EFTA Document EFTA01382710

S-1/A Table of Content& Indirect Regulatory Requirements A number of our clients are financial institutions that are directly subject to various regulations and compliance obligations issued by the CFPB, the Office of the Comptroller of the Currency and other agencies responsible for regulating financial institutions While these regulatory requirements and compliance obligations do not apply directly to us. many of these requirements materially affect the services we provide to our clients and us overall. To remain competitive, we expend significant resources to assist our clients in meeting their various compliance obligations. including the cost of updating our systems and services as newly to allow our clients to comply with applicable laws and regulations, and the cost of dedicating sufficient resources to assist our clients in meeting their new and enhanced oversight and audit requirements established by the CFPB, the Office of the Comptroller of the Currency and others. The banking agencies, including the Office of the Comptroller of the Currency. also have imposed requirements on regulated financial institutions to manage their third-party service providers. Among other things. these requirements include performing appropriate due diligence when selecting third-party service providers: evaluating the risk management. information security, and information management systems of third-party service providers: imposing contractual protections in agreements with third-party service providers (such as performance measures, audit and remediation rights, indemnification, compliance requirements. confidentiality and information security obligations, insurance requirements. and limits on liability): and conducting ongoing monitoring of the performance of third-party service providers. Accommodating these requirements applicable to our clients imposes additional costs and risks in connection with our financial institution relationships. We expect to expend significant resources on an ongoing basis in an effort to assist our clients in meeting their legal requirements. Other Stored-value services we offer to issuers in the United States and internationally are subject to various federal, state, and foreign laws and regulations. which may include laws and regulations related to consumer and data protection. licensing. escheat. anti-money laundering, banking. trade practices and competition. and wage and employment. These laws and regulations are evolving, unclear, and sometimes inconsistent and subject to judicial and regulatory challenge and interpretation. and therefore the extent to which these laws and rules have application to. and their impact on, us, financial institutions, merchants or others is in flux. At this time we are unable to determine the impact that the clarification of these laws and their future interpretations, as well as new laws, may have on us. financial institutions, merchants or others in a number of jurisdictions. These services may also be subject to the riles and regulations of the various international, domestic and regional schemes, networks, and associations in which we and the card issuers participate. In addition. the Housing Assistance Tax Act of 2008 included an amendment to the Internal Revenue Code that requires information returns to be made for each calendar year by merchant acquiring entities and third-party settlement organizations with respect to payments made in settlement of payment card transactions and third-party payment network transactions occurring in that calendar year. Reportable transactions are also subject to backup withholding requirements. We could be liable for penalties if we are not in compliance with these rules. Legal Proceedings From time to time, we arc involved in various litigation matters arising in the ordmar) course of our business. None or these matters. individually or in the aggregate. currently is material to us. 156 httplAvuw.sec.gov/Arehivestedgar/datat883980/000119312515334479/d31022dsla.htm[10/14/2015 9:06:38 AM] CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0082175 SDNY GM_00228359 EFTA01382710