Code of Conduct
This Code of Conduct (the "Code") sets forth certain minimum requirements that Shinsei Bank, Limited (the "Bank") imposes on all executive directors (as defined under No.15, Article 2, the Companies Act), executive officers and employees of the Bank (the "Directors, Officers and Employees") in conformity with "The Charter of Corporate Ethics".
The purpose of the Code is to provide the basic principles to guide Directors, Officers and Employees in day-to-day activities. The Code does not cover every legal or ethical issue that you may confront at the Bank. Indeed, no Code can attempt to anticipate every issue that may arise.
However, by following the Code and other internal rules as well as internal guidance such as circulars (the "Code and Internal Rules"), by adhering to the letter and spirit of all applicable laws, rules and regulations (the "Law"), and above all by applying sound judgment to all activities, the Directors, Officers and Employees can demonstrate commitment to the Bank's values and purpose.
The Code also serves as a code of conduct for the Bank itself.
While temporary workers are required to comply with the Code, specific arrangements with such respective workers should separately be made by the general manager of the Legal and Compliance Division after due consultation with the general manager of the Human Resources Division in light of a level of involvement in the Bank's business activities of such temporary workers.
1. Administration of The Code of Conduct
1.1. Consequences of violating the Law and the Code and Internal Rules
Compliance with the Code and Internal Rules applicable to the executive officers and employees of the Bank (the "Officers and Employees" in this item) constitutes an important part of the terms and conditions of employment by the Bank. Violation of any Law or Code and Internal Rules that apply to the duties of respective Officers and Employees', or failure to cooperate as directed by the Bank with an internal or external investigation, may result in disciplinary action by the Bank, up to and including termination of employment.
1.2. Inquiries about the Code and Internal Rules
Directors, Officers and Employees who have inquiries about the Code and Internal Rules, or about how a particular rule applies in a specific situation, should contact:
- The division in charge of the relevant internal rule
- Compliance officer at Legal and Compliance Division
1.3. Obligation to report violations
The Directors, Officers and Employees must promptly report any suspected violation of any Law or Code and Internal Rules that apply to the respective duties of Directors, Officers and Employees, whether the suspected violation involves themselves or another individual within the Bank. In addition, the Directors, Officers and Employees should report any illegal conduct, or conduct that violates the underlying principles of the Code, by any of our customers, vendors or service providers.
A violation must be reported as follows:
- Matters involving harassment or discrimination must be reported to the committee for human right development promotion of Human Resource Division.
- Matters involving illegal conducts (including those by third parties) or personal dishonesty by the Bank's employee must be reported to the Legal and Compliance Division.
- If Directors, Officers and Employees believe that an official at a high level of the Bank, such as a general manager, executive officer or director, is involved, report must be made to Audit & Supervisory Board Member.
- All other matters should be reported to the Legal and Compliance Division.
All Directors, Officers and Employees are required to affirm in writing or electronically in such a method as designated by the general manager of the Legal and Compliance Division that they have read and understood the Code and that they will comply with it. In addition, according to the instruction of the general manager of the Legal and Compliance Division, all Directors, Officers and Employees are required to re-affirm their understanding of and compliance with the Code and to affirm that they have complied with the Code periodically.
2. Respect For Human Rights
The Bank is committed to a policy of recruiting, hiring, training, promoting and otherwise treating applicants and Directors, Officers and Employees without discrimination based on their race, creed, religion, color, citizenship, age, sex, disability or other factors that are unrelated to the legitimate business interests of the Bank.
2.2. Work environment
The Bank will strive to maintain a healthy, safe and productive work environment that is free from discrimination or harassment. No one may make sexual advances, actions or comments, or racial or religious slurs or jokes, unilaterally force or solicit interest in any specific creed, opinion or religion, or make any other comments or conduct that create a hostile work environment.
3. Concuction Business With Integrity And Fairness
3.1. Fair business conduct
The Directors, Officers and Employees should always endeavor to deal fairly and in good faith with customers, vendors, competitors, regulators, and other Directors, Officers and Employees. It is our policy not to take unfair advantage of others through manipulation, concealment or abuse of privileged information, misrepresentation of material facts, or any other unfair business practice.
3.2. Public disclosure
The Bank is a publicly-traded corporation whose shares are listed for trade on the 1st Section of the Tokyo Stock Exchange. The Bank has a responsibility under applicable securities laws and regulations to make various disclosures in such manner as to ensure that the public is provided with full and accurate information in all material respects.
3.3. Media relations and public statements
The Bank has established the Media Policy in order to promote appropriate and necessary disclosure, to ensure strict confidentiality of the Bank's non-public information and any other non-public information obtained during the course of our business conduct, and to ensure that the Bank will send out consistent media messages.
