MITSUBISHI JISHO INVESTMENT ADVISORS,INC.

Japanese

A Love for People A Love for the City  MITSUBISHI ESTATE GROUP

Policy on Customer-Oriented Business Conduct

Policy on Customer-Oriented Business Conduct

Mitsubishi Jisho Investment Advisors, Inc.(MJIA) has adopted all seven principles stipulated in the Principles for Customer-Oriented Business Conduct released by Japan’s Financial Services Agency on March 30, 2017 and has established the following Policy on Customer-Oriented Business Conduct.*In this Policy, the term “customers” individually and/or collectively refers to the customers who transact directly with MJIA as well as the investors who engage in investment activities through those direct customers.

Formulation and Announcement of Policies Regarding Customer-Oriented Business Conduct

  • MJIA complies with Japan’s Financial Instruments and Exchange Act as well as other laws and regulations, conducts its business sincerely and impartially in good faith, and executes business with the due care of a prudent manager.
  • In order to achieve even better business conduct, the company affirms and publishes the status of efforts relating to this Policy on its corporate website at least once a year in addition to reviewing this Policy at least once a year.
  • The company is committed to appropriate business conduct that earns the trust of customers.

Commitment to Customers’ Best Interest

MJIA positions compliance as one of the most important priorities for management with a view to maintaining the impartiality of financial instrument markets and ensuring the trust of customers, and it is committed to compliance with laws and regulations and to the sound and appropriate conduct of business to achieve customers’ best interest.

Appropriate Management of Conflicts of Interest

MJIA implements the following measures in transactions between customers and interested parties of the company to ensure that customers’ interest is not harmed due to conflict of interest.

  • MJIA has designated related companies from among the Mitsubishi Estate Group that meet certain criteria, including investment from Mitsubishi Estate Co., Ltd., and parties which entrust business to the company, as interested parties in advance.
  • The company obtains the approval of the general manager of the Compliance Department over and above the usual decision-making process when handling transactions between customers and interested parties.
  • When handling transactions between customers and interested parties that exceed certain criteria, the company tasks the Compliance & Risk Management Committee with deliberation and confirms through an external expert (attorney) that there are no problems from the perspective of laws and regulations. This is done in order to carefully consider the advisability of the transaction concerned from the standpoint of conflict of interest prior to the company’s decision.
  • When handling buying and selling between parties which entrust business to the company, MJIA takes measures to shield information between the seller and the buyer (system access restrictions and physical shielding measures) to manage the transaction concerned appropriately.

Clarification of Commissions and Fees

MJIA consults with each customer to set the amount of business remuneration and the method for calculating the amount of business remuneration for each customer in light of the relevant laws and regulations, based on the type and attributes of the transaction target and market transaction practices. When the company engages in two or more businesses, as a general rule it sets the amount of business remuneration and the method for calculating the amount of business remuneration for each business.

Provision of Important Information in an Understandable Manner

  • MJIA complies strictly with laws and regulations and discloses information promptly and accurately with a view to maintaining the impartiality of financial instruments markets and ensuring the trust of customers. The company also gives consideration to the transparency and understandability of the information it provides and is committed to sound and appropriate conduct of business and information disclosure.
  • The company does not currently sell or recommend packages of multiple financial products and services.
  • The company provides information in accordance with customer and product characteristics, taking into account the transaction experience and financial knowledge of customers.

Provision of Appropriate Services to Customers

  • MJIA originates, sells, and recommends financial products and services that are appropriate for customers, taking into account the transaction experience and financial knowledge of customers.
  • The company does not sell or recommend financial products that are particularly complex or high risk and does not sell or recommend financial products to groups with attributes that are deemed to be vulnerable to damage from financial transactions.
  • The company encourages the acquisition of various business-related qualifications (ARES Certified Masters, Real Estate Notary, etc.) by executives and employees and strives to improve their expert knowledge.
  • The company strives to provide customers with information that includes basic knowledge relating to financial transactions, taking into account the transaction experience and financial knowledge of customers.

Framework for Motivating Employees Appropriately

MJIA positions compliance as one of the most important priorities for management and takes the following measures for compliance with laws and regulations and the sound and appropriate conduct of business.

