -

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Remuneration: Solo-regulated Firms’ Rules Reform). In these consultation papers, among other things: (1) the FCA proposes replacing the current U.K. AIFMD-derived framework with a new, standalone rulebook - the Alternative Investment Funds (AIFs) sourcebook (ALTS) - and introduces a three-tier system that classifies AIFMs as small (under £750m NAV), medium (£750m–£5bn NAV), or large (over £5bn NAV), with obligations scaling proportionately by size; (2) the FCA sets out a proposed new reporting framework covering the thresholds, frequency, time to report, and scope of the regime, along with its approach to leverage, master and feeder funds, and calculation methodologies that AIFMs would need to follow; and (3) the FCA proposes changes to the remuneration code applicable to solo-regulated asset managers, aiming to simplify and modernize pay-related rules that currently derive largely from the AIFMD, tailor applicable remuneration requirements more proportionately by firm size, and reduce compliance burdens for smaller managers while preserving standards for larger, more systemically significant firms. The public consultation periods for these papers end on October 14, 2026, September 22, 2026, and September 16, 2026, respectively.

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CBI Undertakings for Collective Investment in Transferable Securities (UCITS) Regulations. On July 10, 2026, the CBI published its final package of updates to the Irish UCITS domestic Irish framework following its consultation paper (CP161) on revised Central Bank UCITS Regulations, which was intended to align domestic Irish UCITS requirements with AIFMD II/UCITS VI, incorporate existing guidance, and revise rules on performance fees and redemption gates for UCITS and certain retail investor AIFs. The final package repeals and replaces the 2019 Central Bank UCITS Regulations and includes substantive changes, including, for example: (1) the CBI removed the proposed standalone swing pricing provision as duplicative; (2) the CBI removed the previously proposed 10% threshold before a redemption gate could be imposed; and (3) the CBI did not proceed with a proposed 10-basis-point deviation limit for non-money market fund UCITS. The publication of the CBI’s final package followed its publication of a revised AIF Rulebook on May 5, 2026.

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EU Sustainability Requirements for Corporations. On July 3, 2026, the EU’s European Commission adopted the final European Sustainability Reporting Standards (ESRS) as part of the simplification of the Corporate Sustainability Reporting Directive (CSRD). The ESRS are designed to reduce administrative burdens for EU businesses while maintaining high-quality disclosures by: (1) introducing additional flexibility measures and new exemptions; (2) reducing the mandatory datapoints; (3) enhancing the connectivity with international standards and other EU legislation; and (4) introducing a more proportionate approach with principle-based guidance and the possibility to include clearly identified non-material information without obscuring material disclosures. Under the ESRS, asset managers who manage investments subject to a fiduciary duty on behalf of clients are not expected to make certain assessments/disclosures relating to those investments. The European Commission also adopted the voluntary sustainability reporting standards for certain small companies not subject to the CSRD.

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EU Savings and Investments Union (SIU) and the Market Integration and Supervision Package (MISP). On June 12, 2026 the European Parliament published three draft reports on the MISP, which is a key component of the EU’s SIU initiative. The MISP consists of, among other things, a Master Regulation amending fourteen underlying acts governing various supervisory aspects of financial markets and a Master Directive amending three acts related to asset management and trading (including the UCITS Directive, AIFMD, and Markets in Financial Instruments Directive II (MiFID II)). The MISP is intended to integrate the EU’s capital markets by expanding the role and direct supervisory powers of ESMA, increasing supervisory coordination, and simplifying and harmonizing the requirements for market participants.

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EU and U.K. Anti-Money Laundering (AML) Requirements. In the U.K., on June 9, 2026, HM Treasury published the Money Laundering and Terrorist Financing (Amendment) Regulations 2026, which had been laid before U.K. Parliament on March 25, 2026, amending the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. This statutory instrument implements targeted updates to the U.K.’s AML and counter-terrorist financing framework. The revisions include amendments regarding customer due diligence and enhanced due diligence requirements for crypto asset businesses and unusually complex or large transactions, high-risk jurisdictions, and pooled client accounts. Most provisions came into force on June 30, 2026, though certain crypto-related change-in-control provisions take full effect from October 25, 2027, aligned with the U.K.’s incoming crypto-asset regulatory regime. In the EU, on April 16, 2026, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) published two consultation papers concerning: (1) draft guidelines on the business-wide risk assessment under Article 10(4) of the Anti-Money Laundering Regulation (AMLR), for which the consultation period closed on July 15, 2026; and (2) draft regulatory technical standards (RTS) on group-wide requirements and additional measures for branches and subsidiaries in third countries under Articles 16(4) and 17(3) of the AMLR, for which the consultation period closed on June 15, 2026.

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EU RIS and the Retail Investment Directive (RID) and Retail Investment Regulation (RIR). In relation to the RIS, on June 9, 2026, the EU Council published its compromised text of the proposed RID and RIR. These set out the EU Council’s negotiation position with other EU legislators. The RID is designed as an omnibus measure amending, among other directives, the Markets in Financial Instruments Directive, the UCITS Directive, and the AIFMD, with the goal of ensuring that the EU's retail

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investment framework adequately empowers and protects consumers while growing retail investor participation in capital markets. The companion RIR amends the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation to adapt its Key Information Documents to the digital environment and the evolving needs of retail investors. The European Parliament has indicated that it is due to consider the proposed RID during its plenary session on November 11, 2026.

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Global Investment Fund Valuation. On June 1, 2026, IOSCO published a final report (FR/03/2026) setting out its Recommendations on Valuing Collective Investment Schemes (CIS). The final report supersedes the 2013 IOSCO CIS Valuation Principles and 2007 Hedge Fund Valuation Principles. It merges those principles and sets out a unified list of 13 recommendations that are intended to ensure that IOSCO’s CIS valuation standards remain consistent with market practice and account for recent market developments, including the increased retail investment in CISs, and the particular challenges posed by illiquid assets and private assets. The recommendations emphasize, among other things: (1) the importance of governance and oversight of valuation processes; (2) the need to identify and manage conflicts of interest; and (3) the need for the responsible entity to ensure assets are valued at fair value in line with applicable regulations, accounting standards and the fund documentation. National and supra-national regulators of financial services regulators are expected to take into consideration the IOSCO recommendations in their regulation of asset managers’ valuation policies and procedures.

