What changed in this filing

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Item 1. Business

2026-02-27 compared with 2025-02-28 · 423 added, 363 removed, 337 unchanged (70% of the section changed)

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Federated Hermes has been in the investment management business since 1955 and is one of the largest investment managers in the United States (U.S.).

Federated Hermes also provides stewardship services to customers seeking a range of solutions for engagement, as well as real estate development services.

Federated Hermes also provides stewardship services to customers seeking a range of solutions for engagement, as well as real estate development and renewable energy project development services.

In seeking to enhance long-term risk-adjusted investment performance, and create long-term financial value/wealth, for its customers and clients (collectively, including intermediaries, customers) consistent with its fiduciary duties and customer objectives, Federated Hermes has taken steps to integrate the proprietary insights from fundamental investment analysis, including governance, environmental and social factors and engagement interactions, into many of the products and strategies it manages.

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Federated Hermes sponsors, markets and provides investment-related services and strategies (collectively, as applicable, strategies) to various investment products, including sponsored investment companies and other funds (Federated Hermes Funds) and Separate Accounts (which include separately managed accounts (SMAs), institutional accounts, sub-advised funds and other managed products) in both domestic and international markets (such products, strategies and other services being, collectively and as applicable, offerings).

In addition, Federated Hermes markets and provides stewardship and real estate development services to various domestic and international customers.

In addition, Federated Hermes markets and provides stewardship, real estate development and renewable energy project development services to various domestic and international customers.

Federated Hermes’ principal source of revenue is investment advisory fees earned by various domestic and foreign subsidiaries pursuant to investment advisory contracts and based primarily upon the AUM of its investment offerings.

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Federated Hermes markets these funds to institutions, banks, broker/dealers, financial intermediaries and other customers who use them to meet the needs of their customers, including, among others, retail investors, corporations and retirement plans.

The Federated Hermes Funds are domiciled in the U.S., as well as Ireland, the United Kingdom (UK), Luxembourg, Guernsey, Jersey and the Cayman Islands.

The Federated Hermes Funds are domiciled in the U.S., as well as Ireland, the United Kingdom (U.K.), Luxembourg, Guernsey, Jersey, Australia and the Cayman Islands.

Most of Federated Hermes’ U.S.-domiciled funds are registered under the Investment Company Act of 1940 (1940 Act) and under other applicable federal laws.

Each U.S.-domiciled registered fund enters into an advisory agreement that is subject to annual approval by the fund’s board of directors or trustees, a majority of whom are not interested persons, as defined under the 1940 Act, of either the funds or Federated Hermes.

In general, material amendments to such advisory agreements must be approved by a fund’s shareholders.

In general, new advisory agreements for new U.S.-domiciled registered funds and material amendments to such advisory agreements must be approved by a fund’s shareholders.

These advisory agreements are generally terminable upon 60 days’ notice to the investment advisor.

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Pursuant to these agreements, a Federated Hermes subsidiary acts as underwriter for these funds and distributes shares of the funds primarily through unaffiliated broker/dealers.

Each distribution plan and agreement is initially approved by the directors or trustees of the respective fund and is reviewed for approval by such directors or trustees annually as required under applicable law.

Each distribution plan and agreement is

initially approved by the directors or trustees of the respective fund (and, as required by law, a fund’s shareholders) and is reviewed for approval by such directors or trustees annually as required under applicable law.

Federated Hermes also provides a broad range of services to support the operation and administration of the Federated Hermes Funds.

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Additionally, certain components of distribution expense can vary depending upon the asset class, distribution channel and/or the size or structure of the customer relationship.

Federated Hermes generally pays out a larger portion of the revenue earned from managed assets in equity, money market and multi-asset funds than the revenue earned from managed assets in fixed-income and alternative/private markets funds.

Federated Hermes generally pays out a larger portion of the revenue earned from managed assets in money market, multi-asset, and fixed-income funds than the revenue earned from managed assets in equity and alternative/private markets funds.

Federated Hermes’ revenue from investment advisory, administrative and other service fees over the last three years were as follows:

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value and income ($37.5 billion);

international/global ($22.7 billion);

growth ($25.3 billion);

international/global ($23.2 billion);

and blended ($11.9 billion).

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financial intermediary market included $491.1 billion in money market assets, $70.3 billion in equity assets, $46.9 billion in fixed-income assets, $2.6 billion in multi-asset and $1.8 billion in alternative/private markets assets.

Institutional Federated Hermes makes available and distributes its offerings to a wide variety of domestic institutional customers including, among others, government entities, not-for-profit entities, corporations, corporate and public pension

funds, foundations, endowments and non-Federated Hermes investment companies or other funds.

As of December 31, 2025, managed assets in the U.S.

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institutional and financial intermediary customers through subsidiaries focused on gathering assets in Europe, the Middle East, Canada, Latin America and the Asia Pacific region.

As of December 31, 2024, managed assets in the international market included $20.2 billion in equity assets, $19.4 billion in money market assets, $16.9 billion in alternative/private markets assets and $3.5 billion in fixed-income assets.

As of December 31, 2025, managed assets in the international market included $23.6 billion in money market assets, $20.3 billion in equity assets, $16.0 billion in alternative/private markets assets and $3.6 billion in fixed-income assets.

As of December 31, 2025, Federated Hermes had $624.3 billion of Federated Hermes Fund AUM and $278.3 billion of Separate Account AUM.

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Competition is particularly intense among mutual fund and ETF providers.

According to the Investment Company Institute (ICI), at the end of 2024, there were over 7,000 open-end mutual funds and over 3,000 ETFs of varying sizes and investment objectives whose shares are currently being offered.

According to the Investment Company Institute (ICI), at the end of 2025, there were over 6,000 open-end mutual funds and over 4,000 ETFs of varying sizes and investment objectives whose shares are currently being offered in the U.S.

In addition to competition from other mutual fund managers, ETF providers and investment advisors, Federated Hermes competes with investment alternatives offered by insurance companies, commercial banks, broker/dealers, deposit brokers, private markets/alternative product managers and other financial institutions.

Federated Hermes launched its first ETFs in December 2021 and currently has eight ETFs in its offerings as of December 31, 2024.

Federated Hermes launched its first ETFs in December 2021 and currently has ten ETFs in its offerings as of December 31, 2025.

Competition for sales of investment offerings is influenced by various factors, including investment performance, attainment of stated objectives, yields and total returns, fees and expenses, advertising and sales promotional efforts, investor confidence and preference, relationships with intermediaries and other customers and type and quality of services.

Regulatory Matters

The business and regulatory environments in which Federated Hermes operates globally remain complex, uncertain and subject to change.

Federated Hermes, its investment management business, and offerings are subject to extensive regulation, both within and outside of the U.S.

With Federated Hermes’ global operations, Federated Hermes, and certain of its subsidiaries and offerings (such as the Federated Hermes Funds), are registered with or licensed by, and subject to examination by, various U.S.

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regulators, self-regulatory agencies or exchanges, such as, among others, the U.S.

Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Commodity Futures Trading Commission (CFTC), Department of Labor (DOL), New York Stock Exchange (NYSE), UK Financial Conduct Authority (FCA), Central Bank of Ireland (CBI), Cayman Island Monetary Authority (CIMA), Monetary Authority of Singapore, Australian Securities and Investments Commission (ASICS) and Luxembourg Commission de Surveillance du Secteur Financier (CSSF).

Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), Commodity Futures Trading Commission (CFTC), Department of Labor (DOL), New York Stock Exchange (NYSE), U.K.

Financial Conduct Authority (FCA), Central Bank of Ireland (CBI), Cayman Island Monetary Authority (CIMA), Monetary Authority of Singapore, Australian Securities and Investments Commission (ASIC) and Luxembourg Commission de Surveillance du Secteur Financier (CSSF).

Federated Hermes’ business and offerings, are subject to various U.S.

and/or non-U.S.

laws, regulations, rules, codes, notices, directives, guidelines, listing standards, judicial decisions, orders, circulars and/or conditions (collectively, as applicable, regulatory requirements).

These include, for example:

laws, regulations, rules, codes, notices, directives, guidelines, listing standards, judicial decisions, orders, circulars and/or conditions (collectively, as applicable, regulatory requirements), including regulatory requirements that impose restrictions, limitations, registration, reporting and disclosure requirements on its business and offerings, and add complexity to its global compliance operations.

These include,

(1) federal securities laws such as the Securities Act of 1933 (1933 Act), the Securities Exchange Act of 1934 (1934 Act), the 1940 Act, Advisers Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), and the Sarbanes-Oxley Act of 2002 (SOX) and related regulations;

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(5) various privacy, and data protection laws and regulations, such as Regulation S-P in the U.S.

and the General Data Protection Regulation (GDPR) of the European Union (EU) and UK GDPR;

and the General Data Protection Regulation (GDPR) of the European Union (EU) and U.K.

(6) various financial crime laws, such as anti-money laundering, anti-terrorist financing, economic, trade and financial sanctions, both domestically and internationally;

(7) various cross-border regulatory requirements, such as the anti-bribery and anti-corruption rules under the Foreign Corrupt Practices Act of 1977 (FCPA) and UK Bribery Act 2010;

(7) various cross-border regulatory requirements, such as the anti-bribery and anti-corruption rules under the Foreign Corrupt Practices Act of 1977 (FCPA) and U.K.

Bribery Act 2010;

and (8) regulations or other rules promulgated by various regulatory or other authorities.

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Federated Hermes monitors, reviews and assesses proposed new or revised regulatory requirements that are proposed from time to time (collectively, as applicable, regulatory developments).

These regulatory requirements and regulatory developments continue to impact the investment management industry generally, and will continue

to impact, to various degrees, Federated Hermes’ business, results of operations, financial condition, cash flows, stock price and reputation (collectively, Financial Condition).

See Item 1A – Risk Factors – General Risk Factors – Regulatory and Legal Risks – Potential Adverse Effects of Changes in Laws, Regulations and Other Regulatory Requirements for additional information.

These regulatory requirements and regulatory developments continue to impact the investment management industry generally, and will continue to impact, to various degrees, Federated Hermes’ business, results of operations, financial condition, cash flows, stock price and reputation (collectively, Financial Condition).

Please see Federated Hermes’ prior public filings, including the discussions under Part 1, Item 2 – Management’s Discussion and Analysis – Business Developments – Current Regulatory Developments, in Federated Hermes’ Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025, June 30, 2025, and September 30, 2025 for an overview of Federated Hermes’ regulatory environment and related key regulatory developments and requirements for periods prior to September 30, 2025.

See also Item 1A – Risk Factors – General Risk Factors – Regulatory and Legal Risks – Potential Adverse Effects of Changes in Laws, Regulations and Other Regulatory Requirements for additional information.

Current Regulatory Environment – Domestic

The legislative and regulatory environment in the U.S.

is dynamic and subject to continual change.

Federated Hermes’ primary regulator in the U.S.

Over the past several years, the SEC received criticism for the expedited pace in which it promulgated new proposed and final regulations.

With the new Presidential administration taking office on January 20, 2025, there will be a new SEC Chairperson, and a majority of SEC Commissioners will be Republican.

The new Chairperson will appoint new SEC leadership as well, including a new Director of the SEC’s Division of Enforcement, a new SEC Chief of Staff and new SEC Director of Policy.

While it is difficult to predict where new SEC leadership will focus their efforts, it appears likely that the SEC will resume the focus of the SEC during the previous Republican Presidential administration on areas such as deregulation, capital formation, enforcement aimed at retail investor protection and combating fraud, and cryptocurrency offerings.

Given the new administration, deregulation is a possibility, and the pace of new SEC proposed and final regulations is expected to slow.

Regarding deregulation, the investment management industry is expected to request the SEC to repeal or modify certain regulatory requirements previously promulgated by the SEC and to adopt more investor- and industry-friendly regulatory requirements.

