What changed in this filing

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Item 1. Business

2021-02-11 compared with 2020-02-13 · 170 added, 179 removed, 249 unchanged (58% of the section changed)

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We provide an array of U.S.

mutual funds , subadvised funds, separately managed accounts, and other T.

mutual funds, subadvised funds, separately managed accounts, collective investment trusts, and other T.

Rowe Price products.

Rowe Price products include:

collective investment trusts, open-ended investment products offered to investors outside the U.S., and products offered through variable annuity life insurance plans in the U.S.

open-ended investment products offered to investors outside the U.S.

and products offered through variable annuity life insurance plans in the U.S.

We also provide certain investment advisory clients with related administrative services, including distribution, mutual fund transfer agent, accounting, and shareholder services;

participant recordkeeping and transfer agent services for defined contribution retirement plans;

and trust services.

trust services;

and non-discretionary advisory services through model delivery.

We are focused on delivering global investment management excellence to help clients around the world achieve their long-term investment goals.

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demand for new investment vehicles to meet client needs;

and an ever-changing regulatory landscape.

capacity challenges with some of our mutual funds and portfolios and an ever-changing regulatory landscape.

Despite the headwinds, we believe there are significant opportunities that align to our core capabilities.

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• Maintain strong processes and controls, which is increasingly important with growing business complexity and regulation.

Remain a destination of choice for top talent, with a culture of empowerment, accountability and collaboration.

• Remain a destination of choice for top talent, with a culture of diversity, inclusivity, empowerment, accountability and collaboration.

• Deliver attractive financial results and balance sheet strength for our stockholders over the long term.

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Rowe Price International Ltd.

In November 2020, we announced our plan to establish T.

Rowe Price Investment Management, a separate SEC-registered investment advisor, to support our continued focus on generating strong investment results for clients.

Rowe Price Investment Management is anticipated to begin operations in the second half of 2022.

Our revenues depend largely on the total value and composition of our assets under management.

Accordingly, fluctuations in financial markets and in the composition of assets under management impact our revenues and results of operations.

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At December 31, 2020, we had $1,470.5 billion in assets under management, including $794.6 billion in U.S.

mutual funds and $524.1 billion in subadvised funds, separately managed accounts, and other T.

mutual funds, $400.1 billion in subadvised funds and separately managed accounts, and $275.8 billion in collective investment trusts, and other T.

Rowe Price products.

During 2019 , market appreciation and income, net of distributions not reinvested, of $231.3 billion combined with net cash inflows of $13.2 billion increased assets under management by $244.5 billion from the end of 2018 .

In 2019 , our net cash inflows included $9.8 billion into our target date retirement products , which provide shareholders with a single, diversified portfolio that invests in underlying U.S.

mutual funds or collective investment trusts.

The assets under management in our target date retirement products totaled $292.4 billion at December 31, 2019 , or 24.2% of our managed assets at December 31, 2019 , compared with 23.9% at the end of 2018 .

The following tables show our assets under management by distribution channel, vehicle, account type, and asset class:

Assets under management increased $263.7 billion from the end of 2019.

This increase was driven by market appreciation and income, net of distributions not reinvested, of $256.9 billion and net cash inflows of $5.6 billion for 2020.

In addition, we acquired client contracts from PNC Bank during 2020 that added $1.2 billion of stable value assets under management.

The following tables show our assets under management by vehicle, asset class, distribution channel, and account type:

(in billions) 2020 2019

Assets under management by vehicle

Subadvised and separate accounts and other investment products:

mutual funds $ 794.6 $ 682.7

Subadvised and separately managed accounts 400.1 313.8

Rowe Price collective investment trusts

Rowe Price stable value and variable annuity products

Rowe Price SICAVs and other funds regulated outside the U.S.

Total subadvised and separate accounts and other investment products

Rowe Price collective investment trusts and other sponsored investment products:

Collective investment trusts 199.6 158.7

Stable value, variable annuity products, and exchange-traded funds 28.0 21.4

SICAVs and other sponsored funds regulated outside the U.S.