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“EU T+1” Settlement. On May 26, 2026, ESMA published a consultation paper on amending its guidelines regarding standardized procedures and messaging protocols under Article 6(2) of the EU Central Securities Depositories Regulation (CSDR). These amendments are intended to enhance settlement efficiency and support a smooth transition to T+1 settlement, which is scheduled to take effect across the EU on October 11, 2027. Among other things, the proposed amendments would mandate electronic, standardized, machine-readable communication of allocations and confirmations using international messaging standards, removing existing references to non-electronic and non-machine-readable communication methods (such as oral allocations and confirmations) except in cases of temporary technical disruption. The consultation period for this paper closed on July 7, 2026, and ESMA expects to publish its final report, including the updated guidelines, by October 2026.

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EU Regulation of Governance. Environmental and Social Ratings. The European Commission published regulations during the second quarter 2026 regarding the implementation of governance, environmental and social ratings in the EU. These regulatory provisions included: (1) RTS published on May 26, 2026 on the information to be included in applications for the authorization or recognition as a rating provider; (2) RTS regarding the separation of governance, environmental and social rating providers’ business lines and an RTS on disclosure, both published on April 21, 2026; and (3) regulations published on April 24, 2026 regarding ESMA supervisory fees and ESMA fines and penalties for breaches. In addition, on April 29, 2026, ESMA published guidelines regarding the Rating Regulation, which seek to ensure rating providers understand the regulatory expectations (and authorization requirements) involved in endorsing third-country ratings.

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U.K. Financial Services and Markets Bill 2026-27. On May 19, 2026, the Financial Services and Markets Bill 2026-27 was introduced to the House of Lords, completing its first reading. The Financial Services and Markets Bill 2026-27 sets out significant changes to the overall U.K. financial services regulatory framework, including, among others: (1) reforming the U.K. Senior Managers and Certification Regime (SMCR), including removing the certification regime from primary legislation; (2) reforming the Financial Ombudsman Service framework to resolve disputes more quickly; (3) creating a new provisional authorization regime; (4) empowering HM Treasury to consolidate the AML supervision for various professional services; (5) empowering HM Treasury to establish broader overseas recognition regimes which may extend beyond the current “equivalence” regimes, an ability HM Treasury does not currently have outside areas of financial services activity already covered by assimilated EU law; and (6) changing various requirements relating to how the FCA and Prudential Regulatory Authority (PRA) should exercise their supervisory functions, including shorter statutory deadlines for certain authorization determinations and the removal of certain consultation obligations on guidance and minor rule changes. The Financial Services and Markets Bill 2026-27 also separately provides for the abolition of the Payment Systems Regulator and the transfer of its functions to the FCA. The Financial Services and Markets Bill 2026-27 received its second reading in the House of Lords on June 8, 2026, and is currently going through the legislative process.

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U.K. and EU Money Market Fund Reform. In the U.K., on May 14, 2026, as an update to a 2023 consultation paper, HM Treasury and the FCA published a joint statement expressing their commitment to reforming the U.K. money market fund regulatory regime (MMFR). The FCA subsequently published a statement on June 8, 2026, stating certain updated proposals that differ from those in the 2023 consultation paper. The updated proposals include: (i) retaining the current minimum daily liquid asset and weekly liquid asset (WLA) requirements (these were initially proposed to be increased in the 2023 consultation); (ii) setting out in guidance a “strong supervisory expectation” that stable NAV money market funds should hold 40% (rather than the required 30%) WLA and variable NAV money market funds hold 20% (rather than the required 15%) WLA; and (iii) requiring all U.K. money market funds to hold sufficient liquidity for adequate resilience. The new U.K. MMFR is expected to be in place by the end of 2026, subject to the legislative process to replace the regulations. In the EU, on May 11,

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2026, the European Commission published a report on the adequacy of the EU MMFR, along with Frequently Asked Questions (FAQs). The report found that, among other things, in stressed market conditions, WLA of 40% for stable NAV money market funds and 20% for variable NAV money market funds is generally sufficient and functions as an “early warning indicator” for EU member state regulators. The report also found that it would not be proportionate to increase the binding regulatory minimum to these levels. As such, the report concludes that these higher WLA levels should be regarded as “market resilience levels” that money market fund managers should monitor to identify situations warranting closer monitoring and increased supervisory engagement.

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CBI Publishes Revised AIF Rulebook. On May 5, 2026, the CBI published a comprehensively updated AIF Rulebook, together with its Feedback Statement on Consultation Paper 162, consolidating the requirements applicable to Irish-authorized AIFs, AIFMs and depositaries. Key changes include, among others: (1) removing the legacy loan origination chapter for qualifying investor AIFs (QIAIFs), aligning with the new EU loan-origination framework under AIFMD II; (2) removing the restriction on QIAIFs providing third-party guarantees, simplifying subscription-line and other fund-financing arrangements for private funds and private equity, real estate and direct lending fund structures; (3) for Retail Investor AIFs, removing the restriction on granting loans (enabling loan-originating Retail Investor AIFs), introducing harmonized liquidity management tools, revising performance-fee verification expectations, and imposing new stress-testing requirements for money market funds; and (4) corresponding updates to the European Long-Term Investment Fund (ELTIF) chapter addressing liquidity, performance fees, share classes and disclosure. The CBI declined to adopt a proposed increase in AIFM financial reporting frequency following industry feedback.

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EU EMIR III and EU Transaction Reporting Simplification. On July 2, 2026, ESMA published its Final Report on the Call for Evidence on a comprehensive approach for the simplification of financial transaction reporting, following a call for evidence launched on June 23, 2025 and a May 4, 2026 interim report. ESMA determined that a transition toward a “report once” framework represents the most effective and future-proof approach to simplifying transaction reporting across Markets in Financial Instruments Regulation, EMIR, and Securities Financing Transactions Regulation (SFTR), under which transaction data would be reported once through a common modular structure and then reused across national competent authorities and supervisory mandates, reducing duplication while preserving the information needed for effective supervision. Consistent with feedback received during the call for evidence process, ESMA confirmed the need to reduce the burden associated with dual-sided reporting under both EMIR and SFTR and the associated reconciliation processes. ESMA has indicated that it will engage with EU institutions on the recommendations set out in the Final Report as next steps toward implementation, which reportedly can take up to five to seven years.

