The Standards on the organizational structure by peisty474

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									             The Standards on the organizational structure

                                                               as of November 28, 2007




  A member firm, by considering the establishment of a good environment for compliance
with laws and regulations to be one of the most important tasks in its management, shall
endeavor not to deteriorate its clients’ trust and its own social reputation in conducting
investment management business or investment advisory & agency business.



1. Compliance with rules including laws and regulations


 (1) Recognition of the importance of compliance and active participation by directors
  (representatives)
        Directors (representatives) of a member firm shall fully recognize the importance of
     compliance (observance of various rules including laws and regulations) and take the
     initiative in the reinforcement of the compliance regime with devotion and enthusiasm by
     taking such measures as establishing the principle policy relating to compliance.


 (2) Appointment of a chief compliance officer and reporting
       A member firm shall appoint a chief compliance officer who supervises the observance
     of various rules including laws and regulations regarding investment management
     business or investment advisory & agency business from an overall viewpoint and
     promptly report the appointment and change, if any, of such a person to the Association.
       A person who meets the conditions provided in Article 15-4 Item 1 of the Order for
     Enforcement of the Financial Instruments and Exchange Law (hereinafter “the Order”)
     may take this position concurrently.


(3) Establishment of a compliance department (or appointment of a compliance officer)
      For the purpose of strengthening the compliance regime, a member firm shall establish
    a compliance department (or appoint a compliance officer) being independent of other
    business departments in a way that fits its scale of business.


(4) Appropriate collection and management of information relating to various rules
 including laws and regulations
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      For the purpose of creating a good environment for compliance, a member firm shall
    appropriately collect and manage information relating to various rules including laws and
    regulations necessary for the proper conduct of investment management business or
    investment advisory & agency business.


 (5) Making the principle policy and various rules including laws and regulations
  thoroughly known and observed
       A member firm shall attach importance to compliance and drive home the principle
     policy about compliance and various rules including laws and regulations for observance
     among its officers and employees by taking proper steps, such as conducting periodical or
     continuous training programs and distributing relevant documents to them.


 (6) Monitoring of compliance with laws and regulations
       A member firm shall review periodically or continuously how the compliance program
     has been implemented.


2. Internal audit
   For the purpose of completing its internal audit functions, a member firm shall conduct a
periodical or continuous internal audit by an independent department (or an independent
person) in a way that fits its scale of business. The internal audit shall also cover the
compliance department (or a compliance officer).


3. Proper management of information


 (1) Information about clients


       a. A member firm shall strictly keep information about its clients, including
          information about its clients’ assets, that its officers or employees have learned
          during the execution of their duties and shall manage such information properly not
          to be divulged to any other person.


       b. A member firm shall, in accordance with purposes of Article 41 or Article 42 of the
           Financial Instruments and Exchange Law (hereinafter “the Law”) establish internal
           rules regarding information about its clients by conducting thorough review from
           the viewpoint of obligation to keep secrets, and establish a robust information
           management system about its clients by ensuring proper enforcement of those
           rules.


         Particularly, a member firm must adopt necessary measures as provided in the
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       Guidelines concerning Personal Information Protection (resolved by the Board of
       Directors Meeting held on March 23, 2005), taking into consideration that a proper
       protection for personal information about its clients must be secured pursuant to laws
       and regulations including the Cabinet Office Ordinance of the Law, the Law
       concerning Personal Information Protection, the Guidelines concerning Personal
       Information Protection in the Financial Sector, and the Guidelines for Implementing
       measures for Security Management concerning Personal Information Protection.
         Furthermore, a member firm is required to report immediately to the competent
       authorities when it finds the fact that personal information has been leaked and also
       report such fact to the Association.


 (2) Information relating to investment management business or investment advisory &
  agency business
     A member firm shall handle information about investment decisions relating to
  investment management business or investment advisory & agency business and
  information relating to the trend in purchase and sale of securities (excluding the
  transmission of such information in order to obtain an offer, etc. about conditions of a
  transaction) with utmost care in order to prevent any leakage that would deteriorate its
  clients’ interests.


 (3) Information relating to other businesses
     In case where a member firm also engages in other businesses (businesses provided in
  Article 29-2 Paragraph 1 Item 5 of the Law), it shall manage properly information obtained
  in conducting each business.


 (4) Prevention of insider trading
     For the purpose of preventing insider trading, a member firm shall establish internal rules
  that includes the items provided in “the Guidelines for Prevention of Insider Trading”
  (resolved by the Board of Directors Meeting held on September 28, 1988).


4. Penal provisions
   A member firm shall establish, in its internal rules (such as office regulations), penal
provisions to be applied when a violation of rules including laws and regulations has been
recognized and shall apply them with strictness and fairness.


5. Clarification of the contents of a contract
   When concluding a discretionary investment advisory contract, a member firm shall
incorporate in a contract, as much as possible, important things including the investment
management policy agreed with its client, and endeavor to obtain the client’s written

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confirmation about the way to place orders relating to the management of its asset.




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