INDEX
Marubeni REIT Advisers Co., Ltd. (MRA), an asset manager of United Urban, positions thorough compliance as a basic principle of management and sorts out the following compliance system.
United Urban is committed to legal compliance and appreciation for social norms as one of the basic principles and operates a compliance system with an emphasis of preventing conflicts of interest. Also, an outside attorney and a certified public accountant are appointed as supervisory officers of United Urban to supervise the performance of duties of the executive officer.
United Urban operates an internal management system through the Board of Directors. In the Rules of the Board of Directors of United Urban, it is stated that the Board of Directors shall convene at least once every three months. The executive officer and supervisory officers must attend the Board of Directors meeting, with the participation of MRA. And the executive officer is required to report on the performance of duties of MRA, the administrative agent and the asset custodian.
Furthermore, while the Rules of the Board of Directors states that reports on the performance of duties shall be presented at least once every three months, in practice the reports are presented monthly.
MRA understands that incomplete compliance results in loss of trust of investors in the financial market and impair the management base of United Urban and MRA. Therefore, MRA sets thorough compliance as a basic principle of management. With the Board Meeting at the top, President and CEO, the Compliance Committee and Chief Compliance Officer (CCO) make various decisions regarding compliance as well as manage compliance with their rights and responsibilities.
Placing compliance as a matter of utmost importance, MRA established the Compliance Regulations that stipulate basic matters on the compliance system and management, the Compliance Manual, a handbook for employees including contract workers for implementing compliance activities, and the Compliance Program, a specific execution plan for each fiscal year. Each of these are reviewed by the Compliance Committee and resolved by the Board Meeting.
MRA understands compliance as the adherence by our officers and employees to laws, regulations and the internal rules (“laws, etc.”) and the implementation of sincere and fair corporate activities in a way that does not violate social norms.
The followings are specified as our basic policies in the Compliance Regulations.
The Compliance Committee aims to promote thorough compliance of MRA in collaboration with the Board Meeting and the auditors.
The Compliance Committee avoids transactions involving conflicts of interest by reviewing transactions between United Urban and related interested parties, etc. from the perspective of abiding by laws, etc. and various procedures as well as securing compliance.
The Compliance Committee is currently comprised of four members, namely CCO (chairperson), President and CEO, the head of the General Affairs Department and one external attorney. The committee meets once a month in principle to deliberate whether or not there are any acts in MRA’s management of United Urban’s assets and other operations which are problematic from the perspective of compliance and how they are handled, mainly pertaining to A through C below. It is reported to the Board Meeting when necessary.
The Compliance Committee examines all of the reviews conducted by the Investment Committee on investment and asset management transactions with Sponsor/Stakeholder from the perspective of compliance. If the examination shows that there is a compliance problem, the Compliance Committee promptly reports the examination results to the Board Meeting.
The Compliance Committee convenes once a month in principle and deliberates whether or not there are any controversial acts in MRA’s management of United Urban’s assets and other operations from the perspective of compliance and also considers measures if there is a problem. In case that there is an act which is or may be problematic in light of laws, etc., the Compliance Committee reports to the Board Meeting.
MRA, the asset management company of United Urban, established the Internal Audit Regulations. Under a system which places Head of the Internal Audit Office as the head of internal audit, three types of audits are conducted; 1) regular audits in which overall internal management of subject departments is examined and evaluated; 2) follow-up audits which review the improvement status based on the results of the regular audits; 3) special audits which are implemented for specific matters that Head of the Internal Audit Office deems necessary or by special order of the President and CEO of MRA.
Regular audits review the entire operations of MRA and examine items common to all departments and items specific to individual departments. For items specific to individual departments, the compliance, effectiveness, efficiency, conformity, etc. of operations and internal control are inspected. Then, departments to be audited are selected based on the status of risks in light of the “control points table,” “risk management status list,” etc. The regular audits are implemented along a formulated audit plan for individual items are implemented after passing deliberation by the Compliance Committee and obtaining approval of the Board Meeting.
