We, as a financial instruments business operator, hereby adopt the “Principles for Customer-Oriented Business Conduct” which the Financial Services Agency laid down (as published on March 30, 2017 and modified on January 15, 2021) and the “Supplementary Principles for Product Governance” (as published on September 26, 2024). With respect to the relationship between those Principles and our own basic policy and status of commitment, please refer to the Correspondence Table with the Financial Services Agency’s “Principles for Customer-Oriented Business Conduct”.
We have mainly engaged in the business of the formation and management of private funds, and our customers are entities entrusting us with (1) the management of real estate and real estate beneficial interests in a trust in private funds or (2) provision of advice, etc. concerning management thereof or equity investors in partnerships, etc., for which we act as a general partner engaging investment management business, or, if such entities are special purpose companies (“SPCs”), investors investing in such SPCs. Most of such entrusting parties (excluding SPCs), equity investors, and investors investing into SPCs are qualified institutional investors (“tekikakukikan toushika”) or professional investors (“tokutei toushika”).
| 1: Establishment, Announcement, etc. of Basic Policy for Customer-Oriented Business Conduct |
We hereby establish and announce the policies for realization of the “Customer-Oriented Business Conduct”. We will regularly review such policies for better business operation, and publish the results of review, together with the status thereof, on our website. |
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| 2: Pursuit of Customers’ Best Interest | In order to realize our customers’ best interest including the maximization of investor interest, we will always endeavor to improve our activities as professionals of finance and real estate management, maintain a high degree of professional ethics worthy of customers’ trust, and carry out our duties fairly and faithfully with a view to providing good quality services to customers. We will ensure our stable customer base and profitability by appropriately motivating our employees and establishing our governance structure so that such business operation may take root as our corporate culture and through them pursuing customers’ best interest. |
| 3: Appropriate Management of Conflicts of Interest | It is our strong point that we can realize the customers’ best interest including the maximization of investor interest through active management strategies making good use of the network of the ORIX Group; provided, however, that when using the ORIX Group network, we will appropriately manage so that there will not occur the result that the interest of the ORIX Group and the interest of customers conflict with each other and the interest of customers may be improperly harmed. Specifically, under the Rules for Transactions among Interest Parties, with respect to transactions threatening to cause any conflict of interest such as transactions with a ORIX Group company, we will ensure the fairness of such transactions by beforehand examining the circumstances of transactions, appropriateness of terms and conditions thereof such as the amount to be paid, etc. and, for certain transactions, by going through the screening by a Compliance Committee with an external member (an external attorney) entitled to power of rejection. |
| 4: Clarification of Fees, etc. | With respect to the management fees and investment advisory fees of our private funds, their compensation structure and amounts are determined on an individual basis in consideration of the type, size, location of the subject property, scheme composition, operation volume and other details of the tasks, etc. and through consultation with a customer concerned. The standard compensation structure is composed of the fee at entrustment, interim fees, fee at sale, fee at additional entrustment, fee at refinancing, and contingency fee for increase of sales price, and we will explain them, together with the detail of what services are covered by them, in a clearly understandable way, by incorporating such explanation in materials for customers’ consideration of investment, etc. In addition, we will explain our fees for partnerships, etc. in which we act as a general partner engaging investment management business, in a clearly understandable way, by incorporating such explanation in materials or agreements for customers’ consideration of investment, etc. |
| 5: Provision of Important Information in an Easy-to-Understand Manner | Before commencement of transactions with each customer, we will, in consideration of the customer’s knowledge, experience of investment, etc., provide the customer with important information objectively seeming to influence the customer’s judgement (details of investment, risks accompanying the investment, material indicators usually verified in the real estate investment, possibility of conflict of interest, etc.) so that the customer can adequately understand the transactions and, during the process of the transactions, we will be highly committed to transparent asset management and provide correct information. We do not sell, recommend, etc. any set of financial instruments and/or services as a package. |
| 6: Provision of Services Suitable to Customers | Based on grasping of customers’ purposes of investment and needs, we will, taking adequate account of the statuses of their property, knowledge and experience of investment, set up, provide, etc. opportunities for investment considered suitable to them. We do not sell, recommend, etc. any set of financial instruments and/or services as a package. |
| 7: Framework for Motivation of Executives and Employees, etc. | We regard compliance with social norms based on high ethical standards, as well as compliance with laws and regulations, as the utmost important issues in management. Under this principle, we have laid down the “Compliance Action Guidelines”, and have expressed in a message by top management to executives and employees that activities concerning the compliance including positive participation in compliance programs are incorporated in their performance evaluation and the criterion for their promotion to upper posts and have practiced it. In addition, we will endeavor to enhance our governance structure so as to urge the practice of the compliance and the “customer-oriented business conduct”. |
| 8: Basic Philosophy of Product Governance | In order to realize the best interests of our customers, we will establish and maintain appropriate product governance for the financial instruments we form under the leadership of our management team. |
| 9: Establishment of Product Governance System | We have established a system to ensure the effectiveness of product governance and will review it as necessary. The formation division verifies the merchantability of financial instruments at the time of formation, and continuously verifies and reports on the status of the transactions and the like after formation. The formation division carries out these matters by screening and reporting to the Fund Committee, etc. |
| 10: Measures to be Taken at the Time of Formation of Financial Instruments | When forming a financial instrument, we confirm its suitability with the expected needs of customers, and verify the sustainability of the financial instruments and the rationality as a financial instrument. In addition, we will specify the attributes of customers who are suitable for selling financial instruments, and will share information to ensure that financial companies engaging in the sale of financial instruments have sufficient understanding. |
| 11: Measures to be Taken after the Formation of Financial Instruments | We continuously verify whether the merchantability envisioned at the time of formation of a financial instrument has been ensured after its formation. The results of the verification will be used to improve and review the formation and sales methods of financial instruments. In addition, as necessary, we will improve and review the formation and sales methods of financial instruments through information sharing with financial companies engaging in the sale of financial instruments. |
| 12: Provision of Easy-to-Understand Information to Customers | We will endeavor to provide information on financial instruments and product governance systems in an easy-to-understand manner through the use of our website, etc. |
