Legal Information

HSBC Securities (Japan) Co., Ltd.

HSBC Securities (Japan) Co., Ltd.

17 November 2023

Policy in relation to Principles of Customer-Orientated Business Conduct


Conduct is a critical component of all of HSBC’s business activities. It is embedded within the Group’s strategy, business models and planning, our culture and behavior, interaction with customers, products and services, financial markets operations, and governance and oversight processes.


We have established a Global Conduct Framework with five outcomes describing the behaviors to which we aspire. It increases our understanding of how the decisions we make affect customers and other stakeholders, helping us to strengthen our business.


Our conduct framework governs everything we do and aligns to the JFSA’s Principles of Customer Orientated Business Conduct for which our businesses in Japan fully support.


Each business must ensure that its policies are designed to deliver the outcomes set out in the Global Conduct Framework.


HSBC Securities (Japan) Co., Ltd.’s Policy in relation to Principles of Customer-Orientated Business Conduct


In line with the JFSA’s Principles of Customer Orientated Business Conduct (Principle 1: Development and Publication of Policy Concerning Customer-Oriented Business Conduct), our firm has developed the following Policy in relation to Principles of Customer-Orientated Business Conduct.


  1. 2.Pursuit of Customers’ Best Interests

    Our firm will conduct its business in Japan in a manner which is consistent with our Global Conduct Framework and the FSA’s ‘Principles on Customer-Orientated Business Conduct’.

    Our Global Conduct Framework mandates that we act in the best interests of our customers by conducting business in a fair and reasonable manner whilst maintaining a high level of professional ethics.

  2. 3.Appropriate Management of Conflicts of Interest

    HSBC has established global policies and Japan specific internal rules to manage conflicts of interests when dealing with customers. Through our policies and internal rules, we strive to detect actual and potential conflicts of interest and take appropriate action to resolve in each case.

    Our Policy on Conflicts of Interest is available here (Legal Information | HSBC Japan).

  3. 4.Disclosure of Commissions, Fees, and Other Costs

    HSBC determines the pricing, commissions and fees of financial products that we offer our customers in a fair and reasonable manner in accordance with our global policies and procedures. Pricing, commissions and fees are communicated to customers clearly and in a manner which is easy to understand in line with each customer’s knowledge and investment experience. Where HSBC is structuring products to be sold to end investors through third party distributors, we work with our distributors to provide them with information on pricing, etc. in order that they can meet their own obligations to their customers.

  4. 5.Provide Important Information in a Clear Way

    HSBC always communicates with customers in a fair and reasonable manner when providing explanations and information in relation to financial products and services. In line with global policies and Japan internal rules, all communication must be clear, fair, not misleading and at a suitable level for the customer considering each customer’s knowledge and investment experience. We also take into consideration the customer’s financial status and investment purpose as well as the complexity of the financial product or service being offered. Where applicable, HSBC will explain to customers any conflict of interest arising as well as provide an explanation of the effect such conflict has on the financial product or service sold or solicited to customers.

    In principle, structured products are provided as one product and are not divisible. HSBC does not provide multiple products or services as a package. Further, we do not offer products or services to individual customers, and therefore we do not create nor provide the Important Information Sheet. (Reflecting this point, we have stated “Not Applicable” with regard to Principle 5, Note (2) in our correspondence chart.)

  5. 6.Provide Suitable Financial Products/Services to Customers

    In line with our Global Conduct Framework, HSBC only provides financial products and services that are suitable for the customer by understanding each customer’s knowledge and investment experience, investment purpose and financial status.

    HSBC endeavors to achieve better understanding of our customers on a long term basis, through our daily business operations for better service provision and by providing information regarding products and services. We conduct appropriate follow up with customers regarding products transacted.

    In principle, structured products are provided as one product and are not divisible. HSBC does not provide multiple products or services as a package. Further, we do not offer products or services to individual customers. Our firm, in structuring a financial product, takes into account the characteristics of the product being structured and specifies the target clients’ investor type to whom the product is expected to be sold. However, we do not publish target client investors by product type. (Reflecting these points, we have stated “Not Applicable” with regard to Principle 6, Note (2) and “Partially Conducted” with regard to Principle 6, Note (3) in our correspondence chart.)

    Our Solicitation Policy is available here (Legal Information | HSBC Japan).

    Where HSBC is structuring products to be sold to end investors through third party distributors, we identify a target market for each product. Further, we provide information on the product and target market to distributors. In line with our global policies, we conduct periodic due diligence on our distributors to confirm that distributors have in place an appropriate framework which enables them to provide products suited to the needs of end investors.

  6. 7.Appropriate Framework etc. to Incentivize Employees

    Mandatory training regarding our Global Conduct Framework is provided to new joiners and on an annual basis for existing employees. Employee performance assessments encompass a broad range of indicators including behavioral standards in line with our Global Conduct Framework. Variable pay remuneration outcomes for all employees are aligned with HSBC Group’s values and are based on the performance assessment conducted.

2-7 above correspond to the JFSA’s Principles of Customer Orientated Business Conduct (as of January 2021), principles 2-7.

Actions and Status

1.Common KPIs
Our firm does not conduct any products within the scope of common KPIs.

2. Our Action Plan and Status (As of 17 November 2023)

Principle 2: Pursuit of Customers’ Best Interests

Actions Status
Our firm has published our policy in response to the FSA’s Principles of Customer-Oriented Business Conduct. Policy in place. Reviewed by management on an annual basis.
HSBC ensures that feedback from customers (including complaints) is properly taken into consideration and that action is taken to address deficiencies where required. Framework in place. Ongoing monitoring is performed to ensure complaints are addressed properly and in a timely manner. During the previous 12-months, all complaints received have been resolved within the timeframe set by internal guidelines in our Global Policy.
In order to meet the diverse needs of our customers, we provide proposals that make use of the combined capabilities of the HSBC Group, including our firm, The Hongkong & Shanghai Banking Corporation Limited, and HSBC Asset Management (Japan) Limited. With the consent of customers as necessary, we work closely with relevant HSBC Group companies to provide support to our customers.


