Ann: Ceasing to be a substantial holder, page-4

Summary of What Happened

1. Ceased to be a substantial holder on 23 June 2025

   • J.P. Morgan's total voting interest dropped below 5%, which triggered the filing of Form 605.

   • Start of period holding: 64,614,620 shares

   • End of period holding: 63,637,345 shares

2. Main Shareholding Activities Identified

   • Securities Lending: Substantial volumes of shares were either borrowed by counterparties from J.P. Morgan (e.g. Citigroup, Goldman Sachs, HSBC) or returned.

   • On-Lending and Rehypothecation: J.P. Morgan Securities LLC and Prime Inc. were involved in rehypothecating client securities (suggesting prime brokerage activity).

   • Principal/Proprietary Trading: Many trades were done by J.P. Morgan entities as principal — both buying and selling actively.

Why Did Their Total Holding Reduce?

1. Share Lending Causes Reduction in “Relevant Interest”:

   • When J.P. Morgan lends shares (through securities lending agreements like GMSLA, AMSLA, etc.), they temporarily lose the right to vote, which reduces their relevant interest for substantial holding purposes.

   • Borrowers are listed as holders of voting rights during the term of the loan.

   • Hence, even though they may still technically "own" the shares economically, their substantial holding reporting is reduced.

2. Returned Borrowings Do Not Increase “Holding” Unless JP Morgan Takes Back Voting Power:

   • When borrowers return shares, JP Morgan regains both the economic and voting interest — but only if JP Morgan retains those shares and doesn't immediately relend them or sell them.

   • If shares are returned and then sold off or re-lent, the net holding (for substantial interest purposes) might still decline.

Was JP Morgan Shorting or Lending?

• Primarily Lending:

  • Multiple large-volume borrow and borrow return transactions suggest JP Morgan was primarily acting as a lender.

  • Appendix disclosures include detailed schedules of securities lending agreements with institutions like Citigroup, Goldman Sachs, HSBC, Merrill Lynch, and others.

• No Evidence of JP Morgan Shorting MSB Themselves:

  • J.P. Morgan’s own trades were mostly market making or proprietary buy/sell.

  • Borrowers of the shares (e.g., Citigroup, Macquarie, Goldman Sachs) could be using those shares to short, but that is not necessarily JP Morgan’s strategy.

Conclusion

• JP Morgan’s holding decreased primarily due to securities lending, not short selling.

• The reduction in reported substantial holding is due to temporary loss of voting rights while shares are on loan.

• If shares are returned but immediately re-lent or sold, it does not increase their reportable holding.

• The decrease is consistent with large-scale lending operations, common for prime brokers acting on behalf of institutional clients.