Head of the Internal Audit Office exchanges views with the audited departments on the findings of internal audits, points of concern, advice, suggestions for improvement and measures to be taken, etc. Then Head of the Internal Audit Office compiles the audit results and reports to MRA’s President and CEO as well as the MRA’s Board Meeting after the deliberation by the MRA’s Compliance Committee.
Number of Departments Targeted by Regular Audits
| Fiscal 2018 | Fiscal 2019 | Fiscal 2020 | Fiscal 2021 | Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | Fiscal 2025 |
|---|---|---|---|---|---|---|---|
| Audited departments: 8 Total departments: 13 |
Audited departments: 6 Total departments: 13 |
Audited departments: 4 Total departments: 13 |
Audited departments: 5 Total departments: 13 |
Audited departments: 0 Total departments: 13 |
Audited departments: 4 Total departments: 13 |
Audited departments: 4 Total departments: 14 |
Audited departments: 4 Total departments: 14 |
MRA abides by a set of regulations stipulated by the Investment Trust Act and sets internal rules on transactions between United Urban and the sponsor group and other conflicts of interest and operates a system of investigation across organization.
For the purpose of preventing damage to United Urban’s interests in transactions between United Urban and the sponsor group, MRA formulates the Investment Committee Rules on Transactions with the sponsor group as internal rules for avoiding conflicts of interest. The Investment Committee Rules on Transactions with the sponsor group prohibits unnecessary transactions with the sponsor group that harm the interest of United Urban. Also, in the case of transactions with the sponsor group including acquisition or disposal of real estate, etc., approval from the Investment Committee and examination by the Compliance Committee are required. And if it is deemed that there is or may be a compliance problem, the approval of the Board Meeting is required to proceed. In the process of approval, strict measures to prevent transactions with a conflict of interest are set. More specifically, external professionals are to participate in the Investment Committee and the Compliance Committee, and committee members who have a conflict of interest are to be excluded from the process.
MRA, as a member of the Dai-ichi Life Marubeni Real Estate (hereinafter "DMRE") group, is committed to practicing compliance. DMRE is the holding company of the DMRE group, funded by Marubeni Corporation and Dai-ichi Life Group Inc., and MRA conducts its business operations by deeply inheriting the compliance policies and high ethics advocated by both investing companies.
As stipulated in the "Fundamental Behaviors" of the DMRE Group Code of Conduct, MRA strictly complies with laws and regulations and does not engage in any inappropriate entertainment or gift-giving that could cause suspicion or distrust in society. Additionally, in accordance with the global compliance standards of both investing companies, MRA strictly prohibits bribery of public officials both domestically and internationally, as well as aiding or participating in conspiracies by other businesses. To thoroughly manage bribery risks, MRA distributes the "Anti-Bribery Policy" to business partners, requests cooperation in due diligence, and ensures thorough compliance with laws prohibiting corruption.
Based on the DMRE Code of Conduct, we are also implementing the following initiatives at MRA:
Additionally, based on the "Internal Audit Regulations," an internal audit plan is formulated. Through on-site audits and risk-based individual item audits, efforts are made to early detect risks inherent in operations, including violations of laws and regulations and fraudulent transactions as an investment management operator, as well as to prevent violations of laws and regulations in advance. The formulation status of the internal audit plan and internal audit results are reported promptly to the board of directors, and improvement plans, etc., are implemented in response to risks related to fraudulent transactions.
In accordance with the DMRE Group Code of Conduct, it is a basic policy that all officers and employees think and act based on "principle-based" principles. Compliance is positioned not merely as legal compliance but as the "practice of corporate ethics to meet the expectations of customers, society, and the company," and we work on our daily tasks with this mindset.