  • MJIA works to raise the awareness of executives and employees by holding periodic training on compliance.
  • The company has included compliance in the items to be evaluated in personnel evaluations.
  • The company has established a Compliance & Risk Management Committee to deliberate on transactions with a possible conflict of interest and matters that concern compliance.
  • The company engages in risk monitoring to evaluate external risks and consider countermeasures and continuously monitors whether internal control is functioning adequately.
  • The company conducts internal audits to verify whether its business is executed appropriately and efficiently in accordance with laws and regulations with the aim of improved business and sound management.

Current Status of Initiatives

Formulation and Announcement of Policies Regarding Customer-Oriented Business Conduct

    In order to ensure even better business operations, MJIA posts updates on the status of initiatives related to this policy on its website and via other channels. In addition, the company reviews this policy at least once a year.

Commitment to Customers’ Best Interest

At the Nippon Open Ended Real Estate Investment Corporation(JOE)and the Mitsubishi Estate Logistics REIT Investment Corporation (MEL) as well as other funds managed by MJIA, compliance is positioned as one of the most important management issues in the effort to continuously increase investor value by delivering stable medium- to long-term growth.

Note that JOE investors are able to check relevant information by accessing the JOE website using a dedicated password.

MEL: https://mel-reit.co.jp/en/ir/highlight.html
JOE: https://joe-re.com/ (in Japanese only)

MJIA holds compliance and risk management training sessions and Compliance and Risk Management Committee meetings on regular basis. The number of training sessions and meetings held in fiscal 2018 is listed below.

Number of In-House Training Sessions held

Training Sessions FY2018
Total no. of compliance and risk management training sessions 9
Of which, no. of compliance training sessions 5
Of which, no. of risk management training sessions 4

*Held between April 2018 and March 2019

Number of Meetings held

Compliance and Risk Management Committee FY2018
No. of meetings 15
*Held between April 2018 and March 2019

Appropriate Management of Conflicts of Interest

MJIA makes sure that the company’s Rules Governing Transactions by Related Parties are duly observed at the investment companies and other funds it manages in order to prevent transactions by related parties that are unjust and/or unfair. For more information, access the websites listed below.

Note that JOE investors are able to check relevant information by accessing the JOE website using a dedicated password.

MEL: https://mel-reit.co.jp/en/features/management.html
JOE: https://joe-re.com/ (in Japanese only)

Clarification of Commissions and Fees

MJIA has systematically determined the management fees it receives from its investment companies and funds. For more information on the management fees charged to the investment companies, check the MEL securities reports and JOE product descriptions.

Note that JOE investors are able to check relevant information by accessing the JOE website using a dedicated password.

MEL: https://mel-reit.co.jp/en/ir/library.html
JOE: https://joe-re.com/ (in Japanese only)

Provision of Important Information in an Understandable Manner

MJIA conducts IR activities for MEL investors and publishes the content of IR briefings and relevant explanatory materials on the MEL website. The company also conducts IR activities for JOE investors and releases current financial statements for each fiscal term as well as forecasts for the coming term.

Note that JOE investors are able to check relevant information by accessing the JOE website using a dedicated password.

MEL: https://mel-reit.co.jp/en/ir/index.html?cate=all&year
https://mel-reit.co.jp/en/ir/library.html
JOE: https://joe-re.com/ (in Japanese only)

Provision of Appropriate Services to Customers

In managing its investment corporations and other investment targets, MJIA strives to clearly understand the needs of its investment customers and to appropriately provide these parties with the information thought necessary for investors in its investment corporations and other investment targets.

In order to train professionals in real estate management as part of its human resource development, MJIA encourages its employees to obtain various qualifications to improve their specialized skills. It also provides training sessions and support for examinations to help its employees acquire the wide range of knowledge and skills required for the investment business.

Number of qualification holders: http://www.mecinvest.com/en/company/employee.html

Framework for Motivating Employees Appropriately

MJIA holds regularly scheduled compliance and risk management training sessions. The number of compliance and risk management training sessions and Compliance and Risk Management Committee meetings held in fiscal 2018 is listed below.

Number of In-House Training Sessions held

Training Sessions FY2018
Total no. of compliance and risk management training sessions 9
Of which, no. of compliance training sessions 5
Of which, no. of risk management training sessions 4

*Held between April 2018 and March 2019

Number of Meetings held

Compliance and Risk Management Committee FY2018
No. of meetings 15
*Held between April 2018 and March 2019

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