For example, among other topics, Federated Hermes intends to discuss with the SEC’s Commissioners and Staff, either directly or through an industry trade group:

(1) repealing the mandatory redemption fee requirement applicable to registered institutional prime and municipal (or tax-exempt) money market funds;

(2) repealing the requirement under the amendments to Rule 35d-1 under the 1940 Act (Names Rule) to sell securities within 90 days to bring a registered mutual fund into compliance with its 80% investment policy (80% Policy);

(3) permitting a new or existing registered fund to offer both mutual fund and exchange-traded share classes;

(4) streamlining the registered fund shareholder approval process by reducing shareholder meeting quorum requirements and amending NYSE Rule 452 to allow brokers the discretion to vote shares for their clients who do not instruct them how to vote ( i.e.

, broker non-votes) for quorum purposes when shareholder approval matters are not contested;

(5) permitting registered fund boards to appoint a greater number of new independent directors to reduce the frequency of conducting expensive shareholder meetings to approve independent directors;

(6) effectuating the NYSE proposal to eliminate the annual shareholder meeting requirement for exchange-traded closed-end funds;

(7) permitting closed-end fund boards to rely on state-recognized anti-takeover measures, such as control share provisions;

and (8) allowing electronic delivery of disclosure documents and other information to shareholders as a default delivery option.

Federated Hermes also intends to continue efforts to have legislation introduced in Congress that, if enacted, would permit the use of amortized cost valuation by money market funds and override the floating net asset value (NAV) and certain other requirements imposed under prior money market fund rule amendments and related guidance that became effective in 2016 for institutional prime and municipal (or tax-exempt) money market funds.

Regarding the pace of new SEC proposals and final regulations, given the results of the Presidential election in November 2024 and the 2024 judicial decisions that overturned the Chevron Doctrine and made it easier to challenge new regulation, during the fourth quarter of 2024, the SEC did not issue any new proposed rules.

The SEC did issue seven final rules that had been previously proposed on, among other topics:

(1) daily computation of customer and broker-dealer requirements under the broker-dealer customer protection rule;

and (2) covered clearing agency resilience and recovery and wind-down plans.

The SEC’s Fall 2024 Unified Agenda of Regulatory and Declaratory Actions (SEC Fall Reg Flex Agenda), which was published on October 17, 2024, identified only 30 other rulemaking initiatives, down from 43 rulemaking initiatives included in the 2023 SEC Fall Reg Flex Agenda.

The 2024 SEC Fall Reg Flex Agenda includes 13 proposed rules and 17 final rules to be issued by October 2025, many of which have appeared on prior SEC Reg Flex Agendas and been delayed.

The 2024 SEC Fall Reg Flex Agenda indicates that proposed rules are scheduled to be issued on, among other topics:

(1) incentive-based compensation arrangements;

(2) corporate board diversity;

(3) human capital management disclosure;

(4) safeguarding advisory client assets;

(5) fund fee disclosure and reform;

(6) conflicts of interest associated with use of predictive data analytics by broker-dealers and investment advisors;

and (7) exchange-traded offerings.

The 2024 SEC Fall Reg Flex Agenda indicates that final regulations are scheduled to be promulgated on, among other topics:

(1) enhanced disclosures by certain investment advisors and registered investment companies about governance, environmental or social investment practices;

(2) cybersecurity risk management for investment advisors, registered investment companies and business development companies;

(3) outsourcing by investment advisors;

(4) customer identification programs for registered investment advisors and exempt reporting advisors;

(5) regulation best execution;

and (6) reporting of security-based swap positions.

Notably, the SEC removed from the 2024 SEC Fall Reg Flex Agenda plans to adopt a final rule on open-end fund liquidity risk management programs.

Federated Hermes also believes that the SEC under the new administration may eliminate plans to adopt other rules or modify certain rules to make them more

industry and investor friendly, such as the rules relating to climate change disclosure, corporate board diversity and safeguarding advisory client assets.

The SEC voluntarily stayed its climate change rule on April 4, 2024, after nine cases challenging the rule’s validity were filed in federal courts across the U.S., which have been consolidated in the United States Court of Appeals for the Eighth Circuit (Eighth Circuit) and remain pending.

However, given the new Republican Presidential administration and Congress, and an apparent shift in sentiment in the U.S.

around governance, environmental or social stewardship practices, the SEC’s climate change disclosure rule could be further challenged by:

(1) the SEC reopening the public comment period of the rule and rescinding it under the Administrative Procedures Act;

(2) the Eighth Circuit vacating the rule;

or (3) the Republican administration and Congress working to withhold funding to the SEC to prevent enforcement of the rule.

On February 11, 2025, the acting SEC Chair requested that the Eighth Circuit pause the litigation over the SEC’s climate change rule, citing, among other things, that a majority of SEC Commissioners no longer agree with the SEC’s prior litigation filings defending the adoption of the rule and that he continues to question the SEC’s statutory authority to adopt the rule, the need for the rule, and the cost-benefit analysis supporting the rule.

The Republican Congress also could pass legislation to block the effectiveness of the rule, or Congress or Republican state attorneys general could take other actions in furtherance of the apparent shift in sentiment in the U.S.

around governance, environmental or social stewardship practices.

For example, on November 27, 2024, eleven Republican state attorneys general filed a lawsuit against three major asset managers alleging that the asset managers, motivated by environmental issues, colluded to reduce coal production through exercising their proxy voting authority over their significant shareholders in nine coal companies in violation of U.S.

antitrust law.

House of Representatives Committee on the Judiciary (House Judiciary Committee) issued on December 13, 2024 an interim report in which the House Judiciary Committee purportedly details how a group of major financial institutions and climate activists allegedly colluded to pressure U.S.

companies into committing to “net zero” climate goals in violation of U.S.

antitrust laws.

On December 20, 2024, the House Judiciary Committee sent letters to over 60 asset managers, including Federated Hermes Limited (FHL, formerly Hermes Fund Managers Limited), Federated Hermes’ wholly owned London-based subsidiary, requesting information regarding their involvement with certain “net zero” initiatives.

On January 20, 2025, the President issued an executive order implementing a regulatory freeze pending review of existing proposed regulations.

Under the executive order, all Federal executive departments and agencies are prohibited from proposing or issuing any rule in any manner, including by sending a rule to the Office of the Federal Register, until a department or agency head appointed or designated by the President reviews and approves the rule.

In addition, all executive departments and agencies are instructed to immediately withdraw any rules that have been sent to the Office of the Federal Register but not published in the Federal Register, so that they can be reviewed and approved by a department or agency head appointed or designated by the President.

Finally, the executive order instructs all executive departments and agencies to consider postponing for 60 days the effective date for any rules that have been published in the Federal Register, or any rules that have been issued in any manner but have not taken effect, for the purpose of reviewing any questions of fact, law, and policy that the rules may raise.

During this 60-day period, where appropriate and consistent with applicable law, executive departments and agencies are instructed to consider opening a comment period to allow interested parties to provide comments about issues of fact, law, and policy, and consider further delaying such rules beyond the 60-day period.

While it is unclear as to the extent to which the SEC will abide by this executive order as an independent agency that operates independently of the executive departments, industry trade groups have requested the SEC to delay the implementation of certain SEC promulgated regulatory requirements for which compliance is not yet required, such as the short sale reporting rule, the amendments to the Names Rule, and amendments to Form PF applicable to private fund advisors.

On January 29, 2025, the SEC and CFTC announced that they are extending the compliance date for the amendments to Form PF that were adopted on February 8, 2024, from March 12, 2025 to June 12, 2025.

Given the executive order and above developments, it appears likely that the timing proposed in the 2024 SEC Fall Reg Flex Agenda will be delayed and the pace of new SEC proposed and final regulations slowed.

On February 18, 2025, the President issued an executive order that will change the manner in which federal agencies promulgate new regulations.

Under the executive order, all independent agencies, such as the SEC, are required to submit proposed new regulations to the White House Office of Information and Regulatory Affairs (White House) for review (except for monetary functions of the Federal Reserve) and must consult with the White House on their priorities and strategic plans.

The executive order also provides that the White House will establish agency performance standards and the Office of Management and Budget will adjust the independent agencies’ apportionments to ensure that tax dollars are spent wisely.

The executive order is in line with other actions and commentary from the new Presidential administration that assert the President has broader authority over federal agencies than previous administrations have wielded.

The SEC and other regulators also continued in 2024, and are expected to continue in 2025, to conduct risk-based, for cause, and sweep examinations, bring enforcement actions, and review and comment on issuer and fund filings.

For example, according to the SEC, the SEC filed 583 total enforcement actions during its 2024 fiscal year ending on September 30, 2024, a

26% decrease compared to its 2023 fiscal year.

On January 17, 2025, the SEC announced that it filed 200 total enforcement actions, including 118 standalone enforcement actions, in the first quarter of the SEC’s 2025 fiscal year, which ended on December 31, 2024, prior to the new administration taking office.

The enforcement actions addressed a wide range of violations, including, among others, financial misstatements, failures by advisory firms to disclose conflicts of interest, and misleading statements about artificial intelligence.

On October 21, 2024, the SEC announced that its 2025 examination priorities include focusing on perennial and emerging risk areas.

These areas include, among other topics:

(1) investment advisor fiduciary duties, standards of conduct, and conflict of interest disclosures;

(2) investment company disclosures of fees, expenses and waivers/reimbursements;

(3) compliance with new regulatory requirements, such as T+1 trade settlement and Form PF amendments;

(4) outsourcing by investment advisors;

(5) commercial real estate market exposure and valuation of illiquid and hard-to-value assets;

(6) cybersecurity;

(7) use of artificial intelligence;

and (8) broker compliance with Regulation Best Interest.

The SEC has emphasized that its published examination priorities are not an exhaustive list, and are in addition to its normal examinations, risk alerts, and other outreach to registrants and investors.

The new Presidential administration has fundamentally redirected the SEC away from expansive regulation and aggressive enforcement since taking office in January 2025, emphasizing deregulation, capital formation and “back-to-basics” investor protection.

This shift has occurred rapidly through executive orders, SEC leadership changes and the number and type of SEC enforcement actions during 2025.

Upon returning to office, the President issued two executive orders asserting broader presidential authority over federal agencies than previous administrations in furtherance of implementing a deregulatory agenda.

For instance, on January 20, 2025, the President issued an executive order implementing a regulatory freeze pending review of existing proposed regulations.

On February 18, 2025, the President issued another executive order changing the manner in which federal agencies promulgate new regulations.

Under this executive order, all independent agencies, such as the SEC, are required to submit proposed new regulations to the White House Office of Information and Regulatory Affairs (White House) for review (except for monetary functions of the Board of Governors of the Federal Reserve System (Federal Reserve)) and must consult with the White House on their priorities and strategic plans.

These executive orders, coupled with a 15% reduction in the SEC’s workforce from the previous administration, have led to a slower pace of SEC proposals and final regulations in 2025.

The SEC had one of its most active rulemaking years in 2024, while 2025 saw far fewer new proposals, a significant reduction in finalized substantive rules, and a large-scale withdrawal of pending proposals.

For instance, in 2024, the SEC planned to finalize approximately 18 major rules across investment management, public company disclosure, governance, environmental, and social disclosure, cybersecurity, market structure and private funds.

Moreover, the SEC’s Regulatory Flex Agenda in 2024 routinely contained 30-40 active items, reflecting a sustained pipeline of proposed and final rules.

By contrast, 2025 saw pronounced deceleration, with the SEC’s Spring Regulatory Flex Agenda in 2025 listing only 23 items scheduled for action in the next 12 months, down significantly from the Fall Regulatory Flex Agenda in 2024 and far below historical averages.

In 2024, the SEC finalized numerous substantive rules, while final rules issued in 2025 were predominantly technical amendments, compliance-date extensions, delegations of authority and procedural or administrative items.

In 2025, the SEC also formally abandoned many inherited initiatives, including withdrawing proposals on governance, environmental, and social disclosures, cybersecurity risk management, predictive data analytics, investment advisor outsourcing oversight and climate-related disclosures.

The SEC’s enforcement actions in fiscal year 2025 also declined compared to previous years.

For instance, in 2025, the SEC initiated 313 total new enforcement actions, a 27% decrease from fiscal year 2024.