Rowe Price collective investment trusts and other sponsored investment products 275.8 210.3

Total assets under management $ 1,470.5 $ 1,206.8

Assets under management by asset class

Equity $ 895.8 $ 698.9

Fixed income, including money market 168.7 147.9

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Global financial intermediaries (2)

$ 765.4 $ 623.0

Global institutions (2)(3)

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Total defined contribution, deferred annuity, and direct retail retirement assets 969.6 817.6

Other 500.9 389.2

Total assets under management $ 1,470.5 $ 1,206.8

(1) The underlying assets under management of the multi-asset portfolios have been aggregated and presented in this category and not reported in the equity and fixed income rows.

(2) Includes Americas, Europe Middle East and Africa ("EMEA"), and Asia Pacific ("APAC") financial intermediaries and institutions.

(2) Includes Americas, Europe, Middle East and Africa ("EMEA"), and Asia Pacific ("APAC").

(3) Includes T.

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Rowe Price employee benefit plans, Private Asset Management accounts, and other.

In 2020, our target date retirement products experienced net cash outflows of $6.5 billion.

The assets under management in our target date retirement products totaled $332.2 billion at December 31, 2020, or 22.6% of our managed assets at December 31, 2020, compared with 24.2% at the end of 2019.

Additional information concerning our assets under management, results of operations, and financial condition during the past three years is contained in the Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7, as well as our consolidated financial statements, which are included in Item 8 of this Form 10-K.

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INVESTMENT MANAGEMENT SERVICES.

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Investors domiciled outside the U.S.

represented nearly 7% of total assets under management at the end of 2019 .

represented over 9% of total assets under management at the end of 2020.

We accumulate our assets under management from a diversified client base across five primary distribution channels:

Americas financial intermediaries, EMEA and APAC financial intermediaries, individual U.S.

Americas financial intermediaries, EMEA & APAC financial intermediaries, individual U.S.

investors on a direct basis, U.S.

retirement plan sponsors for which we provide recordkeeping services, and institutional investors globally.

The following table outlines as of December 31, 2019 , the types of products within each distribution channel through which our assets under management are sourced.

Americas financial intermediaries

EMEA & APAC financial intermediaries

Individual U.S.

investors on a direct basis

retirement plan sponsors - full service recordkeeping

Global institutions

SICAVs (1) / FCPs (2)

Collective Investment Trusts

Australian Unit Trusts ("AUTs")

Separate Accounts

Collective Investment Trusts

Subadvised Accounts

College Savings Plans

Separate Accounts

SICAVs (1) / FCPs (2)

Managed Accounts / Model Delivery

Model Portfolio (4)

retirement plan sponsors for which we provide recordkeeping services, and global institutional investors.

The following table outlines the types of products within each distribution channel through which our assets under management are sourced as of December 31, 2020.

Americas financial intermediaries EMEA & APAC financial intermediaries Individual U.S.

investors on a direct basis U.S.

retirement plan sponsors - full service recordkeeping Global institutions

Mutual Funds SICAVs (1) / FCPs (2)

Mutual Funds U.S.

Collective Investment Trusts Australian Unit Trusts ("AUTs") Separate Accounts Collective Investment Trusts Collective Investment Trusts

Subadvised Accounts OEICs (3)

College Savings Plans Separate Accounts SICAVs (1) / FCPs (2)

Managed Accounts / Model Delivery Subadvised Accounts Model Portfolios (4)

Separate / Subadvised Accounts

College Savings Plans

Subadvised Accounts

Canadian Pooled Funds

Japanese ITMs (5)

College Savings Plans Japanese ITMs (5)

Active Exchange-Traded Funds Canadian Pooled Funds

Canadian Pooled Funds Managed Accounts / Model Delivery Japanese ITMs (5)

Active Exchange-Traded Funds Cayman Funds

(1) Société d'Investissement à Capital Variable (Luxembourg), (2) Fonds Commun de Placement (Luxembourg), (3) Open-Ended Investment Company (U.K.), (4) Provided through our ActivePlus Portfolios, (5) Japanese Investment Trust Management Funds

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We also offer specialized advisory services, including management of stable value investment contracts, modeled multi-asset solutions, and a distribution management service for the disposition of equity securities our clients receive from third-party venture capital investment pools.

