With an array of regulatory changes occurring in regulations surrounding J-REITs such as the Financial Instruments and Exchange Act and the Act on Investment Trusts and Investment Corporations, we put utmost importance for ADR to be able to comply with the changing regulations. To tackle goals, ADR has established the following compliance framework.
One of the first steps taken by ADR was to install a Compliance Officer and Compliance Committee to oversee that compliance framework is implemented. The Compliance Committee deliberate and make decisions on conflicts of interest transaction, related-party transactions, internal compliance and compliance framework.
Compliance and Risk Management Division
- Executing and promoting measures and policies which the Compliance Committee decided that are essential in complying to laws, ordinances and other regulations.
- Administering the Compliance Committee.
- Keeping tabs on domestic and international status of legal and regulatory changes and ensuring the compliance to the latest laws and regulation by informing on such situation to the asset management company staffs.
- Instructing and training company staffs on matters concerning compliance.
- Responding to complaints, compliance violations and other issues (including advising on matters concerning operational improvements based issues found at internal audits).
- Examining and reporting on individual projects for any existence of compliance issues.
- Supervising improvements, reviewing and reporting on risk management.
- Reviewing and advising on making and revising of bylaws, rules and other regulations.
- Reviewing administrations and deliberations of company committees.
- Matters incidental or related to the above items that are required for compliance at the asset management company
Representative Director and President of ADIM, Compliance Officer of ADIM (the committee chairman), CFO of ADIM, And an independent outside committee member
Deliberation Agenda of the Committee
- Matters concerning related party transactions arising from management of ADR’s assets.
- Matters concerning acquisition or sale of assets for ADR with a non-related counterparty, of which the transaction is a “tolerated transaction” as stipulated in the Asset Management Guidelines.
- Matters concerning ADR’s transactions with non-related counterparty, which the Compliance Officer deems as requiring deliberation by the Compliance Committee.
- Matters concerning ADR’s debt financing transactions with related parties which have conflict of interests.
- Matters concerning policies on responding to complaints, which the Compliance Officer deems as requiring deliberation by the Compliance Committee, and measures for preventing recurrence of similar complaints.
- Matters concerning ADR’s asset management policy (making and amending Asset Management Guidelines, Fiscal Asset Management Plans, Medium-Term Asset Management Plan and other management policies).
- Matters concerning Compliance Manual development and amendment
- Matters concerning the making of programs on promoting and improving compliance.
- Matters concerning proposals to make, revise, amend or abolish internal rules, regulations and standards concerning compliance
- Matters concerning internal compliance and compliance framework
- Other compliance matters designated as necessary by the Compliance Officer
- In addition to the above, matters specified in ADIM’s other internal rules and regulations.
- Other incidental business matters
Method of Deliberation, etc.
Deliberation and resolution executed as prescribed for each of the above agenda by attendance of at least two-thirds of the committee members which must include the Compliance Officer and the independent outside committee member.
Investment and Asset Management Plans Approval Flow
Asset Acquisition and Disposal Approval Flow
(i) Related-party transaction or (ii) Transactions requiring approval as stipulated in Asset Management Guidelines
- If there is a suspensive condition for an ADR’s Board of Directors’ approval, the asset management company’s Board of Directors may deliberate and approve proposals in advance of ADR’s Board of Directors' deliberation and resolution.