Principle 3: Appropriate Management of Conflicts of Interest

Actions Status
HSBC has established a framework for the handling of conflicts of interest. Framework in place. Reviews conducted for each case raised. Periodic reviews of business aligned conflicts registers conducted.
Framework and controls in place governing employee activities in the areas of personal account dealing, outside business activities, gifts and entertainment. Framework and controls in place.


Principle 4: Disclosure of Commissions, Fees, and Other Costs

Actions Status
HSBC has established global policies in relation to dealing, managing and executing trades appropriately. This includes reviews of sales margins against defined thresholds. Commissions, fees and other costs are disclosed where necessary. Framework and controls in place.


Principle 5: Provide Important Information in a Clear Way

Actions Status
HSBC has established global polices to ensure that it provides customers with product information that is clear, fair, and not misleading. All marketing materials are subject to review before use to ensure they are of the requisite standard. Framework and controls in place.


Principle 6: Provide Suitable Financial Products/Services to Customers

Actions Status
HSBC has established global polices and local internal rules governing client suitability and ongoing ‘know your customer’ processes to understand the needs and status of our customers. Framework and controls in place.
Where HSBC is structuring products to be sold to end investors through third party distributors:
  • · We conduct periodic due diligence on all distributors in line with our global policies.
  • · We identify a target market for each product and provide information on the product and target market to our distributors.
 Framework in place. Periodic due diligence is performed on a one-year or two-year cycle. During the previous 12-months, all required due diligence reviews were conducted on time.


Principle 7: Appropriate Framework etc. to Incentivize Employees

Actions Status
HSBC has established a framework for employee performance assessments which encompasses a broad range of indicators including behavioral standards in line with our Global Conduct Framework. Framework in place for all employees. Performance evaluations against expected standards of delivery and behavior are discussed with employees throughout the performance year.
HSBC conducts training to raise employees' awareness on our Global Conduct Framework, the FSA’s Principles of Customer-Oriented Business Conduct and the Policy and Action items we have established/published. Mandatory training is conducted for all employees on an annual basis which includes our Global Conduct Framework. Going forward, local mandatory training will include the FSA’s Principles of Customer-Oriented Business Conduct and the Policy and Action items we have established/published.


Principles 2-7 above correspond to the JFSA’s Principles of Customer Orientated Business Conduct (as of January 2021), principles 2-7.

HSBC Securities (Japan) Co., Ltd. will endeavor to conduct the solicitation and sale of financial products in compliance with the following principles:

  • Provide our customers with appropriate information and explanation of financial products in light of their investment objectives, knowledge, experience, and financial conditions;
  • Explain in an appropriate manner, the merits, risks and fees associated with financial products and services;
  • Conduct the solicitation and sale of financial products in a fair and appropriate manner to maintain customer trust and strive to conduct our operations in a client centric manner;
  • Not to make uninvited visits or phone calls during inappropriate hours such as late night and early morning hours;
  • Provide appropriate information on financial products and services in order that customers may make investments based on the judgment of the customer and with the customer’s responsibility;
  • Strive to improve our staff training in areas such as product knowledge to meet customer expectations and build trust;
  • Comply with the Financial Instruments and Exchange Act and other related laws, rules and regulations, and strive to improve our internal control structure to perform appropriate solicitation.

April 2022

HSBC Securities (Japan) Co., Ltd.

Personal Information Protection Policy

HSBC Securities (Japan) Co., Ltd. (hereinafter, the “Company”) has established the following policy with respect to the handling of customer Personal Information, Individual Number and Specific Personal Information (collectively, "Personal Information, etc.").

When handling customer Personal Information, etc., the Company will comply with this policy in addition to relevant laws and regulations, including the Personal Information Protection Act (hereinafter referred to as "PIPA"), and relevant guidelines, including the Guidelines for the Protection of Personal Information in the Financial Sector (hereinafter referred to as the "Guidelines"). The Company will continually review and improve its policy for handling of Personal Information, etc.

In this policy:

"Connected Person" means a person whose information the customer provides to the Company in connection with transactions with the Company. Connected Person may include, but is not limited to, any agent, any beneficiary, trustee or settler, and any substantial owner, representative, director or officer of the customer.

"Sensitive Information" is defined in the Guidelines. It includes "Special Care-Required Personal Information" and other information like membership of workers’ unions, family origin, registered domicile, health record and sex life etc. (excluding the parts under "Special Care-Required Personal Information").

"Personal Related Information" is defined in the PIPA. It refers to information about a living individual, which is not Personal Information nor Kana Processed Information and Anonymously Processed Information that are defined in the PIPA.

"Personal Information" is defined in the PIPA. It refers to information about a living individual that can identify the specific individual by a name, date of birth or other description contained in such information, or information containing an individual identification code defined in the PIPA.

"Personal Data" is defined in the PIPA. It refers to Personal Information constituting a personal information database etc. defined in the PIPA.

"Individual Number" refers to a number obtained by converting a resident record code in order to identify a person (so called "My Number").

"Specific Personal Information" refers to Personal Information that includes Individual Number information.

"Special Care-Required Personal Information" is defined in the PIPA. It refers to personal information comprising a principal's race, religious affiliation, social status, medical history, criminal record, fact of having suffered damage by a crime, or other descriptions etc. of which the handling requires special care so as not to cause unfair discrimination, prejudice or other disadvantages to the principal.

1. Purposes of Use of Personal Information, etc.

The Company will use Personal Information, etc. of the customer (including Connected Persons) to the extent necessary for the following Purposes of Use within the following Business Operations, except where the Company obtains such customer’s consent or where permitted under the relevant laws and regulations. For the avoidance of doubt, the Company will use Individual Number and Specific Personal Information only to the extent permitted under the relevant laws and regulations.