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The following table sets forth our broad investment capabilities as of December 31, 2019 .

International / Global

/ International / Global

Growth, Core, Value

All-Cap, Concentrated, Equity Income, Growth, Value

Global Aggregate

Target Date/Custom Target Date

Growth, Core, Value

International Developed:

Growth, Concentrated, Core, Small-Cap, Value

Credit Opportunities

Global Multi-Sector

Target Allocation

Growth, Core, Value

International Developed Regional:

Australia, Europe, Europe ex UK, Europe Smaller Companies, Europe Core, Japan

Global Dynamic Bond

Global Allocation

Quantitative Equity:

Multi-Cap, Factor Portfolios

Emerging Markets Global:

Growth, Value

Global High Income

Managed Volatility

Tax Efficient

Emerging Markets Regional:

Asia ex-Japan, China, Emerging Europe, Frontier Markets, Latin America, Middle East, Africa

Emerging Markets:

Corporate, Hard Currency, Local Currency

Multi-Asset Solutions

Quantitative Equity:

Global Growth, Global Value

International Developed

Global Corporate

Retirement Income

Global High Yield

Short Duration

Global Government

Municipal Ladders

Quantitative Fixed:

Factor Portfolios

The following tables set forth our broad investment capabilities as of December 31, 2020.

Growth Core Value Concentrated Quantitative Sustainable

All-Cap, Large-Cap, Mid-Cap, Small-Cap, Sectors Large-Cap, Mid-Cap, Small-Cap Large-Cap, Mid-Cap, Small-Cap Large-Cap (Growth & Value) Large-Cap (Value), Multi-Cap, Small-Cap Large-Cap (Growth & Value)

Global / International:

All-Cap, Large-Cap, Small-Cap, Sectors, Regional Large-Cap Large-Cap Large-Cap Large-Cap (Growth & Value) All-Cap, Large-Cap

Stable Value High Yield / Bank Loans Emerging Markets Credit Multi-Sector Government / Securitized Municipal

Stable Value, Taxable, Tax-Exempt Credit Opportunities, Bank Loans, High Yield N/R Investment Grade Corporate, Long Duration Enhanced Index, Short-Term, Core, Core Plus, Investment Grade Core, Total Return, Ultra Short-Term Inflation Protection, Securitized/GNMA, Treasury High Yield, Intermediate, Long-Term, Short/Intermediate

Global / International:

N/R Euro High Yield, High Income, High Yield Corporate, Hard Currency, Local Currency Asia Credit, Dynamic Credit, Dynamic Investment Grade Corporate, Investment Grade Corporate, Euro Investment Grade Corporate Global Multi-Sector, Aggregate, Global ex US Government N/R

N/R - Not relevant

/ Global / International:

Target Date, Custom Target Date Target Allocation Global Allocation Global Income Managed Volatility

Custom Solutions Real Assets Retirement Income Alternatives

We employ fundamental and quantitative security analysis in the performance of the investment advisory function through substantial internal equity and fixed income investment research capabilities.

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with additional staff based in Australia, Hong Kong, Japan, Singapore, and Switzerland.

We also use research provided by brokerage firms and security analysts in a supportive capacity and information received from private economists, political observers,

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commentators, government experts, and market analysts.

We also use research provided by brokerage firms and security analysts in a supportive capacity and information received from private economists, political observers, commentators, government experts, and market analysts.

Our securities selection process for some investment portfolios is based on quantitative analysis using computerized data modeling.

From time to time, we introduce new strategies, investment vehicles, and other products to complement and expand our investment offerings, respond to competitive developments in the financial marketplace, and meet the changing needs of our investment advisory clients.

needs of our investment advisory clients.

We will introduce a new investment strategy if we believe that we have the appropriate investment management expertise and that its objective will be useful to investors over a long period.

In 2019, we introduced six new strategies and several new vehicles and share classes of existing strategies.

