Organizational Efforts for Realizing Compliance
Recognizing compliance to be one of the most important management issues, officers and employees including directors are making a concerted effort under the Internal Administration Supervisor to thoroughly enforce compliance.
Compliance Committee
As an advisory body for the Management Committee, the Company has established the “Compliance Committee,” comprising the President & CEO, Heads of Division, Member of the Board of Directors, Deputy President, General Managing Officer of the Corporate Planning Division, General Managing Officer of the Human Resources Division, General Managing Officer of the Risk Management Division, General Managing Officer of the Compliance Control Division, General Manager of the Compliance Control Division and external lawyers, that in principle meets quarterly to deliberate the Company’s corporate activities from the standpoint of compliance, to verify that the Company’s compliance framework is functioning appropriately, as well as to determine various measures to enhance the Company’s compliance.
Basic Policies on Compliance
In order to win the satisfaction and support from as many customers as possible and become the best model player in the financial instruments exchange market, the Company upholds its “MUFG Way,” “Principles of Ethics and Conduct,” and “Global Governance Standard, Compliance,” which articulate criteria of judgment shared across all officers and employees, as its “Basic Policies on Compliance.”
Compliance Program and Compliance Manual
As part of its action plan to enhance the effectiveness of the compliance framework, the Company has established a compliance program and compiled a compliance manual as a practical guidance towards the realization of compliance.
Whistle Blowing Hotline
The Company has established the whistle blowing hotline, which serves as a consultation and reporting system for identifying internal compliance issues early, enhancing the flexibility of its self-cleansing function, controlling reputation risk and ensuring the Company’s social credibility.
Division of Duties among the
Compliance Monitoring Divisions
- ・The Retail & Corporate Business Inspection and Monitoring Division has been established to oversee the divisions in the Main Office and branches engaged in retail operations, the Wholesale Compliance Division has been established to oversee the divisions of the Head Office engaged in wholesale operations, while the Compliance Control Division has been established to control the company-level framework of compliance.
- ・The Company has appointed an Internal Administrator pursuant to the Rules of the Japan Securities Dealers Association and TypeⅡ Financial Instruments Firms Association to each sales division and branch, and an Internal Administrator pursuant to the Rules of the Financial Futures Association of Japan to the Wealth & Middle Market Risk Management Division, the Retail & Corporate Business Inspection and Monitoring Division and the Wholesale Compliance Division, to conduct monitoring and provide day-to-day instructions on compliance.
- ・The Compliance Control Division is responsible for investigating and dealing with incidents that occurs in the course of business, and notifying the relevant authorities, management of information asset risks, etc. The Wholesale Compliance Division is responsible for management and review of nonpublic corporate information, management of conflicts of interest, and reviewing the pricing of stocks and bonds, etc. and trading management.
Anti-Money Laundering and Counter Financing of Terrorism System
We have positioned the prevention of money laundering and terrorist financing as our most important management issue, and are taking the following measures in compliance with relevant laws and regulations.
Management involvement
Anti-Money Laundering Officer
We have appointed an "Anti-Money Laundering Officer" who is responsible for directing various measures to prevent money laundering, promoting compliance with relevant laws and regulations, and overseeing management and supervision. The "Anti-Money Laundering Officer" is in charge of the Internal Administration Supervisor.
AML Council
We have established the AML Council as a subordinate body of the Compliance Committee, which is an advisory body to the Management Committee, and its members include President & CEO, Deputy President, General Managing Officers of the first line (sales), second line (administrative), and third line (internal audit), Corporate Auditors. The AML Council meets semi-annually to deliberate and report on important matters related to measures to prevent money laundering and terrorist financing, and to promote close cooperation and information sharing among relevant internal departments.
Initiatives to Anti-Money Laundering and Counter Financing of Terrorism
We require our officers and employees to prevent the following actions relating to money laundering and terrorist financing:
- ・Deliberate support or involvement in money laundering and terrorist financing, and activities that assist it
- ・Providing financial services to any entity or individual whose involvement in money laundering and terrorist financing is evident or highly questioned
- ・Neglecting information or status that would suggest money laundering and terrorist financing
- ・Disclosing to any person involved in, or suspected of being involved in, fraudulent or suspicious activities that such activities are being investigated or is reported internally and to law enforcement or regulatory authorities.
