AA

  • S
  • M
  • L
SuMi TRUST
CORPORATE BROCHURE

CONFLICTS OF INTEREST
MANAGEMENT POLICY

We disclose the summery of the Conflicts of Interest Management Policy as follows in order not to unduly harm the interests of our clients, and appropriately manage transactions that may cause conflicts of interest in accordance with this policy.

1.Conflict of Interest Management Process

In principle, we conduct conflicts of interest management through the following processes.

  • 1“Transactions that may cause conflicts of interest” are defined as follows in Section 2 below, and measures (methods for conflicts of interest management) are established to identify the transactions that are specifically anticipated (hereinafter, the “Covered Transactions”) in advance and to prevent the adverse effects of such conflicts of interest.
  • 2When conducting Covered Transactions, we seek to prevent adverse effects arising from conflicts of interest issues, by methods for conflicts of interest management prescribed in advance.
    In addition, if it is effective to aim to prevent adverse effects by establishing an operations execution system, then irrespective of whether or not Covered Transactions are carried out, we take measures to prevent adverse effects by establishing an appropriate operations execution system in advance.
  • 3In order to identify new “transactions that may cause conflicts of interest” and to smoothly and promptly select methods for conflicts of interest management, we have clarified the methods for management of conflicts of interest, together with the classification of the Covered Transactions as set forth in Section 3 below.
  • 4Since transactions that fall under the classification of “transactions that may cause conflicts of interest,” or methods for conflicts of interest management that are effective in preventing adverse effects from conflicts of interest may vary depending on operations of each company in our Group, attributes of clients, social environments, and other factors, we seek to review the Covered Transactions and the methods for management of conflicts of interest, including the existing Covered Transactions, as necessary.

2.Definition of covered “Transactions that May Cause Conflicts of Interest”

  • 1“Transactions that may cause conflicts of interest” are transactions or acts, which involve or result in consequences of conflicting interests. and may unduly harm the interests of our clients, among those conducted with SuMi TRUST Group companies (hereinafter, the “Covered Group Companies”).
  • 2“Transactions that may cause conflicts of interest,” may arise in such cases where, while we have a duty to faithfully conduct investment management operations for our clients, there is motive to give preference to interests of parties, in relation to Covered Group Companies or business partners., other than our clients. At our Group, “transactions that may cause conflicts of interest,” are understood to have a broad meaning, even otherwise than in these operations, including the case where, between the client and the Covered Group Company, there is a significant gap in knowledge and information. with regard to products and services.

(*) The term “Covered Group Companies subject to conflicts of interest management” refers to companies., including those in Japan or overseas that operate banking services or financial instruments transactions of SuMi TRUST Group, which are covered by management that the conflict of interest management control department, set out Section 4 (1) below, implements.

3.Classifications and Management of “Transactions that May Cause Conflicts of Interest”

Transactions that may cause conflicts of interest are specified based on the classifications and managed depending on situations, in the following ways. so as not to unduly hurt our clients’ interests.

  • Securing fair terms and conditions of transactions
  • Making a disclosure to or obtaining consensus from clients
  • Blocking the flow of information between Covered Group Companies or between departments
  • Making changes in terms and conditions of transactions or methods
  • Discontinuing transactions

Typical examples are as follows.

Classification 1: Case where conflicts of interest may arise when managing and administering investment trusts (transactions carried out with Covered Group Companies)

The case where a transaction between a fund under our investment management and a Covered Group Company occurs or services such as administration are provided falls under the classification. There is concern that the transaction is carried out at a rate or under terms and conditions which are disadvantageous to the fund.

Example of Methods for Conflicts of Interest Management

  • We check whether fair transactions and terms and conditions (market real rates/levels) for funds are put in place.

Classification 2: Case where conflicts of interest may arise when managing investment trusts (transactions carried out with companies with which we have transactional relationships.)

The case where a transaction between an investment trust and a company with which we have transactional relationships. occurs falls under the classification. When managing the investment trust, investing in stocks or bonds, there is concern that a sales company selling the investment trust is preferentially selected as an agency that takes orders to buy or sell the stocks or bonds, and the transaction is carried out at a rate disadvantageous to the investment trust.

