Aizawa Asset Management Co., Ltd.
With diversification in services provided by financial institutions and the progress of global financial conglomeration, the risk of conflict of interests is increasing, because there are multiple competing and conflicting interests within financial institutions or financial groups.
Under such circumstances, Aizawa Asset Management, a group company of Aizawa Securities Group, is required to manage transactions that may pose a conflict of interest to prevent customers’ interests from being unjustly impaired.
Aizawa Asset Management has established the conflict-of-interest management policy (hereinafter referred to as the Policy) in accordance with the provisions set forth in the Financial Instruments and Exchange Law and shall announce its overview.
Aizawa Asset Management will establish a management structure for conflict-of-interest transactions in accordance with the Policy and work to prevent customers’ interests from being unjustly impaired.
1. Method to identify and categorize transactions with risk of conflict of interest and manage those according to profile.
(1) Applicable transactions
“Transactions that pose a risk of conflict of interest”, subject to the Policy, refers to those that pose a risk of unjustly impairing customers’ interests among transactions between Aizawa Asset Management or Aizawa Asset Management’s group companies (hereinafter referred to as “Group companies”) and customers.
The conflicts of interest may occur (i) between Group companies and customers, (ii) between customers of Group companies and other customers of Group companies.
When judging whether a transaction is subject to a conflict of interest, Aizawa Asset Management comprehensively considers circumstances, such as whether there is any impact on reputations of Aizawa Asset Management or its Group companies.
Even as actions are banned under the Financial Instruments and Exchange Law and other regulations, they are exempted from the Policy, except for those that are considered as “transactions that pose a risk of conflict of interest.”
(2) Categorizing and identifying transactions
Aizawa Asset Management manages any transaction that poses a risk of conflict of interest by selecting an appropriate method in accordance with its profile.
(3) Transaction categories
|Between Aizawa Asset Management and Customers
|Between Multiple Customers
|Conflict with Interest
|When there is a conflict of interest between Aizawa Asset Management and a customer
|When there is a conflict of interest between customers of Aizawa Asset Management
|When Aizawa Asset Management and a customer are in a competitive relationship for the same subject
|When customers of Aizawa Asset management are competing against each other for the same subject
|When Aizawa Asset management acquires interests by using the information obtained through its relationship with a customer
|When a customer of Aizawa Asset Management acquires interests by using the information that the company has obtained through its relationship with another customer.
(4) Process to identify transactions that pose a risk of conflict of interest
When officers and employees of Aizawa Asset Management are judged to fall into the category stated above in (3) based on the information obtained by transactions with customers, the company will immediately report it to the Compliance Department in charge of a conflict of interest, “identify a transaction with a risk of conflict of interest” and select its “management method.”
(5) Management method
When identifying a transaction that poses a risk of conflict of interest, Aizawa Asset Management selects one of the methods listed below or combines them to properly protect a relevant customer (the methods listed below are only examples, and they may not be necessarily adopted.).
- The method to separate the division that conducts the target transaction from the division that makes the transaction with the relevant customer.
- The method to change the terms or the way to conduct the target transaction or the transaction with the relevant customer.
- The method to abandon the target transaction or the transaction with the relevant customer.
- The method to properly disclose the information to the relevant customer that the target transaction has a risk of unjustly impairing the relevant customer’s interest (However, it will be only limited to the case where there is no breach of confidentiality obligations owed by Aizawa Asset Management, its parent financial institution or subsidiary financial institutions.).
2. Conflict-of-interest management structure
- Aizawa Asset Management appoints the manager of the Compliance Department as the person in charge of establishing the conflict-of-interest structure and the matters concerning its operation.
- Aizawa Asset Management will make its Compliance Department as the division in charge of the conflict-of-interest management, and it will build the structure to integrate necessary information to manage a conflict of interest and control the company-wide management structure related with identifying a transaction that poses a risk of conflict of interest and managing a conflict of interest.
- Internal audit: The auditor of Aizawa Asset Management will verify not only the conflict-of-interest management division but also the personnel structure and operating system concerning conflict-of-interest management, based on internal auditing rules.
3. Scope of companies subject to conflict-of-interest management
The target transactions are those executed by Aizawa Asset Management or its group companies listed below
(Aizawa Asset Management’s group companies)
- Aizawa Securities Group Co., Ltd.
- Aizawa Securities Co., Ltd.
- Aizawa Investments Co. , Ltd.
- Japan Securities Co., Ltd.
- Life Design Partners Co,, Ltd.