Compliance

Basic Policy

Aozora will anticipate and accurately grasp changes in multiple risks in the internal and external environments, comply with all laws and regulations as they pertain to its business operations, and sincerely engage in corporate activities that conform to social norms and common sense. To prevent our corporate value from being damaged by fraud or scandal, we will also work diligently to continuously improve our internal control functions while maintaining and raising awareness toward compliance among our officers and employees, and further enhance our compliance as well as legal risk management systems.

Management Structure

Aozora has a Compliance Management Division and a Legal Division in place as the supervising divisions for compliance and legal risks, and these divisions develop internal rules regarding compliance. The two divisions also conduct seminars and e-learning periodically to maintain and improve compliance awareness. As a specific action plan to realize our compliance framework, the Compliance Management Division develops annual compliance programs that are disseminated to and implemented by all of Aozora’s officers and employees, including those at Group companies. The progress and achievement status of these programs are reported to the Board of Directors on a semi-annual basis. Aozora has also established a Code of Ethics and Conduct as a standard of conduct that every officer and employee must remain in compliance with. All officers and employees of Aozora, including Group companies, pledge on an annual basis that they understand and comply with the Code of Ethics and Conduct.

Customer-oriented Business Conduct

Aozora has established and disclosed its Basic Policy on Customer-oriented Business Conduct in order to provide products and services that meet the true needs of customers, always from the standpoint of customers, and conduct business in a sincere and fair manner. In addition, for retail business, specific action plans based on this policy are separately established, reviewed semi-annually, and the status of the initiatives are also disclosed on a semi-annual basis.

With regard to its product governance framework, Aozora has put in place a system in which it makes decisions on the introduction of products and services with the involvement of the management team, as well as reviews or discontinues products or services as necessary as a result of ongoing post-launch evaluations.

Based on the basic policy, Aozora strives to develop highly specialized human resources to ensure that it can propose and provide the most suitable products and services to its customers. In addition, Aozora has established a Customer Committee to review and discuss matters related to customer-oriented business conduct as well as the status of customer protection management. The results of these reviews are reported to the Management Committee, the Board of Directors, and other bodies as necessary.

Elimination of Anti-social Elements

Aozora clearly states in the Basic Policy on the Elimination of Anti-Social Elements that it steadfastly confronts any anti-social elements that pose a threat to public order and safety while ensuring that it categorically blocks any relationship with such elements. Aozora has established and routinely maintains close cooperative relationships with outside specialized agencies, including law enforcement agencies, the Anti-Organized Crime Campaign Center of Tokyo, and attorneys. In addition, we absolutely refuse to perform any action that may serve to provide income/funding for anti-social elements, including but not limited to backdoor transactions, monetary contributions/membership fees, and subscribing to informational magazines.

• Aozora Bank Group Basic Policy on the Elimination of Anti-Social Elements

Anti-money Laundering Initiatives

Aozora is aware that preventing financial crimes, including money laundering, financing of terrorism, and proliferation financing, and responding to economic sanctions under the Foreign Exchange and Foreign Trade Act (Anti-Money Laundering Measures) are important issues facing the global financial system. We have established a framework to comply with domestic and international laws, regulations, and rules, while also making an ongoing effort to further strengthen our Anti-Money Laundering Measures. For example, Aozora has developed internal policies and an organizational structure, which includes the establishment of a Financial Crime Management Office as a department overseeing Anti-Money Laundering Measures, while conducting a review as needed to ensure their effectiveness. We also systematically provide training for officers and employees regarding the prevention of financial crimes and the response to economic sanctions under the Foreign Exchange and Foreign Trade Act. In addition, we ensure that we verify the identity of customers and the purpose of their transaction at the time of account opening, which is followed by the ongoing monitoring of our customer transactions.

Additionally, we have developed an internal structure that allows for the immediate reporting to the relevant authorities regarding any suspicious transactions detected by our daily monitoring process.

• Aozora Bank Group Basic Policy on Anti-Money Laundering

Insider Trading Prevention

To prevent insider trading by officers and employees, Aozora strictly manages the information obtained in the course of business and regularly provides training to its officers and employees on the prevention of insider trading. In addition, all officers and employees including those of Group Companies pledge every year to comply with Internal Rules on insider trading prevention.

Compliance-related Awareness Activities

To maintain and improve compliance awareness among our Group officers and employees, we carry out awareness-raising activities through training and e-learning on an ongoing basis.

In FY2024, training on 42 programs was conducted. Of these, seven training programs were provided via e-learning and were targeted at all Group officers and employees, with a 100% attendance rate for each. The main themes were as follows:
(Main Themes)
Insider trading prevention, money laundering prevention and compliance with the Foreign Exchange and Foreign Trade Act, anti-social organization checks, the management of information assets, and the prevention of bribery

Whistle-blower Program

Aozora has established a whistle-blower program called the Aozora Hotline Program in order to detect and correct at an early stage any conduct that breaches laws, regulations, and other rules, and to foster a clean, open, and fair corporate culture. As whistle-blowing contacts for officers, employees, and other personnel of Group companies, we have set up an internal contact, and have also arranged for an outside law firm to act as an outside point of contact.

The program allows for anonymous reporting. In addition, all officers and employees are provided with a special postal envelope addressed to the contact point outside Aozora in an effort to create an environment that facilitates access to the internal reporting system.

In order to protect whistle-blowers, the program tightly controls information and protects privacy, and strictly prohibits any unfavorable treatment of whistleblowers. If any violation of the law, misconduct, or other such activity is confirmed as a result of whistle-blower investigations, Aozora will promptly take corrective and preventive measures.

In FY2024, there were no whistle-blower cases that had a significant impact on the management of Aozora.

Tax Compliance

The Aozora Group recognizes that complying with tax laws and properly paying tax liabilities in all countries where it conducts business are part of our social responsibilities as a business entity. As such, we have developed the "Aozora Bank Group Tax Compliance Policy", as a way to raise awareness of tax compliance among the Group's officers and employees.

• Aozora Bank Group Tax Compliance Policy