Moreover, the SEC initiated only four enforcement actions against public companies during 2025.

Total monetary settlements decreased by 45% to $808 million, which is the lowest annual total since fiscal year 2012 and less than half of the fiscal year 2014 to 2024 average $1.9 billion in total annual settlements.

During 2025, the SEC shifted its focus toward traditional enforcement areas, such as insider trading and fraud, and away from novel areas like cryptocurrency.

On November 17, 2025, the SEC announced that its 2026 examination priorities will be focused on advancing compliance, preventing fraud, informing policy decisions and monitoring risk.

Examination topics of focus include, among other topics:

(1) investment advisor fiduciary duty and standards of conduct, including adherence to the duty of care and duty of loyalty and conflicts of interest;

(2) investment advisor compliance program effectiveness;

(3) recently registered investment advisors and investment advisors that have never been examined;

(4) registered investment company compliance programs, disclosures, filings and governance practices, with focus on fund fees and expenses, portfolio management practices and disclosures;

(5) broker-dealer financial responsibility rules;

(6) broker-dealer trading-related practices and services;

(7) broker-dealer retail sales practices, including compliance and regulation best interest;

(8) self-regulatory organizations, such as national securities exchanges, FINRA and the Municipal Securities Rulemaking Board;

(9) clearing agencies;

(10) other market participants, such as municipal advisors, transfer agents, funding portals, security-based swap dealers and security-based swap execution facilities;

and (11) risk areas impacting various market participants, such as cybersecurity, Regulation S-ID and Regulation S-P, emerging financial technology, regulation systems compliance and integrity, and anti-money laundering.

The SEC has emphasized that its published examination priorities are not an exhaustive list, and examination priorities may shift in response to new or emerging risks, products and services, market events or investor concerns.

On December 11, 2025, the Financial Stability Oversight Council (FSOC) issued its 2025 Annual Report.

Among other topics, the FSOC addressed in its 2024 Annual Report risks to financial services companies related to:

(1) cybersecurity;

(2) the use of artificial intelligence;

(3) third party service providers and outsourcing;

(4) crypto assets;

and (5) climate change.

The FSOC also addressed investment funds, including money market funds, other open-end short-term investment vehicles, private liquidity funds, local government investment pools, collective funds, and hedge funds, among others.

Regarding money market funds and open-end short-term investment vehicles, specifically, the FSOC recommended in its 2024 Annual Report that the SEC and the FSOC “should monitor the efficacy of [the SEC’s money market fund reforms] to address the financial stability vulnerabilities created by [money market funds]” and “continue to assess and monitor the vulnerabilities from other [open-end short-term investment vehicles], considering what actions may be appropriate to address potential vulnerabilities.” While the SEC’s latest money market fund reforms became fully effective in October 2024 and the SEC removed its plans to propose a final rule on open-end fund liquidity risk management programs from its 2024 SEC Fall Reg Flex Agenda, the liquidity of (and perceived vulnerabilities created by) money market funds and other open-end short-term investment funds remain a focus of the FSOC.

Federated Hermes has implemented the policy, procedure and operational changes required to comply with the latest SEC money market fund reforms and continues to work with the registered domestic Federated Hermes Funds’ transfer agent and fund accounting service providers to further refine the operational model to support the delivery and remittance of the mandatory redemption fee required for institutional prime and municipal (or tax-exempt) money market funds (which, as noted above, Federated Hermes intends to discuss with the SEC Commissioners and Staff repealing the mandatory redemption fee requirement).

On January 28, 2025, FINRA published its “2025 FINRA Annual Regulatory Oversight Report” (FINRA 2025 Report), which purports to provide insight into findings from FINRA’s regulatory operations programs.

In contrast to its previous annual reports, FSOC focused on deregulation to promote economic growth.

The 2025 Annual Report was accompanied by an introductory letter written by the U.S.

Secretary of the Treasury, which focused on the importance of economic growth and economic security to promote financial stability.

The Treasury Secretary announced that FSOC “will work with and support [its] member agencies in considering whether aspects of the U.S.

financial regulatory framework impose undue burdens and negatively impact economic growth.” And in contrast to last year’s report, which focused on 14 “risks” and “vulnerabilities,” the 2025 Annual Report discusses four “key areas of focus” for the upcoming year:

(1) bolstering the Treasury market;

(2) strengthening cybersecurity;

(3) enhancing supervisory and regulatory frameworks for depository institutions;

and (4) using artificial intelligence (AI) to strengthen financial stability.

On December 9, 2025, FINRA published its “2026 FINRA Annual Regulatory Oversight Report” (FINRA 2026 Report), which purports to provide insight into findings from FINRA’s regulatory operations programs.

In the FINRA 2026 Report, FINRA focuses on regulatory obligations, examination observations, and effective practices in a number of areas, including, for example:

(1) cybersecurity;

(2) anti-money laundering;

(3) manipulative trading;

(4) technology management;

(5) Regulation Best Interest and Form CRS;

(6) books and records;

(7) liquidity risk management;

and (8) segregation of assets.

(1) generative AI, including continuing and emerging trends;

(2) financial crimes prevention, including cybersecurity and cyber-enabled fraud, anti-money laundering, fraud and sanctions, and manipulative trading;

(3) firm operations;

(4) cryptocurrency;

(5) communications and sales;

(6) market integrity;

and (7) financial management.

In the FINRA 2026 Report, FINRA notes that “firms may consider the information in this Report in developing new, or modifying existing, compliance practices.”

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(2) open-end mutual funds and liquidity management;

(3) governance, environmental or social, and sustainability disclosure requirements that could impose significant climate-change related disclosure obligations on SEC registrants, which have been voluntarily stayed by the SEC pending resolution of litigation challenging the final rule;

(4) amendments to the Names Rule;

(3) amendments to Rule 35d-1 under the 1940 Act (Names Rule);

(4) amendments to broker-dealer FOCUS reports;

(5) the Federal Trade Commission’s (FTC) decision to end defense of its noncompete ban, which was struck down by a Federal District Court in Texas, and new enforcement initiatives;

(6) tailored shareholder reports;

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(9) the impact of several recent court decisions that impact the regulation of the investment management industry, including, among other things, the potential ability to challenge regulation, the SEC’s ability to bring enforcement actions seeking civil penalties, and the validity of certain final rules adopted by the SEC;

(9) the new DOL fiduciary rule, the effectiveness of which has been stayed by two federal District Courts in Texas;

(10) the Federal Trade Commission ban on non-compete agreements, which has been struck down by a federal District Court in Texas;

and (11) customer identification programs for investment advisors.

(10) executive orders impacting the investment management industry;

(11) customer identification programs for investment advisors;

and (12) recent actions by state attorneys general and financial officers impacting governance, environmental and social framework-aligned investment strategies and climate disclosure groups.

In addition to the above matters, key recent regulatory requirements and regulatory developments in the U.S.

since September 30, 2024, that can significantly impact or relate to Federated Hermes’ business and offerings include, among others,

the following.

since September 30, 2025, that can significantly impact or relate to Federated Hermes’ business and offerings include, among others, the following.

Unless otherwise noted, Federated Hermes is evaluating the impact of the matters described on its business and offerings.

New DOL Fiduciary Rule .

As noted above, two District Courts in Texas previously stayed the new DOL fiduciary rule, which was issued on April 23, 2024, and, among other things, permits plan fiduciaries to consider governance, environmental and social factors in choosing retirement plan investments.

On February 14, 2025, the District Court for the Northern District of Texas issued a decision in which it concluded that the new DOL fiduciary rule comports with the Employee Retirement Income Security Act of 1974, as amended, noting that the new DOL fiduciary rule is carefully written to specify that fiduciaries must keep beneficiaries’ financial interests paramount and allows for governance, environmental or social considerations to be factored in when choosing among alternatives that serve plans equally.

Despite this court decision, the new DOL fiduciary rule remains subject to potential challenge or revision by the new Presidential administration, the Republican Congress and Republican state attorneys general.

SEC Staff Guidance on Shareholder Proposal Rule .

On February 12, 2025, the SEC Staff issued Staff Legal Bulletin No.

14M, which provides guidance on the exclusion of shareholder proposals under Rule 14a-8 of the 1934 Act.

This bulletin rescinds the previous Staff Legal Bulletin No.

14L and reinstates earlier guidance, expanding the ability of companies to exclude shareholder proposals on the grounds of “economic relevance” and “ordinary business.” The bulletin clarifies that proposals addressing social policy issues, such as climate-related proposals, can be excluded unless they transcend ordinary business matters and raise significant policy issues appropriate for a shareholder vote.

The bulletin emphasizes a case-by-case analysis of shareholder proposals, considering the specific facts and circumstances of each company.

Schedule 13G Interpretive Guidance.

On February 11, 2025, the SEC issued a new Compliance and Disclosure Interpretation (C&DI) regarding the eligibility of shareholders (including institutional investment advisors) to file beneficial ownership reports on Schedule 13G.

Sections 13(d) and 13(g) of the 1934 Act require that beneficial owners of more than 5% of a voting class of equity securities of an issuer registered under the 1934 Act report their beneficial ownership on a Schedule 13D or, if eligible, a Schedule 13G.

The C&DI addresses the circumstances in which a shareholder’s engagement with an issuer’s management on a particular topic would cause the shareholder to be deemed to hold the relevant class of securities of the issuer with the “purpose or effect of changing or influencing control of the issuer,” thereby causing the shareholder to lose eligibility to report on Schedule 13G and requiring the shareholder to report on Schedule 13D within five business days of losing eligibility to report on Schedule 13G.

Under prior guidance, the SEC provided that much of what constitutes ordinary course institutional investor engagement with portfolio companies – including engagement on executive compensation, corporate governance matters (such as board declassification), or social or environmental policies – would not, on its own, constitute an attempt to change or influence control of such companies, and therefore preclude such investors from reporting on Schedule 13G.

The new C&DI deviates from this permissive approach, emphasizing that such engagement may constitute an attempt to influence or control issuers if it involves an attempt to exert pressure on management to take specific actions.

The updated guidance provides for a facts-and-circumstances approach that looks to “the subject matter of the engagement [and] the context in which the engagement occurs.” As a result, shareholders (including institutional investment advisors) who have historically reported their beneficial ownership on Schedule 13G as passive investors will now need to closely consider whether their engagement practices with issuers on certain topics historically perceived as ordinary course could now cause them to be viewed as holding the relevant class of the issuer’s securities with a “purpose or effect of changing or influencing control of the issuer,” and, therefore, trigger a loss of eligibility to report beneficial ownership on Schedule 13G and require reporting on Schedule 13D.

This new guidance has the potential to reshape, potentially in a significant way, the corporate governance, the executive compensation and the governance, environmental or social engagement landscape and stewardship services provided by institutional investment advisors, including, among others, Federated Hermes.

Diversity, Equity and Inclusion (DEI).

On January 21, 2025, the President signed an executive order, “Ending Illegal Discrimination And Restoring Merit-Based Opportunity,” which focuses on DEI initiatives and directs executive agencies and departments to terminate all “discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements,” curtail the Office of Federal Contract Compliance Programs’ (OFCCP) operational authority, and directs agencies to scrutinize the DEI practices of private sector employers.

This executive order raises questions about the future and status of certain programs, preferences, and set-aside procurements administered by the U.S.

Small Business Administration, U.S.

Department of Transportation, and other agencies.

The first portion of the executive order rescinds Executive Order 11246 (1965), which established the OFCCP and provided the OFCCP its operational authority to ensure compliance with anti-discrimination laws by Federal contractors.

The second portion of the executive order focuses on DEI programs in the private sector.

Specifically, the executive order directs agency heads to submit reports within 120 days identifying:

(1) key sectors within each agency's jurisdiction;

(2) private sector companies with the most "egregious and discriminatory" DEI programs;

(3) a plan to deter DEI programs “that constitute illegal discrimination

or preferences;” (4) litigation that would be potentially appropriate for Federal lawsuits, intervention, or statements of interest;

and (5) potential regulatory action and sub-regulatory guidance.