All mass media contact regarding the Bank, its business, or its customers should be directed to the Investor Relations and Corporate Communications Division in principle. The Directors, Officers and Employees should not provide information to the media directly, except for those approved for the purpose in accordance with the Media Policy.
3.4. Confidential and proprietary information
The Directors, Officers and Employees are all responsible for the safeguarding of confidential and proprietary information, whether it is information disclosed to us by our customers, information regarding the Bank's businesses and activities, or information about Directors, Officers and Employees.
3.4.1. Information about the Bank, its customers, its employees, and others
The Directors, Officers and Employees should maintain all confidential and proprietary information in strict confidence, except when disclosure is authorized by the Bank or required by law.
"Confidential information" is information that is not generally known to the public about the Bank, its customers, or other parties with whom the Bank has a relationship and that have an expectation of confidentiality.
"Controlled information" includes all non-public information that might be useful to competitors or that could be harmful to the Bank or its customers if disclosed.
3.4.2. Special rules regarding customer information
Each of the Directors, Officers and Employees has a special responsibility to protect the confidentiality of information related customers. This responsibility may be imposed by law, may arise out of agreements with our customers, or may be based on internal rules adopted by the Bank. Customer information should never be disclosed to anyone outside the Bank except as permitted by law and as a legitimate business conduct. Even within the Bank, customer information should always be treated in accordance with the Law and the Code and Internal Rules.
In particular, our customers' personal information should be collected and/or used appropriately in compliance with the Personal Information Protection Act and other applicable laws and regulations as well as other internal rules.
3.5. Information barriers
When appropriate, the Bank has in place, and the Directors, Officers and Employees must comply with, the "information barrier" procedure. The information barriers are designed to separate the functions engaged in lending or other business activities with routine access to confidential information about customers, from those who trade in securities based on publicly available information.
The Directors, Officers and Employees are responsible for understanding and complying with the information barrier rules applicable to their respective businesses.
3.6. Insider Information and Corporate Information
Buying or selling securities and other financial instruments specified in the Procedure for the Prevention of Insider Trading and Other Unfair Transactions while in possession of insider information and corporate information is prohibited, as is the communication of that information to others.
"Insider information" is certain material, non-public information on management, business or property of listed companies, etc. as specifically provided for under the Financial Instruments and Exchange Law.
Corporate information covers a wider scope of information that may have influence on investors' judgment among material, non-public information on management, business or property of listed companies, etc..
3.7. Entertainment and Gifts
Providing or accepting entertainment or gifts shall be carried out when it is deemed both indispensable for business promotion and also appropriate from the viewpoint of Japanese practices and social code.
The following are prohibited as they breach laws and regulations:
- Providing public officials, deemed public officials, foreign public officials, and others with entertainment, gifts or the like that could be deemed as bribe-giving
- Providing entertainment or gifts to public officials and so forth who have influence over the Bank's interests through their duties
- Providing entertainment or gifts to the Bank's shareholders or corporate bond holders in relation to the exercise of their rights
- The officers, employees, divisions, departments, or branches that have the authority to exercise rights on shares or corporate bonds accepting entertainment or gifts from their issuers in relation to the exercise of such rights
3.7.2. Special Restrictions
The actions listed below require deliberate consideration over their compliance status and appropriateness, and in each individual case, the Directors, Officers and Employees must deal with it in accordance with the Procedures for Entertainment and Gifts:
- Providing or accepting cash or cash equivalents (Prohibited in principle)
- Providing entertainment or gifts to public officials, deemed public officials, foreign public officials, and so forth or holding social gatherings with them for which expenses are equally shared by participants
- Accepting entertainment or gifts from the customers in bad business conditions or the parties which the Bank refuses (or plans to refuse)to have transactions with
- Bank officers, employees, divisions, departments, branches that have the authority to select vendors accepting entertainment or gifts from vendors
- Providing or accepting personal benefits to or from customers or vendors
3.8. Internal accounting procedures, record-keeping and reporting
Internal accounting procedures and record-keeping procedures have been established in order for the Bank to meet both legal and business requirements. The Directors, Officers and Employees are required to maintain and adhere to these controls and procedures. The Bank's record-keeping procedures include procedures for retention and destruction of records and documents.
It is of critical importance that the Bank's filings with and reporting to the Financial Services Agency, the Tokyo Stock Exchange and other regulatory authorities be accurate and timely. If you become aware of a materially inaccurate or misleading statement in a public communication, you should report it immediately to the Legal and Compliance Division or Audit & Supervisory Board Member.
3.9. Your authority
An authority delegated to each of the Directors, Officers and Employees to act on behalf of the Bank is defined by various laws, regulations, articles of incorporation, and board resolutions as well as internal rules.
The Directors, Officers and Employees should exercise the authority empowered for their respective positions appropriately and proactively, and assume the responsibility for the results of the exercise or failure to exercise their authority.
