Nippon Building Fund Management Ltd. (the “Company”) stipulates the following policies given the Financial Services Agency’s announcement of Principles for Customer-Oriented Business Conduct.
1. Development and Publication of Policies on Customer-Oriented Business Conduct
The Company shall develop and publish policies for realizing customer-oriented business conduct and periodically disclose the implementation status. The policies shall be reviewed periodically in order to realize even better business conduct.
2. Pursuit of Customers’ Best Interests
The Company shall maintain highly qualified expertise and professional ethics as a financial services provider and treat its customers faithfully and fairly in pursuit of their best interests. In addition, the Company shall make efforts to ensure such business conduct becomes established as a corporate culture.
Specific Details of the Policy
Pursuit of Customers’ Best Interests
By way of high-quality fund management, NBFM will seek the improvement of unitholder value on a mid- to long-term basis, i.e., the stable growth of DPU (distributions per unit) on a mid- to long-term basis as well as an increase of NAV (net asset value) per unit.
Securement and Retention of Professional Personnel
Expertise required to pursue customers’ best interests is nurtured through the system and performance of a company as well as knowledge and experience of each officer and employee.
The Company will strive to secure personnel with expertise by accepting assignees from the parent company, etc. in addition to hiring employees who possess knowledge and experience required in each department (or a potential for such).
Furthermore, recognizing that review of employees’ working conditions, including realization of good work-life balance and work-style reform, is also an important management issue for securing and retaining personnel with expertise, the Company will strive to retain employees through measures such as the encouragement of taking paid holidays, use of telework and introduction of flexible hours.
Maintaining Professional Ethics and Establishing Such as Corporate Culture
With an awareness and pride as a professional entrusted with asset management, the Company will conduct business to establish the following legal obligations, which the Company especially regards as important, as a corporate culture.
○ Duty of loyalty (Article 42, Paragraph 1 of the Financial Instruments and Exchange Act)
○ Duty of due care of a prudent manager (Article 42, Paragraph 2 of the Financial Instruments and Exchange Act)
○ Obligation to make the best efforts (Article 2, Paragraph 1 of the Financial Services Act for the Provision and Improvement of the Usage Environment)
3. Appropriate Management of Conflicts of Interest
The Company shall accurately identify the possibility of conflicts of interest arising with customers and appropriately manage them in the possible event of such.
Specific Details of the Policy
Asset management is implemented through utilization of the Mitsui Fudosan Group’s tenant leasing capabilities, office management capabilities, etc., but there may also be concerns over conflict of interest.
Regarding transactions in which there may be conflicts between the interest of customers and of the Company or its interested parties, etc., the Company always maintains awareness of its accountability to customers and prevents transactions that are not just or fair in line with laws and regulations and its Rules regarding Transactions with Interested Parties, etc., the internal rules.
4. Clarification of Fees and Expenses
The Company receives asset management fees as compensation for services related to asset management entrusted by Nippon Building Fund Inc. (the “Investment Corporation”). The Company shall provide information in a manner understandable by customers on the details of management fees it receives from the Investment Corporation, as well as what is a service corresponding to each of such fees.
Specific Details of the Policy
The asset management fees of the Company are comprised of the following four types as set forth in the Articles of Incorporation: (1) Management fee 1 (fees based on real estate rental revenues, etc.), (2) Management fee 2 (fee based on net income before tax), (3) Management fee 3 (fee upon acquisition) and (4) Management fee 4 (fee upon disposition).
For the details of the asset management fees, please see the Articles of Incorporation.
Articles of Incorporation of the Investment Corporation
: Article 16 Calculation Methods and Time of Payment of Asset Management Fees to Asset Manager
5. Easily Understandable Provision of Important Information
The Company shall provide important information concerning the Company and the Investment Corporation in a manner understandable by customers while considering the transparency of the information.
Specific Details of the Policy
In addition to statutory disclosure and timely disclosure, the Company voluntarily discloses information that is considered to be useful to its customers.
Furthermore, the Company holds investor meetings for analysts and institutional investors every fiscal period in which the Company’s President & CEO and directors present the statement of accounts and business overview. Presentation materials as well as videos of the investor meetings (in Japanese and English) will be released on the website in a timely manner for the fair disclosure of the content of the investor meetings and materials used.
Moreover, after the announcement of financial statements, the Company will initiate IR activities targeting institutional investors in Japan and overseas. To expand its base of individual investors, the Company holds investor meetings, etc., and participates in seminars organized by securities companies and industry groups which target individual investors.
6. Provision of Services Suited to Each Customer
The Company shall endeavor to understand customers’ needs and implement asset management with these needs in mind.
Specific Details of the Policy
By investing in office buildings exceeding a certain size located in highly competitive areas such as central Tokyo, the Company aims to achieve steady growth of its assets under management and to secure stable profits over a mid- to long-term basis.
Furthermore, the Company aims to secure stable profits and steady growth of assets under management on a mid- to long-term basis while implementing environmental, social and governance considerations in investment management and proactively promoting initiatives on social issues.