Under the executive order, agencies are directed to identify up to nine potential investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets over $500 million, state and local bar and medical associations, and universities with endowments over $1 billion.

On February 21, 2025, the United States District Court for the District of Maryland issued a nationwide injunction temporarily preventing enforcement of the following three provisions of the executive order on the basis that they are unconstitutional under the First and Fifth Amendments of the U.S.

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 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 will end on the date that is 60 days after the proposal is published in the Federal Register.

SEC Frequently Asked Questions (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) the 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.

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 “[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.

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 of 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.

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 has requested that public comments be submitted by April 13, 2026.

Proposal to Eliminate Annual Shareholder Meetings for Exchange Listed Closed-End Funds (CEFs) Withdrawn .

On December 12, 2025, Cboe Global Markets Inc.

(Cboe) withdrew its May 20, 2025 proposal (Cboe Proposal) that would have exempted newly-listed CEFs from the requirement to hold annual shareholder meetings and, subject to shareholder approval, also would have exempted previously listed CEFS from the annual shareholder meeting requirement.

The SEC was originally expected to decide on the Cboe Proposal by December 2025, but extended the review period to February 2026, signaling unresolved concerns.

On January 5, 2026, the NYSE withdrew a similar June 6, 2025 proposal to exempt newly listed CEFs and, subject to shareholder approval, previously listed CEFs from the annual shareholder meeting requirement.

The withdrawals by the Cboe and NYSE terminated their rulemaking efforts before a final SEC decision.

While Federated Hermes is not currently aware of any plan by the NYSE or Cboe to revise or resubmit their Proposals, it is possible that the Texas Stock Exchange could submit its own proposal to exempt newly-listed CEFs from the annual shareholder meeting requirement.

Federated Hermes fully supported efforts to eliminate annual shareholder meetings for exchange listed CEFs because, in Federated Hermes’ view, CEFs are more akin to registered mutual funds, which are not required to have annual meetings, than listed operating companies and the annual shareholder meeting requirement subjects them to attack by activist shareholders who buy discounted shares and then take action to force the CEFs to incur liquidity events (such as tender offers, reorganizations, or open-ending of the CEFs) to realize or arbitrage the difference between the discounted purchase prices and the CEFs’ net asset value (NAV), all to the detriment of the CEFs and their long-term investors.

Regulation of Proxy Advisors .

On December 11, 2025, the President issued an executive order titled “Protecting American Investors From Foreign-Owned and Politically-Motivated Proxy Advisors.” The executive order states that certain proxy advisory firms wield too much influence (including with respect to corporate governance, shareholder proposals, retirement investing, etc.) and are using that influence “to advance and prioritize radical politically-motivated agendas” related to diversity, equity, and inclusion and governance, environmental, and social issues.

The executive order aims to increase federal oversight over the proxy advisory industry by directing:

(1) the SEC to conduct a comprehensive review of the existing regulatory framework governing proxy advisors;

(2) the FTC to examine ongoing state antitrust investigations involving proxy advisors and determine whether they engage in unfair methods of competition;

and (3) the DOL to assess Employee Retirement Income Security Act regulations to ensure “proxy advisors act solely in the financial interests of plan participants.” The new directives signal that federal oversight of both proxy advisors and the institutional investors who rely on them will likely intensify, with a shift toward higher transparency expectations, potential enforcement activity, and closer review of voting rationales involving anything other than strictly financial considerations.

FSOC Considering Revision to Nonbank Designation Guidance.

On December 11, 2025, FSOC met in executive and open sessions to discuss several priority initiatives for 2026.

Among other topics, FSOC discussed potential changes to the current interpretive guidance regarding nonbank financial company determinations and the framework for financial stability risk identification, assessment and response, which were adopted in November 2023.

Under this guidance, FSOC can designate certain non-bank financial companies as systematically important financial institutions (SIFI), which are subject to supervision and regulation by the Federal Reserve.

While the new guidance was purportedly intended to provide greater transparency to the public about how FSOC identifies, assesses, and addresses potential risks to financial stability, regardless of whether the risk stems from activities, individual firms or otherwise, it had the effect of potentially bringing a wider range of companies within the Federal Reserve’s jurisdiction, including potentially money market funds and other investment companies.

In connection with the December 11, 2025 FSOC meeting, the SEC Chairperson issued a statement indicating that he “was especially encouraged to see revising the nonbank designation guidance on the agenda” and stated that the current guidance creates the risk of arbitrary designation, creating significant regulatory risk for companies not engaged in traditional banking businesses.

If Federated Hermes or a Federated Hermes Fund were designated as a SIFI, among other things, they would become subject to enhanced regulatory requirements and direct supervision by the Federal Reserve, which could result in increased operating and compliance costs and potentially restrict business activities.

Accordingly, Federated Hermes strongly encourages the FSOC to revise the 2023 nonbank designation guidance to eliminate the risk of money market funds or other investment companies being designated as a SIFI.

Investment Company Institute Recommendations for a Default E-Delivery Framework.

On November 18, 2025, the ICI submitted a letter to the SEC providing recommendations and data in support of SEC rulemaking that would allow funds to deliver documents to shareholders electronically on a default basis, rather than requiring shareholders to affirmatively opt in to electronic delivery.

In the letter, the ICI articulated the numerous benefits of e-delivery to investors, including better alignment with evolving investor preferences, enhanced investor protection and a better investor experience, cost savings for funds and shareholders, and reduced waste and supply chain concerns.

Federated Hermes strongly supports the ICI’s position and believes adoption of e-delivery on a default basis is in the best interest of shareholders.

On February 11, 2026, the SEC Chairperson testified before the U.S.

House of Representatives Financial Services Committee that he has instructed the SEC Staff to work on a proposed rule that would make e-delivery the default option for delivering fund disclosures to investors.

Scrutiny of Governance, Environmental and Social Initiatives.

Recent state and federal actions highlight continuing scrutiny of governance, environmental and social framework aligned investment strategies and climate disclosure groups.

FTC Investigates Major Proxy Advisory Firms over Antitrust Concerns.

It has been reported that the FTC has launched an investigation into two major proxy advisory firms for potential violations of antitrust laws by guiding shareholders on politically sensitive votes.

The probe, which remains in its early stages, follows intensified Republican scrutiny from both the House Judiciary Committee and Senate Banking Committee over potential conflicts of interest and political bias in the firms’ recommendations.

Florida Attorney General Sues Proxy Advisory Firms for Deceiving Investors and Manipulating Corporate Governance.

On November 20, 2025, the Florida Attorney General filed a lawsuit against two major proxy advisory firms targeting alleged “anticompetitive” conduct.

The complaint alleges that the two firms “deceived” investors and weaponized their influence to “impose [a] radical ideological agenda” on American companies and Florida consumers, through the use of “lockstep” voting that stifles competition and harms shareholders.

Nonprofits Challenge Texas Senate Bill (S.B.)2337.

On November 10, 2025, a coalition of Texas nonprofits filed a lawsuit challenging Texas S.B.

2337 (which was enacted to regulate proxy advisor firms that provide recommendations involving governance, environmental and social factors or diversity, equity and inclusion factors), arguing that the law violates the First and Fourteenth Amendments to the U.S.

Constitution.

(1) the requirement that federal contractors and grantees certify that they do not operate “illegal” DEI programs and comply with federal discrimination laws;

(2) the direction to the U.S.

Attorney General to deter “illegal” DEI programs or principles in the private sector by, in part, submitting a report identifying up to nine civil enforcement investigations of certain private sector companies, associations, and educational institutions;

and (3) the requirement that federal agencies terminate federal equity-related grants or contracts.

It is expected that the court’s decision will be appealed.

Names Rule FAQs.

On September 20, 2023, the SEC adopted significant amendments to the Names Rule, as well as certain forms and disclosure requirements.

Unless the compliance date for the amended Names Rule is delayed, or the amendments modified or repealed, the amended Names Rule has a compliance date of December 11, 2025, for large fund complexes, such as the registered domestic Federated Hermes Funds, and June 11, 2026, for small fund complexes.

Among the relevant changes, the Names Rule amendments significantly expand the universe of fund names in scope of the Names Rule.

For example, the amendments to the Names Rule expand the application of the Names Rule to fund names suggesting a focus on specific types of investments, industries, geographic regions or characteristics, such as “growth,” “value,” and terms indicating that the fund’s investment decisions incorporate one or more governance, environmental or social factors.

To address certain interpretative questions, on January 8, 2025, the SEC released updated Frequently Asked Questions (FAQs) that modify, supersede, or withdraw portions of prior FAQs related to the Names Rule.

In the updated FAQs, among other things, the SEC Staff provides guidance relating to the shareholder approval requirement for a fund seeking to revise a fundamental 80% Policy, stating that a fundamental 80% Policy may be amended to bring such policy into compliance with the amended Names Rule without shareholder approval, provided the amended policy does not deviate from the existing policy or other existing fundamental policies.

The FAQs restate that individual funds must determine, based on their own individual circumstances, whether shareholder approval is necessary within this framework.

Accordingly, funds may take the position that clarifications or other nonmaterial revisions to a fundamental 80% Policy in response to the amended Names Rule would not require shareholder approval.

If it is determined that nonmaterial revisions have been made to a fundamental 80% Policy, notice to the fund's shareholders is required.

With respect to money market funds, the FAQs also confirm that funds that use the term “money market” in their name along with another term or terms that describe a type of money market instrument ( e.g.

, a “Treasury Money Market Fund”) must adopt an 80% Policy to invest at least 80% of the value of their assets in the type of money market instrument suggested by its name.

The FAQs further explain that a generic money market fund, one where no other describing term is included in its name, would not be required to adopt an 80% Policy.

The SEC Staff also removed certain prior FAQs for certain reasons, including because they were deemed no longer relevant as they addressed circumstances that were specific to the 2001 adoption of the Names Rule or were separately addressed in the adopting release related to the 2023 amendments to the Names Rule.

Based on the amended Names Rule and FAQs, Federated Hermes has recommended the following changes be implemented in respect of the domestic registered Federated Hermes Funds upon compliance with the amended Names Rule becoming required:

(1) one name change;

(2) the adoption of an 80% Policy by two funds;

(3) modifications to existing 80% Policies by 16 funds;

and (4) enhanced investment strategies disclosures for three funds.

SEC’s Expanded Dealer Definition.

On November 21, 2024, the U.S.

District Court for the Northern District of Texas (the Northern District Court) ruled against the SEC in two separate cases, vacating its final rule (Dealer Rule), promulgated on February 6, 2024, which expanded the definition of securities dealers.

The Dealer Rule expanded the definitions of “dealer” and “government securities dealer” under the 1934 Act to include market participants who provide significant liquidity to the markets and, as a result, would have included many market participants who trade for their own accounts, such as private funds.

Several trade groups filed lawsuits challenging the Dealer Rule on the grounds that the SEC exceeded its statutory authority and that the Dealer Rule was arbitrary and capricious and therefore should be vacated in its entirety.

The first case was filed by the National Association of Private Fund Managers, Alternative Investment Management Association Limited, and Managed Funds Association representing the interests of their private fund members (the Private Funds Association Case), and the second case was filed by the Crypto Freedom Alliance of Texas and the Blockchain Association.

In both decisions, the Northern District Court granted the trade groups’ motions for summary judgment, finding that the SEC had exceeded its statutory authority.

The Northern District Court reasoned that the new definition is inconsistent with the history of the 1934 Act, which indicates that

“dealers” act on behalf of customers.

The Northern District Court stated in the Private Funds Association Case that the structure of the 1934 Act “only makes sense if dealers are in the business of customer-order facilitation.” The Northern District Court also rejected the SEC’s requests to vacate the Dealer Rule only as it applies to private funds or to remand to the SEC for further rulemaking, handing the SEC two significant defeats.

The plaintiffs contend that the statute’s requirement to label any advice incorporating governance, environmental and social factors or diversity, equity and inclusion factors or other “nonfinancial” considerations as unrelated to shareholders’ financial interests constitutes unconstitutional compelled speech—including for faith-based investors whose recommendations are grounded in religious values.