(1) Business Operations

1. Financial instruments business (including sales and purchase of securities, derivative transactions, brokerage, intermediary or agency services for sales and purchase of securities, and underwriting securities, etc.) and any business incidental thereto;

2. Businesses and any other activities in which financial instruments business operators are permitted to engage in accordance with relevant laws, including Money Lending Business; and

3. Any other activities and related businesses in which financial instruments business operators may be engaged in (including activities that may be permitted in the future).

(2) Purposes of Use

The Company and HSBC Group Companies will use the customer's Personal Information, etc. for the following purposes in relation to the provision of financial products and services. Note, however, that in compliance with Article 123, Paragraph (1), Item (vii) of the Cabinet Order Concerning Financial Instruments Business, etc., the Company will not use, nor shall it provide to a third party, any Sensitive Information of the customer unless the Company deems it necessary to do so for its proper business operations or otherwise.

The Company will endeavor to decide the Purposes of Use as concretely as possible so that they are transparent to customers, and will endeavor to specify the purpose at the time of acquiring the information. For example, if the Company intends to propose its products using Personal Information acquired by conducting a questionnaire, the Company will disclose such intention.

1. To provide information for the solicitation and sale of financial products, introduction, receiving an application, management, and execution of services in accordance with the Financial Instruments and Exchange Act (hereinafter referred to as "FIEA").

2. To: (i) ascertain the customer's identity under the Act on the Prevention of the Transfer of Criminal Proceeds, the Foreign Exchange and Foreign Trade Act and Hong Kong Monetary Authority Guidelines, (ii) avoid financial crime and money laundering, and comply with sanctions programmes that are administered by Japan, the United States, the United Kingdom, the European Union, Hong Kong, United Nations, etc., and (iii) ascertain a customer's eligibility for certain financial products and/or services.

3. Management of ongoing transactions, such as the management of dates in various transactions;

4. To make decisions on offers for various transactions, confirm eligibility for using instruments and services, and ongoing transactions, etc.;

5. To make decisions about the appropriateness of providing financial products and services, such as decisions made in light of the principle of suitability.

6. To appropriately carry out operations when commissioned with all or part of the processing of Personal Information by another business etc.

7. To fulfill obligations and exercise rights based on contracts with the customer or based on laws.

8. For research and development of products and services through market research, data analysis, and questionnaire surveys;

9. For making proposals concerning products and services by means of direct mail, email, etc.

10. To make proposals on the products and services of HSBC Group Companies or associated companies etc.

11. Cancellation of various transactions and post-cancellation management of transactions.

12. To monitor and control the various risks that are necessary to be managed by HSBC Group Companies.

13. Appropriate and smooth performance of transactions with customers.

Notwithstanding the Purposes of Use provided in each item above, the Company will not use the Individual Number and Specific Personal Information for the purposes other than those permitted under the Act on the Use of Numbers to Identify a Specific Individual in Administrative Procedures. The Company’s Purposes of Use of Individual Number and Specific Personal Information are as follows:

1. Preparation of legal documents regarding financial instrument transactions.

2. Processing of account opening and reporting regarding financial instrument transactions.

3. Preparation of legal documents regarding payment records.

4. Other purposes in relation to 1 through 3 above.

The Purposes of Use of Personal Information, etc. by the Company, may be found on the Company's website.

(3) Discontinuance of Direct Marketing

In case a customer requests the Company to stop using his/her Personal Information for the purposes of direct marketing such as sending direct mails or solicitation by phone, the Company will discontinue the usage for such purpose.

2. Proper Acquisition of Personal Information, etc.

To the extent necessary for the achievement of the Purposes of Use specified in item 1 above, the Company will acquire Personal Information, etc. of the customer orally or in writing by appropriate and lawful means, for example, from the following information sources.

Examples

Where the information is provided directly by a document that the customer is required to fill in and submit (e.g. submission of an application form by the person in question, data entry via the website by the person in question). Cases where personal information is provided by third parties, such as a personal credit information organization.

3. Personal Data Provided to Third Parties

The Company will not provide a customer’s Personal Data it retains to third parties without the prior consent of the individual concerned, except as permitted by relevant laws and regulations. However, in the case where the Company entrusts the Personal Data to a third party within the necessary scope to achieve its Purposes of Use, or in the case where the Personal Data is to be jointly utilized by a specified party set forth in item 6 below, the Company may provide a customer’s Personal Data even without the prior consent of the customer.

Where providing Persona Data to third parties in foreign countries (including the above cases of the entrustment of the handling of the Personal Data and the joint use of the Personal Data), the Company will not do so without obtaining prior consent of the customer, except for cases permitted by relevant laws and regulations. If a third party is located in a foreign country which has established a personal information protection system recognized to have equivalent standards to that of Japan (as set forth in the rules of the Personal Information Protection Commission (“PIPC”)) the Company may provide the customers’ Personal Data to the third party without obtaining the prior consent of the customer.

In addition, the Company may provide a customer’s Personal Information, without obtaining prior consent, to a third party in a foreign country which has developed a framework that conforms to the standards set forth in the rules of PIPC and is regarded as equivalent on an ongoing basis to the measures that a business operator handling Personal Information is required to take pursuant to the provisions of the PIPA (hereinafter referred to as "Equivalent Measures"). In such event, the Company shall take measures necessary to ensure the continuous implementation of the Equivalent Measures by such third parties, and a customer may seek information on such measures.

At the time of obtaining consent from the customer, it might be difficult to specify the name of the foreign country, or obtain and provide information on its regime for protecting personal information, or information on the measures to be taken by the third party to protect Personal Information in an appropriate and reasonable manner. Therefore, a customer may request the Company to provide the aforementioned information at a later date.

The Company shall not provide all or part of the information with respect to any requests for information in the event that there is a risk that the proper performance of its business will be seriously impaired.

In providing customers’ Personal Related Information to a third party and where the third party is expected to receive the Personal Related Information as Personal Data, except as otherwise provided by relevant laws and regulations, the Company shall confirm and provide the information in accordance with the provisions of such laws and regulations.