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EU and U.K. Sustainability Requirements for Asset Managers and Investment Offerings. In the EU, amendments to the Sustainable Finance Disclosure Regulation (SFDR), commonly known as “SFDR 2.0”, are still ongoing following the European Commission’s adoption of the proposed SFDR 2.0. On May 4, 2026, the European Parliament published a draft report setting out its amendments to SFDR 2.0. The European Parliament agreed in principle with the proposed labelling regime but proposed changes to certain detailed requirements. Among these changes, the report proposes mandatory Principal Adverse Impact indicator disclosures for products using one of the new sustainability categories, a requirement that products under the “ESG Basics” category exclude at least 20% of the lowest sustainability-rated securities, and a retail investor disclaimer for products that reference sustainability factors without qualifying for one of the new labelled categories. In the U.K., the FCA published a consultation paper on June 5, 2026 proposing to remove the Task Force on Climate-related Financial Disclosures (TCFD) product reporting requirements. The FCA intends to reduce the disclosure burden and complexity, recognizing the overlap with the product disclosure required under the FCA’s Sustainability Disclosure Requirements (SDR). The consultation period for this paper closed on July 13, 2026.

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Ireland Transposes AIFMD II and UCITS VI. On May 1, 2026, two statutory instruments - S.I. No. 181/2026 (the AIFMD II Regulations) and S.I. No. 182/2026 (the UCITS VI Regulations) - came into operation, giving effect in Irish law to Directive (EU) 2024/927 (AIFMD II/UCITS VI). The new regulations embed the Directive’s core reforms at the national level, including harmonized liquidity management tools for both EU UCITS and open-ended AIFs (such as suspensions, redemption gates, swing pricing and side pockets) and a harmonized EU framework for AIFs engaged in loan origination, including QIAIFs and, for the first time, retail investor AIFs. Ireland’s implementation closely tracks the EU directive, exercising limited national discretion, including preservation of Ireland’s existing depositary model.

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SEC Announces Enforcement Results for Fiscal Year 2025. On April 7, 2026, the SEC announced enforcement results for the fiscal year ended September 30, 2025. During fiscal year 2025, the SEC filed 456 enforcement actions, including 303 standalone actions and 69 “follow-on” administrative proceedings seeking to bar or suspend individuals from certain functions in the securities markets based on criminal convictions, civil injunctions or other orders, and obtained orders for monetary relief totaling $17.9 billion. The total fiscal year 2025 enforcement actions represented a 22% decrease from fiscal year 2024. The 2025 enforcement actions addressed a broad range of misconduct and prioritized cases involving direct harm to investors and the integrity of the U.S. securities markets, including offering frauds, market manipulation, insider trading, issuer disclosure violations and breaches of fiduciary duty by investment advisors. The SEC Chairperson commented that the SEC’s new enforcement emphasis represents an end to “regulation by enforcement” and is aimed at misconduct that creates the greatest harm to investors.

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DOL Proposes Safe Harbor for Alternative Assets in 401(k) Plans. On March 31, 2026, the DOL issued proposed rules establishing a safe harbor framework that allows for the inclusion of alternative assets, such as private market investments, in 401(k) plans. The proposal responds to a Presidential executive order and would provide legal protections for plan sponsors that follow a defined fiduciary process when evaluating and selecting investments, without regard to whether the asset is “traditional” or an “alternative.” Under the proposal, fiduciaries would be required to assess six factors in making investment decisions: performance, fees, liquidity, valuation, benchmarks and complexity. The proposal emphasizes an asset‑neutral, process‑driven approach, allowing selection of higher‑fee or less‑liquid options if these characteristics are justified by anticipated returns and overall value to participants. Industry stakeholders widely supported the proposal, noting that a formalized fiduciary‑process safe harbor may reduce Employee Retirement Income Security Act of 1974 (ERISA) litigation risk and expand access to private‑market strategies. The public comment period for the proposed rule ends on June 1, 2026.

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Scrutiny of Governance, Environmental and Social Initiatives. Recent state, federal and legal actions highlight continuing scrutiny of governance, environmental and social framework-aligned investment strategies and climate disclosure groups.

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State Laws Governing Proxy Advisors. Two states have recently enacted laws like Texas S.B. 2337, which was enacted in 2025 to regulate proxy advisor firms that provide recommendations involving governance, environmental and social factors or diversity, equity and inclusion factors. For instance, on March 31, 2026, the Kentucky General Assembly passed S.B. 183, which is intended to provide transparency and accountability standards for proxy advisory firms that influence shareholder voting decisions. S.B. 183 requires disclosure by covered firms in two circumstances. First, if a proxy advisor provides a service that isn’t based solely in the financial interests of shareholders. This disclosure must explain that the advice is based in whole or in part on nonpecuniary factors and briefly describe the rationale. Second, if a proxy advisor gives materially different advice to different clients (e.g., suggests to one client to vote “for,” while suggesting to another client to vote “against” or “abstain”). This disclosure requires notice of the materially different vote and clarification as to which of the conflicting voting suggestions are provided solely in the interest of shareholders and supported by an economic analysis.

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On March 3, 2026, the State of Indiana enacted Indiana House Bill 1273, which has an effective date of July 1, 2026. Indiana House Bill 1273 imposes one multi-layered disclosure requirement and applies broadly to proxy advisors providing services to any person located in Indiana with respect to a proxy vote pertaining to an entity (i.e., an issuer) even if the entity is out-of-

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state. The disclosure requirement is triggered if a proxy advisor recommends voting against management (including if the “recommendation” is based upon a default policy). The disclosure must state whether the recommendation is backed by a written financial analysis (and state the analysis is available upon request). The proxy advisor must also provide a copy of the analysis to entity management. If there is no supporting financial analysis, a proxy advisor must disclose this fact to the client and the entity plus make the disclosure publicly available. On April 13, 2026, an investor services and proxy advisory company filed a lawsuit against the Indiana Attorney General in the U.S. District Court for the Southern District of Indiana challenging the constitutionality of Indiana House Bill 1273. Among other things, the complaint argues that Indiana House Bill 1273 violates free speech by targeting only anti-management recommendations and asks the court to grant a preliminary injunction preventing the law from coming into effect.

