Policies on Client-Oriented Business Conduct｜Cross-border investment Mercuria Holdings

This page contains information on matters that Mercuria Investment Co., Ltd. should inform in connection with its business activities and the company's policies.
If you have any inquiries about the contents of this page, please contact Mercuria Investment Co., Ltd., directly.

Policies on Client-Oriented Business Couduct

Mercuria Investment complies with the Principles for Customer-Oriented Business Conduct that were announced on March 30, 2017 by Japan’s Financial Services Agency. We have established the following policies in accordance with these principles for putting customers first. Based on these principles, we have a firm commitment to providing financial products and asset management services that meet the needs of our customers. In addition, we periodically review these policies and disclose information about activities involving these policies.

1. A commitment to the best interests of customers

As professionals in the field of financial services, we conduct business operations with sincerity and fairness while maintaining high standards of specialized knowledge and ethics and always being faithful to our customers.
Based on an accurate understanding of customers’ needs, we are dedicated to the best interests of our customers by pursuing returns accompanied by the control of customers’ risk exposure.
For the growth of customers’ assets, we will aim for long-term and stable returns by placing emphasis on cash flows of businesses and assets rather than seek short-term gains.
Investments are thoroughly examined to properly determine risk factors and we have a high level ofinvolvement with the management of assets with the goal of increasing the value of our investments.

＜Mercuria Investment initiatives＞

Our philosophy is to identify unique investment opportunities through our broad network of industrial and investment contacts, transcending all boundaries such as geographical, mental and generational borders and focusing on investment in growth areas and growth potential around the world based on Japan's strengths.Since its establishment, Mercuria Investment has used a cross-border approach for making investments in assets and businesses in many countries and regions. We also provide hands-on support for our investments to aim for nonlinear growth by using activities that go beyond conventional thinking.
By providing suitable opportunities to customers with a need to invest in quality assets and businesses, we are dedicated to generating long-term and stable returns to a broad spectrum of customers, including companies, financial institutions, pension funds and individuals. Our highest priority is always the best interests of our customers.

2. Proper oversight concerning conflicts of interest

We have established a Basic Policy concerning Conflicts of Interest and perform the suitable oversight of all transactions that may involve a conflict of interest in order to prevent any activities that would be detrimental to the interests of our customers.
For transactions with a Mercuria subsidiary, affiliated company, shareholder or other investment asset associated with Mercuria Investment that aredetrimental to the interests of our customers, we identify conflicts of interest or potential conflicts and take actions as needed by using procedures stipulated in Mercuria Investment’s rules.

＜Mercuria Investment initiatives＞

Mercuria Investment has established Rules for Transactions with Related Parties for the management oftransactions that may be detrimental to the interests of customers because the transaction may aim to produce a gain for a specific party. The Compliance Department was established to oversee in accordance with these rules for transactions involving a conflict of interest. The manager of this department is responsible for supervising activities involving conflicts of interest. Furthermore, this department performs the centralized management of all information concerning conflict of interest transactions.
The Compliance Department manager determines the most suitable actions to use concerning an actual or potential conflictof interest. The actions to take are reported to the Board of Directors, InvestmentManagement Committee and Compliance Committee where the actions are examined. Depending on the nature of the conflict of interest, these committees may include outside directors and external individuals with professional skills.
In addition, after properly notifying customers individually of the nature of a conflict of interest, we may ask customers to agree to the transaction after providing a thorough explanation.

3. Transparency of fees, remuneration, etc.

We set fees and remuneration at proper levels in accordance with the terms and characteristics of financial products and services provided.
Fees and remuneration concerning financial products and asset management services provided to customers are explained to customers in a manner that is easy to understand. Explanations include relationships between fees and remuneration and specific services.
For expenses other than fees and remuneration that customers may indirectly pay in the future, information is disclosed as much as possible in order to receive the understanding of customers.

＜Mercuria Investment initiatives＞

When Mercuria Investment creates an investment scheme using a new strategy, fees, remuneration and other expenses for customers are set at an appropriate level. If this scheme includes one or more financial products created and operated by Mercuria Investment or its partner companies, fees, remuneration and other items will be adjusted as necessary.
We ask customers to sign contracts for financial products and asset management services only after providing a thorough explanation of fees, remuneration and other expenses paid by customers to receive the customers’ understanding. In addition, information about these fees, remuneration and other expenses is included in the contract, explanatory materials and other documents.

4. Provision of clear information about important subjects

When customers receive information about financial products and asset management services, explanations are provided in a manner that is easy to understand. Explanations include the basic structure of the product or service, risk and return characteristics, fees, remuneration and other items paid by customers, other terms of the transaction, performance after the investment is made, and other subjects.
To prevent information asymmetry with customers, in addition to information about direct investments, information is also provided to give customers an understanding of the characteristics of the final investments held by a financial product or asset management service.
We determine the knowledge, experience, financial condition and investmentobjectives of customers and provide information with sincerity and at the necessary level in order to give customers an understanding of financial products and asset management services.
Mercuria Investment holds seminars and posts information on its website for the purpose of giving customers an even better understanding of investment strategies.

＜Mercuria Investment initiatives＞

To give customers an understanding of our financial products and asset management services, we produce explanatory materials that include diagrams, graphs and other items and use these materials when providing explanations to customers. At this time, in addition to explaining direct investments, we provide information about final investments that customers may hold indirectly. We are dedicated to supplying customers with information about investment schemes, risk and return profiles, fees and remuneration, and other terms of a transaction.
In July 2017, we established a Sales Investor Relations Department for the purpose of giving customers even more thorough explanations and other assistance. This department strengthened the framework for supporting customers. Based on the requests of customers, explanations may be given by both sales personnel and an individual involved with asset management who can explain the status of these activities.
To give customers a better understanding of our investment strategies, we use seminars (1 in 2016, 2 in 2017, 3 in 2018, 2 in 2019 and 5 in 2020) to provide information and post information concerning these strategies on our website.

5. Provision of services that match customers’ needs

We create proposals for customers about the provision of our financial products and asset management services from the standpoint of customers based on a sound understanding of each customer’s knowledge, investment experience, financial condition, investment objectives and risk tolerance.
The goal of our financial products and asset management services are to contribute to the growth of customers’ assets by earning a long-term and stable return.

＜Mercuria Investment initiatives＞

A customer card with information obtained by asking customers about their investment objectives, investment experience, financial condition and other characteristics are prepared and maintained for every customer.While using procedures that comply with laws and regulations, we accurately determine the needs of every customer in order to confirm that the financial products and asset management services we provide result in a suitable investment strategy for each customer.

6. Measures for training and motivation of employees

To provide customers with outstanding financial products and asset management services, we hire people who have advanced specialized skills and we continuously give these people additional training in order to further increase the quality of our highly skilled team of financial professionals.
We are dedicated to conducting business operations that put customers first by making all executives and employees well aware of the importance of these policies and performing proper assessments of results of operations and the performance of individuals based on this awareness.

＜Mercuria Investment initiatives＞

To upgrade the skills of our employees, we hold internal training sessions primarily for compliance, internal controls and internal rules.In addition, employees are encouraged to use external education and other training programs in order to further strengthen their professional knowledge and skills.
By including items concerning compliance and the implementation of these policies in assessments of the performance of executives and employees, we have established an effective framework for conducting customer-oriented business operations.