Further, the Company will not provide Individual Number and Specific Personal Information to third parties beyond what is allowed under the laws and regulations.

4. Handling of Sensitive Information

The Company will not acquire, utilise, nor provide to third parties, customer’s Sensitive Information, except in cases as illustrated by the Guidelines including cases based on relevant laws and regulations and the case in which there is a prior consent of the individual concerned within the scope of business need.

5. Entrustment of Operations Concerning Personal Data

The Company shall entrust its operations concerning Personal Data to a third party within the necessity to achieve the Purposes of Use as exemplified below. Note that the Company, in entrusting its operations to a third party, will execute an agreement with the third party regarding the stringent handling of the Personal Data within such third party, and ensure that there are appropriate security control measures in place.

Examples

  • Operations regarding printing and dispatch of documents to be sent to customers.
  • Operations related to transactions
  • Operations to send out direct mails
  • Operations and maintenance of computer systems
  • Maintenance of books and records relating to business operations

6. Joint Use of Personal Data

The Company may jointly use Personal Data (excluding Individual Number and Specific Personal Information) with other parties as follows:

(1) Joint Use of Information among HSBC Group Companies

The Company may jointly use Personal Data with HSBC Group Companies in order to provide high value-added products and services and/or conduct strong risk management and enhancement of HSBC group business controls. This joint use will be undertaken under necessary control measures, and when there are restrictions set by applicable laws and regulations other than the PIPA, such as the FIEA, the Company shall comply with such laws and regulations.

(2) Jointly Used Personal Data

Information (name, address, date of birth, contents and purpose of a transaction, and occupation) of the customer (including its Connected Persons to the extent necessary for the implementation of the Purposes of Use) regarding the Company's financial instruments business and other transactions.

(3) Scope of Joint Users

The Company and other HSBC group companies, the ultimate parent company of which is HSBC Holdings plc. (“HSBC Group Companies”). http://www.hsbc.com/about-hsbc/structure-and-network

(4) Purposes of Use

1. The information will be used to monitor and manage the various risks that are necessary to be so monitored and managed for the business operations of the HSBC group.

2. To: (i) ascertain the customer's identity under the Act on Prevention of Transfer of Criminal Proceeds, the Foreign Exchange and Foreign Trade Act and Hong Kong Monetary Authority Guidelines, (ii) avoid financial crime and money laundering, and comply with sanctions programmes that are administered by Japan, the United States, the United Kingdom, the European Union, Hong Kong, United Nations, etc. or (iii) ascertain a customer's eligibility for certain financial products and/or services.

3. To plan and develop various financial products and services and related proposals.

4. To properly and smoothly implement transactions with customers.

(5) Company Name

Our company name, address, and the name of the Representative Director responsible for management of Personal Data are shown below:
HSBC Securities (Japan) Co., Ltd.
11-1, Nihonbashi 3-chome Chuo-ku, Tokyo Japan
Chikako Nagahara
Representative Director and Chief Executive Officer

7. Procedures for Disclosure etc. of Retained Personal Data

Upon receipt of a request/demand for disclosure etc. by a customer in relation to the purpose of utilization, disclosure, correction, addition or deletion, ceasing of provision to a third party, disclosure of a third party provision record of the customer’s Retained Personal Data, as defined in the PIPA (hereinafter referred to as a “Disclosure Request, etc.”), the Company shall action the Disclosure Request, etc., without delay, by means of providing an electronic record, delivering documents or by other means agreed with the customer.

In case the customer inquiries about the existence of his/her Individual Number in the Company's records, the Company shall disclose whether it retains such Individual Number or not.

(1)Cases that cannot be handled

The Company may not respond to the Disclosure Request, etc. in the following cases:

1. if we cannot confirm the identity of the customer or if we cannot confirm the authority of the agent of the customer;

2. if the application form is inadequately completed or if the fee is not paid within the prescribed period;

3. if we are not required to respond under relevant laws and regulations, for example, because the item requested does not fall within the definition of Retained Personal Data; or

4. if there is threat to seriously interfere with our business.

If the Company decides not to accept the customer's Demand for Disclosure etc., in whole or in part, the Company shall notify the customer thereof without delay.

(2)Documentation and Procedures for Handling a Disclosure Request, etc.

In order to make a Disclosure Request, etc., the customer shall submit a form prescribed by the Company. The Company, in handling the Disclosure Request, etc. shall confirm the identity of the customer or his/her agent in a manner comparable to the procedures required by the Act on the Prevention of the Transfer of Criminal Proceeds etc., by requesting the customer or his/her agent to submit necessary documents etc.

(3)Disclosure Request, etc. by an Agent

An agent who makes a Disclosure Request, etc. on behalf of a customer shall be one of the following:

1. A legal guardian of a customer who is a minor or a ward that is of age.

2. An agent authorized by the customer to make the Disclosure Request, etc.

The Company will request a public certificate or power of attorney to confirm the authority of the agent, in addition to the above mentioned identity checking process.

(4)Handling Fee

The Company will charge a fee of JPY 1,100 per case for the handling of a Disclosure Request, etc. The fee is payable at the time of such request and shall be paid in cash.

8. Security Control Measures

The Company takes necessary and appropriate action in relation to security controls to avoid data leakage, loss or damage of customers’ Personal Information, etc. The Company shall exercise necessary and appropriate supervision over staff and outsourced vendors (including subcontractors) who are handling customers’ Personal Information, etc.

(Development of Rules on the Handling of Customers' Personal Data)

The Company shall establish rules for the handling of customer Personal Data detailing how to handle the data, clarifying those in charge and for defining the roles at each stage of data processing (acquisition, use, storage, provision, deletion, disposal, etc).

