1.Development/Publication of policy

Tosei Asset Advisors (“TAA”) has developed and published the “Basic Policy concerning Customer-Oriented Business Conduct.” In this policy, the Customers are defined as Tosei REIT Investment Corporation (“Investment Corporation”), investors of Investment Corporation, Special Purpose Companies in private funds, and the like who have entered into asset management agreements for real estate or related investments, and investors of such private funds collectively. TAA will review this policy and publish the status of implementation of our policy periodically.

2.Engagement for enhancing asset value

•  TAA addresses the customers’ best interest through enhancing the mid-to-long term value of assets under management.
•  TAA provides the Customers with the best advice tailored to their asset management needs and high value-added service.

Action plan

• As a team of professionals, TAA leverages our comprehensive expertise and experience as an asset management company and makes the most use of know-how and business resource of Tosei Group regarding real estate management.
•  TAA develops the management policy after understanding the characteristics of the subject assets and the risk profile. It achieves investment performance based on a balanced strategy between risks and returns by implementing such a management policy.
•  TAA considers valuable opinions obtained through engagements with the Customers in our management policy.

3.Stringent rules toward management of conflict-of-interest management

• To ensure the effectiveness of our conflict of interest management system that puts Customers’ interests first, TAA complies with our internal rules and procedures as well as laws and regulations.
•  TAA maintains the stringent information management policy through retaining the independence of decision-making established for each asset under management and setting up the Chinese Wall between groups within TAA.

Action plan

• To manage conflict-of-interest around transactions appropriately, TAA performs fair and equitable deliberation through holding Risk Compliance Committee meetings and obtaining opinions from the external independent committee members (lawyers) in such meetings under our internal rules.
•  TAA discloses our policy dealing with conflict-of-interest transactions regarding Investment Corporation in Securities Reports.
• To manage conflict of interest with private fund-related customers, TAA controls the relevant information based on company policies and procedures and organizes appropriate deliberation where necessary.

4.Provision of information in a customer-friendly manner

• When TAA explains the content of financial products and asset performance or prepares documents, TAA notes to provide information openly, equitably, and easily understandable for the Customers.
• When TAA explains fees to the Customers, TAA provides the details of the intended services and presents them easily understandable for the Customers.

Action plan

• To ensure transparency for the Customers, TAA continuously reviews things from the customer’s standpoint and discloses information necessary for investment decisions in a timely and appropriate manner.
•  For the fee standard and schedule from Investment Corporation to TAA, TAA specifies them in the Certificate of Incorporation of the Investment Corporation, publishes the contents thereof, and discloses the amount of the fees in every period in investment management reports and Securities Reports.

5.Provision of financial products in consideration of the Customers’ risk tolerance

• TAA understands the Customers’ knowledge regarding financial products, investment experience, investment purpose, needs, and status of their assets sufficiently. It provides appropriate solicitation and advice based on the Customers’ desires and current conditions.

Action plan

• TAA has the Customers understand the Important Matters defined in “Act on Sales of Financial Instruments” accurately, and sufficiently explains the contents and risks of the financial products to be provided to the Customers for their own investment decisions appropriately.
•  When forming private funds, TAA provides important information for customers to make investment decisions in an easily understandable manner in accordance with laws and regulations even for sophisticated customers with sufficient knowledge and experience in transactions on real estate and financial products (professional investors defined in the Financial Instruments and Exchange Act) in light of the attribute and intention of customers and the characteristic of products.

6.Establishment of Customer-Oriented Corporate Culture

• For the further rollout of our services and initiatives that meet the needs and interests of the Customers, TAA provides the employees with training to foster their customer-oriented mindset.  We consolidate the HR and performance evaluating system that promotes customer-oriented business conduct improve the appropriate compliance structure and governance structure.

Action plan

• TAA fosters competent professional personnel through enhancing their knowledge of transactions on financial products in various situations relevant to real estate.
• When TAA conducts personnel and performance evaluations, TAA also looks at their customer-oriented attitudes deemed critical in the professional service business.