Basic Principle of Compliance for the Investment Corporation (JRE)
JRE's basic principle of compliance is to thoroughly observe legal and other relevant norms in regard to the business operation as well as to respond to the requirements from society. This means that the investment corporation administers and oversees the outsourcing companies from the same standpoint, while complying with legal and other relevant norms in its decision-making.
Basic Principle of Compliance for the Asset Management Company (JRE-AM)
Basic Principle
- Ensuring thorough compliance is one of its top priority issues, since JRE-AM understands that any insufficiency in compliance would affect even its management base.
- As an asset management company, JRE-AM recognizes that it bears the responsibility for realizing the values that are required by society in its business operation, and makes proactive and continuous efforts for full compliance to enhance the value of its business operation both qualitatively and quantitatively.
- JRE-AM is determined to achieve a reputation for quality among its investors by promoting compliance activities, and thereby gains the trust of a wide spectrum of society.
Compliance Promotion Structure for the Asset Management Company
At JRE-AM, the Board of Directors, along with the Compliance Committee, Compliance Department and compliance managers in each department determine and verify various matters concerning compliance in accordance with their respective authorities and responsibilities.
| Organization | Main roles |
|---|---|
| Board of Directors of the Asset Management Company |
Oversees the companywide compliance and is fully responsible for all compliance issues. Main roles are below.
|
| Compliance Committee |
The committee's activities include deliberating over and deciding on system development and important matters (including verifying important transactions that involve key related parties) in relation to compliance. The committee consists of the President & CEO, General Manager of Compliance Department, General Manager of Risk Management Department and one or more external experts. |
| Compliance Department | Drafts general compliance plans, practices compliance, and inspects, checks, and works to improve the level of compliance in each department. |
| Compliance Manager and Compliance Promoter in Each Department |
A compliance manager has been appointed in each department to promote compliance, which includes daily compliance checks and assessments, formulation and implementation of compliance programs, and formulation and practice of rules and manuals under jurisdiction of each department. |
Regular Internal Audits
JRE-AM has set up its Internal Audit Regulations and it states Internal Audit Plan shall be formulated and internal audits shall be conducted based on the said plan every year. Through the annual internal audits, we inspect and verify the appropriateness and effectiveness of legal compliance, internal management, risk management, crisis management, and other systems from the perspective of ensuring investor protection and fair market formation as an asset management company.
Internal audits shall be conducted targeting operations of all departments while also receiving support from external experts encompassing a broad range of items such as appropriateness of information management, observance of internal rules, and anti-money laundering measures, etc. The results of the audits will be reported to the Board of Directors of JRE-AM, for issues found through the audits, the audited departments will work on improvement activities and the department in charge of the audit will periodically check the status of the improvement.
General training for all employees (compliance, human rights, ESG and health promotion trainings)
JRE-AM provides all employees including temporary and contract staffs with compliance training programs to promote a high degree of awareness of business ethics throughout the company and to ensure that all employees have the necessary skills and information available to them to ensure that work practices remain in compliance.
We also provide various training programs to raise awareness and increase knowledge on critical issues that need to be addressed at all levels of the company, such as human rights, ESG, and health promotion.
All (100%) of our employees participated in these training programs in FY2023.
Examples of training programs by external lecturers in FY2023 (17 programs were conducted in total):
- Compliance training for those engaged in investment management business (June 2023, February 2024)
- Internal Audit Training (June 2023)
- Anti-Money Laundering Training (July 2023)
- DEI（Diversity, Equity & Inclusion）Training (November 2023)
- Sustainability Training (January 2024)
In addition to training for management career track positions, JRE-AM's sponsor, Mitsubishi Estate Co., Ltd. also carries out group training on the prevention of workplace harassment. Human rights lectures are also given every year to executives such as the company's president, directors and department managers, as well as Group company presidents.
- For Mitsubishi Estate Group Human Rights Initiatives, please click here.
- For JRE-AM Human Rights Initiatives, please click here.
Employee hotlines & grievance reporting (Confidential)
For the purpose of empowering staff, uncovering risks/problems, and increasing workplace satisfaction, all employees can consult with either the GM of the Compliance Department, a legal advisory firm on such matters as work problems, grievances, improvement requests, and whistleblowing on illegal/unethical behavior by officers and employees. Consultations and reports can be made confidentially, and whistleblowers are given protection under the Whistleblower Protection Act in accordance with JRE-AM's internal regulations. The internal regulations stipulate that employees who have consulted with or made a report to the hotlines based on the internal regulations must not be subject to dismissal; disciplinary action; demotion; salary reduction; disadvantageous transfer, secondment, or reassignment; encouragement to resign; non-renewal of contract; claims for damages; de facto harassment; disadvantageous treatment in relation to retirement allowance and other benefits; or any other disadvantageous treatment on the basis of having consulted or made a report. Upon receiving a consultation or report, JRE-AM conducts an investigation and takes the measures necessary to resolve the issue while taking into consideration the protection of the whistleblower.
