Compliance

Basic Views on Compliance

Asset management and other operations concerning the financial instruments business are acts of managing the funds of investors who invest in NUD, and NUD understands the importance of such acts. In order to establish an appropriate management structure, NUD has set up a Compliance Office in its Asset Management Company as a department responsible for matters concerning compliance and appointed a Compliance Officer as an individual responsible for supervising matters concerning compliance. Through these efforts, NUD is securing the effectiveness of the internal check-and-balance system for other departments.
The Compliance Officer constantly monitors the execution of business in asset management and other financial instruments businesses to ensure that it is based on laws and regulations, NUD’s Articles of Incorporation and other various rules, and monitors and supervises the status of compliance in daily business execution as well.

Compliance System

Roles of each organization in the asset management company

Core / Position Title	Main role
Board of Directors	Deliberation and decision-making related to important compliance matters
Compliance Committee	Deliberation and decision-making on matters related to compliance issues, etc.
Compliance Officer	As the person in charge, oversees matters related to compliance
Compliance Office	Practical work related to the establishment of a compliance system and adherence to laws and regulations

Matters Considered and Characteristics of Management Structure, Etc.

NUD provides compliance standards in the “Compliance Rules,” which are internal rules of NUD, as the basic policy on corporate ethics and the code of conduct for Executive Directors and Supervisory Directors of NUD serving as the guide for securing soundness in management based on self-discipline while performing corporate activities in a sincere and fair manner in strict compliance with laws, regulations and rules in the operation of business. Compliance standards provided include: (i) Awareness of social responsibility and public mission, and strict compliance with laws, regulations and other rules; (ii) Firm stance against anti-social forces; (iii) Thoroughly ensuring the principles of self-responsibility; (iv) Prohibiting granting of favors, etc. to interested parties, etc.; (v) Drawing a line between public and private matters; (vi) Thoroughly ensuring information management; and (vii) Prohibiting conflicts of interest. Along with each officer’s strict compliance with not only the “Compliance Rules” but also laws, regulations, market rules, internal rules and other various rules, business is operated in accordance with the “Rules to Prevent Insider Trading,” which are internal rules for preventing, etc. insider trading, and such in pursuit of robust governance.

Compliance Training

In order for the Asset Management Company to fulfill its social responsibilities and public mission as a financial business, we believe it is necessary to maintain a high level of professional ethics, and we conduct regular training.

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Securement of Operating System in Consideration of the Interests of Unitholders

Decision-Making Process for Property Acquisition and Sale

• J-REIT Management Division of the Asset Management Company will draft a proposal, which will then be reviewed and approved by the Compliance Officer to determine whether there are any legal compliance issues, after which the Investment Committee will deliberate and make a resolution.

Elimination of Relationships with Anti-Social Forces

In order to eliminate anti-social forces, the Asset Management Company has established (1) “Regulations for the Elimination of Anti-Social Forces” to define the basic policy for dealing with anti-social forces, and (2) “Manual for Dealing with Anti-Social Forces” to define the scope of checks for anti-social forces and the specific methods to be used.