Compliance

Like citizens, corporations have social responsibilities as members of society. Monex Group, Inc. (hereinafter, "the Company") conducts management and business activities in an ethical manner while being committed to to maintaining compliance system. 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, officers, and employees (all people engaged in the Group’s operations regardless of title; hereinafter, collectively referred to as “Monex People”), and is distributing it to all Group Directors around the world.

 

In day-to-day operations, Monex People must strictly abide by all relevant laws and regulations as well as the Ethics and Compliance Code of Conduct. In addition, Monex People 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 in an ethical manner, 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 Monex People.

As a system to ensure the compliance with the laws and regulations at each group company, our ethics team and compliance team respectively are developing annual plans and promoting activities in accordance therewith. Executives of our group companies are in charge of these activities, and they liaise with the Monex Group team. The executive officer of the Monex Group team reports directly to the CEO and the company’s Board of Directors. 　

 

The company has put together the Corporate Ethics and Compliance Code of Conduct, which provides the standards of conduct in terms of ethics, and all officers and employees are required to strictly comply with these guidelines. In addition, the company has also established the Regulations on Management of Gift and Offerings, which are internal regulations to prevent corruption. These regulations define gifts and offerings, stipulate prohibited acts (such as incurring debt, providing or lending money, etc.) and clarify the internal procedures for the provision and acceptance of gifts and offerings. They also state that any possible violation shall be reported promptly to the executive officer in charge of internal control.

To ensure a high level of compliance awareness and to raise this awareness continuously, the group's major companies provide compliance training on a regular basis, including anti-corruption & anti-bribery training, for directors, employees, part-time employees, and temporary staffs. In addition, for our Japanese operations, we share the up-to-date information on compliance at monthly company-wide meetings attended by many employees from the group companies.

 

The status of compliance, including anti-corruption & anti-bribery, is reported monthly to the Board of Directors for oversight by the Board. The scope of internal audits is determined based on risk assessments on the whole operations, including ethical standards and anti-corruption policies. As a result, we have been conducting audits of our anti-corruption policy for the past two years, as well as audits at each of our major group companies around every three years.

 

The Company has established whistleblowing contact points, including an external hotline operated by outside legal counsel and another hotline available to officers and employees of the Company’s group companies, for the purpose of facilitating the early detection and correction of conduct that violates laws and regulations and of implementing and strengthening compliance management. The Company continuously informs officers and employees of the Company and its group companies of the significance and importance of these systems, how to use the whistleblowing contact points, and the confidentiality rules for protecting privacy. Under either system, reports may be submitted 24 hours a day, 365 days a year, including by e-mail, and may be made anonymously. In addition, dismissal, demotion, salary reduction, or any other disadvantageous treatment on the grounds that a person has sought advice or made a report is strictly prohibited. When a report is accepted, the person designated as responsible for the investigation, as determined according to the nature of the matter, investigates the relevant facts, and the reporter is informed of the results of the investigation and the response, including corrective measures. A summary of the investigation results is also reported to the Company’s Board of Directors, which oversees the operation of the system.

Major group companies have established their own internal whistleblowing systems, and group companies that do not have their own systems may use the above whistleblowing contact point, which is also available to officers and employees of the Company’s group companies.

 

In this way, the Company has developed an internal consultation and whistleblowing framework by appropriately combining the Company’s own system and those of major group companies with a group-wide common system so that users can utilize the framework with confidence.

To prevent corruption and 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. Monex People is required to fully comprehend and strictly comply, 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’s directors, officers, and 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”) to gain advantage under the Gift and Donation Management Guidelines. In addition, under the Ethics and Compliance Code of Conduct, Monex People must not offer, request or promise bribes or have any other inappropriate dealings with transaction parties or others. It also ensures that political contributions are made in a legal and appropriate manner.

 

Monex People shall not directly or indirectly demand any outside parties to provide money, business entertainment, gifts, entertainment tickets, or other benefits (including kickbacks) for the purpose of gaining personal interest or misconduct, and shall not accept excessive entertainment or gifts. For acts that comply with the laws or regulations of the country or region in which the act takes place and the Monex Group's regulations, and with proper frequency and values are acceptable.　

 

Violations to the Company’s corporate philosophy or the Ethics and Compliance Code of Conduct, as well as suspected illegal behavior, i.e. money laundering and financing of terrorism, corruption and bribery, human rights issues (including harassment), are subject to reporting to Internal Consultation and Reporting Desk, which is a whistleblowing hotline that accepts anonymous reporting. The Internal Audit Department must regularly investigate and evaluate internal controls aimed to prevent bribery in terms of their effectiveness and validity and report to Company’s Board of Directors. Based on their findings, rules and regulations shall be updated and recommend improvements. In order to demonstrate a clear intention to prevent bribery and corruption, the “Monex Group Code of Conduct” which serves as a basic guideline for all Monex People clearly states to prevent and eliminate all corrupt and criminal activities including bribery and corruption.

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

The division in charge of AML/CFT risk management at each of the group companies reports the status of AML/CFT measures every month to the person in charge of the Group’s AML/CFT measures (hereinafter, the “Group AML/CFT Head”) through the Internal Control Committee which includes members of the Group’s global offices. The Group AML/CFT Head reports on the status of these efforts to the Company’s Board of Directors on a monthly basis. 

 

For AML/CFT risk management of the Group, each group 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.

To ensure the effectiveness of these policies and systems, the Japan-based group companies hold regular seminars and training on AML as well as internal training to help combat bribery and corruption. Major subsidiaries abroad also hold regular seminars and training on governance, anti-bribery, anti-corruption and AML. Given the global nature of the group’s financial operations, information on important legal and regulatory developments—both domestic and international—is actively shared across the group through meetings and regular reports, with efforts made to ensure thorough understanding among all relevant parties.