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New ERISA Fiduciary Breach Lawsuit. In a complaint filed on March 3, 2026 in the U. S. District Court for the Western District of Washington, a participant in a 401(k) plan of a global commercial real estate firm alleges that plan fiduciaries breached their ERISA duties by selecting and retaining an investment fund that failed to consider or manage climate-related financial risks, resulting in excessive risk, inferior performance and higher fees for participants. A core theory of the complaint is that climate change presents financially material risks to investment portfolios, and that these are precisely the types of risks ERISA requires fiduciaries to prudently evaluate and monitor.

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This case follows last year’s Spence v. American Airlines litigation (in which a plaintiff successfully argued that their employer breached their ERISA duty of loyalty by allowing corporate interests in governance, environmental and social objectives to influence the management of an employee retirement plan) and represents the second recent ERISA lawsuit involving governance, environmental and social-related theories of fiduciary breach, though the claims arise from the alleged failure to account for climate risk rather than from the use of governance, environmental and social-focused investment strategies. Together, these cases highlight how climate and governance, environmental and social issues are increasingly appearing in ERISA litigation involving defined contribution plan investment menus.

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FSOC Proposes Interpretive Guidance and Request for Public Comment on Systemically Important Financial Institutions (SIFI) Designations. On March 25, 2026, the FSOC issued proposed interpretive guidance, and request for public comment, regarding its process for identifying, assessing and responding to potential risks to U.S. financial stability, including through potential designation of nonbank financial companies as SIFI’s. The proposal would rescind the FSOC’s 2023 guidance and restore the structure of the guidance initially issued in 2019 regarding the procedural processes and substantive analytic framework used by the FSOC in considering a nonbank financial company for potential designation. The proposed guidance would re‑establish a two‑step activities‑based approach under which the FSOC would first work with primary regulators to address identified risks before considering a firm‑specific designation. The proposed guidance would also update the FSOC’s analytic methodologies by expanding the set of vulnerabilities considered, such as asset‑valuation risks and broader measures of economic security. Additionally, the proposal would enhance analytical rigor by requiring a cost‑benefit analysis and an assessment of the likelihood of a firm’s material financial distress before designation, while introducing a pre‑designation “off‑ramp” that identifies steps a company or its regulators could take to mitigate risks. The SEC Chairperson indicated support for the proposal but cautioned that it cannot resolve what he views as structural deficiencies in the nonbank designation framework, emphasizing that only Congress can address the underlying issues. On April 15, 2026, Federated Hermes submitted a comment letter to the FSOC expressing: (1) Federated Hermes continued belief that the FSOC’s 2023 guidance was substantively and procedurally defective and should be withdrawn; and (2) the inappropriateness of nonbank SIFI designation of mutual funds generally and particularly money market funds because designating mutual funds generally and particularly money market funds under Section 113 of The Dodd‑Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) is inconsistent with the statutory text and in direct conflict with the stated intent of Congress in adopting the Dodd-Frank Act. The public comment period for the proposal ends on May 14, 2026.

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SEC Issues Exchange Act Exemptive Relief to Supplement 1940 Act Exchange-Traded Fund (ETF) Share Class Relief for Multi-Class Funds. On March 17, 2026, the SEC issued exemptive relief under the Exchange Act to a number of applicants providing broker-dealer and market structure relief necessary to permit open-end management investment companies registered under the 1940 Act to functionally operate when offering one class of ETF shares that operates as an exchange-traded fund and one or more classes of shares that are not exchange-traded. The relief granted under Exchange Act Section 36 allows broker‑dealers and other market participants to engage in transactions in ETF share classes without triggering restrictions under Rules 10b‑10, 14e‑5, or Section 11(d)(1) of the Exchange Act, provided that the ETF share class operates in accordance with existing ETF requirements. This action follows earlier relief under the 1940 Act enabling registered investment companies to offer both mutual fund and ETF share classes within the same portfolio. As of March 17, 2026, approximately 100 applications had been filed requesting exemptive relief to operate multi‑class ETF structures. Federated Hermes is still evaluating whether to file a similar application.

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SEC and CFTC Issue Joint Interpretive Release on Crypto Assets. On March 17, 2026, the SEC and CFTC issued a joint final rule and interpretive release clarifying that most crypto assets are not securities and providing guidance on when transactions involving crypto assets are securities transactions. The interpretive release, which became effective on March 23, 2026: (1) establishes a five-part token taxonomy for crypto assets based on their characteristics, uses and functions, and analyzes each category under the “security” definition; (2) addresses how a non-security crypto asset may become subject to, and cease to be subject to, an “investment contract;” and (3) clarifies the application of federal securities laws to certain crypto activities including airdrops, protocol mining, protocol staking and the “wrapping” of a non-security crypto asset, consistent with existing SEC staff guidance. While most crypto assets are not themselves securities under the new guidance, the SEC reiterates its view that a non-security crypto asset may be sold as part of an “investment contract” (and, therefore, become subject to the securities laws) depending on the representations and promises made to purchasers to undertake future managerial efforts. The interpretive release also provides guidance as to when a crypto asset that was initially offered and sold as part of an investment contract may cease to be subject to an investment contract.