(Organizational Security Control Measures)

The Company shall:

  • Assign a person to be responsible for the management of Personal Data.
  • Maintain Security Control Measures under its Rules of Employment etc.
  • Process Personal Data by applying the above mentioned rules.
  • Maintain methods by which the handling status of Personal Data can be checked.
  • Maintain and conduct a regime for monitoring and auditing the handling status of Personal Data.
  • Maintain a regime to deal with incidents such as leakage etc.

(Measures for Human Security Management)

The Company shall:

  • Enter into a non-disclosure agreement etc. with employees covering Personal Data.
  • Clarify employees’ roles and responsibilities.
  • Inform, educate, and train employees regarding these Security Control Measures.
  • Check employees’ compliance with processes to manage Personal Data.

(Physical Security Control Measures)

The Company shall:

  • Establish measures to prevent theft of equipment, etc.
  • Manage recording media, etc. appropriately.
  • Prohibit Personal Data to be taken outside the designated managed area in principle.
  • Prohibit usage of floppy disk、USB port, personal laptop, etc., in principle.
  • Strictly manage a log of entrance and exit of employees and visitors based on its rules for access management.
  • Prevent mistakes of sending Personal Data by fax, telex, and emails and conduct checking of recipients and receipts to prevent Personal Data loss, etc.
  • When disposing or returning equipment, process deletion of Personal Data in recordable media in the equipment appropriately.
  • Dispose paper-based Personal Data in the box dedicated to the collection and disposal of sensitive documents.

(Technical Security Control Measures)

The Company shall:

  • Identify and verify users of Personal Data.
  • Set up area controls and limit access to Personal Data.
  • Manage access entitlements to Personal Data.
  • Establish measures to prevent leakage and destruction of Personal Data.
  • Record and analyze access to Personal Data.
  • Record and analyze the ongoing status of information systems that process Personal Data.
  • Monitor and audit information systems that process Personal Data.

(Understanding of External Environments)

When handling Personal Information of customers in foreign countries, the Company shall implement appropriate Security Control Measures, after understanding the regime, etc. related to the protection of Personal Information in the foreign countries concerned.

9. Contacts

The Company shall deal with complaints regarding the handling of Personal Information etc. properly and in a timely manner. Please use the following phone number for any inquires, comments, complaints, and Disclosure Request, etc. concerning the Company’s handling of Personal Information etc. and Security Control Measures.

Compliance Department
HSBC Securities (Japan) Co., Ltd.
Tel: 03-5203-3111 (Weekdays 9 a.m. - 5 p.m.)

10. Authorized Personal Information Protection Organization

The Company is a member of the Japan Securities Dealers Association and Financial Futures Association of Japan, which are authorized Personal Information Protection Organizations. If you have any complaints or inquiries regarding the handling of Personal Information, you may contact these organizations as below:

Personal Information Consulting Centre
Japan Securities Dealers Association
Tel: 03-6665-6784 (http://www.jsda.or.jp)

Personal Information Complaints/Consultations Centre
Financial Futures Association of Japan
Tel: 03-5280-0881 (http://www.ffaj.or.jp/)

11. Changes to this Policy

The contents of this policy may by changed without notice and without informing customers individually in accordance with relevant laws and regulations due to legislative amendments and others reasons. In such case, the changes shall be published on the Company’s website.

End

HSBC Securities (Japan) Co., Ltd.
11-1, Nihonbashi 3-chome Chuo-ku, Tokyo Japan
Chikako Nagahara
Representative Director and Chief Executive Officer

November 2023

HSBC Securities (Japan) Co., Ltd.

This Best Execution Policy establishes the policy and method in order to execute orders on the best possible terms for the client as stipulated in Article 40-2, Paragraph 1 of the Financial Instruments and Exchange Law. When HSBC Securities (Japan) Co., Ltd. ("HSBC Japan") receives an order from a client involving securities listed on financial markets in Japan, we will do our best to execute the order in accordance with the following policy, unless the client provides other instructions concerning how the transaction should be executed.

(Note that HSBC Japan does not currently conduct equities business related to Listed stocks, etc. as defined below.)

  1. 1. Applicable securities
    (1)"Listed stocks, etc." as defined in Article 16-6 of the Enforcement Ordinance of the Financial Instruments and Exchange Law, which includes stocks, convertible bonds, exchange-traded funds (beneficiary certificates of investment trusts linked to equity indexes), real estate investment trusts (REITs), etc.
    (2)Although "securities handled" as defined in Article 67-18, Item 4 of the Financial Instruments and Exchange Law, which includes Phoenix stocks, convertible bonds, etc., are legally covered by the best execution policy, we do not perform transactions for these securities.
  2. 2. Method for executing orders on the best terms
    We will handle all orders received from clients as brokerage orders and will not serve as the direct counterparty for these transactions. At our company, we primarily consider matters that are in our clients’ interest other than executing at the most advantageous price as the best trading conditions, and therefore all orders from clients concerning listed stocks, etc. will be executed on financial markets in Japan. We will not use off-exchange transactions, including proprietary trading systems (PTS). (1) When an order is received from a client, we will immediately execute the transaction on a financial market in Japan where the applicable security is listed. When an order is received after trading hours for financial markets, the order will be executed after the financial market reopens. (2) Orders from clients will be executed on financial markets as follows. (a) For securities listed on a single financial market, the order will be executed on that market. (b) For securities listed on multiple financial markets, the order will be executed on the market that we select as having the highest liquidity based on trading volume and other items during a specific period. Specific reasons for selection of a particular market, in addition to the items that we already disclose, will be provided to clients upon request. (c) If we are not a participant or member of the market used in (a) or selected as described in (b), we will execute the transaction on that market using a party that is a participant or member of that market and with which we have a brokerage contract for orders on that market.
  3. 3. Reason for selection of a particular method
    We use financial markets rather than off-exchange transactions because we believe that financial market transactions are better from the clients' standpoint. Financial markets attract a large volume of orders from investors, resulting in greater liquidity, a better possibility of completing a transaction, faster transactions, and other advantages. For securities listed on multiple financial markets, we use the market with the highest liquidity because we believe that this is in the best interests of the client.
  4. 4. Other items
    (1) Given the explanation in 2. above of the order execution method used, the transactions listed below will be executed as follows.
    (a) For transactions where the client specifies a particular execution method (request for HSBC Japan to act as the direct counterparty, request for execution on a particular financial market, request for execution during a particular time of day, etc.), we will use the specified method.
    (b) For transactions involving odd lots or amounts of less than one trading unit (tangen), we will use financial product companies that handle these transactions.
    (c) Transactions where the execution method is specified in the transaction terms and conditions, such as stock cumulative investment and stock mini-investment, etc.
    (d) On open and on close orders.

