Janus Henderson Group (JHG) Risk Factors

The success of our business is highly dependent on our ability to attract, retain and motivate highly skilled and often highly specialized technical, executive, sales and investment management personnel. The market for qualified investment and sales professionals is extremely competitive and is characterized by the frequent movement of portfolio managers, analysts and salespeople among different firms. Any changes to management structure, shifts in corporate culture, changes to corporate governance authority, or adjustments or reductions to compensation could affect our ability to retain key personnel and could result in legal claims. In order to retain certain key personnel, we may be required to increase compensation to such individuals, resulting in additional expense. Existing and newly enacted or adopted laws and regulations could impose restrictions on compensation paid by financial institutions, which could restrict our ability to compete effectively for qualified professionals. There can be no assurance that we will be successful in finding, attracting and retaining qualified individuals, and the departure of key personnel, particularly those personnel responsible for managing client funds that account for a high proportion of our revenue, could cause us to lose clients, which could have a material adverse effect on our AUM, results of operations and financial condition.

Like all investment management firms, our activities are highly regulated in almost all countries in which we conduct business, including the U.S., the UK, Europe, Australia, Singapore and other international markets. A substantial portion of the products and services we provide are regulated by one or more of the following: - the Securities and Exchange Commission ("SEC"), the Financial Industry Regulatory Authority ("FINRA"), the Commodity Futures Trading Commission ("CFTC") and the National Futures Association ("NFA") in the U.S.;- the Financial Conduct Authority ("FCA") in the UK;- the Australian Securities and Investments Commission ("ASIC");- the Monetary Authority of Singapore ("MAS"); and - the Commission de Surveillance du Secteur Financier ("CSSF") in Luxembourg. In addition, subsidiaries operating in the EU are subject to various EU directives, which are implemented by member state national legislation, and regulations, which are directly applicable without further implementation. Our operations elsewhere in the world are regulated by similar regulatory organizations. Laws and regulations applied at the international, national, state or provincial and local levels generally grant governmental agencies and industry self-regulatory authorities broad administrative discretion over our activities, including the power to limit or restrict our business activities; to conduct examinations, risk assessments, investigations and capital adequacy reviews; and to impose remedial programs to address perceived deficiencies. As a result of regulatory oversight, we could face requirements that negatively impact the way in which we conduct business, increase compliance costs, impose additional capital requirements and/or involve enforcement actions that could lead to sanctions up to and including the revocation of licenses to operate certain businesses, the suspension or expulsion from a particular jurisdiction or market of any of our business organizations or key personnel, or the imposition of fines and censures on us or our employees. Judgments or findings of wrongdoing by regulatory or governmental authorities, or in private litigation against us, could affect our reputation, increase our costs of doing business and/or negatively impact revenues, any of which could have an adverse impact on our results of operations or financial condition. The regulatory environment in which we operate changes frequently and has seen a significant increase in regulation in recent years. Various changes in laws and regulations have been enacted or otherwise developed in multiple jurisdictions globally in recent years, and various other proposals remain under consideration by legislators, regulators and other government officials and public policy commentators. Certain enacted provisions and other proposals are potentially far-reaching and, depending upon their implementation, could increase the cost of offering mutual funds and other investment products and services and have material adverse effects on our business, results of operations or financial condition. Proposed Changes in the U.S. Regulatory Framework In the U.S., the government and other institutions have taken action, and may continue to take further action, in response to volatility in the global financial markets. For example, the Dodd-Frank Act was signed into law in July 2010. Certain provisions of the Dodd-Frank Act have required us, and other provisions will or may require us, to change and or impose new limitations on the manner in which we conduct business. More generally, the Dodd-Frank Act has increased our regulatory burdens and related compliance costs. Rulemaking is still ongoing for the Dodd-Frank Act, and any further actions could include new rules and requirements that may be applicable to us, the effect of which could have additional adverse consequences to our business, results of operations or financial condition. The Trump administration has indicated a desire to repeal, revise or replace aspects of the Dodd-Frank Act, but the timing and details on specific proposals are uncertain. Regulators also continue to examine different aspects of the asset management industry. For example, in December 2014, the then-chairperson of the SEC announced a comprehensive agenda for regulatory change governing the U.S. asset management industry and directed SEC staff to develop a five-part series of new regulations addressing the topics of enhanced portfolio reporting, liquidity risk management, leverage and use of derivatives, adviser wind-up, and stress testing for funds and advisers. This resulted in new regulations regarding enhanced portfolio reporting (Investment Company Reporting Modernization Reforms) and liquidity risk management (Investment Company Liquidity Risk Management Rules). The SEC has proposed a new rule that would materially restrict the manner in which many investment companies use derivatives transactions (swaps, futures and forwards) and financial commitment transactions (reverse repurchase agreements, but not repurchase agreements), short sale borrowings or any other firm or standby financial commitment. In June 2019, the SEC adopted Regulation Best Interest ("Reg BI"), which establishes a "best interest" standard of conduct for broker-dealers and associated persons. Since then, states and other fiduciary rule initiatives and challenges have been raised. These new industry rules can be expected to add additional reporting, operational and compliance costs, and may affect the development of new products. It is unclear whether any of the former SEC chairperson's other initiatives will result in any new rulemaking. The FSOC has the authority under the Dodd-Frank Act to review the activities of non-bank financial companies predominantly engaged in financial activities and designate those companies determined to be "systemically important" for supervision by the Federal Reserve. To