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other unauthorized use, creating a possible security risk and resulting in potentially costly actions by us.Most of the software applications that we use in our business are licensed from, and supported, upgradedand maintained by, third-party vendors. A suspension or termination of certain of these licenses or therelated support, upgrades and maintenance could cause temporary system delays or interruption. In addition,although we currently outsource to a single third-party vendor the operation of our U.S. data centers, we arerevising our operations such that the majority of the services currently performed by the vendor will beperformed by us and by a separate third-party vendor in the future. The failure by the current vendor toprovide adequate transition support services in connection with the termination and transition of theirservices, or the failure by us or the new third-party vendor to adequately perform the services performed bythe current vendor, could have an adverse impact on our business. Although we have in place certaindisaster recovery plans, we may experience system delays and interruptions as a result of natural disasters,power failures, acts of war, and third-party failures. Technology is subject to rapid change and we cannotguarantee that our competitors may not implement more advanced Internet platforms for their products,which could affect our business. Potential system failures or breaches, or advancements in technology, andthe cost necessary to address them, could result in material financial loss or costs, regulatory actions, breachof client contracts, reputational harm or legal claims and liability, which in turn could negatively impact ourrevenues and income.Our investment management business operations are complex and a failure to properly performoperational tasks or the misrepresentation of our products and services could have an adverse effect on ourrevenues and income. Through our subsidiaries, we provide investment management and related services tofunds and institutional, high net-worth and separately-managed accounts (collectively, our “sponsoredinvestment products”). Our investment management and related services include fund administration,shareholder services, transfer agency, underwriting, distribution, custodial, trustee and other fiduciaryservices. In order to be competitive, we must properly perform our fund and portfolio administration andrelated responsibilities, including portfolio recordkeeping and accounting, security pricing, corporateactions, investment restrictions compliance, daily net asset value computations, account reconciliations, andrequired distributions to fund shareholders. In addition, the intentional or unintentional misrepresentation ofour products and services in advertising materials, public relations information or other externalcommunications could adversely affect our reputation and business prospects. Further, certain of oursubsidiaries may act as general partner for various investment partnerships, which may subject them toliability for the partnerships’ liabilities. If we fail to properly perform and monitor our investmentmanagement operations, our business could suffer and our revenues and income could be adverselyaffected.We face risks, and corresponding potential costs and expenses, associated with conducting operationsand growing our business in numerous countries. We sell mutual funds and offer investment managementand related services in many different regulatory jurisdictions around the world, and intend to continue toexpand our operations internationally. As we do so, we will continue to face challenges to the adequacy ofour resources, procedures and controls to consistently and effectively operate our business. In order toremain competitive, we must be proactive and prepared to implement necessary resources when growthopportunities present themselves, whether as a result of a business acquisition or rapidly increasing businessactivities in particular markets or regions. As we grow, we face a heightened risk that the necessaryresources and/or personnel will be unavailable to take full advantage of strategic opportunities when theyappear or that strategic decisions can be efficiently implemented. Local regulatory environments may varywidely, as may the adequacy and sophistication of each. Similarly, local distributors, and their policies andpractices as well as financial viability, may be inconsistent or less developed or mature. Notwithstandingpotential long-term cost savings by increasing certain operations, such as transfer agent and otherback-office operations, in countries or regions of the world with lower operating costs, growth of ourinternational operations may involve near-term increases in expenses as well as additional capital costs,27

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