    (2) There may be instances where we are forced to select an order execution method that is not consistent with this best execution policy due to a computer system malfunction or other problem. In this case, we will do our best to execute the order on the best terms possible at that time.

If a system failure occurs in a financial market, etc., since it may be difficult to use the method outlined in 2 above, the order may be executed by a method different from the method outlined in 2 above. Even in such a case, we will endeavor to execute the transaction under the best terms at that time.

Our obligation involving the best execution of orders is not restricted to the price. We are obligated to execute orders in the best manner by also taking into account cost, speed, reliability and many other factors associated with the order. Consequently, there may be instances where, following the execution of an order, the terms do not appear to be the best possible based on price alone. However, it is not possible to use solely the price as the basis for determining whether or not a particular transaction is in violation of the best-execution obligation.

For customers who have been reclassified as a Professional Investor, reclassification continues to be effective on and from the date of acceptance for reclassification by HSBC Securities (Japan) Co., Ltd. to and including the immediately succeeding September 30 (the last day of the effective period hereinafter referred to as the “Expiry Date”). If a customer desires to remain reclassified as a Professional Investor beyond the Expiry Date, the customer is required to make a renewal request for reclassification prior to the Expiry Date. If a customer who has been reclassified as a Professional Investor wishes to be treated as a General Investor, the customer may make the request at any time to HSBC Securities (Japan) Co., Ltd.

For a customer who has been reclassified as a General Investor, the customer will continue to be treated as a General Investor until the earlier of (i) the day on which HSBC Securities (Japan) Co., Ltd. accepts, pursuant to the provisions of the Financial Instruments and Exchange Act, a request from such customer to be treated as a Professional Investor, or (ii) the day immediately preceding the day on which such customer becomes a qualified institutional investor.

HSBC Holdings plc, its subsidiaries and associates (HSBC Group) is a global organisation which provides an extensive range of financial services to its customers around the world. In Japan, HSBC Group entities include branches of The Hongkong and Shanghai Banking Corporation as well as HSBC Securities (Japan) Co., Ltd. and HSBC Asset Management (Japan) Limited.

As the HSBC Group engages in a wide range of commercial and investment banking, brokerage, funds management, hedging transactions and investments it is possible that companies or businesses within the HSBC Group may from time to time potentially have interests which conflict, or potentially conflict, with its customers' interests or with the duties that it owes to its customers.

The types of conflicts include (a) those arising between the interests of HSBC on the one hand and with the interests of its customers on the other, (b) those conflicts between different customers, and (c) conflicts between an employee of HSBC Group and a customer.

For example, HSBC Group may trade proprietary positions in a security when at the same time another business or entity within HSBC Group may have information about future transactions with customers in relation to that security. HSBC Group may also provide advisory and financing services to one customer in respect of a bid and seek to provide financing services to another customer in respect of the same bid. HSBC Group has therefore established comprehensive Conflict of Interest Management procedures which are designed to identify and manage such potential conflicts of interest. A key element of such procedures is that HSBC Group staff engaged in different business activities involving a potential conflict of interest must carry on those activities independently of one another. In Japan, the Compliance Department, which is managed independently from business departments, is the responsible department for Conflict of Interest Management. The Compliance Department identifies potential conflicts of interest by monitoring the necessary business information and where applicable taking appropriate measures to manage and control conflicts of interest when they arise. These control procedures include organisational measures and administrative arrangements to safeguard the interests of customers and clients.

Where necessary, HSBC Group maintains arrangements which restrict the flow of information to certain employees in order to protect its customers' interest and to prevent improper access to customer information. Rules are also in place to prevent insider dealings by employees of HSBC Group.

In certain circumstances, HSBC Group may consider it appropriate to disclose a potential conflict of interest to a customer and obtain the customer's formal consent to proceed.

However, HSBC Group will decline to act in any circumstance where a customer declines to give consent or where it considers that the potential conflict of interest cannot be managed without risk of damage to the interest of any customer.

The scope of conflicts of interest management is the activities of The Hongkong and Shanghai Banking Corporation Limited, HSBC Securities (Japan) Co., Ltd., HSBC Asset Management (Japan) Limited and all other HSBC Group companies worldwide which engage in financial business. Please be advised that HSBC Asset Management (Japan) Limited does not share individual customer information with remaining HSBC Group companies.

Any customer requiring more details of our Conflict of Interest Management procedures should contact their Relationship Manager or other contacts at any of HSBC's offices in Japan.

As a responsible organisation the HSBC Group is committed to actively engaging in activities which contribute to the maintenance of stability and social order. It is our policy to take a firm stance against any group or organisation which engages in activities that may be deemed anti-social. Our position is in accordance with recent guidelines issued by both the Financial Services Agency and the Japan Securities Dealers Association, namely we will:

  1. 1. Resolutely oppose any attempt by ASFs to associate with us.
  2. 2. Take all reasonable measures to protect HSBC staff against the activities of ASFs during the performance of their jobs.
  3. 3. We will continue to support external parties, including the police and legal professionals, in their fight against ASFs.
  4. 4. We will use the Japanese legal system to protect our staff and our business against ASFs.

Our Policy for Handling Complaints and Disputes

In relation to the handling of complaints and disputes, taking into consideration the financial Alternative Dispute Resolution system, the relevant departments of HSBC Securities (Japan) Co., Ltd., in coordination with one another, shall clarify the cause and responsibility of a complaint or dispute, respect the client’s situation, and make efforts to resolve the matter promptly, sincerely and fairly.