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SEC Proposes to Limit Rule 15c2-11 to Equity Securities. On March 16, 2026, the SEC proposed amendments to Exchange Act Rule 15c2‑11 that would formally limit the rule’s scope to equity securities, replacing all references to “securities” with “equity securities” as defined in Exchange Act Rule 3a11‑1. Rule 15c2‑11 historically required broker‑dealers to gather and review specified issuer information before publishing quotations in an over-the-counter (OTC) quotation medium, a framework originally designed to combat fraud in thinly traded OTC equity markets. The SEC noted that the proposal responds to several years of industry feedback following the staff’s unexpected 2021 interpretation that the rule extended to fixed‑income securities, contrary to decades of market practice. Under the proposed amendments, fixed‑income instruments and other non‑equity securities would no longer fall within the rule’s requirements, though convertible bonds, warrants, options and forwards linked to equity securities would continue to be treated as equity securities and remain subject to Rule 15c2‑11. The SEC also proposes conforming changes to recordkeeping and information‑review provisions and clarifies that the amended rule would apply to crypto assets only to the extent a particular crypto asset qualifies as an “equity security” under Rule 3a11‑1. The SEC stated that the amendments are consistent with the rule’s original anti‑fraud purpose and would remove outdated exceptions, such as the municipal‑securities exemption, which become unnecessary if the rule is limited solely to equity securities.

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Second Circuit Rejects Reliance on SEC Definition of Investment Advisor in Enforcement Action. On February 27, 2026, the U.S. Court of Appeals for the Second Circuit (Second Circuit) issued a summary order in SEC v. Amah holding that courts must independently interpret the statutory definition of “investment advisor” under the Advisers Act and may not defer to the SEC’s interpretation simply because the statutory text is ambiguous. The SEC had argued that an individual’s “expectation” of receiving compensation could satisfy the statutory requirement that an advisor receive compensation, even if no compensation was actually paid by the allegedly defrauded investors. Traditionally, the SEC has advanced this view through guidance and rulemaking preambles. The Second Circuit rejected this approach, emphasizing that the Supreme Court’s ruling under Loper Bright Enterprises v. Raimondo requires courts to exercise their own judgment when a statute lacks judicial construction.

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In SEC v. Amah, the Second Circuit vacated a district court decision imposing liability on an investment advisor under the Advisers Act because the district court appeared to treat the SEC’s interpretation as controlling without analyzing whether the statutory definition is consistent with the SEC’s expansive interpretation. The ruling is among the first to apply the ruling from Loper Brightin the SEC enforcement context, citing that judges may not defer to agency interpretation just because a statute is ambiguous. The Second Circuit decision signals that the SEC must be prepared to ground its interpretations more firmly in statutory text and provides defendants with an avenue to challenge even long‑standing agency positions.

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SEC Adopts Final Amendments for Foreign Private Issuers Holding Foreign Insiders Accountable Act (HFIAA). On February 27, 2026, the SEC adopted final amendments implementing the HFIAA, eliminating the longstanding exemption that previously shielded directors and officers of foreign private issuers (FPIs) from Section 16(a) reporting obligations. As a result, directors and officers of FPIs with a class of equity securities registered under Section 12 of the Exchange Act must begin filing Forms 3, 4 and 5 to disclose their beneficial ownership and transactions in the issuer’s equity securities starting March 18, 2026. The final amendments revise Rule 3a12‑3(b) to remove the full exemption from Section 16 and replace it with exemptions only from Section 16(b) short‑swing profit rules and Section 16(c) short‑sale prohibitions and amend Rule 16a‑2 to continue excluding 10% beneficial owners of FPIs from Section 16(a) reporting.

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The SEC also updated Forms 3, 4 and 5 to include optional fields for foreign trading symbols and more precise address information to better accommodate foreign insiders. In a related action on March 5, 2026, the SEC issued an exemptive order allowing FPI insiders in certain qualifying jurisdictions, including Canada, Chile, the European Economic Area, Korea, Switzerland and the U.K., to satisfy Section 16(a) obligations through home‑country filings if those regimes provide

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substantially similar reporting. These amendments collectively align foreign‑issuer insider reporting obligations more closely with those applicable to U.S. domestic companies.

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CFTC Staff Preserves Commodity Pool Operator (CPO) Delegation Structures Relief. On February 26, 2026, the CFTC’s Market Participants Division issued an updated no‑action position confirming that CPO delegation structures may remain intact even when a CPO that has been delegated CPO responsibilities by a non-registrant relies on recent no‑action relief and is therefore no longer registered as a CPO. This clarification addresses uncertainty created by earlier relief that allowed certain registered CPOs to deregister; market participants questioned whether a non-registrant could continue delegating regulatory responsibilities if the CPO was no longer formally registered, as previously required under CFTC No‑Action Letter 14‑126.

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The updated CFTC position makes clear that a non-registrant does not need to register so long as (1) it delegates CPO responsibilities to a CPO relying on the new relief (i.e., a non‑registered CPO); and (2) all other conditions of No‑Action Letter 14‑126 remain satisfied, such as the CPO accepting full responsibility for CPO obligations and the non-registrant not engaging in solicitation or management activities. This ensures that long‑standing delegation arrangements for private funds, including those involving offshore fund boards or general partners, are not unintentionally disrupted by the deregistration of the CPO and that fund complexes may continue operating under pre‑existing, CFTC‑sanctioned delegation models.

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Initial Implementation Regulation Adopted for California Climate Disclosure. On February 26, 2026, the California Air Resources Board (CARB) approved initial implementing regulations for the Climate Corporate Data Accountability Act (SB 253) and the Climate‑Related Financial Risk Act (SB 261). The regulations establish applicability criteria, fee structures, reporting timelines and key definitions, marking the first formal regulatory framework for California’s mandatory climate‑disclosure regime. CARB confirmed that entities are considered to be “doing business” in California if they are organized or commercially domiciled in the state or if their California sales exceed a threshold set by the Franchise Tax Board. The regulations also adopt a flat‑fee structure for covered companies, with program fees allocated based on total annual program costs divided by the number of regulated entities.

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The first reporting deadline under SB 253 is August 10, 2026, and applies initially only to Scope 1 and Scope 2 greenhouse‑gas emissions, with Scope 3 reporting beginning in 2027. CARB clarified that insurance companies, nonprofits, government entities and certain limited‑activity businesses are exempt from reporting requirements. Although the regulations also apply to SB 261, CARB emphasized that enforcement of SB 261 remains stayed pending ongoing Ninth Circuit litigation, and the agency will not enforce SB 261 until the injunction is lifted. CARB noted that these implementing rules advance California’s broader effort to standardize climate‑risk disclosure and align the state with similar global frameworks adopted in the EU, U.K. and Japan.