They further argue that the law is overly broad and vague, risking penalties for a wide range of nonprofits and smaller organizations engaged in shareholder advocacy, investment research, or public education.

The lawsuit follows an earlier injunction obtained by major proxy advisory firms, marking an escalation in legal challenges to Texas’s anti-governance, environmental and social regulatory framework.

Current Regulatory Environment – International

Like the U.S., the legislative and regulatory environment outside the U.S.

is dynamic and subject to continual change.

Federated Hermes’ primary regulators outside the U.S.

include the FCA in the UK, and the CBI in Ireland, a member state of the EU.

include the FCA in the U.K.

and the CBI in Ireland.

Depending upon where Federated Hermes is doing business, or distributing or marketing its offerings, other regulators in other jurisdictions outside the U.S.

can also regulate Federated Hermes and its business and offerings.

Consequently, regulatory developments and regulatory requirements promulgated, or recommended, by, among others, the European Commission, European Securities and Markets Authority (ESMA), Bank of England (BoE), His Majesty’s Treasury (HMT), FCA, CBI, Financial Stability Board (FSB), and International Organization of Securities Commission (IOSCO) can apply to or impact Federated Hermes and its business and offerings.

Consequently, regulatory developments and regulatory requirements promulgated, or recommended, by, among others, the European Commission, European Securities and Markets Authority (ESMA), Bank of England (BoE), His Majesty’s Treasury (HMT), FCA, CBI, CIMA, Monetary Authority of Singapore, ASIC, CSSF, Financial Stability Board (FSB), and International Organization of Securities Commission (IOSCO) can apply to or impact Federated Hermes and its business and offerings.

The pace of proposed and new regulatory developments and regulatory requirements outside the U.S.

continued throughout 2025 and is expected to continue in 2026.

In the UK, in its Business Plan 2024/25 published on March 19, 2024, the FCA reaffirmed its goal to deliver on the public commitments previously set out in its three-year strategy, 2022-2025.

In its Business Plan 2024/2025, the FCA stated that in 2025 it expects to focus on:

(1) reducing and preventing financial crime, including investing in systems to use intelligence and data more effectively to identify financial crime;

(2) putting consumers’ needs first, which will include further work to implement the Consumer Duty that took effect in July 2023;

and (3) strengthening the UK’s position in the global wholesale markets, including by supporting industry work on T+1 settlement, concluding its review of the UK’s Listing Regime, and further consultations on the options for the payment of investment research by asset managers.

In the EU, ESMA’s 2025 Work Programme for the investment management sector indicates that there will be a focus on liquidity management tools, sustainability in investment management, monitoring of costs, and further work on reforming the regime for EU Undertakings for the Collective Investment in Transferable Securities (UCITS).

In the U.K., in its Annual Work Programme for 2025/26 published on April 8, 2025, the FCA reaffirmed its goal to deliver on the public commitments set out in its five-year strategy for 2025 to 2030.

The FCA stated that in 2025 to 2026 it expects to focus on:

(1) improving regulatory efficiency and enhancing its supervision model by continuing to digitize the FCA authorization process and reduce regulatory burdens for firms;

(2) putting consumers’ needs first, which will include further work on embedding the Consumer Duty that took effect in July 2023;

and (3) supporting the U.K.’s economic growth by implementing a new prospectus regime, considering more options for the payment of investment research by asset managers and enhancing productivity through the increased encouragement of digitized initiatives such as fund tokenization.

In the EU, ESMA’s 2026 Work Programme for the investment management sector was published on October 3, 2025.

ESMA’s 2026 Work Programme focuses on financial stability, risk assessment, effective supervision, sustainability in investment management, effective use of technological innovation, retail consumer protection, and further work on regulating governance, environmental and social rating providers.

This is reflected in the regulatory priorities outlined by national regulators, including the CBI.

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(2) addressing systemic risks generated by non-banks;

(3) consulting and engaging on the review of the Consumer Protection Code and the Individual Accountability Framework;

(3) finalizing the revised Consumer Protection Code and the Individual Accountability Framework;

(4) ensuring that the EU Anti-Money Laundering Plan results in a consistent and robust EU-wide framework;

(5) implementing new EU regulations on digital operational resilience and markets in crypto assets;

and (6) strengthening the resilience of the financial system to climate risks.

(5) enhancing digital operational resilience and implementing changes to the fitness and probity process for the firms it supervises;

(6) strengthening the resilience of the financial system to climate risks;

(7) preparing for the EU Artificial Intelligence Act with further engagement with the use of AI in financial services;

and (8) implementing the Markets in Crypto Assets Regulation.

Please see Federated Hermes’ prior annual and periodic SEC filings for additional information regarding other non-U.S.

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These include, among others:

(1) money market fund reform initiatives in the UK, EU, and internationally;

(2) UK and EU sustainability disclosure requirements;

(3) EU regulatory developments such as the EU Retail Investment Package, review of the EU UCITS Eligible Assets Directive, and the Digital Operational Resilience Act (DORA);

and (4) UK regulatory developments such as the UK Overseas Funds Regime (OFR), the re-introduction of the possibility of bundling investment research costs.

(1) money market fund reform initiatives in the U.K., EU, and internationally;

and EU sustainability disclosure and related requirements;

(3) EU regulatory developments such as the EU Retail Investment Package, review of the EU Undertakings for the Collective Investment in Transferable Securities (UCITS) Eligible Assets Directive (EAD), and the Digital Operational Resilience Act;

regulatory developments such as the U.K.

Overseas Funds Regime, and the re-introduction of the possibility of bundling investment research costs.

In addition to the above matters, key recent regulatory requirements and regulatory developments outside the U.S.

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Unless otherwise noted, Federated Hermes is evaluating the impact of the matters described on its business and offerings.

Consumer Composite Investments.

On December 19, 2024, the FCA published a Consultation Paper CP24/30, “A new product information framework for Consumer Composite Investments,” in which the FCA proposed and solicited public comment on certain significant changes to the rules for the way information on consumer composite investments (i.e., funds, structured products and other investments where returns are dependent on the performance of, or changes in, the value of indirect investments) is presented by moving from an overly prescriptive disclosure regime purportedly to a more flexible, simpler approach.

The rule changes would replace the existing disclosure frameworks for packaged retail and insurance-based investment products (PRIIPS), UCITS, and certain other types of investment products.

The public consultation period ends on March 20, 2025.

Money Market Fund Reform.

On November 21, 2024, the European Central Bank (ECB) published its Financial Stability Review (ECB Review), which included, among other things, renewed critiques of money market funds.

In the ECB Review, the ECB stressed that the EU must proceed with money market fund reform to ensure the stability of short-term funding markets

and to mitigate the risk of cross-border regulatory arbitrage.

The ECB argued that to prevent regulatory arbitrage due to divergences in minimum standards—which could potentially shift liquidity risk towards EU money market fund markets—the EU should prioritize money market fund legal reforms to address risks from liquidity mismatch by increasing liquidity buffer requirements for private debt money market funds and ensuring that these buffers are more usable.

Additionally, the ECB supports removing threshold effects linked to breaches of liquidity requirements.

This ECB push for reform will likely influence the incoming European Commission's decision regarding whether to reopen the money market fund reform review in early 2025.

T+1 Settlement.

On November 18, 2024, ESMA published its Final Report, “ESMA assessment of the shortening of the settlement cycle in the European Union,” in which ESMA recommended migrating the settlement cycle for all trades in relevant securities and other investment instruments from a two-day cycle from the trade date (or T+2) to a one-day cycle from the trade date (or T+1) on October 11, 2027.

Similarly, in the UK, on September 27, 2024, the Accelerated Settlement Taskforce published a draft Recommendation Report and Consultation in which it solicited public comment on migrating from a T+2 settlement cycle to a T+1 settlement cycle.

The Accelerated Settlement Taskforce recommended that the migration in the UK also occur on October 11, 2027.

The migration aims to enhance settlement efficiency and market integration.

previously migrated to a T+1 settlement cycle effective May 28, 2024.

UK and EU regulation of governance, environmental or social ratings.

The framework for the regulation of providers of governance, environmental or social ratings in the EU and UK is beginning to emerge.

In the UK, HMT published draft legislation on November 14, 2024, that would bring such rating providers within the scope of UK regulations.

Subject to certain exemptions, such rating providers would need to be authorized and regulated by the FCA and would be subject to requirements made by the FCA, which are yet to be developed.

The EU is at a slightly more advanced stage.

The text of a regulation published on November 8, 2024 has been adopted by the EU Council, and is pending publication in the Official Journal.

That Regulation will bring the provision of such ratings in the EU within EU regulations, subject to certain exceptions.

and EU Money Market Fund reform.

In the EU, the European Systemic Risk Board published a compliance report on the implementation of its recommendations on the reform of MMFs on February 12, 2025.

It is yet to be established whether there will be substantive changes to the EU MMF Regulation following that report.

On April 17, 2025, the CBI published a “Notice of Intention on ESMA Guidelines on Stress Testing Scenarios under the Money Market Fund (MMF) Regulation” in which the CBI indicated its expectation of full compliance with ESMA’s updated MMF stress‑testing guidelines, which ESMA published on February 24, 2025 and applied beginning on May 4, 2025.

These guidelines, updating 2024 parameters, establish common risk scenarios (credit, interest rate, liquidity, redemption) under Article 28 of the MMFR, and apply to competent authorities, MMFs and managers of MMFs.

On January 13, 2026, ESMA published a Final Report titled “Guidelines on stress test scenarios under the MMF Regulation,” which includes updated guidelines and risk parameters, so that managers of MMFs have the information needed to fill in the reporting template mentioned in the MMF Regulation.

and EU, public statements regarding progress on reforms of the regulatory regime for MMFs are expected.

In the U.K., the FCA and BoE published a joint consultation setting forth their proposals for a post-Brexit MMF regime in the U.K., while HMT consulted on changes to legislation.

While the U.K.

regime proposed by the FCA and BoE was substantially based on the EU MMF Regulation, certain differences were proposed.

As of January 31, 2026, the European Commission has not yet reopened its MMF Regulation file.

FCA Consultation Paper 25/36 on Client Categorization and Conflicts of Interest.

The FCA issued a consultation paper on proposed changes to the elective professional client categorization rules concerning the qualitative tests required for these types of clients to be considered professional clients.

The consultation closed on February 2, 2026.

EU UCITS – Review of eligible assets.

The EU is assessing whether to make changes to the EAD, which sets out the types of investments that can be acquired by an EU UCITS and the applicable requirements.

On June 26, 2025, ESMA published its technical advice to the European Commission regarding its review of the EAD.

Key changes proposed by ESMA include:

(1) applying a look-through approach to determine the eligibility of assets that UCITS can invest in to address circumstances where a UCITS acquires exposure to an ineligible asset class by investing in an eligible wrapper;

(2) requiring an assessment of the liquidity of individual assets (in addition to portfolio level liquidity monitoring);

and (3) relaxing some aspects of the rule permitting up to 10% of assets to be invested in assets that do not meet the standard eligibility requirements and that would not be subject to the look-through assessment.

The European Commission is considering ESMA’s technical advice, plans to issue public consultations and market analysis in 2026, and will decide whether to move forward with legislation.

Liquidity risk management for open-end funds.

There are specific regulatory developments in the EU relating to liquidity risk management for open-end funds.

The regulatory requirements relating to liquidity risk management for open-end funds continue to be refined in the EU and U.K.

Those developments are occurring in the context of the ongoing international efforts to enhance and harmonize liquidity risk management requirements for collective investment schemes.

These include steps to update the Recommendations for Liquidity Risk Management published and developed by the IOSCO in 2018.

On November 11, 2024, IOSCO released two consultation reports, one proposing revisions to the recommendations and the second consulting on complementary guidance for the effective implementation of the revised recommendations.