Example of Methods for Conflicts of Interest Management

  • Selecting an agency that takes orders based on the rules
  • Executing transactions under the best terms and conditions

Classification 3: Case where conflicts of interest may arise by exercising influence within the group

There is concern that, in the case where our funds invests in stocks of a company with which the corporate sales division of a Covered Group Company has transactional relations, the department requests us to exercise the voting rights, which is advantageous to the company, the issuer of the stocks.

Example of Methods for Conflicts of Interest Management

  • Exercising the voting rights according to the guideline for exercising voting rights and disclosing the results
  • Restrictions on personnel transfers, blocking the flow of information, and restrictions on contact between the corporate sales divisions of the Covered Group Companies and us ※

4.Management Systems for Conflicts of Interest

  • 1Establishment of a department responsible for conflicts of interest management control department
    To properly manage conflicts of interest, we set up the conflict of interest management control department (Compliance Department), and it appropriately examines on a regular basis our Group’s total development of the conflicts of interest management system and its effectiveness, and while continually striving to improve it, education and training programs for officers and employees are periodically conducted, and everyone is kept informed about how to manage transactions that may cause conflicts of interest.
    Furthermore, as far as the examination results obtained by the conflict of interest management control department, we periodically report to the Executive Committee and receive reviews and directions for improvements. including necessary enhancements to the management systems.
  • 2Examination Implemented by the Internal Audit Department
    Our Internal Audit Department examines whether conflicts of interest are appropriately managed.
  • 3 Supervision of Executing Operations by Board of Directors
    Our Board of Directors maintains our management systems to ensure that our clients’ interests are not unduly harmed, receiving reports from the compliance program.
    Besides, we have appointed independent outside Directors to ensure the effectiveness of supervision.
  • 4Establishment of the Committee for Stewardship Committee and Exercising Voting Rights and the Stewardship Activity Advisory Committee
    We set guidelines for the exercise of voting rights, subsequent to deliberations at the Stewardship Meeting and seeking advice from the Stewardship Activity Advisory Committee, a third-party committee, and exercise voting rights, not only based on the guidelines but also in light of details of engagements with companies.
    In addition, the results of exercising voting rights are reported to the Committee for Stewardship Committee and Exercising Voting Rights.
    Moreover, the Stewardship Activity Advisory Committee, the majority of whose members are composed of independent outside experts, makes revisions or abolition of the guidelines for the exercise of voting rights, or decisions on exercising rights to vote, in addition to providing advice and recommendations with regard to stewardship activities related to business partners, which is all intended to further enhance conflicts of interest management systems.
  • 5Establishment of the Fiduciary Duty Advisory Committee
    We have established the Fiduciary Duty Advisory Committee, which includes outside experts, to have a broad range of discussions, in terms of status of our activities on fiduciary duties, with outside opinions sought. For example, as for overall activities in relation to exercising voting rights, implementing discussions based on the standpoints of client-oriented business operations, we make the most of the opinions and recommendations obtained therefrom to improve our operations.

******************************
(*) Restrictions on personnel transfers, blocking the flow of information, and restrictions on contact
Restrictions on personnel transfers, blocking the flow of information, and restrictions on contact between the corporate sales divisions of the Covered Group Companies and us are established specifically as follows.

  • 1Measures for Flow of Information and Restrictions on Contact
    Our respective departments for investment operations restrict the flow of information and contact between them and the following departments of the Covered Group Companies.
    We have a system, as it always has been in the past, in which non-public information relating to funds. managed by the respective departments for investment operations is prohibited from being disclosed to the Covered Group Companies, unless permitted under laws and regulations.
    • Corporate loan business and planning departments
    • M&A operations-related departments
    • Respective departments for stock transfer agency services business
  • 2Measures for Restrictions on Personnel Transfers
    Assignments or appointments from the following departments of the Covered Group Companies to important decision-making positions in management and stewardship activities implemented by the respective departments for investment operations are restricted for a certain period of time.
    • Corporate loan business and planning departments (Restricted period: 5 years)
    • M&A operations-related departments and respective departments for stock transfer agency services business (Restricted period: 1 year)
CORPORATE BROCHURE

About Us

TOPTOP