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SEC Overhauls Enforcement Manual. On February 24, 2026, the SEC Division of Enforcement announced the first substantial overhaul of its Enforcement Manual since 2017, adopting changes designed to make enforcement proceedings more efficient, transparent and less punitive for cooperative parties. The revised manual restores a prior policy that allows simultaneous SEC consideration of an offer of settlement and related waiver requests from automatic disqualifications and other collateral consequences from the settlement terms. This change reduces the likelihood of duplicative “follow‑on proceedings,” and provides respondents with clearer visibility into the full implications of a proposed settlement. Under the new process, if the SEC accepts the settlement but rejects the waiver request, the respondent must decide whether to proceed with or withdraw the settlement.

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The SEC also revised the Wells process, which is the procedure by which potential defendants can provide substantive argument after the Division of Enforcement staff preliminarily decides to recommend that the SEC bring charges. Among other things, the changes standardized a four‑week period for respondents to submit Wells responses and require that any requested Wells meeting occurs within four weeks thereafter, with participation by a senior SEC official. Additional updates aim to incentivize meaningful cooperation: the Division of Enforcement may recommend reduced or waived civil penalties for entities that demonstrate effective self‑policing, self‑reporting, remediation and cooperation, including actions such as enhancing internal controls, taking remedial personnel measures, clawing back compensation and improving training. For individuals, penalty mitigation will consider the quality of assistance provided, the importance of the matter, the public‑interest factors involved and the individual’s personal and professional profile. These updates come amid a noted decline in enforcement‑action volume over the SEC’s past fiscal year and reflect the SEC’s refocused priority on fraud prevention and misconduct that threatens market integrity.

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Proposed Amendments to Form N-PORT Reporting; Extension of Compliance Dates for Names Rule Reporting. On February 18, 2026, the SEC proposed amendments to certain registered investment company reporting requirements on Form N-PORT to: (1) provide funds with an additional 15 days to file monthly reports of portfolio-related information; (2) reduce

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the publication of reports from monthly to quarterly; (3) streamline or remove certain reported information and (4) require certain additional information for funds, including certain identifying information and information about funds with share classes that operate as ETFs. The SEC also extended the compliance dates for amendments to Form N-PORT that relate to the Names Rule to November 17, 2027, for fund groups, such as the Federated Hermes Funds, with net assets of $10 billion or more as of the end of their most recent fiscal year, and to May 18, 2028, for fund groups with less than $10 billion in net assets as of the end of their most recent fiscal year. The public comment period on the proposed Form N-PORT amendments ended on April 24, 2026.

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On April 24, 2026, Federated Hermes submitted a comment letter to the SEC regarding the proposed amendments to Form N-PORT. In its comment letter, Federated Hermes strongly supported the proposal and commended the SEC for reassessing the 2024 amendments to Form N-PORT and proposing new amendments designed to reduce reporting burdens without significantly affecting the SEC’s use of the data and the public’s ability to assess relevant information about a fund. Among other comments, Federated Hermes supported: (1) extending the Form N‑PORT filing deadline from 30 days to at least 45 days (preferably 60 days) after month‑end to strengthen accuracy, validation, reliability and internal review processes; (2) restoring the quarterly public disclosure framework for Form N‑PORT information to limit the public release of fund information to the third month of each fiscal quarter because it appropriately mitigates the risk of predatory trading, reverse engineering and front running a fund while preserving transparency for investors; (3) streamlining Form N‑PORT by narrowing portfolio‑level risk metrics, simplifying return reporting, eliminating data elements of limited regulatory or investor utility, and removing the requirement to file a Regulation S‑X‑compliant Schedule of Investments, which is duplicative and costly for funds and their shareholders and (4) eliminating adopted‑but‑not‑yet‑effective reporting items related to the Names Rule compliance and other subjective portfolio classifications that could confuse investors or inadvertently disclose proprietary investment perspectives.

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SEC Releases Additional Staff FAQs on the Names Rule. On February 18, 2026, the SEC issued additional FAQs on the Names Rule. The FAQs related to: (1) shareholder notice of certain changes to non-fundamental 80% investment policies; (2) Names Rule’s treatment of unfunded commitments for certain funds; (3) the use of “Growth” or “Value” in certain fund names and (4) the use of “Merger” or “Merger Arbitrage” in fund names.

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Financial Crimes Enforcement Network (FinCEN) Issues Beneficial Owner Relief. On February 13, 2026, the FinCEN issued Order FIN‑2026‑R001, providing significant exceptive relief from the 2016 Customer Due Diligence (CDD) Rule’s requirement that financial institutions identify and verify the beneficial owners of legal‑entity customers at each new account opening. Instead, institutions may now limit beneficial‑owner identification and verification to three circumstances: (1) at the initial account opening; (2) when facts arise that reasonably call into question the reliability of previously obtained beneficial‑ownership information and (3) as otherwise required under the institution’s risk‑based ongoing CDD procedures. The order further clarifies that when reverification is triggered under a risk‑based program, institutions may rely on previously obtained information so long as the customer certifies or confirms that the information remains current, with institutions required to maintain records of this certification. FinCEN explicitly reaffirmed that all other anti-money laundering obligations and financial crime requirements under the Bank Secrecy Act remain fully in effect, including suspicious‑activity monitoring, risk‑based due‑diligence procedures and internal controls. FinCEN noted that the updated approach aligns more closely with a risk‑based framework while still ensuring that institutions maintain accurate, reliable beneficial‑ownership information and remain vigilant against financial‑crime risks.

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FINRA Gifts Rule Increased To $300. On February 12, 2026, the SEC approved and FINRA adopted amendments to FINRA Rule 3220, raising the annual per‑recipient gift limit from $100 to $300 and codifying long‑standing guidance regarding the treatment of gifts and business entertainment. The amendments, which were first proposed by FINRA on May 29, 2025, clarify that while gifts incidental to a business‑entertainment event count toward the $300 limit, the entertainment event itself remains outside the valuation, and ordinary business entertainment, such as meals, sporting events or theater outings, continues to be permissible so long as it is not so frequent or extensive as to raise concerns about propriety. The revised rule also incorporates prior FINRA interpretations and creates a formal exemptive‑relief mechanism, while expressly identifying several categories of exempt gifts, including de minimis items, nominal promotional items with firm logos, deal toys, personal gifts for infrequent life events paid personally by the giver, bereavement gifts and certain disaster‑related donations. These amendments modernize the gift framework, provide clearer compliance parameters and require firms to update supervisory procedures, tracking systems and training programs to align with the new $300 limit and codified exemptions. The amended FINRA Rule 3220 became effective on March 30, 2026.

