Thinking Behind Ethics and Compliance

Like citizens, corporations have social responsibilities as members of society. Monex Group, Inc. (hereinafter, "the Company") conducts management and business activities with high ethical standards backed by an unwavering commitment to compliance. The Company and its subsidiaries (hereinafter, collectively referred to as “the Group”) recognize that strict adherence to laws and regulations and observance of social norms are vital not only from a public perspective but also in terms of earning the stable and ongoing trust of our customers and business partners, which helps to maintain and enhance the Group’s corporate value.

 

Based on the above, the Group has formulated the Ethics and Compliance Code of Conduct, which defines specific action guidelines for directors, executive officers, officers, executive directors and employees (all people engaged in the Group’s operations regardless of title; hereinafter, collectively referred to as “Directors”), and is distributing it to all Group Directors around the world.

 

In day-to-day operations, Directors of the Group must strictly abide by all relevant laws and regulations as well as the Ethics and Compliance Code of Conduct. In addition, Directors and employees are expected to adhere to laws and regulations and act as good citizens in the local communities in which they live. The various individual and concrete management decisions and business activities of the Group must be made and implemented with the highest ethical standards and the interests of society in mind. To ensure the strict and ongoing observance of the above-mentioned policy, the Group will continuously strive to enhance the relevant systems throughout the entire Group and maintain and elevate the morals of the Directors.

Compliance and Conduct Risk Management System

As a system to ensure thorough compliance with laws and regulations at each Group company, the team in charge of ethics and compliance activities develops an annual plan and promote activities in accordance with the plan. The executive officers of each Group company are in charge of these activities, and they liaise with the Group’s team. The executive officer in charge of the team reports directly to the Group’s CEO and the Group’s Board of Directors. The content of reports is appropriately recorded and stored as documents.

 

We have formulated the Ethics and Compliance Code of Conduct, which defines specific standards of ethical conduct. To ensure a high level of compliance awareness, all directors and employees, including CEO, receive regular e-learning on ethics and compliance activities, and we also conduct risk management training to repeatedly raise awareness.

 

The Group has established a whistle-blowing system, and the CEO directly sends out a message once a year regarding the significance and importance of the system to all employees of Group’s companies. We have established internal regulations for the whistle-blowing system, which include rules on confidentiality to protect the information reported and the privacy of those who consult with us, and these rules are well known throughout the company. The contact point is located in an independent law firm, and consultation is available in English as well as Japanese 24/7. The information received at the contact point is reported to the Chair of the Audit Committee. The sources making genuine and appropriate reports are assured fair treatment and protection against unfair dismissal or unwarranted disciplinary action.

 

Once a report is received, the whistle-blower hotline desk in a specialized department, appoints a different department or officer to investigate the facts of the case depending on the matter. In the case of a directors, the Chair of the Audit Committee will take action. The system is designed to communicate the process and final results of the response to the sources. If the content of the case reported is slanderous, defamatory, or for any other improper purpose, there is a system in place to deal with the act in a strict manner. In addition, the status of response to reported consultations is periodically verified and reviewed as necessary by directors or the Audit Committee.

 

Training on ethics and compliance activities is conducted regularly for all directors and employees, in addition to sharing the latest information on ethics and compliance to raise awareness at monthly company-wide meetings, The Group also use risk information to create and implement action plans. We conduct employee surveys to check the level of awareness and understanding, and report the results to the CEO.

 

In our contracts with business partners and suppliers, we require them to be compliant with ethics and compliance activities and respect for human rights.

Prevention of Bribery

To prevent bribery, the Company has enacted the Gift and Donation Management Guidelines, which are action guidelines regarding gift giving based on the Ethics and Compliance Code of Conduct. Company Directors (directors except outside directors, executive officers and executive directors) as well as employees (all people engaged in the Company’s operations regardless of title or employment status, including temporary and part-time employees; hereinafter, collectively referred to as “Company Directors/Employees”) are required to fully comprehend and strictly comply with these guidelines, which have been formulated with the aim to ensure impartial and independent decisions and to eliminate conflict of interest in all transactions with outside parties.

 

Company Directors/Employees are strictly prohibited from offering or accepting gifts or entertainment with government officials or persons equivalent to government officials (hereinafter, “government officials and others”) under the Gift and Donation Management Guidelines. In addition, under the Ethics and Compliance Code of Conduct, Directors of the Group must not offer, request or promise bribes or have any other inappropriate dealings with transaction parties or others.

 

Violations to the Company’s corporate philosophy or the Ethics and Compliance Code of Conduct, as well as suspected illegal behavior, including bribery, are subject to reporting in accordance with the Internal Consultation and Reporting System. The Internal Audit Department must regularly investigate and evaluate internal controls aimed to prevent bribery in terms of their effectiveness and validity and based on their findings, recommend improvements.

Anti-Money Laundering / Counter Financing of Terrorism (AML/CFT) Policy

To help maintain a healthy financial system, Monex Group (hereinafter, the “Group”) has established the Monex Group Anti-Money Laundering and Counter Financing of Terrorism Regulations (hereinafter, the “Monex Group AML/CFT Regulations”) and Compliance Policy on Anti-Money Laundering and Combating Financing of Terrorism (hereinafter, the "Compliance Policy"). The Group is undertaking measures to combat money laundering and the financing of terrorism.

 

In accordance with the Monex Group AML/CFT Regulations and the Compliance Policy, the division in charge of AML/CFT risk management at each of the Group’s companies (if there is an intermediate holding company, through such intermediate holding company) shall report the status of AML/CFT measures to the company person in charge of the Group’s AML/CFT measures (hereinafter, the “Group AML/CFT Head”) at the Internal Control Committee meeting held every quarter with global members of the Group. In addition, the Monex Group AML/CFT Regulations require that the Group AML/CFT Head share information with the person in charge of AML/CFT at each of the Group’s major domestic subsidiaries approximately every three months and report on the management status to the Company’s Board of Directors. Furthermore, every month, the Group AML/CFT Head collects the report of the status of measures for AML/CFT from the person in charge at each subsidiary and attends a compliance meeting with each of the Group’s major domestic subsidiaries for a full awareness of all issues and responses related to AML/CFT.

For AML/CFT risk management of the Group, each company and relevant division will take appropriate mitigation measures according to the level of risk using a risk-based approach. The approach is to properly manage the three lines of defense in management control, identification and evaluation of risks, risk mitigation measures and the reporting system to ensure the formation and maintenance of a robust AML/CFT risk management plan.

Anti-Money Laundering / Counter Financing of Terrorism (AML/CFT) Policy

In order to maintain the effectiveness of these policies and systems, the Japan Segment in the Group holds regular seminars and training on AML as well as internal training to help combat bribery and corruption. Subsidiaries abroad also hold regular seminars and training on governance, anti-bribery, anti-corruption and AML. Monex Group is not just developing the financial instruments business but the crypto asset and investment businesses in Japan, the U.S. and Asia-Pacific. Therefore, the Group has a system in place to share valuable information, such as revisions to the law, at the Group's meetings or from regular reports made to the Group, to understand the differences between domestic laws and those in other countries.

List of Monex Group's Corporate Policies