In 2020, we introduced six new strategies and several new vehicles, like our active exchange-traded funds, and share classes of existing strategies.

We typically provide seed capital for new investment products to enable the portfolio manager to begin building an investment performance history in advance of the portfolio receiving sustainable client assets.

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At December 31, 2020, we had seed capital investments in our products of $1.2 billion.

Conversely, we may also close or limit new investments to new investors across T.

We may also close or limit new investments to new investors across T.

Rowe Price investment products in order to maintain the integrity of the investment strategy and to protect the interests of its existing shareholders and investors.

At present, the following strategies, which represent about 20% of total assets under management at December 31, 2020, are generally closed to new investors:

Strategy Year closed

Mid-Cap Growth 2010

Mid-Cap Value

High Yield Bond 2012

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Capital Appreciation 2014

Global Technology*

Emerging Markets Growth 2018

International Small-Cap Growth 2018

* This fund will re-open for new accounts in the second quarter of 2020.

Investment Advisory Fees

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clients on a subadvised or separately managed account basis;

Rowe Price products , including collective investment trusts, funds offered to investors outside the U.S., and portfolios offered through variable annuity life insurance plans in the U.S.

collective investment trusts;

Rowe Price products, including funds offered to investors outside the U.S.

and portfolios offered through variable annuity life insurance plans in the U.S.

Nearly 64% of our investment advisory fees are earned from our U.S.

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Ten of our 177 U.S.

mutual funds - Blue Chip Growth , Growth Stock , Capital Appreciation , Mid-Cap Growth , New Horizons , Value , Emerging Markets Stock , Overseas Stock , Equity Income , and Institutional Large-Cap Growth - accounted for approximately 35% of our investment advisory revenues in 2019 , and approximately 27% of our assets under management at December 31, 2019 .

mutual funds - Blue Chip Growth, Growth Stock, Capital Appreciation, New Horizons, Mid-Cap Growth, Large-Cap Growth, Health Sciences, International Discovery, Equity Income, and Emerging Markets Stock - accounted for approximately 30% of our investment advisory revenues in 2020, and approximately 22% of our assets under management at December 31, 2020.

Our largest client account relationship, apart from the U.S.

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mutual fund under individual investment management agreements that grant the fund the right to use the

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Rowe Price name.

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The Capital Appreciation Fund has its base individual flat rate reduced by 10% on net assets in excess of $27.5 billion.

The effective fee rates for each of the stock and bond funds on which we earned annual advisory fees of approximately $6.0 million or greater in 2019 , varied from a low of 15 basis points for the U.S Treasury Long-Term Fund to a high of 104 basis points for the Emerging Markets Stock and International Discovery funds.

The effective fee rates for each of the stock and bond funds on which we earned annual advisory fees of approximately $6.0 million or greater in 2020, varied from a low of 21 basis points for the Limited Duration Inflation Focused Bond Fund to a high of 104 basis points for the International Discovery fund.

The fee rate of several of the U.S.

mutual funds, including the Index funds as well as specific funds offered solely to institutional investors, does not include a group fee component but rather an individual fund fee or an all-inclusive fee.

mutual funds, including the Target-Date and Index funds as well as specific funds offered solely to institutional investors, does not include a group fee component but rather an individual fund fee or an all-inclusive fee.

An all-inclusive fee covers both the investment management fee and ordinary operating expenses incurred by the fund and, as a result, our management fee varies with the level of operating expenses a fund incurs.

The funds in the Spectrum Funds series and in the multiple target date retirement funds series that we offer have no separate investment advisory fee;

rather, they indirectly bear the expenses of the funds in which they invest.

In the second quarter of 2020, the fee structure of the target date retirement funds changed that the investment advisory fee revenue is now earned at the target date retirement fund level rather than at the underlying mutual fund level.

The Spectrum Funds series we offer have no separate investment advisory fee;

rather, they bear the expenses of the funds in which they invest.

mutual fund typically bears all expenses associated with its operation and the issuance and redemption of its securities.

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Rowe Price in the future.

