Summary of Management Policy Concerning Conflicts of Interest in SMBC



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Sumitomo Mitsui Banking Corporation (the “Bank”) 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 Bank or its group companies (collectively, the “Bank 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 Bank are as indicated in the chart below.

In the chart below, the “Conflicts of Interest between the Customer and the Bank Group” refers to circumstances where the Bank 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 Bank 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 Bank 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 Bank

Conflicts of Interest between Customers

Direct-Transaction Type

Situation or status where the customer and the Bank 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 Bank 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 Bank Group is structurally able to gain its own benefit by using disclosed information which the Bank Group obtained from the customer

Situation or status where the Bank Group is structurally able to have another customer gain a benefit by using disclosed information which the Bank 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 Bank 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 Bank 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.

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.

  • 1By blocking information using appropriate information walls.
  • 1By disclosing the conflict of interest to customers.
  • 1By refusing, changing or discontinuing part or all of the transaction.

5. Conflicts of Interest Management System

The Bank will establish the COI Controlling Office independent from the Business Units. The COI Controlling Office conducts, in an integrated fashion, the specification and management of the Transactions to be Managed.In addition, the Bank 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 Bank and the following group companies of the Bank shall be subject to management.

  • Bank Agent for which the Bank serves as a Principal Bank.
  • Parent Financial Institutions, etc. of the Bank ( ) (e.g., SMBC Friend Securities Co., Ltd.)
  • Subsidiary Financial Institutions, etc. of the Bank ( ) (e.g., SMBC Nikko Securities Inc. THE MINATO BANK, LTD., Kansai Urban Banking Corporation)
  • Other group companies, if any, that the COI Controlling Office deems necessary to include as companies subject to management from a conflicts of interest management perspective.
  • Please refer to Article 13-3-2 of the Banking Act and Article 36, Paragraphs 2 through 5 of the Financial Instruments and Exchange Act.

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