Management Policy for Conflict of Interest (Outline)

SBI Shinsei Bank, Limited

1. General Rules

1-1. Purpose

SBI Shinsei Bank, Limited (hereinafter the “Bank”) has established the Management System for Conflict of Interest for (1) managing conflict of interest that may unfairly impair the interest of customers based on the Banking Act and the Financial Instruments and Exchange Act, and (2) managing conflict of interest that may impair the interest of customers in business operations that have set the highest priority in the “best interests” of the customers based on the Policy on Customer-Oriented Business Conduct publicly announced by the Bank at the Bank and its group companies (hereinafter, the “Group”). The Bank has also established Management Policy for Conflict of Interest which stipulates basic items of the Management System for Conflict of Interest.

Outline of this Policy shall be publicly announced as follows under the relevant laws and regulations, etc.:

2. Management of Conflict of Interest Based on the Banking Act and the Financial Instruments and exchange Act

2-1. Scope of the Group Companies

Group companies subject to the management for conflict of interest by the Bank based on the Banking Act and the Financial Instruments and exchange Act shall be as shown in a separate table.

2-2. Categories of Transactions Which May Involve Conflict of Interest and Examples

(1) Categories of Transactions Which May Involve Conflict of Interest

Categories of transactions which may involve conflict of interest may include following: However, these categories merely show standards for making a judgment whether if there may be a conflict of interest or not. It does not necessarily mean that there is a conflict of interest if it is applicable to any one of the following. Also, additions or revisions, as required, may be made in future.

• ⅰ ) When there is a conflict of interest between the Group and a Customer
• ⅱ ) When there is a conflict of interest between the Group’s Customer and another Customer
• ⅲ ) When it is similar to ⅰ ) or ⅱ ) above or when the interests of Customers are unfairly impaired in other ways

The Bank shall take general circumstances, including any influence on the Group’s reputation, into consideration to judge if conflict of interest is involved or not.

(2) Examples

Examples of transactions which may involve conflict of interest shall include following and other similar transactions:

• ⅰ ) Examples of Categories under ⅰ ) (1) Above
  

  (a) When fundraising support services and/or advice, etc. on M&A are given with to a Customer who is in a conflicting or competitive relationship with principal investment of the Group

  (b) When advice, etc. are given for M&A to a Customer, to whom credit is given by the Group

  (c) When advice, etc. are given for fundraising support services and/or M&A to another Customer, who is in a conflicting or competitive relationship with a Customer

  (d) When advice, etc. are given to a Customer for fundraising support services and/or M&A and at the same time principal investment is made in the applicable Customer by the Group, assets are purchased from the applicable Customer and other transaction is carried out with the applicable Customer

  (e) When a Customer is assisted by the Group in the applicable Customer’s financing and at the same time the Group intends to collect fund from the applicable Customer by means of fund raised through the Group’s assistance

  (f) When the Group makes a principal investment in a Customer’s assets, for which the Group has information

  (g) When a wide range of services are rendered to a Customer by the Group and it is intended to limit participants of a transaction to the Group companies

  (h) When securities issued or established by the Group or an interested party are recommended or sold to the applicable Customer, or when the Group incorporates the applicable securities into the applicable Customer’s assets, of which the Group is entrusted with investment by the Customer. In addition, when the Group back-finances the applicable Customer who invests in the applicable securities.

  (i) When the Group makes use of information of transactions with a Customer against the Customer’s intention to pursue its own interests

• ⅱ ) Examples of Categories under ⅱ ) (1) Above
  

  (a) When advice, etc. are given with regard to fundraising support services and/or M&A to a transaction in which more than one Customer are in conflicting or competitive

  (b) When the Group makes use of information of transactions with a Customer against the Customer’s intention to pursue interests of another Customer

2-3. How to Manage a Transaction Which May Involve Conflict of Interest (hereinafter, “Subject Transaction”)

If it is determined that a transaction is applicable to Subject Transaction, the Bank shall try to protect Customers appropriately through a selection or combination of methods below and other methods.