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Subadvised and separate accounts and other investment products

Our subadvised and separate accounts and other investment products had assets under management of $524.1 billion at December 31, 2019 , an increase of $126.3 billion from the beginning of the year.

Other investment products include collective investment trusts, open-ended investment products offered to investors outside the U.S., and products offered through variable annuity life insurance plans in the U.S.

We earn investment management fees from these clients based on, among other things, the specific investment services to be provided and are computed using the value of assets under management at a contracted annual fee rate or the products' effective fee rate for those with a tiered-fee rate structure.

Further to these contractual fee waivers, due to the low interest rate environment in 2020, we voluntarily waived $20.4 million, or less than 1%, of our investment advisory fees from certain of our money market mutual funds, trusts, and other investment portfolios in order to maintain a positive yield for investors.

We expect to continue to waive fees in 2021, and we currently anticipate that the waivers for the first quarter of 2021 will be at or slightly above the level of waivers experienced in the fourth quarter of 2020.

We also expect that the fee waivers for the first quarter of 2021 will represent a high-water mark for fee waivers issued.

Subadvised funds, separate accounts, collective investment trusts, and other investment products

Our subadvised, separate accounts, collective investment trusts, and other investment products had assets under management of $675.9 billion at December 31, 2020, an increase of $151.8 billion from the beginning of the year.

Other investment products include open-ended investment products offered to investors outside the U.S.

and products offered through variable annuity life insurance plans in the U.S.

We earn investment management fees from these clients based on, among other things, the specific investment services to be provided, and these investment management fees are computed using the value of assets under management at a contracted annual fee rate or the products' effective fee rate for those with a tiered-fee rate structure.

The value of assets under management billed is generally based on daily valuations, end of billing period valuations, or month-end average valuations.

In 2020, approximately 78% of our advisory fees were recognized based on daily portfolio valuations, 15% were based on end of billing period valuations, and 7% were based on month-end averages.

Our standard subadvised client accounts normally pay a daily tiered rate and their agreement typically provides for termination with 60 days notice.

For separately managed accounts, the fee is generally based on a period ending value and their agreements provide for termination at any time.

Unearned fees paid in advance are refunded upon termination.

We currently also earn performance-based investment advisory fees on certain separately managed accounts.

These fees are currently immaterial to our total investment advisory fees and are only recognized when the performance condition has been met.

This recognition criteria can lead to uneven recognition of performance-based revenue throughout the year.

Our U.S.collective investment trusts, sponsored by T.

Rowe Price Trust Company and subscribed to by certain qualified U.S.

retirement plans, normally pay an all-inclusive tiered rate investment management fee computed on a daily basis.

Our standard form of investment advisory agreement with other T.

Rowe Price products that pay management fees on a daily basis normally provides for termination with thirty days notice.

Our standard separately managed account agreements provide for termination at any time and the refunding of any unearned fees paid in advance.

Our standard subadvised client account agreement typically provides for termination with sixty days notice.

Rowe Price products that pay management fees on a daily basis normally provides for termination with 30 days notice.

The following table details the services provided by certain of our subsidiaries based on our non-U.S.

global investment products:

Rowe Price Subsidiary

Services Provided

Rowe Price (Luxembourg) Management Sàrl

SICAVs / FCPs

Management company

Rowe Price Australia

Investment management

Rowe Price UK

Authorized corporate director

Rowe Price (Canada)

Canadian Pooled Funds

Investment management

Rowe Price Japan

Japanese ITMs

Investment management

Rowe Price Subsidiary Products Services Provided

Rowe Price (Luxembourg) Management Sàrl SICAVs / FCPs Management company

Rowe Price Australia AUTs Investment management

Rowe Price UK OEICs Authorized corporate director

Rowe Price (Canada) Canadian Pooled Funds Investment management

Rowe Price Japan Japanese ITMs Investment management

Our subsidiaries T.

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Rowe Price International, T.

Rowe Price Hong Kong, as well as T.

Rowe Price Hong Kong, T.

Rowe Price Singapore, T.

Rowe Price Australia and T.

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We currently recognize any related distribution fees paid to these financial intermediaries in distribution and servicing costs.

