Policies on Customer-Oriented Business Conduct (3)

3.Appropriate Management of Conflicts of Interest

TSCM will accurately recognize potential conflicts of interest with clients in transactions and those implications, and will appropriately manage such conflict of interest, if those should happen.
In order to protect the interests of our customers, TSCM will formulate a specific policy for managing conflicts of interest and will comply with its procedures and restrictions.

Specific Policy Content and Implementation Status

● Specific policy for managing conflicts of interest: TSCM has established self-regulations to identify and categorize transactions that may unfairly harm the interests of customers, and to clarify the management method, management system, and scope of interested parties to be managed. TSCM manages transactions involving conflicts of interest through methods such as internal checking by separation of duties and the isolation/blocking of information, etc.
In addition, TSCM will disclose such fact to the customer in an appropriate manner in the case of a transaction that may cause a conflict of interest.

Handling of Interested Party Transactions and Conflicts of Interest Transactions

Interested Parties:

Board Members and Employees of Touchstone Capital Management and its group companies
Those that manage the company through equity holding interests and other methods
Corporates managed by Touchstone Capital Management through equity holding interests and other methods

	Transaction Type①	Transaction Type②	Principally	Excemptions	Consents required to apply for excemptions
Transactions by interested parties (Transactions between ① and ②)	Companies that a board member has personal ties or Companies that a board member is concurrently a board member of	Touchstone Capital Management or Funds managed by Touchstone Capital Management	Prohibited	Exempted if the transaction is a fair deal that protects the investors and does not impair the credibility of the financial instrument transaction firms	Consent required by all of the below: - Investment Committee - Compliance/Risk Management Committee - Board Meeting
	nterested Parties	Funds managed by Touchstone Capital Management	Prohibited	Exempted if meets the following two items: - Proof of price validity or if the price is within 20% of the appraisal value - Disclosure to fund investors
	Companies with investment interests with Touchstone Capital Management	Funds managed by Touchstone Capital Management	Prohibited
	Funds managed by Touchstone Capital Management	Funds managed by Touchstone Capital Management	Prohibited	Exempted if meets the following two items: - Proof of price validity by external real estate appraiser - Disclosure to fund investors	Consent by investors of both funds (Recalls within 10 business days allowed)

In the case of brokerage business or private placement handling business, TSCM will disclose that fact in an appropriate manner, in transactions that may give rise to conflicts of interest, for example that we receive payments such as brokerage fees from the seller concerning the transaction of target asset acquired and invested by customers.

● Review process by the Compliance Risk Management Committee: In the case of interested party transaction, the Compliance Risk Management Committee will review and discuss whether there is a conflict of interest in the transaction, necessary procedures, and other management methods to be implemented.
The committee requires the attendance of a compliance officer and an external expert (lawyer) as a general rule, and decisions of the committee shall be made with the unanimous approval and consent of the attending committee members.
In addition, resolutions that are rejected or disapproved by the committee will be remanded to the Investment Committee, and after reconsidering in the investment management department, the resolution will need to be reviewed again by the Investment Committee and the Compliance Risk Management Committee.

戻る