Northern Trust Analyzes Three Regulatory Changes Facing Fund Managers

White paper says UCITS IV and UK Retail Distribution Review will enable increased distribution of funds across Europe while the AIFM Directive still lacks clarity

LONDON, June 9, 2010 - Northern Trust (Nasdaq: NTRS) says that if investment managers are to
navigate the intricacies of pending new European regulations, they cannot
look at each regulation in isolation. This, according to Northern Trust's
latest white paper Funds regulation: A brighter distribution future? is vital
to ensure investment managers are well positioned to take advantage of the
potential for increased ease of distribution across Europe.

"Europe's supervisors are looking for ways to get more investors involved
in the market and to keep them involved, while providing a framework for
improved governance," says Wilson Leech, head of Northern Trust's Global Fund
Services business.

"The challenge for the regulators is to ascertain the appropriate level
of oversight so that the market becomes more and not less efficient. The
challenge for investment managers is to understand the impact the regulations
will have on their business and their investor base and the overhead required
to support and implement these. Whether managers are based in Europe, the
United States or Asia-Pacific, these regulations may impact how they do
business so they need to be prepared," he said.

The Undertakings for Collective Investment in Transferable Securities
(UCITS) IV Directive, the UK's Retail Distribution Review (RDR) and the
European Union's Alternative Investment Fund Managers (AIFM) Directive are
three significant regulations impacting the funds industry due to converge in
2012.

"While there are notable challenges involved in UCITS IV and RDR the
result should be positive for fund managers in terms of driving distribution.
UCITS IV takes the principle of harmonisation further through the ability to
create a master feeder fund, and passport a fund management company (meaning
managers will have the opportunity to have one pan-European UCITS management
company, rather than one in every jurisdiction), while the RDR will remove
the commission structure allowing more funds to invest in the UK
marketplace," said Karen Hamilton, head of product development for fund
administration at Northern Trust.

"The AIFM Directive is the newest piece of legislation facing the funds
industry and is the most controversial. There are still significant areas
where the industry is seeking greater clarification so investment managers
should not make any sweeping changes until it is clear what the directive
will entail," she said.

A full copy of the paper is available on request.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of
investment management, asset and fund administration, banking solutions and
fiduciary services for corporations, institutions and affluent individuals
worldwide. Northern Trust, a financial holding company based in Chicago, has
offices in 18 U.S. states and 16 international locations in North America,
Europe, the Middle East and the Asia-Pacific region. As of March 31, 2010,
Northern Trust had assets under custody of US$3.7 trillion, and assets under
investment management of US$647.3 billion. For 120 years, Northern Trust has
earned distinction as an industry leader in combining exceptional service and
expertise with innovative products and technology. For more information,
visit www.northerntrust.com.

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