In addition to providing investment management services to the U.S.

mutual funds, our subsidiaries, T.

Rowe Price Associates and T.

Rowe Price International offer separately managed institutional investment management and subadvised investment management services to global intermediaries.

Our subsidiary, T.

Rowe Price Trust Company, offers and provides investment management services to our T.

Rowe Price collective investment trusts, which are used in the investment portfolios of certain qualified U.S.

retirement plans.

ADMINISTRATIVE, DISTRIBUTION, AND SERVICING FEES.

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Rowe Price complex;

and trust services.

trust services;

and non-discretionary advisory services.

Rowe Price Services provides the U.S.

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mutual funds contract directly with BNY Mellon to provide mutual fund accounting services, including maintenance of financial records, preparation of financial statements and reports, daily valuation of portfolio securities, and computation of each mutual fund's daily net asset value per share.

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Rowe Price Retirement Plan Services provides participant accounting and plan administration for defined contribution retirement plans that invest in the U.S.

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As of December 31, 2020, we provided recordkeeping services for $239 billion in assets under administration, of which nearly $148 billion are assets we manage.

Rowe Price Trust Company provides administrative trustee services.

Rowe Price Trust Company also provides administrative trustee services.

Through this entity, which is a Maryland-chartered limited service trust company, we serve as trustee for employer sponsored retirement plans and other retirement products.

Rowe Price Trust Company may not accept deposits and cannot make personal or commercial loans.

We also provide non-discretionary advisory planning services to fund shareholders and potential investors through our subsidiary T.

Rowe Price Advisory Services.

These services are limited in scope and include retirement planning services, such as saving for retirement, transitioning into retirement, and income in retirement.

An investment portfolio evaluation service is an integral part of these services.

An ongoing checkup service is also available to assist investors in staying on track to achieve their financial goals.

Our trust vehicles are not mutual funds.

As such, trust requirements can result in lower compliance and administrative costs over other vehicles with a similar investment strategy.

Our trust vehicles include investments in equity, fixed income and multi-asset assets.

We also provide discretionary and non-discretionary advisory planning services to individual investors through our subsidiary T.

Rowe Price Advisory Services, Inc.

These services are limited in scope, and advice recommendations consist solely of mutual funds advised by T.

Rowe Price Associates or its affiliates that have been selected for inclusion in these services.

These services include, but are not limited to, point-in-time financial planning, asset allocation advice, and discretionary advice through a solely digital experience.

Rowe Price subsidiaries also provide non-discretionary advisory services to model delivered managed accounts.

For these model delivered managed accounts, we provide the holdings and trades of the portfolio to the sponsor platforms to implement for their clients.

The assets under advisement in these portfolios, predominantly in the United States, was $2.8 billion at December 31, 2020.

The revenue earned on these services is recorded in administrative fees.

Distribution and Servicing

Our subsidiary, T.

Rowe Price Investment Services ("TRPIS"), is the principal distributor of the U.S.

mutual funds and contracts with third-party financial intermediaries who distribute these share classes.

TRPIS enters into agreements with each intermediary under which each fund is responsible to pay the distribution and service fees directly to the applicable intermediaries.

The Investor Class of all U.S.

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These share classes pay 12b-1 fees of 25 and 50 basis points, respectively, for distribution, administration, and personal services.

Our subsidiary, T.

Rowe Price Investment Services ("TRPIS"), is the principal distributor of the U.S.

mutual funds and contracts with third-party financial intermediaries who distribute these share classes.

TRPIS enters into agreements with each intermediary under which each fund is responsible to pay the distribution and service fees directly to the applicable intermediaries.

In addition, those U.S.

mutual funds offered to investors through variable annuity life insurance plans have a share class that pays a 12b-1 fee of 25 basis points.

In accounting for 12b-1 fees, the applicable mutual fund share classes incur the related expense and we recognize the corresponding distribution and servicing fee revenue in the administrative, distribution, and servicing fees line of

our consolidated statements of income.

We also recognize the corresponding cost paid to the third-party financial intermediaries who distribute these funds' share classes within the distribution and servicing costs line of the consolidated statements of income.