Furthermore, all employees at JRE-AM can also use the Mitsubishi Estate Group helpline, which is operated externally. This helpline serves as a contact point for Mitsubishi Estate Group employees, and for temporary employees, part-time employees, and others engaged in part-time work at the Mitsubishi Estate Group, to consult with and report on matters that would be difficult to resolve through the regular reporting route. Employees can consult and report confidentially. The helpline also ensures the protection of those who consult with or report to it by, for example, not disclosing matters related to privacy, such as the identity of said individuals or the details of their consultation or report, to anyone other than the parties involved.
Contact information for consulting and reporting hotlines and helplines is posted at office workspaces and on the in-house intranet to ensure that the information is widely known among employees.
Conflict of Interest Policy of Asset Management Company
JRE-AM recognizes the importance that its business of investing the assets of the investment corporation (JRE) is to manage the funds of the unitholders of the investment corporation, and makes it a principle that JRE-AM always gives the first priority to the interest of the investment corporation, which entrusts the asset investment to JRE-AM, and performs the asset management services in a loyal, fair, sincere, and equitable way. JRE-AM acts in the best interest of the investment corporation, and discharges the fiduciary duties as an asset management company, and makes a fair deal at all times.
Decision-making structure in internal control system
(In a case where a transaction is made with an interested party and above a certain amount)
For details, please refer to the report on the management systems of the issuers of real estate investment trust securities (2. Management systems of investment corporations and asset management companies, (3) Measures for transactions that constitute conflicts of interest) (available only in Japanese).
Preventing Fraud and Corruption at the Asset Management Company
The Mitsubishi Estate Group has declared that it will carry out equitable, transparent corporate activities with a primary emphasis on earning trust. The Group's Guidelines for Conduct forbid not just actions that could be construed as collusion with government officials or other actions considered illegal, but also entertainment and gift-giving that goes beyond the bounds of social convention.
When providing support related to the activities of political groups, the Group ensures it is appropriate in accordance with relevant laws and regulations such as the Political Funds Control Act and the Public Offices Election Act, as well as internal regulations such at the Mitsubishi Estate Group Guidelines for Conduct.
Moreover, in 2013, the Group established the Mitsubishi Estate Group Basic Regulations on the Prevention of Corruption to put in place a system to prevent corruption across the organization. In 2018, the Group established and published the Mitsubishi Estate Group Anti-Corruption Guidelines. The Guidelines document expectations of business partners with the aim of ensuring compliance throughout the supply chain based on the cooperation of all of the Group's business partners. The Group provides training on corruption prevention to officers and employees and obtains pledges on the Guidelines on the Prevention of Corruption from officers and employees. The Group also holds annual lectures on corruption prevention, particularly for departments and Group companies engaged in international business.
In 2017, an external organization assessed the Mitsubishi Estate Group's corruption prevention system as a whole. The Group has been working to further strengthen the corruption prevention system by responding to the issues identified through the assessment.
JRE-AM observes the Mitsubishi Estate Group Basic Regulations on the Prevention of Corruption and the Mitsubishi Estate Group Anti-Corruption Guidelines, of which it is a part, and works towards preventing bribery when entertaining clients or giving gifts.
Specifically, Rules for Entertainment and Gifts of JRE-AM provides below. JRE-AM strictly implements the Group Guidelines for Conduct, for instance, detailed reporting and documentation of the details of entertainment or goods provided or received by its officers and employees.
- With regard to receipt or provision of entertainment or gifts from or to business partners, JRE-AM's officers and employees shall not request, provide, or receive entertainment or gifts incompatible with sound business practices or common sense
- The giving or receiving of cash as a business gift is prohibited except for congratulatory or condolence expenses at weddings, funerals, or ceremonial occasions
Moreover, with a high regard for the “Guideline to Prevent Bribery of Foreign Public Officials,” formulated by the Ministry of Economy, Trade and Industry, JRE-AM has established the Rules for Entertainment and Gifts and conducts specific internal processes when dealing with public officials such as entertaining, giving gifts, inviting, donating, and utilizing their agencies, etc. The said Rules for Entertainment and Gifts of JRE-AM provides “Entertainment and gift-giving to public officials and others are prohibited. When entertainment or gift-giving is required for business purposes, regardless of the amount, prior approval must be obtained from the head of the department and the Director of Compliance Department, and after expenditure, approval for settlement must be obtained from the head of the department.”