Ultimately, the FSB and IOSCO intend to assess whether the implemented reforms have sufficiently addressed the financial stability risks identified in the FSB’s earlier policy paper, published on December 20, 2023, on structural vulnerabilities arising from liquidity mismatches in open-ended funds.

UK and EU changes to rules on how asset managers may pay for investment research.

On July 26, 2024, the FCA implemented changes to its rules that permit FCA regulated asset managers to ‘bundle’ payments for third party investment research together with trade execution costs.

This payment method is optional, meaning that managers may continue to pay for research out of their own resources or from a dedicated research payment account established by the manager.

The ability to bundle investment research costs is subject to certain requirements, including requiring that firms:

(1) adopt a formal policy on the use of bundled payments for research;

(2) establish a budget for the amount of third-party research to be purchased;

(3) undertake ongoing assessments of the value and price of the research received;

(4) determine an approach to the allocation of costs across the firm’s clients and a structure for the allocation of payments across research providers;

(5) put in place operational procedures for the administration of accounts to purchase research;

and (6) disclose to clients the firm's approach to bundled payments and the costs incurred.

The new rules apply to FCA-regulated Markets in Financial Instruments Directive (MiFID) investment firms, and so are available for asset managers providing services for individual portfolios.

For collective investment schemes, the FCA is currently consulting on extending the same payment optionality.

The consultation closed on December 16, 2024, and the FCA intends to publish its response and final rules (if any) in 2025.

In the EU, there are similar efforts to re-introduce the option for asset managers to combine investment research and execution costs.

These are being considered as part of the EU Listing Act, which refers to a package of measures amending several pieces of EU legislation and regulatory requirements.

On December 4, 2024, amendments to the existing EU MiFID provisions regarding payments for investment research were finalized.

Under the amendments:

(1) bundled payments for execution services and research are allowed irrespective of the issuers’ market capitalization, which removed the current threshold;

(2) research labelled as “issuer sponsored research” must comply with an EU Code of Conduct, which is currently being developed;

(3) investment research must be fair, clear and not misleading in regards to the information or content provided;

and (4) trading commentary and other bespoke trade advisory services linked to the execution of transactions in financial instruments should not be considered as research.

In connection with these changes, on October 28, 2024, ESMA published a

consultation paper on the safeguards that should apply alongside the new payment optionality under MiFID.

ESMA intends to deliver technical advice following its consideration of responses to the consultation during 2025.

EU and UK sustainability requirements for asset managers and investment offerings.

These include updates to the Recommendations for Liquidity Risk Management originally published and developed by IOSCO in 2018, with IOSCO publishing its final report on revisions to those recommendations on May 27, 2025.

In the EU, changes are being made to the requirements regarding liquidity risk management for UCITS and open-ended alternative investment funds (AIFs) as part of the revisions to the UCITS Directive and Alternative Investment Fund Managers Directive (AIFMD).

On November 17, 2025, the European Commission adopted the Delegated Regulation with regulatory technical standards (RTS) specifying the characteristics of liquidity management tools (LMTs) under the AIFMD and the UCITS Directive.

The Delegated Regulation specifies the characteristics and conditions of use for a full suite of LMTs, including:

(1) suspension of subscriptions, repurchases, and redemptions;

(2) redemption gates;

(3) extension of notice periods;

(4) redemption fees;

(5) swing pricing;

(6) dual pricing;

(7) anti‑dilution levies;

(8) redemptions in kind;

and (9) side pockets.

The goal is to ensure consistent application, supervisory convergence, and enhanced investor protection, while giving fund managers the flexibility to manage liquidity stress effectively.

The Delegated Regulation applies to all EU managers of open‑ended AIFs and UCITS

Under AIFMD II and the amended UCITS Directive, managers must select at least two LMTs per fund (MMFs can select only one).

These tools must be calibrated to the fund’s strategy, investor base, liquidity profile, and distribution channels.

On December 18, 2025, ESMA also published a revised version of its LMT guidelines for UCITS and open-end AIFs, which updated its April 2025 version to ensure full alignment with the RTS formally adopted by the European Commission on November 17, 2025.

ESMA updated the guidelines to reflect that:

(1) open‑ended AIFs with no retail investors and a limited number of professional investors can use investor‑level redemption gates alone or in combination with fund‑level gates to mitigate first‑mover advantage during liquidity stress;

(2) explicit transaction costs must always be included in anti-dilution tool calculations;

and (3) implicit transaction costs ( e.g.

, market impact, bid‑ask spreads) must be included only where appropriate for the fund’s strategy and estimated on a best‑efforts basis.

The revised guidelines apply to new funds from April 16, 2026, and existing funds have until April 16, 2027 to comply.

In the U.K., the FCA published a consultation paper on December 9, 2025 with respect to enhancing fund liquidity risk management.

The proposed changes do not fundamentally alter the liquidity management requirements for U.K.

open-ended funds, but do make certain changes to align the U.K.

requirements with the amended IOSCO recommendations.

The proposed changes are intended to apply to U.K.

UCITS and U.K.

non-UCITS retail schemes other than MMFs, and include:

(1) requiring anti-dilution tools to be available for use, and imposing requirements and providing guidance regarding the calibration and use of such tools;

(2) for transferable securities, removing the presumption that a security listed on an exchange is liquid, and thereby requiring an assessment of the liquidity of individual transferable securities (similar to ESMA’s proposals for UCITS, see ‘EU UCITS – Review of eligible assets’);

and (3) requiring all unitholders to be treated equitably, which is expected to generally involve redemptions being satisfied by adopting a vertical slice approach to selling portfolio assets rather than selling only the most liquid assets.

The FCA has not proposed extending these requirements to MMFs.

sustainability requirements for asset managers and investment offerings.

The regulation of sustainable investment offerings remains an area of focus for regulators outside the U.S.

In the EU, work on the sustainability related requirements for investment offerings has continued.

On May 14, 2024, ESMA published its final report setting out its guidelines regarding the use of governance, environmental or social and sustainability-related terms in fund names.

The guidelines apply to EU UCITS management companies and alternative investment fund (AIFs) managers.

The guidelines aim to ensure that investors are protected against unsubstantiated or exaggerated sustainability claims in fund names by setting out clear and measurable criteria to be met for funds using governance, environmental or social or sustainability-related terms in their names.

In particular, the guidelines indicate that the use of governance, environmental or social or sustainability related terms in fund names will trigger mandatory quantitative investment requirements or obligations, including the application of certain thresholds, exclusions or benchmarks to the proportion of fund investments used to meet:

(1) transition, social and governance terms;

(2) environmental or impact-related terms;

or (3) sustainability-related terms.

The guidelines took effect on November 21, 2024 for new funds, and will take effect on May 21, 2025 for existing funds.

Federated Hermes has determined that three of its offshore Federated Hermes Funds will change names, while five other offshore Federated Hermes Funds with governance, environmental or social-related names will adopt new monitoring guidelines.

The CBI had until October 21, 2024, to issue guidance or consultation on the ESMA requirements.

It did not issue any substantive changes but created a streamlined filing process for fund name changes or disclosures made necessary by the rule.

In addition, a review of the EU Sustainability Finance Disclosure Regulation (SFDR) by the European Commission is ongoing, with results expected to be published during 2025.

The review of the SFDR may result in a legislative proposal for further amendments to the SFDR.

In the UK, the FCA’s Sustainability Disclosure Requirements (SDR) began to take effect during 2024.

This regulation has several components:

(1) an anti-green washing rule that took effect on May 31, 2024;

(2) the introduction of sustainability labels for UK investment funds beginning on July 31, 2024;

and (3) naming, marketing and disclosure rules for UK-based asset managers, which became effective on December 2, 2024.

Further developments are expected.

In particular, the UK Government is expected to consult on extending SDR, and, in particular, the SDR labelling regime, to non-UK funds that can be sold to retail investors in the UK under the UK’s Overseas Funds Regime (OFR), though the publication of that consultation has been delayed.

The FCA has consulted on extending the SDR sustainability labelling regime to asset managers providing portfolio management services but has since delayed publication of the outcome of that consultation, and so the final rules remain pending.

EU UCITS – Review of eligible assets.

The EU is assessing whether to make changes to the Eligible Assets Directive (EAD), which sets out the types of investments that may be acquired by an EU UCITS and the applicable requirements.

On May 7, 2024, ESMA published a Call for Evidence (CfE) as part of its review of the EAD.

A key component of the CfE was to seek input on divergent interpretations and market practices in the application of the EAD, and whether there is a need for increased clarity on key concepts and definitions within the EAD.

In addition, ESMA requested feedback from stakeholders to assess potential risks and benefits of EU UCITS gaining direct and indirect exposure to certain asset classes, such as structured loans and crypto assets.

The CfE closed on August 7, 2024, and ESMA is expected to deliver its technical advice during 2025.

EU UCITS and AIFs – Targeted reforms of the UCITS directive and Alternative Investment Fund Manager Directive.

On March 13, 2024, amendments to the existing EU regulatory frameworks for EU UCITS and alternative investments funds (AIFs) were finalized, which included:

(1) enhancements to improve delegation arrangements by investment managers to third parties;

(2) changes to liquidity risk management requirements;

and (3) for AIFs, permitting depositary and custody services to be provided cross-border and prescribing requirements for loan originating AIFs.

Most of the changes become effective starting on April 16, 2026.

EU regulators are expected to promulgate rules and regulations during 2025 related to certain changes, such as finalizing regulatory technical standards and accompanying guidelines on liquidity risk management tools and consulting on regulatory technical standards for open-ended loan originating AIFs.

EU and UK sustainability reporting requirements for corporations.

In the EU, the Corporate Sustainability Reporting Directive (CSRD) was promulgated on December 14, 2022, and became effective on May 28, 2024.

A key component of the CSRD regime is the European Sustainability Reporting Standards (ESRS), and these remain under development following a delay in finalization of sector-specific ESRS.

Alongside the CSRD, the Corporate Sustainability Due Diligence Directive (CSDDD), which was proposed on February 23, 2022, became effective on July 25, 2024, following an extensive negotiation process.

The CSDDD imposes due diligence obligations requiring companies to identify, prevent or at least mitigate, adverse impacts on human rights and the environment, including by their subsidiaries and supply chain partners.

Member states must adopt the Directive by July 26, 2026.

In the UK, the UK Government has stated that it is creating UK Sustainability Reporting Standards (UK SRS) that will apply to UK incorporated entities.

The UK SRS is to be based on the sustainability disclosure

standards developed by the International Sustainability Standards Board of the International Financial Reporting Standards Foundation.

A consultation on the UK SRS is expected during 2025.

Upon the UK exiting from the EU in 2020, the FCA created the Temporary Marketing Permissions Regime (TMPR) for UCITS funds then passported into the UK to continue to be marketed with obtaining individual recognition under the UK Financial Services and Markets Act.

The TMPR will expire in December 2026.

It was replaced by the OFR, which was introduced in February 2021 and allowed the UK to declare that types of funds passported into the UK, and individual funds, have equivalent investor safeguards as FCA registered funds, or impose additional standards, so they can continue to be marketed.

In January 2024, the UK announced European Economic Area UCITS were an equivalent regime for purposes of the OFR, but individual funds would be recognized after applying.

Asset managers are to apply during “landing periods” assigned alphabetically.

The landing period for Federated Hermes’ Irish UCITS Funds to apply is July 2025 to the end of September 2025.

EU and UK operational resilience requirements.

In the EU, the DORA, which was first proposed by the European Commission on September 24, 2020, became effective on January 17, 2025.

The DORA applies to a range of firms, including regulated financial services firms in the EU, and seeks to enhance and harmonize the requirements applicable to the information and communications technology (ICT) that firms use.

This includes, among other aspects, requirements for the maintenance of registers, due diligence and monitoring of ICT service providers, mandatory contractual provisions for ICT service providers, and enhanced reporting.

Meanwhile, in the UK, on November 12, 2024, the FCA, Prudential Regulatory Authority, and BoE published a joint policy statement and final rules regarding the operational resilience of critical third parties (CTPs) to the UK financial sector.

