Policy for Managing Conflicts of Interest
Aozora Bank and its group (hereinafter, the “Aozora Group”) shall define a system for appropriately managing the Aozora Group’s transactions in which a conflict of interest may exist, publish its policy to manage conflicts of interest and practice Customer-Oriented Business Conduct in order not to unreasonably damage the interests of its customers.
1. Conflict of interest management
The Aozora Group shall identify a transaction in which a conflict of interest may exist and determine whether or not a conflict of interest actually exists in such a transaction. In the presence of a conflict of interest, the Aozora Group shall select a management approach according to the specifics of the situation. and the degree of the conflict of interest, and manage the conflict of interest accordingly.
2. Identification of transactions in which a conflict of interest may exist
In order to identify a transaction in which a conflict of interest may exist, the Aozora Group shall determine whether or not such transaction corresponds to any of the previously defined types below.
- Type Ⅰ: Transaction in which a conflict of interest exists between a customer and the Aozora Group
- Type Ⅱ: Transaction in which a conflict of interest exists between a customer and another customer
- Type Ⅲ: Transaction in which a customer and the Aozora Group compete against the same target
- Type Ⅳ: Transaction in which a customer and another customer compete against the same target
- Type Ⅴ: Transaction in which the Aozora Group gains a profit through using a customer’s non-public information
- Type Ⅵ: Transaction in which a customer gains a profit through using another customer’s non-public information
- Type Ⅶ: Other transactions which may unreasonably damage other customers’ interests
Typical examples of the transactions are as follows:
- M&A-related transactions
- Asset/Receivables securitization-related transactions
- Syndicated loan-related transactions
3. How to manage a conflict of interest
The Aozora Group shall manage a conflict of interest by appropriately selecting any of the following methods and other means, or adequately combining them as necessary according to the specific circumstances and the degree of the conflict of interest.
- Method for separating divisions/branches carrying out a target transaction and blocking information
- Method for changing trade conditions or methods of a target transaction
- Method for suspending a target or the other transaction
- Method for appropriately disclosing to a customer the status of a conflict of interest
4. Management system for conflicts of interest
Aozora Bank shall establish a supervising division responsible for managing conflicts of interest independent from the business Groups, and identify and manage transactions to be managed in an integrated manner under its control. Further, the supervising division shall provide training sessions, keep officers and employees informed about the appropriate management of conflicts of interest, put in place a system necessary for appropriately managing conflicts of interest in cooperation with the Aozora Group and inspect it on a regular basis.
5. Scope of companies that are covered under management of conflicts of interest
Typical companies that are covered under management of conflicts of interest are as follows:
- Aozora Bank, Ltd.
- GMO Aozora Net Bank, Ltd.
- Aozora Securities, Co., Ltd.
- Aozora Investment Management Co., Ltd.
- Aozora Real Estate Investment Advisors Co., Ltd.
Other Subsidiary Companies and Affiliates engaged in financial services, financial instruments transactions, or insurance businesses, or special business with authorities as well as companies deemed to be required for managing conflicts of interest by the supervising division responsible for managing conflicts of interest.