The purpose of its Conflict of Interest Management Policy is to appropriately manage conflicts of interest within the Company or the companies of the group to which the Company belongs (collectively, the "Group") so that the interests of a customer or customers of the Group (collectively, “Customer”) will not be unduly harmed.
2. Types of Conflicts of Interest to Manage
The table below shows major types of "conflicts of interest" that we manage.
On the table, "Conflicts of Interest between Customers and the Group" refer to the circumstances where the Group has an interest independent of customers associated with a particular transaction (less a relationship whereby the Group receives economic interests as consideration for providing products or services to Customers) and Customer's interest threatens to be unduly harmed because of the interest of the Group; and the "Conflicts of Interest between Customers" refer to the circumstances where Customer's interest and that of another customer of the Group conflict as regards a particular transaction and Customer's interest threatens to be unduly harmed because of another customer's interest.
|Major Types||Conflicts of Interest between Customers and the Group||Conflicts of Interest between Customers|
|Direct Transaction||A situation or status where Customer and the Group are direct parties of a transaction involving a conflict of interest.||A situation or status where Customer and another customer of the Group are direct parties to a transaction involving a conflict of interest.|
|Indirect Transaction||A situation or status where Customer and the Group have mutually-exclusive or competing interests.||A situation or status where Customer and another customer of the Group have mutually- exclusive or competing interests.|
|Use of Information||A situation or status where the Group is structurally able to gain its own benefit by using non-public information that the Company obtained from Customer.||A situation or status where the Group is structurally capable of having another customer of the Group gain a benefit by using non-public information that the Company obtained from Customer.|
3. How We Specify Transactions that Threaten to Cause Conflicts of Interest (Transactions to Manage)
In order to appropriately manage conflicts of interest, the Company specifies the transactions that threaten to cause conflicts of interest (the "Transactions to Manage") in the following ways:
- Identify the types of transactions that threaten to give rise to conflicts of interest and then specify the individual transactions that threaten to give rise to conflicts of interest in light of their relationships with other transactions conducted by the Group.
- Categorize the transactions involved with the products or services that may give rise to conflicts of interest due to their nature or structure collectively into the Transactions to Manage.
In addition, based on our “Basic Policy for Customer-Oriented Business Conduct,” we pay attention to the following cases in identifying the Transactions to Manage for the appropriate management of conflicts of interest:
- A case where we sell or recommend a mutual fund, etc. to Customer and we receive a fee from the company that provides a mutual fund, etc. for the sale or recommendation
- A case where we sell or recommend a mutual fund, etc. to Customer and we receive a mutual fund, etc. from another company of the Group for the sale or recommendation
- A case where we manage Customer's assets and invest in a company which our Wholesale Business Unit has a transactional relationship with for the management
Typical Transactions to Manage are as follows:
- Transactions relating to mergers and acquisitions (M&A)
- Transactions relating to asset management
- Transactions relating to real estate securitization
4. Method of Managing Conflicts of Interest
We manage the Transactions to Manage by appropriately selecting a method from (1) to (3) below or by other methods, or appropriately combining them in accordance with the details and extent of specific conflicts of interest:
- Set up an information wall between two parties that have mutually conflicting interests.
- Disclose to Customers whose interest is in conflict with that of another.
- Refuse, modify or discontinue the whole or part of a transaction.
5. Framework for Conflicts of Interest Management
The Company sets up a department to control conflicts of interest independent of its business units, and the department centrally identifies and manages the Transactions to Manage. Further, the Company, in collaboration with other companies of the Group, builds a framework necessary for appropriate conflict-of-interest management, including raising the awareness of the officers and employees of the Company through training and education. In addition, the Company regularly reviews the framework.
6. Scope of Companies Subject to Conflicts of Interest Management
The transactions conducted by the Company and the following companies of the Group are the Transactions to Manage by the Company.
Parent Financial Institution, etc. of the Company*(e.g., Sumitomo Mitsui Banking Corporation, etc.)
- *Please refer to Article 13-3-2 of the Banking Act and Article 36, Paragraphs 2 through 5 of the Financial Instruments and Exchange Act.