Policy on Managing Conflicts of Interest

Concordia Financial Group, Ltd. (hereinafter, “the Company”) and its consolidated subsidiaries and equity method affiliates (hereinafter, “the Group”) shall properly execute businesses in compliance with laws and regulations to avoid impairing the interests of customers unreasonably.

1. Definition of a Conflict of Interest

A conflict of interest refers to conditions in which the interests of customers are unreasonably impaired as a result of a clash of interests, competition and the like between the Group and customers and among customers for companies belonging to the Group.

2. Patterns of Transactions That May Correspond to a Conflict of Interest

Individual and specific circumstances determine whether a given transaction may correspond to a conflict of interest or not. For example, transactions stated below may correspond to a conflict of interest.

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Patterns Transactions between customers and the Group Transactions among customers for companies belonging to the Group
Clashes of interests Transactions in which the interests of customers and the interests of the Group are in opposition to each other Transactions among customers for companies belonging to the Group in which their interests are in opposition to each other
Competing transactions Transactions in which customers and the Group are in competition with each other Transactions among customers for companies belonging to the Group in which the customers are in competition with each other
Use of information Transactions in which the Group derives benefits from using information the Group has gained through its relationships with customers Transactions in which other customers for companies belonging to the Group derive benefits from using information the Group has gained through its relationships with customers

3. Identification of Transactions That May Correspond to a Conflict of Interest

The Group shall properly identify transactions that may correspond to a conflict of interest, taking factors, such as contractual or fair and equitable obligations to customers and reputational risks, into consideration.

4. Methods for Managing Transactions That May Correspond to a Conflict of Interest

The Group shall manage transactions that may correspond to a conflict of interest by choosing one of the following methods or selecting a combination of the following methods appropriately.

  • (1)
    Blocking of information among companies belonging to the Group and among divisions by installing information partitions
  • (2)
    Alteration of a condition or a method for one of the parties (or both parties) to the concerned transaction or a transaction with the concerned customer
  • (3)
    Discontinuation of the concerned transaction or a transaction with the concerned customer by one of the parties thereto
  • (4)
    Disclosure of a conflict of interest to customers and their consent
  • (5)
    Other methods for properly guaranteeing the protection of customers

5. Preparations for Managing a Conflict of Interest

The Company shall set up a section in charge of managing and overseeing a conflict of interest for properly managing such conflict within the Group. The section shall manage a conflict of interest in a centralized manner.
Furthermore, the section shall make proper ways for managing a conflict of interest known to all directors and employees within the Group by providing them with education, training and the like.

6. The scope of the Group subject to a Conflict of Interest

For example, the Group stated below is subject to a Conflict of Interest.

  • The Bank of Yokohama,Ltd.
  • The Higashi-Nippon Bank, Limited.
  • BANKCARD Service Japan Co., Ltd.
  • Hamagin Tokai Tokyo Securities Co., Ltd.
  • Hamagin Finance Co., Ltd.
  • Yokohama Guarantee Co., Ltd.
  • Yokohama Capital Co., Ltd.
  • Hamagin Research Institute, Ltd.
  • Sky Ocean Asset Management Co., Ltd.
  • The Higashi-Nippon Business Service Co., Ltd.
  • The Higashi-Nippon Guarantee Service Co., Ltd.
  • The Higashi-Nippongin JCB Card Co., Ltd.