Morgan Stanley MUFG Securities Co., Ltd. (hereinafter referred to as “Morgan Stanley”) establishes policies for client-oriented business conduct as set out below based on the “Principles for Customer-Oriented Business Conduct” (the “Principle(s)”) published by the Financial Services Agency and the notes thereto.
We will provide periodic disclosures regarding the status of our compliance with such policies. Also, we will review the policies on a periodic basis and make a constant effort to provide our services in a client-oriented manner (corresponding to Principle 1).
1. Our Core Value to Put Clients First (Corresponding to Principle 2)
At Morgan Stanley, we are committed to fostering and maintaining a culture based on our five core values as set out below. Living these values means, above all, conducting ourselves as directors, officers and employees and our business activities in accordance with the letter and spirit of applicable laws and regulations and our policies, and acting with integrity to deliver first-class business in a first-class way. As directors, officers and employees, we have a shared responsibility to perform our duties with integrity and with strict professional ethics in our dealings with our clients and communities.
Morgan Stanley’s Five Core Values
- Do the Right Thing
- Act with integrity
- Think like an owner to create long-term shareholder value
- Value and reward honesty and character
- Put Clients First
- Keep the client’s interests first
- Work with colleagues to deliver the best of the Firm to every client
- Listen to what the client is saying and needs
- Lead with Exceptional Ideas
- Win by breaking new ground
- Leverage different perspectives to gain new insight
- Drive innovation
- Be vigilant about what we can do better
- Commit to Diversity & Inclusion
- Value individual and cultural differences as a defining strength
- Champion an environment where all employees feel a sense of belonging – are heard, seen and respected
- Expect everyone to challenge behavior counter to our culture of inclusion
- Attract, develop and retain talent reflecting the full diversity of society
- Give Back
- Serve our communities generously with our expertise, time and money
- Build a better firm for the future by contributing to our culture
- Develop our talent through mentoring and sponsorship
Please refer to our Code of Conduct available on Morgan Stanley website for greater detail.
2. Our Policy on Proper Management of Conflict of Interest (Corresponding to Principle 3)
Our core value to Put Clients First requires us to place our clients’ interests first and manage conflicts appropriately between their interests and ours. As set forth in our global policy such as our Code of Conduct, officers and employees must be sensitive to whether the actions they take could create an actual or potential conflict of interest, or even the situation of the appearance of a conflict of interest.
Conflicts of interest can arise in a number of circumstances, including between Morgan Stanley and one or more clients or between two or more clients. If we become aware of a conflict of interest (including potential conflict of interest), we must act in accordance with regulatory requirements and our policies and procedures. Our global policy stipulates that, pursuant to our policies and procedures, we are required to identify, and where appropriate, address, disclose and/or restrict, business conduct and practices that may pose a conflict (including potential conflict of interest) involving the interests of Morgan Stanley, its clients and/or its officers and employees.
Please refer to our Code of Conduct and Summary of Our Policy on the Management of Conflict of Interests available on Morgan Stanley website for greater detail.
3. Our Policy on Clarification of Pricing and Applicable Fees for the Financial Products and Services (Corresponding to Principle 4)
We will seek to determine the terms and conditions of the financial products or services we offer to our clients in a fair manner in compliance with the applicable laws and regulations and our internal policy on pricing for the financial products and services. Our global policy stipulates that the pricing and fees for financial products or services should be reasonable and fair taking into consideration various factors including, but not limited to, the nature, volume and maturity of the relevant transaction, type of transaction execution, market conditions (including market events and volatility), cost of capital and certain client characteristics.
We will provide an appropriate explanation with respect to the fees for the financial products or services when we deliver information regarding such products or services in compliance with the applicable laws and regulations and our policies and procedures. Also, we will seek to ensure transparency of pricing for the financial products or services so that our clients can make appropriate investment decisions based on sufficient information.
4. Our Policy on Providing Important Information in an Understandable Manner (Corresponding to Principle 5)
When we conduct a transaction with our client, we will understand the asset status, investment experience and objectives as well as the level of risk tolerance of our client, confirm the intention and needs of our client and offer a transaction suitable for such conditions in accordance with the applicable laws and regulations and our policies and procedures. Also, we will endeavor to provide a plain and clear explanation necessary for our clients to make an informed investment decision, such as the terms and conditions of the financial product or services, risk embedded in such products or services, relevant market conditions and conflicts of interest (including potential conflicts of interest) between Morgan Stanley and our clients, if any, in light of our clients’ investment experience and nature of the products and in accordance with the applicable laws and regulations and our policies and procedures.
Since we do not trade with individual clients directly, we currently do not prepare the Important Information Sheet.
5. Our Policy on Providing Suitable Service for Clients (Corresponding to Principle 6)
We will strive to develop a system to offer financial products and services suitable to our clients as described below.
Upon initiating transactions with our clients, we will conduct sufficient due diligence on our clients including but not limited to their asset status, investment experience and objectives. We will then scrutinize whether a transaction is suitable for a particular client under the particular circumstances and, if there are any issues or concerns, strive to address them appropriately through dialogue with the client.
When we introduce a new or complex product, we will determine such introduction upon conducting sufficient analysis such as on the potential risk our clients may take in accordance with our internal policies and offer the product to clients who are deemed suitable for such product.
Furthermore, we do not trade with individual clients directly; however, based on the requests and the like of other distributors, we may originate retail structured products and sell such products to such distributors. In such cases, we will assess the suitability of such distributors in accordance with the retail structured products business policies and procedures in a manner designed to ensure that proper solicitation and marketing is conducted by such distributors.
Please refer to our Solicitation Policy available on Morgan Stanley website for greater detail.
6. Our Policy on Proper Training and Incentives for Employees (Corresponding to Principle 7)
We strive to adhere to the highest standards of ethical conduct. Our commitment to ethical conduct means that we abide by the letter and the spirit of applicable laws and regulations. These principles are hallmarks of Morgan Stanley’s culture and reflect our pledge to Do the Right Thing and Put Clients First.
In order to prevail the aforementioned core values and a corporate culture in accordance therewith within Morgan Stanley, we will deliver mandatory training to all the employees on a regular basis and strive to ensure thorough compliance with our policies and procedures.
A breach of Morgan Stanley’s five core values and above mentioned policies including the Code of Conduct may result in disciplinary action. Also, we regularly review our incentive compensation programs. We have implemented an employee performance evaluation and compensation determination processes designed to ensure that each employee’s compliance with the five core values and the policies will be reviewed and considered during those processes.