date, the FSOC has not designated any asset management firms or funds as a systemically important financial institution. In the unlikely event that such designation was to occur, we would be subject to significantly increased levels of regulation, including, without limitation, a requirement to adopt heightened standards relating to capital, leverage, liquidity, risk management, credit exposure reporting and concentration limits, restrictions on acquisitions and annual stress tests by the Federal Reserve. The full extent of the impact on us of the Dodd-Frank Act or any other new laws, regulations or initiatives that may be proposed, and regulatory reform initiatives and enforcement agendas pursued by regulators such as the SEC and the DOL (which have separately expressed support for investor protection initiatives that may impact how and to whom certain investment products can be distributed in the U.S.), is impossible to determine. These changes have imposed, and may continue to impose, new compliance costs and/or capital requirements or impact us in other ways that could have a material adverse impact on our business, results of operations or financial condition. Moreover, certain legal or regulatory changes could require us to modify our strategies, businesses or operations, and these changes may result in the incurrence of other new constraints or costs, including the investment of significant management time and resources in order to satisfy new regulatory requirements or to compete in a changed business environment. Changes in the European Union Regulatory Framework The EU has promulgated or is considering various new or revised directives pertaining to financial services, including investment managers. Such directives are progressing at various stages and either has been or will be implemented by national legislation of member states. The MiFID II is an example of such regulation, which seeks to promote a single market for wholesale and retail transactions in financial instruments. MiFID II, which was effective on January 3, 2018, addresses the conduct of business rules for intermediaries providing investment services and the effective, efficient and safe operation of financial markets. Key elements of MiFID II in relation to investor protection measures include changes to the extent to which retrocessions may be paid and provisions regarding the use of trading commissions to fund research. Further such regulatory changes may have a direct impact on the revenue of our business should they result in operational changes and may increase operational or compliance costs. Various regulators have promulgated or are considering other new disclosure or suitability requirements pertaining to the distribution of investment funds and other investment products or services, including enhanced standards and requirements pertaining to disclosures made to retail investors at the point of sale. We do not believe implementation of these directives will fundamentally change the asset management industry or cause us to reconsider our fundamental strategy, but certain provisions may require us to change or impose new limitations on the manner in which we conduct business and may result in increased fee and margin pressure from clients. They also have increased regulatory burdens and compliance costs and will or may continue to do so. Certain provisions, such as MiFID II, may have unintended adverse consequences on the liquidity or structure of the financial markets. Similar regulations are being implemented or considered in other jurisdictions where we do business and could have similar effects. In addition, a new EU law provides that, effective June 2021, a revised prudential regime will be applicable to our EU subsidiaries that are investment firms for the purposes of MiFID II. In summary, such investment firms will be subject to a new prudential framework, replacing the requirements set out in the Capital Requirements Directives III ("CRD III"). "K-factors" will be used in the classification of investment firms and in the new capital requirements methodology for investment firms. K-factors are quantitative indicators intended to represent the risks that an investment firm can pose to customers, to market access or liquidity, and to the firm itself. Investment firms could be subject to revised regulatory capital, remuneration and governance standards. The European Commission also intends to use the new regime to tighten requirements relating to the supervision of firms with parent undertakings in third countries. The aim of the framework is to simplify the prudential classification of investment firms and establish a single harmonized approach to their prudential requirements. It also seeks to increase proportionality and risk-sensitivity, and reduce the complexity of the existing system. In April 2018, the FCA published a policy statement outlining its feedback and final rules relating to its Asset Management Market Study. The final rules and guidance cover a number of areas, including a requirements for managers of UK funds to (i) make an annual assessment of value (as part of their duty to act in the best interests of the investors in their funds), (ii) appoint a minimum of two independent directors to the boards of companies managing UK- domiciled funds and (iii) publish additional information regarding benchmarks and performance targets for such funds. The final rules and guidance have a staged implementation, which began in 2019 and will finish in 2020. The European Securities and Markets Authority ("ESMA") also adopted guidance regarding fund benchmarks in March 2019 which was inspired by that of the FCA and must be implemented along a similar timetable. The full impact of potential legal and regulatory changes or possible enforcement proceedings on our business cannot be predicted. Such changes have imposed, and may continue to impose, new compliance costs and/or capital requirements, including costs related to information technology systems, or may impact us in other ways that could have an adverse impact on our results of operations or financial condition, including by placing further downward pressure on fees. Similarly, regulatory enforcement actions that impose significant penalties or compliance obligations or that result in significant reputational harm could have similar adverse effects on us. Moreover, certain legal or regulatory changes could require us to modify our strategies, business or operations, and could require us to invest significant management time and resources in order to satisfy new regulatory requirements or to compete in a changed business environment. In recent years, certain regulatory developments have also put additional pressure on our fee levels. We cannot predict the nature of future changes to the legal and regulatory requirements applicable to our business, nor the extent of the impacts on our business of future proposals. However, any such changes are likely to increase the costs of compliance and the complexity of our operations. They may also result in changes to our product or service offerings. The changing regulatory landscape may also impact a number of our service providers and, to the extent such providers alter their services or increase their fees, it may impact our expenses or those of the products we offer.