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Risk Management and Compliance

OJR and its Asset Management Company, fully recognizing the public duties and importance of social responsibilities required of an investment corporation, consider compliance with social norms based on a highly esteemed ethical values and legal compliance with the Act on Investment Trust and Investment Corporations and the Financial Instruments and Exchange Act to be one of management's most important tasks.

OJR's main risk management and compliance initiatives

■ Fostering greater awareness of compliance

Members of OJR's Board of Directors are continually aware of compliance issues, fully recognizing the importance of addressing compliance at the Board of Directors level. Compliance is also ensured through active and sound discussions at the Board of Directors.

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The Asset Management Company's main risk management and compliance initiatives

■ Compliance manual

The Asset Management Company has created a Compliance Manual that stipulates the importance and meaning of compliance, the basic policy on compliance, the roles of each organization in compliance, and actions and procedures of executives and employees of the Asset Management Company, as a set of guidelines for daily operations in compliance with the Financial Instruments and Exchange Act, the Act on Investment Trusts and Investment Corporations and other relevant laws, the Regulations of The Investment Trusts Association, Japan, OJR's regulations, the asset management entrustment agreement between OJR and the Asset Management Company, rules and regulations of the Asset Management Company, and general social norms, ethics and rules. The Compliance Manual is explained in-depth at compliance training sessions held for new employees. Compliance awareness is also enhanced through compliance training sessions held at least biannually and reflecting the practice of compliance in performance reviews

■ Risk management and compliance structure

The Risk Management and Compliance Department has been established to carry out main duties regarding all aspects of risk management, compliance and legal affairs. An executive officer fulfills the role of compliance officer while monitoring the activities of the Risk Management and Compliance Department. The Asset Management Company has established the Risk Management and Compliance Committee, chaired by the Executive Officer in charge of the Risk Management and Compliance Department and comprised of the President and external members (attorneys-at-law with no vested interests in the Asset Management Company). This committee deliberates and passes resolutions on matters regarding transactions with affiliates as well as the acquisition and transfer of assets. It also receives reports about the status of risk management and creates the risk compliance program. In case executives and employees of the Asset Management Company detect compliance issues in executing their work, they shall report the content immediately to their managers and a manager of the Risk Management and Compliance Department in accordance with provisions of the Compliance Manual. Moreover, the Board of Directors of the Asset Management Company maintains a responsibility to fairly and effectively secure compliance. The Board of Directors passes resolutions on important matters concerning compliance and approves the risk compliance program deliberated on and approved by the Risk Management and Compliance Committee. The Asset Management Company, following this multiple structure, carries out risk management and takes steps to ensure legal compliance.
The Asset Management Company has established the Internal Audit Department, which is charged with carrying out the internal audit and other important operations. The General Manager of the Internal Audit Department audits every department of the Asset Management Company at least once per year and carries out other audits on each department as needed. The General Manager of the Internal Audit Department informs the head of the department receiving the audit of matters requiring improvements after the internal audit is performed, and also reports the results of the internal audit as well as improvement measures and the status of improvements to the Board of Directors and Risk Management and Compliance Committee.

■ Training

Training sessions for executives and employees on the Financial Instruments and Exchange Act, the Act on Investment Trusts and Investment Corporations, Building Lots and Buildings Transaction Business Act and other real estate transaction related laws are held at least biannually. These training sessions form part of the Asset Management Company's efforts to enhance awareness of compliance internally and ensure compliance best practices are followed.

■ Refinement of operational management methods

To ensure proper compliance and maintain its risk management systems, the Asset Management Company prevents omissions in various types of work and makes operations more efficient by standardizing operational procedures, establishing rules, regulations and manuals on operations, and clarifies operational procedures as well as the authority and responsibility of managers and auditors.

■ Initiatives against conflicts of interest

The Asset Management Company has established Affiliated Company Transaction Regulations to address conflicts of interest with affiliates and other parties (unitholders and parties with a vested interest in the Asset Management Company), while certain transactions with affiliates and other parties are checked by deliberating in the Risk Management and Compliance Committee of the Asset Management Company and obtaining prior consent of OJR's Board of Directors. This prevents any adverse effects related to transactions between parties that may have a conflict of interest.

For more details, please see the Asset Management Company's Policy on Transactions with Affiliates PDF  (445KB)」and OJR's securities report in the IR Library of this website.

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