Directors, Officers and Employees may not sign any documents, or otherwise represent or exercise authority, on behalf of the Bank unless they are specifically authorized to do so. The Directors, Officers and Employees should clearly understand limits in their respective authority and a due care should be taken not to take any action that exceeds those limits.
3.10. Money Laundering
The Bank has established the Anti-Money Laundering Rule designed to assure compliance with applicable laws and regulations regarding money laundering. The Directors, Officers and Employees should be familiar and comply with this procedure. The Directors, Officers and Employees should also understand their obligations to be alert to and report suspicious activity to the designated persons in charge within their line of business and further to the Money Laundering Prevention Office.
3.11. Impediment of relations with antisocial forces
The Directors, Officers and Employees should always keep in mind the idea of the Charter of Corporate Ethics – i.e. "impediment of relations with antisocial forces" – and firmly and resolutely refuse unreasonable demands, including transaction relationships, from antisocial forces. The Directors, Officers and Employees should not provide any funds to antisocial forces or execute any backdoor deals to conceal problems. If you receive a contact from an antisocial force, you should immediately report to and consult the relevant divisions pursuant to the prescribed procedures in order to deal with it as an organization. Moreover, you should actively cooperate with external professionals, including the police and lawyers.
4. Personal Conduct
4.1. Conflict of Interest
All business decisions must be made, and all business activities must be conducted, in the best interests of the Bank. The Directors, Officers and Employees should avoid any action which may involve, or may appear to involve, a conflict with the interest of the Bank. The Personnel may not have any financial or other business relationships with customers, vendors, or competitors that might impair, or even appear to impair, the independence of any judgment they may need to make in the best interest of the Bank. The Directors, Officers and Employees must disclose to their supervisors all potential conflicts of interest between them and the Bank.
For example, it is considered that the following actions will or may be deemed to involve a conflict with the interest of the Bank.
- The Directors, Officers and Employees, as individuals (including acting through a private asset management company) and outside the ordinary course of duties, make investments related to a transaction entered into by the Bank, hold other financial relationship with a company or individual who is directly or indirectly involved in such transaction or take any action which has a similar appearance.
- When selecting vendors or outside service providers, the Directors, Officers and Employees make decisions, without any reasonable grounds, in favor of their own private circumstances, such as vendors or outside service providers operated by or related to their relatives, acquaintances or friends, etc.
Any waiver of application of this provision for the benefit of a director must be approved by the board of directors pursuant to the Companies Act.
4.2. Devotion to work; prohibition of side business
The Directors, Officers and Employees should devote themselves to their duties of the Bank, and should not unduly engage in personal affairs during working hours.
Without the Bank's permission, the Directors, Officers and Employees should not be employed by others, nor otherwise should engage in other business nor assume a position to generate a business profit.
4.3. The Bank's assets
The Bank's assets are to be used only for legitimate business purposes and only by authorized person or their designees.
The Bank's assets include not only financial assets such as cash and securities and physical assets such as furnishings, equipments and supplies, but also systems, including telephones, computer networks, electronic mail and remote access capabilities, and customer relationships, and other intangible assets such as information about products, services, customers, and people.
Under no conditions may Directors, Officers and Employees use the Bank's systems to view, store or send unlawful, offensive or other inappropriate materials nor pursue personal benefits using the Bank's assets. In addition, protecting Bank assets against loss, theft, waste or other misuse is the responsibility of all Directors, Officers and Employees. Any suspects of misuse should be reported to your supervisor or the Legal and Compliance Division.
To the extent permitted under applicable laws, the Bank reserves the right to monitor and inspect how its assets are used, including inspection of all e-mails, data, and files kept on PCs or other network terminals.
4.4. Personal investments
When the Directors, Officers and Employees intend to make a personal investment in securities specified in the Procedure for Insider Trading Prevention on Personal Investment, or to make a concurrent investment specified in the Procedure for Staff's Personal "Concurrent Investment", they should observe the provisions of those respective procedures.
Directors, Officers and Employees are not allowed to buy/sell securities and carry out other transactions solely for the purpose of pursuing speculative profits. If Directors, Officers and Employees repeat transactions frequently to seek profits from short-term fluctuations in prices, or if they continue margin transactions, etc. with higher leverage, it is deemed to be a transaction for the purpose of pursuing speculative profits, and therefore, is prohibited.
4.5. Political activities and contributions
The Directors, Officers and Employees have the right to voluntarily participate in the political activities. The Bank will not require the Directors, Officers and Employees to contribute to, support or oppose any political group or candidate. If the Directors, Officers and Employees choose to participate in the political activities, they must do so during their own time and as individual, not as a representative of the Bank. The Directors, Officers and Employees may not use the Bank's property for political activities, nor allow such activities to be considered as the Bank's activities or those supported by the Bank.