The new rules will enable UK regulators to monitor and manage operational resilience risks purportedly in an effective and proportionate manner.

The relevant requirements for CTPs will cover various regulatory areas including:

(1) governance;

(2) risk management;

(3) dependency and supply chain risk management;

and (4) technology and cyber resilience.

In the EU, there is a move towards introducing a sustainability labelling regime for investment products.

On November 20, 2025, the European Commission published a proposal to amend the Sustainable Finance Disclosure Regime (SFDR).

The proposed changes, commonly known as “SFDR 2.0,” would (1) simplify and reduce sustainability-related administrative and disclosure requirements;

and (2) improve end-investors’ ability to understand and compare sustainability-linked financial products by introducing a classification ( i.e.

, labelling) framework.

The proposals are under review by the European legislative bodies.

In the U.K., the FCA has stated that it requires additional time to consider the extension of the Sustainability Disclosure Requirements (SDR) sustainability labelling regime to asset managers providing portfolio management services, that it had consulted on in 2024.

The FCA has yet to issue a consultation on the extension of the SDR sustainability labelling regime to non-U.K.

funds that are recognized in the U.K.

sustainability reporting requirements for corporations.

The application of sustainability disclosure requirements to corporations has moved forward.

In the EU, work has continued 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), and the existing requirements under the EU Taxonomy.

This work is known as the ‘Omnibus I’ package.

On December 9, 2025, the European Parliament and the Council of the EU reached a provisional agreement regarding amendments to the CSRD and CSDDD, and the changes to both directives were adopted by the European Parliament on December 16, 2025 (with the Council of the EU yet to adopt its final position).

As currently drafted:

(1) the revisions to CSRD will reduce the scope of entities subject to sustainability disclosure requirements, as well as reduce some of the reporting burden;

and (2) the revisions to CSDDD will postpone the application date to July 26, 2029, reduce the scope of entities subject to it by raising the size threshold tests, delete the requirement for undertakings to have adopted and put into effect a transition plan, and seek to take a more proportionate approach to when and what information is required under the CSRD.

Regarding the EU Taxonomy, this legislation determines whether an economic activity can be considered environmentally sustainable, which is relevant for various EU regulatory regimes.

The Omnibus I package changes to the EU Taxonomy are in a Delegated Act, the final version of which was published on January 8, 2026.

That Delegated Act:

(1) introduces a materiality threshold for when a company must assess and report on whether a specific economic activity they engage in is aligned with the EU Taxonomy;

(2) simplifies the reporting templates, including significantly reducing the number of data points;

and, amongst other matters, (3) amends the EU ‘do no significant harm’ criteria regarding pollution prevention and the use of chemicals with a view to simplifying the report.

The Delegated Act became effective on January 1, 2026.

In the U.K., the U.K.

Government has stated that it is creating U.K.

Sustainability Reporting Standards (U.K.

SRS) that will apply to U.K.

incorporated entities.

SRS is to be based on the sustainability disclosure standards developed by the International Sustainability Standards Board of the International Financial Reporting Standards Foundation.

A consultation on

SRS was published on June 25, 2025 and closed on September 17, 2025.

Following this, the U.K.

Government and the FCA will consider how certain U.K.

entities (including listing companies) will report against these standards.

Meanwhile, the U.K.

Government has decided that it will not develop a U.K.-specific green taxonomy.

regulation of governance, environmental and social ratings providers.

The framework for the regulation of providers of governance, environmental and social ratings in the EU and U.K.

is being developed.

In the U.K., the legislation setting out the framework for the regulatory regime was finalized on December 18, 2025 and the new regime will take effect on June 29, 2028.

Subject to certain exemptions, governance, environmental and social rating providers would need to be authorized and regulated by the FCA and would be subject to requirements imposed by the FCA.

The FCA published a consultation paper on December 1, 2025 regarding the requirements that would apply to governance, environmental and social rating providers subject to their supervision under the U.K.

regulatory regime.

The proposals include a four-pillar framework that focuses on:

(1) transparency;

(2) governance systems and controls;

(3) conflicts of interest;

and (4) complaint handling requirements.

The FCA also intends to apply existing baseline rules to rating providers, including (among others), the anti-greenwashing rule and Senior Managers and Certification regime.

The consultation closes on March 31, 2026.

The EU is at a more advanced stage with respect to its regulatory regime for providers of governance, environmental and social ratings.

The Regulation regarding the transparency and integrity of governance, environmental and social rating providers came into force on January 2, 2025 and will apply effective July 2, 2026.

Once effective, governance, environmental and social rating providers operating in the EU will need to be authorized by ESMA or, for providers established outside the EU, the European Commission must have adopted an equivalence decision and the provider must be subject to supervision in that country.

With respect to the detailed regulatory requirements that will apply to governance, environmental and social ratings providers in the EU, on October 25, 2025, ESMA published its final report on three sets of draft RTS covering:

(1) the authorization and recognition process of governance, environmental and social rating providers;

(2) the separation of business lines by governance, environmental and social rating providers;

and (3) disclosure requirements imposed on governance, environmental and social rating providers.

EU Savings and Investments Union (SIU) and Retail Investment Strategy (RIS).

On April 15, 2025, the European Commission launched a targeted consultation on obstacles to capital markets integration across the EU.

This encompassed a wide-ranging set of initiatives aimed to develop the EU capital and banking markets, and to boost the EU’s economic competitiveness by improving the way the EU financial system mobilizes savings towards productive investments.

One component of the SIU is the Retail Investment Strategy (RIS), which aims to reinforce investor protection rules, address the participation of retail customers in capital markets and ensure that retail investors have access to quality financial products.

On December 18, 2025, the European legislative bodies announced that a provisional agreement has been reached on the RIS package, which will introduce new retail investment rules and various amendments to several EU directives, including AIFMD and Markets in Financial Instruments Directive.

The RIS package will seek to address a range of concerns, including:

(1) requiring value for money assessments for retail investment products, including using peer group benchmarking for such assessments;

(2) strengthening the rules on inducements and conflicts of interest for retail investment products;

and (3) certain changes to the required contents for packaged retail and insurance-based investment products (PRIIPs) key information documents (KIDs) to aid investor comprehension and requiring KIDs to be machine-readable.

The final text of the RIS package is expected in early 2026.

consumer access to retail products .

In the U.K., the FCA published a discussion paper on December 8, 2025 on expanding consumer access to investments.

The discussion paper describes changes to the retail investing landscape in the U.K., and states the FCA’s aim to continue to help consumers access investments that suit their circumstances.

While the discussion paper does not detail specific proposals, the FCA states its intention:

(1) to continue to support innovation by firms in the retail investment market;

(2) to consider revised requirements on how firms communicate and promote financial products to customers;

and (3) to streamline its financial promotion and distribution requirements in light of the Consumer Duty rules, which came into force in July 2023.

Consumer Composite Investments regime.

The FCA has finalized its rules for the U.K.

Consumer Composite Investments (CCIs) regime.

The CCI regime will impose disclosure and related requirements on both FCA-authorized and unauthorized firms in relation to CCIs (including funds) that are or can be distributed to a retail investor in the U.K.

The new rules will take effect on June 8, 2027, though firms will have the option of switching to the new disclosure regime from April 6, 2026.

The CCI regime requires a “product summary” to be prepared and made available to client investors, and will replace the “PRIIPs KID” and ”UCITS key investor information document” disclosure documents prepared to date for funds.

The product summary is intended to be a more flexible form of disclosure, but there will be some mandatory content with prescribed requirements, including a risk and return indicator, past performance information, and cost information.

fund dealing models and tokenization.

Fund tokenization is a key area of focus in the U.K.

On October 14, 2025, the FCA published a consultation paper proposing new rules and plans to support and accelerate tokenization and efficiency in the U.K.

The consultation paper also proposed changes to the FCA rules to allow U.K.

authorized funds to switch to direct dealing models (even if not using tokenization).

Final rules and guidance are expected in the first half of 2026.

Reform of AIFMD regime.

HMT and the FCA published a consultation paper and call for input respectively on April 7, 2025, on the reform of the U.K.

alternative investment funds regime which is derived from the EU AIFMD.

Key proposals include the removal of the distinction between the existing registration regime for sub-threshold Alternative Investment Fund Manager (AIFM) and the authorization regime for full-scope AIFMs so that all AIFMs will be subject to a single authorization regime.

Consequently, on the removal of the sub-threshold AIFM concept, it is proposed that the requirements for AIFMs would be based on a proportionate application depending on the size of the AIFM, with larger firms subject to more onerous requirements.

For these purposes, AIFMs will be categorized into three tiers based on the size of their AUM.

The proposed tiers are:

(1) large – AUM of £5bn or more;

(2) mid-sized – AUM of £100m to £5bn;

and (3) small – AUM of £100m or less.

The deadline for responses to the publications closed on June 9, 2025.

The FCA intends to consult on detailed rules in the first half of 2026.

transaction reporting regime.

In the U.K., the FCA intends to reform the transaction reporting framework as part of its post-Brexit review of the U.K.

regulatory environment.

On November 21, 2025, the FCA published a consultation paper setting out its proposals.

The FCA states that its aim is to:

(1) simplify and improve the regime by removing reporting obligations for six million financial instruments which are only tradeable on EU trading venues;

(2) exclude foreign exchange derivatives from the scope of reporting requirements;

and (3) streamline transaction reporting data fields.

The FCA states that it intends to retain the exemption from the transaction reporting requirements for Collective Portfolio Management Investment firms.

The consultation closes on February 20, 2026.

and EU T+1 Settlement.

Following the migration to a T+1 settlement cycle in the U.S.

effective May 28, 2024, the EU and U.K.

are similarly taking steps to migrate from a T+2 to a T+1 settlement cycle.

This is scheduled to occur in late 2027, but is subject to change.

In relation to the EU, on June 18, 2025, the European Parliament and the Council of the EU reached political agreement on the necessary amendments to the Central Securities Depositaries Regulation (CSDR) to shorten the settlement cycle from T+2 to T+1.

On September 17, 2025, the Council of the EU published the draft amendment legislation.

The next step is for the Council to formally adopt the legislation which will subsequently be published in the Official Journal of the EU and apply effective October 11, 2027.

In the U.K., on February 6, 2025, the Accelerated Settlement Technical Group (ASTG) published the U.K.

implementation plan for the first day of trading for T+1 settlement, which it recommends should be October 11, 2027 – this date is in alignment with the EU approach.

The ASTG also recommends that the U.K.

and other EU jurisdictions should collaborate closely to determine if a coordinated shift to T+1 is possible.

On February 19, 2025, the U.K.

Government confirmed that it intends to legislate to make T+1 the standard settlement cycle in the U.K.

from October 11, 2027.

On November 20, 2025, HMT published a policy note and draft version of the amended CSDR.

The CSDR changes will reflect and assist with the transition to a T+1 settlement cycle.

The deadline for submitting technical feedback on the revised CSDR is February 27, 2026.

Pending any comments received on the draft, HMT intends to publish the final revised CSDR in advance of October 11, 2027.

EU Financial Transaction Tax.

Based on the European Commission’s 2026 Work Programme published in October 2025, the long-standing proposal for an EU-wide financial transaction tax (FTT), originally introduced in 2013, is being withdrawn.

The Commission is withdrawing the FTT proposal due to a lack of progress, potential administrative burdens, and lack of alignment with current EU priorities.

Current Regulatory Environment – Potential Impacts

Applicable regulatory requirements, regulatory developments and regulatory supervision impact the domestic and international investment management industry generally by imposing substantial legal and compliance burdens, and significant restrictions and requirements, on its participants, and their offerings, and, therefore, will continue to impact, to various degrees, Federated Hermes’ Financial Condition.

The imposition of a financial transaction tax (FTT) with broad application in the U.S., UK, or EU, or the designation of Federated Hermes or any of its offerings, such as certain money market funds, as a systemically important financial institution (SIFI), also can affect, potentially in a material way, Federated Hermes’ Financial Condition.

