Thinking Regarding Compliance
GLP J-REIT (hereinafter referred to as the “Investment Corporation”) and GLP Japan Advisors Inc. (hereinafter referred to as the “Asset Management Company”) are fully cognizant of the significance of the fact that the asset management the Asset Management Company conducts for the assets of the Investment Corporation constitutes the management of the funds of the Investment Corporation’s investors, and the Asset Management Company has prepared internal compliance rules and other necessary rules and has established a Compliance Committee and a position of Compliance Officer as described below to ensure full compliance with applicable laws and regulations in order to ensure the development of an appropriate management structure.
Compliance Structure (structure for ensuring compliance with laws and regulations)
A. Compliance Committee
In order to establish an appropriate management structure for the Asset Management Company to conduct the asset management of the Investment Corporation, the Asset Management Company has established a Compliance Committee charged with the revision (excluding the correction of errata) of compliance rules; the formulation and revision of a Compliance Manual and Compliance Program (excluding the correction of errata); deciding on corrective measures regarding conduct which is, or is suspected to be, inappropriate from a compliance standpoint; and the review on whether there are issues of compliance with respect to matters concerning transactions with related parties and other matters regarding that the Compliance Officer judges there to be questions in terms of compliance. The Compliance Committee is composed of the Compliance Officer as chairperson, the President, and at least one outside professional designated by the Board of Directors (hereinafter referred to as the “Outside Expert(s) on the Compliance Committee”). When designating the Outside Expert(s) on the Compliance Committee, the approval of the board of directors of the Investment Corporation will be required (but will not be required for reappointment). As of the date of this report, an outside attorney is the one Outside Expert on the Compliance Committee. Furthermore, the General Administration Department has been established under the order by the CFO (Executive Officer) and a member of the General Administration Department will attend meetings of the Compliance Committee under the role of secretariat to the Compliance Committee to assist the Compliance Officer. In principle, the Compliance Committee meets once every three months as convened by the chairperson, and as otherwise necessary. Decisions of the Compliance Committee require that a majority of all of the members with voting rights and all Outside Expert(s) on the Compliance Committee be present and a majority of those members and all Outside Expert(s) on the Compliance Committee vote their approval. When the Compliance Committee reviews as one of the matters it must decide on whether there are issues of compliance with respect to matters concerning transactions between related parties and the Investment Corporation, a committee member with voting rights who is a related party or a committee member with voting rights who currently holds the position of an officer or employee (including as a concurrent position, but excluding cases when such person has been seconded or transferred to the Asset Management Company) of a related party, which is a corporation, may not participate in the decision. Decisions of the Compliance Committee will be reported regularly to the Board of Directors by the Compliance Officer. When the Compliance Committee reviews and approves matters which the Investment Committee must decide, the substance of the review (including any minority opinion presented during the course of the review) will be reported to the Investment Committee by the Compliance Officer.
B. Compliance Officer
The Asset Management Company, fully cognizant of the significance of the fact that the asset management it conducts with the assets of the Investment Corporation constitutes the management of the funds of the Investment Corporation’s investors, in order to ensure the development of an appropriate management structure, has established the position of Compliance Officer as the key person responsible for compliance, thereby ensuring the effectiveness of the function of internal oversight of other units The selection or the dismissal of the Compliance Officer requires the approval of two-thirds or more of the directors in attendance at meeting of the board of directors that is attended by a majority of all the directors with voting rights. The Compliance Officer, as the key person responsible for compliance at the Asset Management Company, is charged with establishing and maintaining the internal compliance structure of the company and raising the level of standards awareness within the company in regard to compliance with all applicable laws, regulations and rules. To those ends, the Compliance Officer prepares a Compliance Manual and Compliance Program through the Compliance Committee, continually monitors to ensure that all operations conducted for the asset management of the Investment Corporation by the Asset Management Company comply with all applicable laws, regulations, rules and the articles of incorporation of the Investment Corporation, and exercises supervision over the overall internal compliance environment in daily operations. The General Administration Department, established under the overall direction and control of the CFO (Executive Officer) and being charged with overall general administrative operations, will assist the work of the Compliance Officer. In view of the importance of the duties of the Compliance Officer, the Compliance Officer at the Asset Management Company devotes him/herself exclusively and on a full-time basis to addressing compliance matters. Only a person having adequate investigative and supervisory capacity for ensuring compliance with all applicable laws, regulations and rules may be appointed as the Compliance Officer. The Compliance Officer is also in charge of internal auditing of the Asset Management Company (However, the internal auditing of the Compliance Officer is conducted by the President.) All internal organization and job classifications are subject to internal audit; audit and other procedures to assess whether the operations and management of all internal organizations comply with all applicable laws, regulations and rules and are being conducted appropriately and efficiently will be carried out on a regular basis based on the Compliance Program and the Internal Audit Rules. When internal audits are conducted all departments must submit and explain all documents, account books or other materials as requested by the Compliance Officer and cooperate fully to ensure the smooth implementation of the internal auditing.