To thoroughly instill these principles, all MRA employees (including contract employees) undergo compliance training at least once a year under the direction of the MRA’s President and CEO, aimed at fostering understanding of the DMRE Group Code of Conduct, the corporate philosophies of both investing companies, and their anti-bribery policies.
After the training, all employees annually pledge to the President and CEO of MRA to comply with the Code of Conduct and various compliance regulations, ensuring thorough adherence.
Furthermore, independently at MRA, comprehensive supervisory guidelines required for financial instruments business operators as a UUR asset management company, prevention of conflict of interest transactions, customer-oriented business operations, and insider trading regulations are entrusted to external organizations and instructors with expertise, and training tailored to employees’ positions and job content is conducted every year.
For a sound management of operations, MRA sets the Rules for Handling Misconduct, Clerical Errors, etc. It stipulates a uniform standard for processing misconduct by officers and employees, acts which violate or may violate laws, etc. (including the rules of the Investment Trusts Association, Japan, rules of the financial instruments exchange on which United Urban’s investment units are listed, the Articles of Incorporation of United Urban, the internal rules, etc.), clerical errors, complaints and other matters that may lead to management risks and reputational risks for MRA and United Urban.
CCO reports misconduct, clerical errors, etc. to the Compliance Committee and the Board Meeting when necessary. CCO compiles incidents of misconduct, clerical errors, etc. to present periodic reports to the Compliance Committee at least once a year. Also, CCO manages the process from reception of an incident report to its resolution, periodically monitors the implementation of preventative measures and reports the status to the Compliance Committee and, when necessary, MRA’s President and CEO.
MRA complies with the Board Meeting’s stipulation on corporate activities that donations and contributions relating to political activities must not be made to political parties or political fundraising organizations.
Amount of Political Contributions/Recipients of Contributions
MRA has not made any political contributions.
MRA has multiple points of contact which are available for all of our employees and our partner companies. Each system provides comprehensive whistleblowing/consultation to prevent corruption and bribery as well as organized crime including money laundering and terrorism, etc., and to impede violations of the law or internal regulations. They also handle work- or workplace-related troubles or inquires, including power harassment and sexual harassment. The contact information for each consultation system is widely circulated by publishing it on the company intranet.
When reports or consultations are received, our company, in principle, promptly initiates an investigation to confirm the facts and takes appropriate action based on the content. Based on the results of the investigation, we implement corrective measures and have established a system to conduct "effectiveness verification" to ensure that the corrective measures are actually functioning, so that the response does not end as a one-time event. Through this, we aim to achieve substantial and continuous improvement, rather than merely formal responses.
When it is possible to provide feedback to the person who made the consultation regarding the progress and results of the investigation, we strive to operate with transparency and reliability by providing information as appropriate. Additionally, if the investigation reveals violations of laws or regulations, we have established internal rules to take disciplinary action based on the work rules and respond appropriately to ensure correction and prevention of recurrence.
As a preventive measure for problems raised using whistleblowing systems, MRA management-level employees are appointed as Compliance Officers who oversee the inspection, coordination, and thorough implementation of compliance items relating to matters under the jurisdiction of each department. In addition to promoting compliance in each department, the Compliance Officers share information about examples of legal violations or paperwork-related errors that occur in each department.
MRA has also formulated the Compliance Manual comprising the basic details of the laws to be followed and the compliance activities to be taken. To promote understanding of the Compliance Manual, MRA creates a compliance program once per fiscal year as a rule, which serves as a specific implementation plan for achieving compliance and will be revised if necessary. In addition, education activities for officers and employees are conducted about MRA’s business environment, the laws to be observed, preventive measures and actions taken if a violation of the law occurs.
Internal regulations set out what behavior corresponds to power harassment or sexual harassment, the company’s stance that power harassment and sexual harassment are issues that should be eradicated and how cases are handled if harassment does occur (e.g. consideration of privacy). They are posted on the company’s intranet so that MRA’s officers and employees may consult them at any time.