Principles for Customer-Oriented Business Conduct

Global Alliance Realty Co., Ltd. ("GAR") has adopted the Principles for Customer-Oriented Business Conduct, which were announced by the Financial Services Agency on March 30, 2017, and GAR's action policy is as follows:
Note that the term "customer" in the Principles for Customer-Oriented Business Conduct includes not only customers in the sense of direct counterparties in transactions of GAR, but also customers in the sense of ultimate beneficiaries.

1．Formulation, publication, etc. of policy for customer-oriented business conduct

As a financial business operator, GAR has adopted "achievement of maximum value for our clients" as a management policy aimed at realizing customer-oriented business conduct, and we have published this policy on our website.
Furthermore, action taken based on this policy is verified through objective internal audits conducted by external experts. If these internal audits result in issues being identified, improvements are proposed and periodic reviews are conducted.

2．Pursuit of the best interests of clients

As a financial business operator, GAR maintains high levels of expertise and professional ethics, conducts its business with integrity and fairness toward its clients, and strives to serve their best interests.
GAR also endeavors to make this approach to business conduct an integral part of its corporate culture.

3. Appropriate management of conflicts of interest

As a financial business operator, GAR ensures the appropriate management of conflicts of interest by formulating in advance the following two measures to prevent business transactions that involve conflicts of interest:

① Rules on Transactions with Related Parties

To control conflicts of interest with its major shareholders, GAR defines “related parties,” which has a broader scope than “interested persons and other close affiliates” as stipulated by the Act on Investment Trusts and Investment Corporations (“Investment Trusts Act”) and the Order for Enforcement of the Investment Trusts Act, under its voluntary rules. Furthermore, it has established certain transaction guidelines and procedures to prevent transactions from being conducted for the benefit of related parties.

② Prevention of Conflict-of-Interest Transactions Between Clients Involved in GAR's Three Core Businesses

GAR has established internal rules for the purpose of preventing conflict-of-interest transactions among clients involved in its three core businesses. The Guidelines for Preventing Competition to Acquire Properties allow the sharing of new property information obtained from third parties, while clearly stipulating the order of priority among clients involved in the three core businesses at the property acquisition stage. In addition, the Rules on Transactions with Related Parties prevent leasing competition among clients and stipulate that the intentions of candidate tenants be faithfully reflected to ensure that preferential treatment is not given to specific properties without a valid reason. Regarding property sales and purchase transactions between clients, the rules rigorously set forth transaction procedures for each business and between the three core businesses.

4. Clarification of fees etc.

As a financial business operator, GAR provides detailed information on fees and other costs borne by clients, regardless of the names used to describe them, so that clients can understand matters such as the services to which such fees etc. relate.

5. Provision of important information in an easy-to-understand manner

As a financial business operator, GAR, in light of the asymmetry of information between GAR and its clients, provides, in addition to the information described in 4. above, important information relating to the sale, recommendation, etc. of financial products/services provided by GAR in an easy-to-understand manner to ensure that its clients can comprehend it.

6. Provision of services that are suitable for clients

As a financial business operator, GAR finds out about the assets, trading experience, knowledge, and trading objectives/needs of its clients, and designs, sells, recommends, etc. financial products/services that are suitable for them.

7. Appropriate motivational framework for employees etc.

As a financial business operator, GAR endeavors to nurture and improve compliance awareness by providing internal compliance training to all employees and encourages them to participate in external compliance training programs to ensure that the best interests of clients are served, that clients are treated fairly, and that conflicts of interest are managed appropriately.
GAR has also made compliance-related awareness/action one of the indicators used in employee evaluations.

The governance structure, basic policy, investment policy (growth policy, financial policy, distribution policy, etc.), management fee structure, etc. of Global One Real Estate Investment Corp. ("GOR"), for which GAR undertakes asset management, are disclosed in GOR’s annual securities report, on its website, etc.