Summary of Management Policy Concerning Conflicts of Interest in SMBC NIKKO SECURITIES INC.
SMBC Nikko Securities Inc. (the "Company") hereby announces the summary of the "Management Policy Concerning Conflicts of Interest" that it has established.
1. Purpose
The purpose of the "Management Policy Concerning Conflicts of Interest" is to appropriately manage conflicts of interest within the Company or its group companies (collectively, the "Company Group") so that Customers' interests will not be unduly harmed.
2. Categories of Conflict of Interest Subject to Management
Major categories of "Conflicts of Interest" subject to management at the Company are as indicated in the chart below.
In the chart below, the "Conflicts of Interest between the Customer and the Company Group" refers to circumstances where the Company Group has an interest that is independent from the customer's interest in connection with a particular transaction, and where such customer's interest threatens to be unduly harmed (a mere relationship whereby the Company Group receives economic interests as consideration for providing instruments and/or services to the customer shall not be included in this meaning); and the "Conflicts of Interest between Customers" refers to circumstances where the interest of a particular customer and the interest of another customer of the Company Group conflict in connection with a particular transaction, and where the interest of such particular customer threatens to be unduly harmed.
| Conflicts of Interest between the Customer and the Company |
Conflicts of Interest between Customers | |
|---|---|---|
| Direct-Transaction Type | Situation or status where the customer and the Company Group become direct parties | Situation or status where the customer and another customer become direct parties |
| Indirect-Transaction Type | Situation or status where the customer and the Company Group have interests that are exclusive to each other, or have competing interests | Situation or status where the customer and another customer have interests that are exclusive to each other, or have competing interests |
| Information-Using Type | Situation or status where the Company Group is structurally able to gain its own benefit by using disclosed information which the Company Group obtained from the customer | Situation or status where the Company Group is structurally able to have another customer gain a benefit by using disclosed information which the Company Group obtained from the customer |
3. Methods of Specifying Transactions which Threaten to Cause Conflicts of Interest (Transaction to Be Managed)
In order to appropriately manage conflicts of interest, the Company shall specify a transaction which threatens to cause a conflict of interest (the "Transaction to Be Managed") using the following methods.
- (1)By collecting information on transactions which typologically threaten to give rise to conflicts of interest and subsequently individually specifying transactions which threaten to give rise to conflicts of interest, as Transactions to Be Managed, in light of their relationship with other transactions conducted by the Company Group.
- (2)By collectively specifying transactions of the instruments and/or services, etc. which threaten to give rise to conflicts of interest due to the nature or structure of the instruments or services, etc., as Transactions to Be Managed.
Examples for Transactions to Be managed
- Advisory services and Finance relating to M&A
- Securitization of Assets and Receivables
- Securities(Equity and Bond) Underwriting
- Asset Management
4. Method of Managing Conflicts of Interest
Transactions to Be Managed shall be managed by appropriately selecting a method indicated below or by other methods, or appropriately selecting a combination of the same, depending on the substance and extent of the relevant conflicts of interest.
- (1)By blocking information using appropriate information walls.
- (2)By disclosing the conflict of interest to customers.
- (3)By refusing, changing or discontinuing part or all of the transaction.
5. Conflicts of Interest Management System
The Company will establish the COI Controlling Officer independent from the Business Units. The COI Controlling Officer conducts, in an integrated fashion, the specification and management of the Transactions to be Managed. In addition, the Company will cooperate with the Bank's group companies in organizing a system necessary for appropriately managing conflicts of interest (including, but not limited to, thoroughly informing officers and employees of appropriate conflict of interest management through training and education) and regularly inspect the system.
6. Scope of Companies Subject to Conflicts of Interest Management
Transactions conducted by the Company and the following group companies of the Company shall be subject to management.
- (1)Parent Financial Institutions, etc. of the Company (*) (e.g., Sumitomo Mitsui Banking Corporation, THE MINATO BANK, LTD., Kansai Urban Banking Corporation.)
- (2)Subsidiary Financial Institutions, etc. of the Company (*) (e.g., Nikko Research Center, Inc.)
- (3)Other group companies, if any, that the COI Controlling Officer deems necessary to include as companies subject to management from a conflicts of interest management perspective.
- *Please refer to Article 36, Paragraphs 2 through 5 of the Financial Instruments and Exchange Act.