Compliance Measures

In addition to observing laws, regulations and rules, compliance refers to the act of adhering to and fulfilling social norms. Hyakugo Bank believes that as a bank, whose most valuable asset is its credibility, enhancing its managerial soundness and solidifying society’s trust are natural principles of compliance, and each executive and employee must steadily put compliance into practice in the daily execution of duties.
To this end, the Hyakugo Bank has made compliance one of its highest management priorities and has been making efforts to bolster its compliance structure, while at the same time mitigate ethical and legal risks*.
Specifically, in addition to issuing the Compliance Manual that states fundamental guidelines for compliance within the Bank, we have created the Bank-wide Compliance Committee to discuss overall compliance measures. Furthermore, Hyakugo Bank has established the Compliance Management Division to conduct integrated supervision and promotion of compliance.
Moreover, compliance officers are assigned to all headquarters divisions, regional headquarters, branches and the Retail Banking Centers to prevent legal infractions and check the status of compliance. Furthermore, Hyakugo Bank is engaged in initiatives based on the Compliance Action Plan, which is formulated as a concrete action plan each year.
Hyakugo Bank will continue to reinforce its compliance structure going forward.

*The risk of Hyakugo Bank having to assume liability for damages or the Bank losing its credibility as a result of Hyakugo Bank being held legally or morally culpable by clients, shareholders and other stakeholders, on account of directors and employees engaging in activities that violate laws, regulations, rules, social norms, etc. in the execution of their duties or Hyakugo Bank’s rules of procedures being in violation thereof.

Response to Antisocial Forces

1. Basic Approach Towards the Elimination of Antisocial Forces

Hyakugo Bank has made it its basic policy to resolutely cut off and eliminate any relationships with antisocial forces to maintain public trust as a financial institution and ensure the appropriateness and soundness of its operations.

2. Current Status of Initiatives Towards the Elimination of Antisocial Forces

Hyakugo Bank has established the Customer Consultation Department, Compliance Division as the division responsible for cutting off relationships with antisocial forces and is engaged in the following initiatives. In addition, Managers to Prevent Unreasonable Demands have been assigned to all branches and Retail Banking Centers.

(1) We have clearly set out our policy as an organization in dealing with antisocial forces in the Regulation for

Responding to Antisocial Forces, and communicated throughout the Bank specific methods of responding to antisocial forces based on the Antisocial Forces Response Manual.

(2) For unreasonable demands, we have regularly built close cooperative relationships with specialized external

organizations such as the police, the National Center for Removal of Criminal Organizations and lawyers to ensure the safety of our employees.

(3) The division responsible gathers, manages and analyzes information on antisocial forces in an integrated

manner, while at the same time establishes and continuously update relevant databases.

(4) In an effort to cut off relationships with antisocial forces, we require our general managers at branches and

Retail Banking Centers to attend Seminars on Managers to Prevent Unreasonable Demands and also conduct in-house seminars, as necessary.

(5) We have incorporated the “clause on exclusion of antisocial forces” in our deposit terms and

conditions and other regulations, and carried out other concrete initiatives towards cutting off and eliminating antisocial forces from our transactions.

Management of Conflicts of Interest

In transactions that may pose a conflict of interest between Hyakugo Bank or its group companies and customers, and between customers of Hyakugo Bank or its group companies, Hyakugo Bank properly conducts business so as not to unfairly impair the interests of customers, in accordance with the Banking Act, the Financial Instruments and Exchange Act and other related laws and regulations. “Transactions that may pose a conflict of interest” refer to transactions entered into by Hyakugo Bank or its group companies that “may unfairly impair the interests of customers.” “Conflicts of interest” refer to situations in which interests conflict between the Hyakugo Bank or its group companies and the customer, and the interests between the customers of Hyakugo Bank or its group companies. Companies subject to conflict of interest management are Hyakugo Bank and its group companies, namely Hyakugo Research Institute Company Limited and Hyakugo Securities Company Limited.
Hyakugo Bank appropriately manages conflicts of interest by identifying transactions that are subject to conflict of interest management.
Pursuant to laws and regulations, Hyakugo Bank also discloses its Guidelines on the Management of Conflicts of Interest by posting them on its website and at its branches.

Response to the Financial Alternative Dispute Resolution (ADR) System

Hyakugo Bank has concluded a contract regarding procedures for handling customer complaints and procedures for dispute resolution with the Japanese Bankers Association, which is the designated dispute resolution institution as defined in the Banking Act.
Contact: Advisory Office, Japanese Bankers Association
Phone: 0570-017109 or 03-5252-3772

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