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SEC Chairperson Testifies that the SEC is Open for Certain Additional Money Market Fund Reforms. On February 11, 2026, the SEC Chairperson testified before the U.S. House of Representatives Financial Services Committee in respect of the mandatory redemption fee required under the SEC’s 2023 money market fund reforms that “[a]ll these things are open” and

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“[y]es, we’re looking at all of these things.” In response to a letter from a member of the Financial Services Committee, the SEC Chairperson indicated that the SEC Staff is working with the fund industry on provisions in Rule 2a-7 under the 1940 Act that require liquidity fees on institutional prime and institutional municipal (tax-exempt) money market funds when they reach a certain threshold of investor redemptions. Federated Hermes previously submitted letters to the SEC Chairperson on April 28, 2025 and July 11, 2025, in which Federated Hermes expressed its view that the SEC’s adoption of the 2023 amendments to Rule 2a-7 under the 1940 Act related to the mandatory liquidity fee framework for institutional prime and institutional municipal (tax-exempt) money market funds violated the Administrative Procedures Act and should be repealed. Federated Hermes believes this violation stems from the SEC’s failure to conduct a proper cost-benefit analysis, the establishment of an arbitrary threshold for mandatory liquidity fees, the absence of an analysis of less restrictive alternatives, and the lack of adequate notice and opportunity for public comment.

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SEC FAQs on Net Performance and Promotor Disqualification. On January 15, 2026, the SEC published two new FAQs aimed at addressing challenges faced by investment advisors complying with Rule 206(4)-1 under the Advisers Act (Marketing Rule). The Marketing Rule permits investment advisors to calculate net performance applying either actual or model fees. Despite this apparent flexibility in the rule, footnote 590 of the Marketing Rule Adopting Release states that if the fees charged to the intended audience of an advertisement are anticipated to be higher than the actual fees used to calculate net performance, the investment advisor “must use a model fee that reflects the anticipated fee to be charged in order not to violate the rule’s general prohibitions.” The new FAQ clarifies that the guidance in footnote 590 should be interpreted through the lens of the Marketing Rule’s general prohibitions, which are intended to “provide appropriate flexibility and regulatory certainty for investment advisors considering how to market their investment advisory services” and “[i]n applying the general prohibitions, an investment advisor should consider the facts and circumstances of each advertisement.” In the SEC Staff’s view, whether the use of actual fees violates the general prohibitions depends on all the facts and circumstances of a specific advertisement, including, but not limited to, relevant disclosures. The SEC Staff’s view is that investment advisors can use various means to illustrate the effect of differences between actual fees and anticipated fees on performance. This guidance provides welcome relief for investment advisors that have struggled to apply the prescriptive language in footnote 590 to various forms of investment performance. The second FAQ provides guidance on circumstances in which investment advisors can engage certain persons to provide testimonials or endorsements.

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SEC Chairperson Issues Statement on Reforming Regulation S-K. On January 13, 2026, the Chairperson of the SEC stated that: “[t]oday, the disclosure that companies provide in response to the myriad requirements of Regulation S-K does not always reflect information that a reasonable investor would consider important in making an investment or voting decision.” Towards the goal of eliminating requirements to disclose “undisputably immaterial information,” the Chairperson has instructed the SEC’s Division of Corporation Finance to undertake a comprehensive review of Regulation S-K. He noted that this process began in May 2025, with the solicitation of public comments on the executive compensation disclosure requirements of Regulation S-K, Item 402. The SEC Staff is evaluating the comments received with respect to Item 402 of Regulation S-K and is preparing revision recommendations. The SEC will now focus on the other Regulation S-K disclosure requirements “with the goal of revising the requirements to focus on eliciting disclosure of material information and avoid compelling the disclosure of immaterial information.” As part of this effort, the SEC requested that public comments be submitted by April 13, 2026. Federated Hermes submitted a comment letter expressing, among other comments, its support for modernizing Regulation S-K to ensure that registrants provide clear, decision-useful and material disclosures while avoiding unnecessary reporting burdens.

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managers and investment offerings; (7) EU and U.K. sustainability reporting requirements for corporations and (8) the EU Savings and Investments Union (SIU) and Retail Investment Strategy (RIS).

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U.K. FCA and EU ESMA Regulatory Priorities. In the U.K., the FCA has replaced its practice of issuing ‘portfolio letters’ with annual Regulatory Priorities reports for different sectors. The first such reports were published in February and March of 2026. The 2026 Regulatory Priorities for the consumer investments sector include: (1) building a stronger investment culture; (2) strengthening trust by working with firms to ensure strong governance, robust risk systems and responsible innovation; (3) customer outcomes and (4) strengthening financial crime controls. The 2026 Regulatory Priorities for wholesale buy side firms include seeking to ensure firms deliver good outcomes to customers, and evolving regulations to foster growth and innovation and serve changing customer needs. On March 26, 2026, the FCA published its annual work program for 2026/27, marking the second year of its five-year strategy to "deepen trust, rebalance risk, support growth and improve lives.” Key themes are the FCA’s continued commitment to becoming a more efficient and proportionate regulator while supporting U.K. economic growth and competitiveness.

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In the EU, ESMA published its 2027 to 2029 programming document on January 29, 2026. The strategic priorities identified by ESMA include: (1) fostering effective markets and financial stability; (2) strengthening supervision of EU financial markets and (3) enhancing the protection of retail investors. ESMA also identified enabling sustainable finance and facilitating technological innovation and the effective use of data as key thematic drivers. ESMA indicates that further planned policy actions will consider and be aligned with the ongoing legislative initiatives regarding the SIU and continuing work on changes to simplify the reporting burden under the Corporate Sustainability Reporting Directive (CSRD) (which sets out sustainability reporting requirements for certain EU and non-EU entities), the Corporate Sustainability Due Diligence Directive (CSDDD) (which imposes a due diligence duty on certain large EU/non-EU companies to address adverse human rights and environmental impacts in their own operations, their subsidiaries and their supply chains) (known as the Omnibus I package).