• ⅰ ) Separation of a business organization responsible for the Subject Transaction and a business organization responsible for the applicable Customer’s deal
• ⅱ ) Change in conditions or ways of the Subject Transaction or the applicable Customer’s deal
• ⅲ ) Suspension of the Subject Transaction or the applicable Customer’s deal
• ⅳ ) Appropriate disclosure of information on possible risks that the applicable Customer’s interests may be unfairly impaired incidental to the Subject Transaction (provided, however, that such disclosure does not infringe with confidential liability of the Group)

2-4. Management System for Conflict of Interest

(1) Establishment of a Division Responsible for the Management of Conflict of Interest

• ⅰ ) Group Legal and Compliance Division, the Bank shall be the division responsible for the management of conflict of interest.
• ⅱ ) The division responsible for the management of conflict of interest shall not be instructed by the manager of any other business organization for details of operations and shall maintain its independence in operations of the management of conflict of interest.
• ⅲ ) The division responsible for the management of conflict of interest shall be responsible for the company-wide management system to specify transactions, which may involve conflict of interest, and to control conflict of interest.

(2) Responsibilities of the Division Responsible for the Management of Conflict of Interest

The division responsible for the management of conflict of interest shall discharge following responsibilities in a position independent from divisions responsible for businesses at the Bank and the Group companies: When the division responsible for the management of conflict of interest gives an instruction to the Group companies or when the Group companies make a report to the division responsible for the management of conflict of interest, such an instruction/a report shall be given/made through the division responsible for internal management at the applicable the Group companies.

• ⅰ ) To instruct divisions responsible for businesses at the Bank and the Group companies to implement appropriate management of conflict of interest with regard to the Subject Transaction as well as to specify the Subject Transaction.
• ⅱ ) To make semi-annual reports to the Group Compliance Committee and the Compliance Committee on transactions which may involve conflict of interest, as specified and managed. However, any item, which may have a considerable influence on the management or may considerably impair the interests of customers, shall be reported to the Group Executive Committee without delay.
• ⅲ ) To receive reports on the management status, etc. of conflict of interest for Subject Transactions, including Subject Transactions of the Group companies, on a regular basis or from time to time, to verify implementation of appropriate management and to review procedures and systems for the management of conflict of interest, as required.
• ⅳ ) If Customer’s interests may be unfairly impaired, to instruct implementation of appropriate management of conflict of interest to divisions responsible for businesses at the Group, as required, or to review the Subject Transaction, etc.
• ⅴ ) To give training, on a regular basis, to statutory executive officers and employees of the Group with regard to the management of conflict of interest on the basis of this Policy and management regulations for conflict of interest and to make sure that everybody appropriately understands about the management of transactions which may involve conflict of interest.

(3) Preparation and Conservation of Management Records of Conflict of Interest

The division responsible for the management of conflict of interest shall record and maintain actions taken to appropriately ensure specification of Subject Transactions and their management and Customer protection for five years from the date of preparation.

3. Management of Conflict of Interest in Business Operations that Set the Highest Priority in the “Best Interests” of the Customers

the Bank will strive to manage conflict of interest indicated in “The Policy on Customer-oriented Business Conduct” and its “Action Plan” publicly announced separately.

End

(Appendix)
Parent Financial Institutions, etc.
Subject to Conflict of Interest Management (as of March 1, 2024)

Company Name

SBI Holdings, Inc.

Japannext Co., Ltd.

SBI SECURITIES Co., Ltd.

SBI Insurance Co., Ltd.

SBI Sumishin Net Bank, Ltd.

SBI Life Insurance Co., Ltd.

SBI Asset Management Co., Ltd.

Rheos Capital Works Inc.

SBI MONEYPLAZA Co.,Ltd.

SBI Investment Co., Ltd.

Other Parent Financial Institutions, etc.

Subsidiary Financial Institutions, etc.
Subject to Conflict of Interest Management (as of March 1, 2024)

Company Name

Shinsei Trust & Banking Co., Ltd.

Shinsei Investment Management Co., Ltd.

Shinsei Investment & Finance Limited

Showa Leasing Co., Ltd.

Shinsei Kobelco Leasing Co., Ltd.

APLUS Co., Ltd.

Shinsei Personal Loan Limited

Shinsei Financial Co., Ltd.

Diamond Asset Finance Co., Ltd.

Nissen Credit Service Co., Ltd.

Shinsei Corporate Investment Limited

Other Specially Permitted Business Notifying Person

Bank Agent having the Bank as its Principal Bank