AML Compliance Program
We have developed an AML compliance program that includes the following control processes:
- ・Implementation of KYC processes such as identity verification, customer due diligence, detailed due diligence, and periodic customer reviews, etc.
- ・Trading monitoring to detect suspicious transactions
- ・Investigations to identify and report suspicious transactions
- ・Sharing information with authorities and law enforcement agencies as required to detect and prevent money laundering and terrorist financing
Compliance Educational and Training Programs
The Company ensures that every officer and employee at sales divisions and branches is fully aware of and complies with laws, regulations and standards through a monthly compliance training program conducted in individual divisions and branches, job level-specific training (separately targeting officers, business managers, internal administrators, new recruits, etc.), specialized training (primarily for mid-career employees) and other training provided on a regular basis, in addition to day-to-day guidance by general managers and internal administrators, etc..
The Compliance Control Division receives reports on the contents and status of implementation of the training programs, and verifies and evaluates these programs with a view to increasing their effectiveness.
Also, in order to promote deeper understanding and knowledge of compliance matters, “compliance exams” are taken once a year.
Examples of Job Level-Specific Training Programs
- Compliance training for officers
- Generally these programs are in principle implemented once or twice a year, with the aim of raising awareness of compliance among officers, as well as facilitating the establishment of an effective business management structure.
- Compliance training for business managers
- Business managers refer to the heads of business units as defined by the self-regulatory rules of The Japan Securities Dealers Association or general managers the Company has judged necessary to appoint. Business managers are responsible for ensuring that every officer and employee of their sales divisions and branches conducts his/her jobs in compliance with laws and regulations. They also assume the responsibility of providing guidance to and exercising supervision of officers and employees to properly conduct business operations such as solicitation for investment and customer management.
With the goal of reaffirming our pursuit of legal compliance and a deeper recognition of compliance-related issues identified within and outside the Company, as required by the self-regulatory rules of The Japan Securities Dealers Association, the Company conducts a training course for relevant business managers once a year.
- Internal administrator meetings
- Internal administrators refer to those engaged in internal control operations, in either a business unit as defined by the self-regulatory rules of The Japan Securities Dealers Association and the rules of The Financial Futures Association of Japan or in divisions and branches the Company has judged necessary to appoint. Internal administrators are responsible for the full-time supervision of proper internal operations, ensuring that operations conducted in their divisions and branches conform to laws and regulations and are implemented appropriately.
With the goal of reaffirming our compliance measures and policies, together with standardizing and increasing understanding of business knowledge among internal administrators, the Company conducts a training program for internal administrators twice a year.
Basic Policy regarding Anti-Social Elements
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. (“the Company”) has prescribed the following basic policy regarding anti-social elements and, through the observance of this policy by all executives and employees, will strive to ensure the appropriateness and safety of its business operations.
- 1.Response as an organization
- In relation to anti-social elements, the Company has established the foundation of express provisions in its Principles of Ethics and Conduct and Internal Rules, etc., and will respond as an entire organization, from the top management downward. In addition, the Company will guarantee the safety of employees who would respond to anti-social elements.
- 2.Cooperation with external specialist organizations
- Under normal circumstances, the Company endeavors to establish a close cooperative relationship with external specialist organizations such as the police, the Centers for the Elimination of Boryokudan, and lawyers.
- 3.Blocking of all relationships, including business transactions
- The Company shall block all relationships with anti-social elements, including business relationships.
- 4.Civil and criminal legal responses in times of emergency
- The Company shall reject improper demands from anti-social elements, and take legal actions on both a civil and criminal basis, as the need arises.
- 5.Prohibition of secret deals and provision of funds
- The Company shall absolutely not engage in secret deals with anti-social elements.
The Company shall absolutely not provide funds to anti-social elements.