The fee revenue that we recognize from the funds and the expense that we recognize for the fees paid to third-party intermediaries are equal in amount and, therefore, do not impact our net operating income.

We believe that our lower fund cost structure, distribution methods, and fund shareholder and administrative services help promote the stability of our fund assets under management through market cycles.

Except as noted above for 12b-1 fees earned from the mutual funds, we bear all advertising and promotion expenses associated with the distribution of our investment products.

We bear all advertising and promotion expenses associated with the distribution of our investment products.

These costs are recognized when incurred and include advertising and direct mail communications to potential shareholders, as well as substantial staff and communications capabilities to respond to investor inquiries.

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Advertising and promotion expenditures vary over time based on investor interest, market conditions, new and existing investment offerings, and the development and expansion of new marketing initiatives, including the enhancement of our digital capabilities.

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All aspects of our business are subject to extensive federal, state, and foreign laws and regulations.

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Possible sanctions that may be imposed on us, in the event that we fail to comply, include the suspension of individual employees, limitations on engaging in certain business activities for specified periods of time, revocation of our investment adviser and other registrations, censures, and fines.

The following table shows the regulator to certain of our subsidiaries:

Rowe Price Entity

Within the U.S.

Securities & Exchange Commission ("SEC") - T.

Rowe Price Associates - T.

Rowe Price Hong Kong

Rowe Price International - T.

Rowe Price Japan

Rowe Price Australia - T.

Rowe Price Singapore

Rowe Price (Canada) - T.

Rowe Price Hong Kong, T.

Rowe Price Japan, T.

Rowe Price Singapore, and T.

Rowe Price Advisory Services are registered with the Securities and Exchange Commission ("SEC") as investment advisers under the Investment Advisers Act of 1940.

The Investment Advisers Act of 1940 imposes substantive regulation around, among other things, fiduciary duties to clients, transactions with clients, effective compliance programs, conflicts of interest, advertising, recordkeeping, reporting, and disclosure requirements.

Rowe Price International is also regulated by the Financial Conduct Authority ("FCA") in the United Kingdom and, in certain cases, by other foreign regulators in countries in which we have a license to conduct business.

Rowe Price UK, the authorized corporate director of our UK OEIC funds, is also regulated by the FCA.

The Securities and Futures Commission ("SFC") and Monetary Authority of Singapore ("MAS") also regulate T.

Rowe Price Hong Kong and T.

Rowe Price Singapore, respectively.

Rowe Price (Canada) is also registered with several of the provincial securities commissions in Canada.

Rowe Price (Luxembourg) Management Sàrl, the management company of our Luxembourg-based FCP and SICAV funds is regulated by the Commission de Surveillance du Secteur Financier ("CSSF").

Rowe Price Australia is regulated by the Australian Securities and Investments Commission and T.

Rowe Price Japan is regulated by the Japan Financial Services Agency.

Rowe Price Advisory Services

All entities above are registered as investment advisers under the Investment Advisers Act of 1940, which imposes substantive regulation around, among other things, fiduciary duties to clients, transactions with clients, effective compliance programs, conflicts of interest, advertising, recordkeeping, reporting, and disclosure requirements.

State of Maryland, Commissioner of Financial Regulation - T.

Rowe Price Trust Company

Outside the U.S.

Financial Conduct Authority ("FCA") - T.

Rowe Price International

Rowe Price UK

Securities and Futures Commission ("SFC") - T.

Rowe Price Hong Kong

Monetary Authority of Singapore ("MAS") - T.

Rowe Price Singapore

Several provincial securities commissions in Canada - T.

Rowe Price (Canada)

Commission de Surveillance du Secteur Financier ("CSSF") - T.

Rowe Price (Luxembourg) Management Sàrl

Australian Securities and Investments Commission - T.

Rowe Price Australia

Japan Financial Services Agency - T.

Rowe Price Japan

Swiss Financial Market Supervisory Authority

Rowe Price (Switzerland)

Serving the needs of retirement savers is an important focus of our business.