In order to convey such management status in an easy-to-understand manner, the Company will proactively provide information to unitholders and other customers.
7. Framework for Motivating Employees Appropriately and Other Measures
The Company shall develop a framework for motivating employees appropriately and an appropriate governance system to thoroughly promote actions for pursuing customers’ best interests and the appropriate management of conflicts of interest.
Specific Details of the Policy
Personnel Philosophy
The Company evaluates compliance in the performance rating of employees and also upholds a personnel philosophy of “while employees continue to do their best to grow and commit to results in pursuit of continuous realization of an ideal organization, the Company provides them with a platform for growth and rewards their achievements appropriately.”
Development of Professional Personnel
The Company focuses on nurturing its professional personnel to implement high-quality fund management on an ongoing basis. Employees are encouraged to acquire various certifications so that their expertise can be improved as professional personnel. Employees are given support in their training and examinations for acquiring and maintaining expert qualifications and are assisted in obtaining a wide range of knowledge and skills that are required for their work. The Company encourages employees to acquire beneficial qualifications, such as real estate notary, ARES (The Association for Real Estate Securitization) Certified Master, tax accountant and lawyer, and bears the examination fees and registration fees to retain the qualification.
Through the implementation of training on compliance, ESG and such on an ongoing basis, the Company aims to spread awareness of customer-oriented business conduct among its employees.
*As the Company is engaged only in investment management for Nippon Building Fund Inc.’s asset management, it does not set forth in these policies any policy related to the sale or recommendation of financial instruments and services or the formation of financial instruments corresponding to Policy 5 (Notes 2, 4) or Policy 6 (Notes 1-4).
Established March 2018
Revised March 2024
1. Pursuit of Customers’ Best Interests
- For the Investment Corporation’s approach, please see “Corporate Governance” under “About NBF.”
https://www.nbf-m.com/nbf_e/profile/governance/index.html - The parties to which the Investment Corporation entrusts operations are as shown in the “Structure of the Investment Corporation.”[172KB]
- The Company’s system and track record: For the organizational chart and management system of the Company, please see “Management Structure.”
https://www.nbf-m.com/en/?id=organization - Stable growth of DPU on a mid- to long-term basis and change in NAV (net asset value) per unit are as follows.
Change in DPU and NAV per unit[212KB]
2. Appropriate Management of Conflicts of Interest
Although the comprehensive strength of the Mitsui Fudosan Group is utilized, there still exist concerns over conflicts of interest. The Company has established a system to prevent transactions that are not just or fair so as not to harm the interests of customers.
- The policy and management system for dealing with conflict of interest transactions is as follows.
Policy and Management System for Dealing with Conflict of Interest Transactions[146KB] -
The number of the Investment Review Meetings and the Compliance Committee meetings held
Number of the Investment Review Meetings held 47 times Number of the Compliance Committee meetings held 10 times *From April 2023 to March 2024
- Transactions with related parties are as shown in “Transactions with Related Parties of Asset Management Company.”[126KB]
3. Clarification of Fees and Expenses
- The Company displays clearly the system of management fees it receives from the Investment Corporation.
Management Fee System / Amount of Management Fee Paid[76KB] - The breakdown of expenses related to asset management including asset management fees is as shown in “Breakdown of Expenses Related to Asset Management.”[231KB]
4. Easily Understandable Provision of Important Information
The Investment Corporation’s basic policy on information disclosure is to further endeavor to fairly and promptly disclose even broader information not subject to Timely Disclosure Regulations to customers, in addition to disclosure of information required by said regulations, etc.
- For the disclosure policy, please see “Regarding Our Disclosure.”
- Specific disclosure items are as follows.
News Releases https://www.nbf-m.com/nbf_e/ir/index.html
IR Library https://www.nbf-m.com/nbf_e/ir/library.html
5. Provision of Services Suited to Each Customer
- For Features and Investment Policy, please see “Features of NBF” and “Investment Policy”.
https://www.nbf-m.com/nbf_e/profile/feature/index.html
https://www.nbf-m.com/nbf_e/profile/policy/portfolio.html - The Company strives to understand the changes in investment environment and customers’ needs and to implement asset management with such understanding in mind. For instance, the Company seeks to achieve steady growth of its assets under management and to secure stable profits on a mid- to long-term basis by implementing ESG initiatives.
The “ESG initiatives” of the Investment Corporation are as shown on the page below.
https://esg.nbf-m.com/en/index.html
6. Framework for Motivating Employees Appropriately and Other Measures
The Company implements measures for employees that will enable them to become highly aware of compliance and accurately understand the Policies on Customer-Oriented Business Conduct to act accordingly when executing business activities.
- For more details, please see “Initiatives for NBFM Employees” in “Social Initiatives” under “ESG Initiatives.”
https://esg.nbf-m.com/en/social/index.html - Certificate Holders[75KB]
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Training attendance status (including outside trainings)
Number of compliance trainings attended 10 times Number of ESG trainings attended 5 times Number of other trainings 12 times *From April 2023 to March 2024
Updated: March 2024