The imposition of a FTT with broad application in the U.S., U.K., or EU, or the designation of Federated Hermes or any of its offerings, such as certain money market funds, as a SIFI, also can affect, potentially in a material way, Federated Hermes’ Financial Condition.

Federated Hermes has monitored, reviewed, and assessed, or will continue to monitor, review, and assess, regulatory developments and regulatory requirements, as applicable, and their impact on its business and offerings.

Federated Hermes actively participates, either individually or with industry-trade groups (such as the Investment Company Institute), in the public comment process regarding regulatory developments that can significantly impact Federated Hermes’ business and offerings.

Federated Hermes actively participates, either individually or with industry-trade groups (such as the ICI), in the public comment process

regarding regulatory developments that can significantly impact Federated Hermes’ business and offerings.

Regulatory developments and regulatory requirements also are subject to legal challenge in court, and Federated Hermes’ considers initiating, participating in or supporting such legal challenges when management deems it necessary or appropriate.

23 unchanged sentences

and, where appropriate, long-term incentives.

Generally, for employees working in the UK, and other non-U.S.

Generally, for employees working in the U.K., and other non-U.S.

locations, compensation is based on fixed and variable compensation.

14 unchanged sentences

For employees working in the U.S., all or a portion of any annual performance bonus can be paid in cash or a combination of cash and annual bonus restricted stock.

Beginning in 2026 (for any annual performance bonuses payable in 2027), employees working outside the U.S.

will be able to receive all or a portion of any annual performance bonus in cash or a combination of cash and annual bonus restricted stock or restricted cash awards depending upon the jurisdiction in which they reside.

Investment Management employees are also eligible for periodic restricted stock awards.

3 unchanged sentences

• The components of Federated Hermes’ executive compensation programs are designed to be competitive within the investment management industry and reward outcomes related to a variety of factors including Federated Hermes’ financial, investment, sales and customer service performance as measured against other similar companies within the investment management industry.

Financial factors include, for example, Federated Hermes’ operating profits (as defined in Federated Hermes Stock Incentive Plan), AUM, gross offering sales, net offering sales, total revenue (including net revenues after taking into account the net pre-tax impact of waivers to maintain the yields of certain money market funds at or above zero (Voluntary Yield-related Fee Waivers), net income and net income per diluted share.

Financial factors include, for example, Federated Hermes’ operating profits (as defined in Federated Hermes Annual Incentive Plan), AUM, gross offering sales, net offering sales, total revenue (including net revenues after taking into account the net pre-tax impact of any waivers to maintain the yields of certain money market funds at or above zero (Voluntary Yield-related Fee Waivers)), net income and net income per diluted share.

Please refer to the Compensation Discussion and Analysis section of Federated Hermes’ Information Statement for additional information regarding executive compensation.

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employees, the award’s fifth- and tenth-year anniversaries, and for non-U.S.

employees, generally the award’s sixth, seventh and eighth anniversaries which extend beyond the five-year vesting period in an effort to continue to align the employees’ and Federated Hermes’ interests during the restriction period).

employees, generally, for awards prior to November 2025, the award’s sixth, seventh and eighth anniversaries which extend beyond the five-year vesting period in an effort to continue to align the employees’ and Federated Hermes’ interests during the restriction period and for awards effective November 2025 or later, the award’s fifth anniversary).

Additionally, for certain groups of employees, a portion of their bonus awards are paid in the form of bonus restricted stock with a three-year ratable vesting schedule with restrictions lapsing on each vesting date.

For all employees working in the UK, and other non-U.S.

For all employees working in the U.K., and other non-U.S.

locations, discretionary bonus awards above a certain threshold are subject to deferral.

Under the deferred bonus scheme, a portion of the bonus is deferred, notionally tracks the performance of certain Federated Hermes Funds, and vests over three years.

The Private Equity and Infrastructure businesses of Federated Hermes also operate carried interest and share of performance fee programs typical in the management of such asset classes.

For 2024, Federated Hermes’ total compensation expense was $540.5 million and included, among other items, salary, bonus and share-based compensation expense.

Effective January 1, 2026 (for any discretionary bonuses paid in 2027), Federated Hermes’ compensation deferral practices have been harmonized globally, with Federated Hermes’ current bonus restricted stock program for U.S.

employees being extended to, and replacing the current deferred bonus scheme applicable to, all non-U.S.

As a result, for eligible non-U.S.

employees (similar to eligible U.S.

employees), all or a portion if any annual performance bonus can be paid in cash or a combination of cash and annual bonus restricted stock or

restricted cash awards depending upon the jurisdiction in which they reside, and the deferred compensation scheme described above applicable to non-U.S.

employees will no longer apply to bonuses payable in 2027 or later and will lapse after three years (or in 2029).The Private Equity and Infrastructure businesses of Federated Hermes also operate carried interest and share of performance fee programs typical in the management of such asset classes.

When Federated Hermes acquires a company or business, the employees of such company can be subject to legacy compensation programs and arrangements until the company or business is fully integrated with Federated Hermes.

For 2025, Federated Hermes’ total Compensation and Related expense was $577.7 million and included, among other items, salary, bonus and share-based compensation expense.

Federated Hermes’ benefit offerings across the company are designed to reflect the local market and equip Federated Hermes’ employees with resources and services to help them stay healthy, balance the demands of work and personal life, develop their careers, and meet their financial goals, as well as to further employee engagement and retention.

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technical (systems) topics;

and general professional

and general professional development.

The attraction, development, and retention of qualified employees across the company supports Federated Hermes’ succession planning at all levels.

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In the U.S., 8% of Federated Hermes’ employees are minorities, 34% of business managers are women and/or minorities and 29% of investment professionals are women and/or minorities.

Federated Hermes’ strategy recognizes the dignity and respect of each person and that a diverse and inclusive workplace benefits employees and supports stronger long-term business performance.

Federated Hermes developed its strategy with the mission of fostering a diverse, inclusive, and respectful workplace where employees’ unique perspectives and experiences are recognized and appreciated for the contributions they bring to the company.

Federated Hermes has made a long-term commitment to enhancing its workforce and providing an inclusive environment.

The company’s strategy is centered around four pillars:

driving diversity;

One of Federated Hermes’ core tenets is that employees treat one another with dignity and respect.

The company recognizes that a diverse, inclusive, and respectful workplace enhances the employee experience, encourages creativity, supports innovation and individual potential, and strengthens its ability to deliver better long-term risk-adjusted returns for clients and customers, as well as strong long-term business performance.

Dignity acknowledges diversity.

Diversity encompasses opportunity, acceptance, dignity, and respect.

Inclusion is the extent to which each employee is welcomed, accepted, respected, supported, and valued as a team member.

In line with this mission, Federated Hermes is committed to fostering a workplace where opportunity is supported and where employees’ unique and individual backgrounds, qualifications, expertise, skills, abilities, capabilities, perspectives, and experiences are recognized and appreciated on their merits for both their potential and actual contributions to the company.

The company actively demonstrates its long-term commitment to offering opportunities based on merit and fostering an inclusive environment.

It cultivates the benefits of opportunity and workforce inclusion through its recruitment process, onboarding of new employees, and ongoing employee education and development.

It strives to ensure that employees are recruited, engaged, rewarded, recognized, and trained based on their qualifications, skills, abilities, and aptitudes.

Federated Hermes implements a long-term, activities-based approach to diversity and inclusion efforts.

This approach is centered around four key pillars:

driving opportunity and diversity;

creating inclusion;

and sustainability with ongoing program development.

Federated Hermes cultivates the benefits of workplace inclusion throughout the company through its recruitment process, onboarding of new employees, and employees’ ongoing education and development.

The company’s efforts are sponsored and endorsed by Federated Hermes’ board of directors and executive management, and support dignity and respect in the workplace.

The Compensation Committee of Federated Hermes’ board of directors receives periodic updates and reports on the company’s strategy and its compensation practices, including an annual pay equity analysis.

In collaboration with management and employees at all levels, these efforts are advanced by various teams and employee resource business groups across the company, including Human Resources.

Federated Hermes is committed to providing equal employment opportunities across the company to qualified individuals without regard to:

national origin;

sexual orientation;

gender identity or expression;

mental or physical disability;

familial or marital status;

military status;

veteran status;

or genetic information;

as well as any other prohibited criteria under law applicable to Federated Hermes.

Federated Hermes encourages its employees across the company to raise human resource questions or concerns with their managers or the Human Resources Department in the U.S.

Separately, the company also provides a phone line and website portal through a third-party service provider for employees to report, anonymously should they so choose, various compliance matters.

and continuing the ongoing development of the company’s efforts.

The board of directors, executive management, and senior leadership all actively support and endorse the company’s efforts to create a workplace grounded in dignity and respect.

The Compensation Committee of Federated Hermes’ board of directors receives periodic updates and reports from management on these efforts and compensation practices.

Management may also receive periodic updates.

These efforts are advanced in collaboration with management and employees at all levels by various teams and resource groups across the company, including the Human Resources Department.

The company provides opportunities to qualified individuals without regard to race, color, national origin, religion, sex, pregnancy, sexual orientation, gender identity or expression, mental or physical disability, age, familial or marital status, ancestry, military status, veteran status, genetic information, or any other prohibited criteria, protected characteristic, or class under laws applicable to Federated Hermes.

Employees are encouraged to raise any human resources-related questions or concerns and to report any instances of discrimination, bullying, harassment, or other inappropriate conduct they experience or witness to their manager or the Human Resources Department.

Separately, the company also provides a confidential phone line and website portal, operated by a third-party service provider, through which employees can report various compliance matters, if they choose.

Information about our Executive Officers

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He previously served as a member of Federated Hermes’ board of directors from May 1998 to April 2004 and was re-elected to Federated Hermes’ board of directors in April 2016.

He also serves as an Assistant Secretary of Federated Hermes and is President of FII Holdings, Inc., a wholly-owned subsidiary of Federated Hermes.

He serves as a director of FHL.

He also serves as an Assistant Secretary of Federated Hermes and is a director and President of FII Holdings, Inc., a wholly-owned subsidiary of Federated Hermes.

He serves as a director of Federated Hermes Limited (FHL).

He also serves as a director, trustee or officer of various other Federated Hermes subsidiaries.

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Between September 2003 and October 2007, Mr.

Van Meter served as Senior Counsel in the SEC’s Division of Examinations.

Van Meter served as Senior Counsel in the SEC’s Division of Enforcement.

Zierden III has served as Vice President of Federated Hermes since July 2024.

He has also served as the President-Administration of Federated Services Company since 2012.

In such capacity, he manages the Global Technology Organization, data governance, investor services and financial planning and analysis, which includes responsibility for company-wide mergers and acquisitions.

In such capacity, he manages the Global Technology Organization, Enterprise Delivery, Data Governance, Investor Services and Financial Planning and Analysis, which includes responsibility for company-wide mergers and acquisitions.

Zierden is also Executive Managing Director of the Federated Hermes Private Markets business.

As Federated Hermes announced on December 2, 2025, effective April 30, 2026, Mr.

Fisher will step back from full-time responsibilities and no longer serve as an executive officer of Federated Hermes.

Fisher is expected to remain actively involved in several major strategic initiatives as Chairman of the Federated Advisory Companies.

Uhlman will replace Mr.

Fisher as President and CEO of the Federated Advisory Companies.

Uhlman, who has been with Federated

Hermes for 35 years, will remain a Vice President and executive officer of Federated Hermes.

Burke (age 53), Federated Hermes’ National Sales Director, Strategic Solutions, and Executive Vice President, Federated Securities Corp., will replace Mr.

Uhlman as President, Federated Securities Corp., and become a Vice President and executive officer of Federated Hermes.

He has been with Federated Hermes for 23 years.

These leadership changes will be effective after a transition period on April 30, 2026.

Fisher will remain on Federated Hermes’ Board of Directors during the transition period but is not standing for re-election to the Board at the next Annual Meeting of Shareholders of Federated Hermes, which will be held on April 30, 2026.

Uhlman has been nominated for election to the Board at the next Annual Meeting of Shareholders.

Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business