  • Complaints and disputes raised by clients shall be treated sincerely, the relevant information shall be shared and used in order to improve our firm’s business operations.
  • Personal information received from clients shall be managed appropriately.
  • Complaints by anti-social forces and unjustified involvements disguised as disputes shall be handled with a robust attitude, and managed appropriately in cooperation with the police or other relevant organizations as necessary.
  • Resolution with the understanding and consent of the client shall be pursued to the extent possible, such as by explaining appropriately to the client the process in handling the complaint or dispute.
  • In cases where it is evident that the complaint or dispute will not able to be resolved internally or in other cases that are deemed appropriate, an external dispute resolution organization below shall be introduced to the client in order to resolve the complaint or dispute.

Contact Point for Making a Complaint or Dispute

If you wish to make a complaint or dispute, please contact your sales representative or the Compliance Department (the designated responsible department).

HSBC Securities (Japan) Co., Ltd. Compliance Department

Phone: 03-5203-3111

Alternative Dispute Resolution Framework

The Customer Complaint and Dispute Resolution Procedures for Type I and Type II Financial Instruments Businesses, based on the Financial Instruments and Exchange Act Article 37-7, are set out below.

For Type I Financial Instruments Business, HSBC Securities (Japan) Co., Ltd. has signed an agreement with the Financial Instruments Mediation Assistance Center ('FINMAC') with respect to the use of customer complaint and dispute resolution procedures to be provided by FINMAC, which is a Designated Dispute Resolution Body under the Financial Instruments and Exchange Act.

For Type II Financial Instruments Business, HSBC Securities (Japan) Co., Ltd. is registered with the Type II Financial Instruments Firms Association and Financial Futures Association of Japan, through which the use of customer complaint and dispute resolution procedures by FINMAC is also available.

Contact Information

FINMAC
Address: 1-1, Nihonbashi Kayaba-Cho 2-chome, Chuo-ku, Tokyo, 〒103-0025

Phone:

0120-64-5005 (available during 9:00 - 17:00 from Monday to Friday, except holidays)

Website:

http://www.finmac.or.jp

Disclosure pursuant to Money Lending Business Act Article 12-2-2

For Money Lending Business, HSBC Securities (Japan) Co., Ltd. has signed an agreement with the Japan Financial Services Association with respect to the use of customer complaint and dispute resolution procedures to be provided by the Association, which is a Designated Dispute Resolution Body under the Money Lending Business Act.

Contact Information
Money Lending Business Consultation and Dispute Resolution Center, The Japan Financial Services Association

Address:

Futaba Takanawa Building 2F, 19-15, Takanawa 3-chome, Minato-Ku, Tokyo, 〒108-0074

Phone:

03-5739-3861 (available during 9:00 - 17:00 from Monday to Friday, except holidays and the period of 29 December – 4 March)

Website:

http://www.j-fsa.or.jp/personal/contact/index.php

Explanatory note on unregistered credit rating
(For S&P Global Ratings)

HSBC Securities (Japan) Co., Ltd.

From the viewpoint of ensuring fairness and transparency in the markets, Financial Instruments and Exchange Law has introduced the registration system for credit rating agencies. In accordance with this regulation, financial instruments business operators, etc are required to inform customers of the fact that the rating is not registered and the rationale for the registration system, etc. whenever marketing any financial products which are rated by unregistered credit rating agencies.

Rationale for the Registration System

Registered credit rating agencies are subject to the following regulations: (1) the duty of good faith; (2) the duty to maintain an operational management system which prevents conflicts of interest and ensures the fairness of the credit rating process, etc.; (3) the prohibition on giving a credit rating to a security which they hold; and (4) the duty to disclose information including to prepare and make available for public inspection the policies for credit ratings and the documents for public release and explanation. Registered credit rating agencies are also subject to supervision by the Financial Services Agency, including orders to submit information, onsite inspections and business improvement orders. However, unregistered credit rating agencies are not subject to such regulation or supervision.

Name of the Credit Rating Agency Group, etc. 

Name of the Credit Rating Agency Group:
S&P Global Ratings (“S&P”)
Name of the Registered Credit Rating Agency within the Group and its Registration Number:
S&P Global Ratings Japan Inc. (FSA Commissioner (Rating) No. 5)
S&P Global SF Japan Inc. (FSA Commissioner (Rating) No. 8)

Method of Obtaining the Information about the Summaries of the Policies and Criteria for Credit Rating

The information is published in the “Unregistered Rating Information”  (「無登録格付け情報」) which can be found in the menu under “Library/Regulation Related” (「ライブラリ･規制関連」) on the website of S&P Global Ratings.

Assumptions, Significance and Limitations of the Rating

Credit ratings assigned by S&P Global Ratings are statements of opinion on the future credit quality of specific issuers or issues as of the date they are expressed and do not indicate the probability of default or guarantee the credit of the specific issuers or issues. Credit ratings are not a recommendation to purchase, sell or hold any securities, or a statement of market liquidity or prices in the secondary market of any issues.

Credit ratings may change depending on various factors, including issuers' performance, changes in external environment, performance of underlying assets, creditworthiness of counterparties and others. S&P Global Ratings conducts rating analysis based on information it believes to be reliable and provides ratings only when it believes to have enough information in terms of quality and quantity to support its opinion. However, S&P Global Ratings does not perform an audit, due diligence or independent verification of any information it receives from issuers or other third parties, nor guarantees accuracy, completeness or timeliness of the information received or the results caused by use of such information. It should be noted that, depending on the credit ratings, there may be inherent risks associated with the limitation on available historical data.

This information is prepared as of 1 November 2022 based on sources which we believe are reliable, but we do not guarantee its accuracy or completeness. For details, please refer to the above mentioned website of S&P Global Ratings.

