Asset Management Company
Simplex REIT Partners
Sponsor
Mizuho Trust & Banking

japanese

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  2. Characteristics of One REIT
  3. Internal Management and Compliance Structure

Internal Management and Compliance Structure

Compliance Structure

The Asset Management Company understands that the asset management operations of One REIT Inc. are crucial in managing the funds of unitholders for One REIT Inc. In order to establish an appropriate management structure, ONE REIT has set up a Compliance Office as a department responsible for compliance, and has appointed a Compliance Officer as an individual responsible for supervising compliance, securing the effectiveness of the internal checks-and-balances system for other departments.

Compliance Structure of the Asset Management Company

(1) Role of Compliance Officer

As the person responsible for supervising compliance within the Asset Management Company, the Compliance Officer will establish the internal compliance structure and will also endeavor to bring about a normative conscience internally which strictly observes laws and other regulations.

(2) Role of Compliance Committee

The Compliance Committee is comprised of the Compliance Officer, President and Representative Director, Head of Finance & Administration Division, and external members (third parties possessing specialized knowledge outside of the Asset Management Company such as lawyers, etc.), as well as additional members appointed when needed by the Board of Directors. The Committee will review or decide matters related to compliance, such as interested parties transactions and observing laws, etc., as well as the compliance structure.

(3) Compliance Office

The Compliance Office will control operations related to advancing and supervising compliance in the Asset Management Company and will conduct matters, etc., related to advancing and supervising compliance in the Asset Management Company together with the Compliance Officer.

Internal Auditing Structure

Internal auditing for the Asset Management Company will be conducted by the Internal Audit Office. The Internal Audit Office audits all departments and offices of the Asset Management Company except for the Internal Audit Office itself. Internal auditing for the Asset Management Company is conducted more than once per fiscal year, according to the basic plan for auditing and the execution plan for auditing.

Internal Organizations that Acquire and Sell Assets under Management

Plans related to acquiring or selling assets under management are drafted by Investment & Asset Management Division I, approved by the Compliance Officer, and decided upon by the Compliance Committee or the Investment Committee on behalf of the Asset Management Company. However, in cases where the said draft for acquisition or sale of an asset under management is an interested parties transaction, consent must be gained from the Board of Direction in addition to the aforementioned process. Moreover, resolutions made by the Investment Committee must be attended by two-thirds or more of the members of the Investment Committee with voting rights (however, the attendance of external members and the Compliance Officer is necessary), requires support from two-thirds of the members at the meeting with voting rights (however, this includes support from external members for interested parties transactions), while resolutions made by the Compliance Committee must be attended by at least two-thirds of the members of the Compliance Committee with voting rights (however, external members’ attendance is necessary) and requires support from two-thirds of the members at the meeting with voting rights, including support from the external officers at the meeting. Furthermore, One REIT Inc. has established a structure that can acquire assets at the appropriate price and under the appropriate conditions from the perspective of protecting unitholder earnings, including countermeasures against conflicts of interest in interested parties transactions.

Internal Organizations that Acquire and Sell Assets under Management

Efforts against Conflict of Interest Transactions

(1) Countermeasures and Management Structure against Conflict of Interest Transactions

Under the interested parties transaction rules, for transactions with parties that have relations with the Asset Management Company, the Asset Management Company will not only investigate if there are any legal issues, but will also define interested parties(note 1) broader than what is determined as interested parties by the Act on Investment Trusts and Investment Corporations as well as the Order for Enforcement of the Act on Investment Trusts and Investment Corporations, in order to carry out the duties of the Asset Management Company in the said transaction as the consignee of the business related to the asset management of One REIT Inc.

(Note 1)
(1)The Asset Management Company or directors of the Asset Management Company
(2)The Asset Management Company’s shareholders
(3)Interested parties, etc., determined by the Order for Enforcement of the Act on Investment Trusts and Investment Corporations, other than (1) and (2)
(4)Corporations that conduct the majority of investments, silent partnership of equity Investments, or preferred equity investments to corporations that correspond to (1) and (3)
(5)Corporations that have contracted asset management operations to those who correspond to (1) through (3)
(6)Corporations in which executives of the Asset Management Company also hold an executive position

(2) Procedural Overview

When conducting transactions with linked parties determined by our rules that fall under (3) “Restrictions,” in principle, the decision making process will be based on the “interested parties transaction rules.”

a.When conducting a transaction with linked parties determined by our rules that fall under (3) “Restrictions,” the Compliance Officer will first screen whether or not there are problems with observing laws, etc., or with compliance. If approved, it can be passed on to the Compliance Committee. If the Compliance Committee approves such a transaction under the rules of the Compliance Committee, etc., it can be passed on to the Investment Committee. After such a transaction is reviewed by the Investment Committee and approved, it can be passed on to the Board of Direction. Upon gaining approval from the Board of Direction, it is decided that such a transaction is approved. Approved transaction proposals and related documents that have gone through the above process will be delivered to Board of Directors without delay. However, when it is difficult to deliver these documents to the Board of Directors without delay in light of the Board of Director meeting schedule, they can be delivered individually to each member comprising the Board of Directors, and this will be considered as having delivered the documents to the Board of Directors.
b.Notwithstanding the provisions of a. above, upon planning of asset management, if details of asset management, maximum transaction price (maximum return value and maximum rates used to calculate return value), execution methods, scheduled transaction date, transaction parties, and other transaction conditions are recorded in detail, and asset management is possible based the transaction conditions or transaction conditions that are profitable for One REIT Inc., the Head of Investment & Asset Management Division can approve such asset management. Moreover, upon planning of asset management, if details of fund procurement, execution methods, scheduled date of fund procurement, transaction parties, maximum fund procurement costs (maximum interest payments, etc.), and other fund procurement conditions are recorded in detail, and it is possible to execute fund procurement based on fund procurement conditions or fund procurement conditions that are profitable for One REIT Inc., the Head of Finance & Administration Division can approve such fund procurement, without going through the process mentioned above in a.

(3) Restrictions

Acquisition of real estate, etc.
Disposition of real estate, etc.
Acquisition and disposition of assets other than real estate, etc.
Leasing of real estate, etc., and securities
Transacting real estate, etc., and entrustment of leasing brokerage operations
Entrustment of property management operations
Requests for construction
Borrowing of funds
Entrustment of One REIT’s operations that are conducted by the Asset Management Company
Entrustment of other operations

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