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U.K. and EU Anti-Money Laundering (AML) Requirements. The AML regulations in the U.K. and EU continue to be reviewed and developed. In the U.K., on March 26, 2026, HM Treasury published a draft regulation proposing amendments to the Money Laundering Regulations 2017. The draft regulations propose various amendments including changes to the customer due diligence and enhanced due diligence requirements regarding crypto asset businesses and unusually complex or large transactions, high-risk jurisdictions and pooled client accounts. In the EU, on February 9, 2026, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) published three consultation papers addressing: (1) penalty measures for AML breaches; (2) customer due diligence and harmonizing its application across the EU and (3) the criteria for identifying business relationships, occasional and linked transactions, as well as lower thresholds.

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Liquidity Risk Management for Open-End Funds. On February 27, 2026, ESMA published Commission Delegated Regulations (Delegated Regulations) which include regulatory technical standards (RTS) on liquidity management tools. These Delegated Regulations supplement relevant provisions in the EU Alternative Investment Fund Managers Directive (AIFMD) and the EU UCITS Directive. The RTSs specify the characteristics of liquidity management tools set out in the Annexes to the AIFMD and UCITS Directive (i.e., suspension of subscriptions, repurchases and redemptions, redemption gates, extension of notice periods, redemption fees, swing pricing, dual pricing, anti-dilution levy, redemption in kind and side pockets). The Delegated Regulations became effective on March 19, 2026, and they applied beginning April 16, 2026.

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EU and U.K. Sustainability Requirements for Asset Managers and Investment Offerings. In the U.K., on February 27, 2026, the FCA published a review of the Sustainability Disclosure Requirements (SDR) and investment labeling regime. That review focused on use of the four sustainability labels and provided examples of good and poor practices. It did not indicate whether steps are to be taken to extend the U.K.’s SDR sustainability labeling regime to non-U.K. funds. In the EU, amendments to the Sustainable Finance Disclosure Regulation (SFDR), commonly known as “SFDR 2.0”, are still ongoing following the European Commission’s adoption of the proposed Regulation to amend SFDR on November 20, 2025 (discussed in the Federated Hermes’ 2025 Annual Report).

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EU and U.K. Sustainability Requirements for Corporations. In the EU, on February 24, 2026, the European Council gave its final approval regarding the simplification of sustainability reporting and due diligence requirements for companies in the EU. The changes to the CSRD and the CSDDD form part of the sustainability-related reforms called the Omnibus I package. Regarding the EU Taxonomy, the European Commission launched, on March 6, 2026, a call for technical advice which invited the European Supervisory Authorities (ESAs) to review the Key Performance Indicators (KPIs) and other aspects of the

Current report — wording carried from elsewhere

Texas Stock Exchange (TXSE) Proposes to Exempt CEFs from Requirement to Hold Annual Shareholder Meetings. On April 6, 2026, the TXSE filed a proposed rule change with the SEC, SR TXSE 2026-005, establishing listing and continued listing standards for CEFs and interval funds on its new exchange. As part of this proposal, the TXSE proposed to eliminate the

Current report — wording carried from elsewhere

A Separate Account was reclassified from Multi-Asset to Equity effective October 1, 2025.

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The income tax provision was $71.0 million for the six-month period ended June 30, 2026, as compared to $66.3 million for the same period in 2025. The increase in the income tax provision was primarily due to increased U.S. pre-tax income in 2026. The effective tax rate was 25.9% for the six-month period ended June 30, 2026, as compared to 24.8% for the same period in 2025.

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The increase in the effective tax rate was primarily due to a valuation allowance on foreign deferred tax assets and increased foreign losses in the six months ended June 30, 2026 as compared to the same period in 2025.

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Net income increased $8.6 million for the six-month period ended June 30, 2026, as compared to the same period in 2025, primarily as a result of the changes in revenues, expenses, nonoperating income (expenses) and income taxes noted above. Diluted earnings per share for the six-month period ended June 30, 2026 increased $0.25, as compared to the same period in 2025, due to a decrease in shares outstanding resulting from share repurchases ($0.14) and increased net income ($0.11).

Current report — wording carried from elsewhere

Borrowings. 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 March 17, 2032. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the

Current report — wording carried from elsewhere

of Financial Condition and Results of Operations (unaudited)

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of Financial Condition and Results of Operations (unaudited)

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a centralized, SEC‑mandated system that collects and links detailed data on all orders, quotes and trades across U.S. equity and options markets that purports to enable regulators to efficiently surveil, reconstruct and investigate market activity. The public comment period will end 60 days after the concept release is published in the Federal Register.

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initiating, participating in or supporting such legal challenges when management deems it necessary or appropriate. Federated Hermes also continues to monitor and assess the impact of the interest rate environment (whether increasing or decreasing), and any instability in the banking sector and financial markets, on asset values and money market fund and other fund asset flows, and related asset mixes, as well as the degree to which these factors impact Federated Hermes’ institutional prime and municipal (or tax-exempt) money market business and Federated Hermes’ Financial Condition.

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As of March 31, 2026, given the regulatory environment and the possibility of future additional regulatory developments, requirements and oversight, Federated Hermes is unable to fully assess the impact of regulatory developments and requirements, and Federated Hermes’ efforts related thereto, on its Financial Condition. Regulatory developments and requirements in the current regulatory environment, and Federated Hermes’ efforts in responding to them, can have further material and adverse effects on Federated Hermes’ Financial Condition.

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the highly regulated nature of the investment management business, management anticipates that aggregate expenditures for compliance and investment management personnel, compliance systems and technology and related professional and consulting fees can continue to increase.

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Market volatility and other events related to geopolitical or other unexpected events in the future can further reduce the AUM, revenues and earnings associated with Federated Hermes’ indefinite-lived intangible assets and can result in subsequent