As a result, such activities are subject to regulators such as the U.S.

Department of Labor, and applicable laws and regulations including the Employee Retirement Income Security Act of 1974.

Registrations

- Our subsidiaries providing transfer agent services, T.

Rowe Price Services and T.

Rowe Price Retirement Plan Services, are registered under the Securities Exchange Act of 1934, and our trust company is regulated by the State of Maryland, Commissioner of Financial Regulation.

Rowe Price Retirement Plan Services, are registered under the Securities Exchange Act of 1934.

Rowe Price Investment Services is a registered broker-dealer and member of the Financial Industry Regulatory Authority ("FINRA") and the Securities Investor Protection Corporation.

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Pershing, a third-party clearing broker and an affiliate of BNY Mellon, maintains our brokerage’s customer accounts and clears all transactions.

Serving the needs of retirement savers is an important focus of our business.

As a result, such activities are subject to regulators such as the U.S.

Department of Labor, and applicable laws and regulations including the Employee Retirement Income Security Act of 1974.

Rowe Price Associates and certain subsidiaries are registered as commodity trading advisors and/or commodity pool operators with the Commodity Futures Trading Commission and are members of the National Futures Association.

Net Capital Requirements

Certain of our subsidiaries are subject to net capital requirements, including those of various federal, state, and international regulatory agencies.

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For further discussion of the potential impact of current or proposed legal or regulatory requirements, please see the Legal and Regulatory risk factors included in Item 1A of this Form 10-K.

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As a member of the financial services industry, we are subject to substantial competition in all aspects of our business.

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We compete with brokerage and investment banking firms, insurance companies, banks, mutual fund companies, hedge funds, and other financial institutions and funds in all aspects of our business and in every country in which we offer our advisory services.

Some of these financial institutions have substantially greater resources than we do.

Some of these financial institutions have greater resources than we do.

We compete with other providers of investment advisory services primarily based on the availability and objectives of the investment products offered, investment performance, fees and related expenses, and the scope and quality of investment advice and other client services.

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In order to maintain and enhance our competitive position, we may review acquisition and venture opportunities and, if appropriate, engage in discussions and negotiations that could lead to the acquisition of a new equity or other financial relationship.

HUMAN CAPITAL.

Rowe Price, our people set us apart.

We thrive because our company culture is based on collaboration and diversity.

We believe that our culture of collaboration enables us to identify opportunities others might overlook.

Our associates’ knowledge, insight, enthusiasm, and creativity are the reason our clients succeed and our firm excels.

In order to attract and retain the highest quality talent, we develop key talent and succession plans, invest in Company diversity and inclusion initiatives, provide opportunities for our associates to learn and grow, provide strong, competitive, and regionally specific benefits and programs that promote the health and wellness of our associates, both personally and financially.

Our diversity and inclusion initiatives have garnered recognitions, including Pensions & Investments 2020 Best Places to Work in Money Management and Best Places to work for LGBTQ Equality by the Human Rights Campaign Foundation.

Although we have made progress in our workforce diversity representation, we seek to continuously improve in this area.

Our goal is to increase our hiring and the retention and development of talent from groups that are underrepresented in asset management, this includes both minorities and women.

Pursuant to this goal, each year we establish annual corporate Diversity and Inclusion goals to continue improving our hiring, development, advancement, and retention of diverse talent and our overall diversity representation.

At the end of 2020, women comprised 44% of our associates globally.

In addition, at the end of 2020, 29% of our U.S.

associates were racial and ethnic minorities.

Furthermore, we are committed to pay equity for employees doing similar work, regardless of gender, race or ethnicity, and we conduct pay equity analyses on a regular basis and adjust our associates pay accordingly.

At December 31, 2020, we employed 7,678 associates, up 4.2% from the 7,365 associates employed at the end of 2019.

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Unless otherwise expressly stated, the information found on our website is not part of this or any other report we file with, or furnish to, the SEC.

The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549.

The public may obtain information of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC maintains a website that contains the materials we file with the SEC at www.sec.gov.

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What changed 10-K

Item 1. Business