Explanatory note on unregistered credit rating
(For Moody’s Investors Service)

HSBC Securities (Japan) Co., Ltd.

From the viewpoint of ensuring fairness and transparency in the markets, Financial Instruments and Exchange Law has introduced the registration system for credit rating agencies. In accordance with this regulation, financial instruments business operators, etc. are required to inform customers of the fact that the rating is not registered and the rationale for the registration system, etc. whenever marketing any financial products which are rated by unregistered credit rating agencies.

Rationale for the Registration System

Registered credit rating agencies are subject to the following regulations: (1) the duty of good faith; (2) the duty to maintain an operational management system which prevents conflicts of interest and ensures the fairness of the credit rating process, etc.; (3) the prohibition on giving a credit rating to a security which they hold; and (4) the duty to disclose information including to prepare and make available for public inspection the policies for credit ratings and the documents for public release and explanation. Registered credit rating agencies are also subject to supervision by the Financial Services Agency, including orders to submit information, onsite inspections and business improvement orders. However, unregistered credit rating agencies are not subject to such regulation or supervision.

Name of the Credit Rating Agency Group, etc. 

Name of the Credit Rating Agency Group:
Moody’s Investors Service
Name of the Registered Credit Rating Agency within the Group and its Registration Number:
Moody’s Japan K.K. (FSA Commissioner (Rating) No. 2)
Moody’s SF Japan K.K. (FSA Commissioner (Rating) No. 3)
14 specified related companies＊

Method of Obtaining the Information about the Summaries of the Policies and Criteria for Credit Rating

The information can be found on the website of Moody’s Japan K.K. and Moody’s SF Japan K.K. (https://ratings.moodys.com/japan/ratings news), under the tab “Regulatory Affairs” (「規制関連」), then by clicking on “Disclosures” (「開示」) and in the “Matters Related to the Explanation of Unregistered Ratings” (「無登録格付説明関連」)　section. ＊Specified related companies are published on the website under (「金融庁長官より指定を受けた特定関係法人一覧」).

Assumptions, Significance and Limitations of the Rating

Credit ratings are Moody’s Investors Service's (“Moody’s”) current opinions of the relative future credit risk of entities, credit commitments, or debt or debt-like securities. Moody’s defines credit risk as the risk that an entity may not meet its contractual, financial obligations as they come due and any estimated financial loss in the event of default. Credit ratings do not address any other risk, including but not limited to: liquidity risk, market value risk, or price volatility. Credit ratings do not constitute investment or financial advice, and credit ratings are not recommendations to purchase, sell, or hold particular securities. No warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such rating or other opinion or information is given or made by Moody’s in any form or manner whatsoever.

Based on the information received from issuers or from public sources, the credit risks of the issuers or obligations are assessed. Moody’s adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources Moody’s considers to be reliable. However, Moody’s is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

This information is prepared as of 1 November 2022 based on sources which we believe are reliable, but we do not guarantee its accuracy or completeness. For details, please refer to the above website of Moody’s Japan K.K. and Moody’s SF Japan K.K.

Explanatory note on unregistered credit rating
(For Fitch Ratings)

HSBC Securities (Japan) Co., Ltd.

From the viewpoint of ensuring fairness and transparency in the markets, Financial Instruments and Exchange Act has introduced the registration system for credit rating agencies. In accordance with this regulation, financial instruments business operators, etc. are required to inform customers of the fact that the rating is not registered and the rationale for the registration system, etc. whenever marketing any financial products which are rated by unregistered credit rating agencies.

Rationale for the Registration System

Registered credit rating agencies are subject the following regulations: (1) the duty of good faith; (2) the duty to maintain an operational management system which prevents conflicts of interest and ensures the fairness of the credit rating process, etc.; (3) the prohibition on giving a credit rating to a security which they hold; and (4) the duty to disclose information including to prepare and make available for public inspection the policies for credit ratings and the documents for public release and explanation. Registered credit rating agencies are also subject to supervision by the Financial Services Agency, including orders to submit information, onsite inspections and business improvement orders. However, unregistered credit rating agencies are not subject to such regulation or supervision.

Name of the Credit Rating Agency Group, etc. 

Name of the Credit Rating Agency Group:
Fitch Ratings (“Fitch”)
Name of the Registered Credit Rating Agency within the Group and its Registration Number:
Fitch Ratings Japan Limited (FSA Commissioner (Rating) No. 7)

Method of Obtaining the Information about the Summaries of the Policies and Criteria for Credit Rating

The information is published in the “Overview of Policies etc for Credit Rating” (｢格付方針等の概要｣) in the “Regulation Related” (｢規制関連」) section on the website of Fitch Ratings Japan Limited .

Assumptions, Significance and Limitations of the Rating

Ratings assigned by Fitch are opinions based on established criteria and methodologies. Ratings are not facts, and therefore cannot be described as being "accurate" or "inaccurate". Credit ratings do not directly address any risk other than credit risk. Credit ratings do not comment on the adequacy of market price or market liquidity for rated instruments. Ratings are relative measures of risk; as a result, the assignment of ratings in the same category to entities and obligations may not fully reflect small differences in the degrees of risk. Credit ratings, as opinions on relative ranking of vulnerability to default, do not imply or convey a specific statistical probability of default.

In issuing and maintaining its ratings, Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The assignment of a rating to any issuer or any security should not be viewed as a guarantee of the accuracy, completeness, or timeliness of the information relied on in connection with the rating or the results obtained from the use of such information. If any such information should turn out to contain misrepresentations or to be otherwise misleading, the rating associated with that information may not be appropriate.  Despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed. 

For a detailed explanation on the assumption, significance, and limits of credit rating, please refer to the section on “Definition regarding credit rating and other forms of opinions” on Fitch’s Japanese website.

This information is prepared as of 1 November 2022 based on sources which we believe are reliable, but we do not guarantee its accuracy or completeness. For details, please refer to the above mentioned website of Fitch Ratings Japan Limited.