Internal Control

Initiatives for Thorough Compliance

All officers and employeThe ownership ratio in the total number of investmes of NBF and NBFM are to conduct corporate activities honestly and appropriately based on high ethical standards beyond mere compliance with laws and regulations.

While NBF sets forth in its "Rules of Board of Directors" that the Board of Directors shall hold a meeting at least once every three months, a meeting is actually held almost every month, the Executive Director reports on the status of business affairs, and the supervising and checking functions by the Supervisory Directors are ensured. The Board of Directors consists of one Executive Director, and three Supervisory Directors who are elected from among independent professionals such as lawyers, real estate appraisers and certified public accountants, etc.

Pursuant to the "Management Policies" setting forth its basic management philosophy, NBFM considers compliance to be an important issue in its management in order to increase trust from investors and all other related parties. In addition, NBFM, as an asset management company entrusted with asset management services, endeavors to properly manage assets under management by specifically defining norms, processes and strategies, etc. to be complied with, and completely discharges its fiduciary responsibilities.

NBFM considers "Compliance" not only as legal compliance but also as observing its internal rules and taking appropriate actions following social ethics and codes. As such, NBFM sets internal rules, such as "Code of Ethics" and "Compliance Rules" as concrete guidelines and rules. In addition, its Compliance Officer promotes company-wide compliance activities by planning and executing "Compliance Program" and training and awareness raising activities for all officers and employees.

NBFM sets forth in its "Compliance Rules" that when doubts concerning a breach of or conflict with laws, regulations or internal rules, etc. arise, its directors, officers and employees must immediately report the facts, background and methods of solution thereof, etc. to the compliance officer, and in the event it is judged that there are problems with the content of such report, the compliance officer must promptly report the same to the CEO, General Managers of the Investment & Finance Group as well as the Corporate Operations Group and discuss appropriate measures to be taken. Such events will also be referred to independent professionals as necessary for confirmation, and reported to the Compliance Committee and Board of Directors, as well as the Board of Directors of NBF.

In light of applicable laws and regulations or internal rules etc., if a compliance violation or an act deemed to be a compliance violation exits, the relevant director or officer will be subject to necessary measures pursuant to deliberation by the board of directors, and the relevant employee will be subject to a disposition under its work rules.
(There were no complaints, violations or discipline of officers or employees related to non-compliance from January to December 2020.)

Anti-Bribery and Anti-Corruption Policy

NBF and NBFM consider compliance to be one of the most important issues in management of the Group and strive to both build a compliance system and promote compliance. They ensure thorough compliance and prevention of bribery and corruption by stipulating in the Compliance Manual guidelines regarding excluding anti-social forces, preventing money laundering, ensuring fair competition, prohibiting insider trading and receiving gifts and entertainment.

Prohibition of Bribery and Information on Gifts and Entertainment

NBF and NBFM prohibit in their Compliance Manual giving more than moderate gifts and entertainment internally or to clients or business partners, gifts or entertainment meant to influence the other party’s judgment or gifts or entertainment to government officials.

Anti-Corruption Initiatives

All employees, including temporary employees, are taught about the Compliance Manualally or from clients or business partners or providing special service based on receiving, requesting or being promised bribes from clients or buying and receiving gifts and entertainment through e-learning and other training.

Fines, Surcharges and Settlements Related to Bribery and Corruption

There were no serious violations of laws and regulations due to non-compliance with anti-bribery regulations nor fines, surcharges or settlements related to corruption paid from January 1, 2020, to December 31, 2020.

Employees Subjected to Discipline or Dismissal Related to Bribery and Corruption

No employees were disciplined or dismissed in relation to bribery or corruption from January 1, 2020, to December 31, 2020.

Risk Management Initiatives

NBF and NBFM aim to evade and minimize risks in investment and management of its assets under management. For details please refer to " Investment Risks: Matters Concerning Risk Management System for Investment Risks. [1.4MB] "

Compensation of Directors

The REIT’s Board of Directors for the 40th period (January 1, 2021, to June 30, 2021) consisted of a total four people; one Executive Director (man) and three Supervisory Directors (2 men, 1 woman).

Title Name Total compensation of the
offices in the 40th Period
Executive Director Koichi Nishiyama (6/6 100%) 3,600 thousand yen
Supervisory Director Motohiko Sato (6/6 100%) 9,000 thousand yen
Masaki Okada (4/4 100%)
Keiko Hayashi (4/4 100%)

An Executive Director (man) and two Supervisory Directors (2 men, 1 woman) were elected at the General Meeting of Unitholders on March 9, 2021.

Title Name
Executive Director Koichi Nishiyama(Reappointment)
Supervisory Director Motohiko Sato(Reappointment)
Masaki Okada(New appointment)
Keiko Hayashi(New appointment)
  • Directors & Auditors of Asset Management Company(As of April 1,2021)
Title Name
Executive Director Yoshiyuki Tanabe(Man)
Director Hideki Shuto(Man)
Tetsuya Saito(Man)
Masahiko Okamoto(Man)
Yusuke Ogata(Man)
Auditor Yasuki Nozoe(Man)
Masayuki Hori(Man)

Status of Unitholders

The top 10 unitholders in terms of percentage of owned investment units in the total number of investment units issued and outstanding as of January 1 to June 30, 2021 is as follows.

Name Number of
Investment Units
Percentage of Total (%)
Custody Bank of Japan, Ltd. (trust account) 356,165 21.6
The Master Trust Bank of Japan, Ltd. (trust account) 224,893 13.6
The Nomura Trust and Banking Co., Ltd. (investment trust account) 67,872 4.1
Mitsui Fudosan Co., Ltd. 55,630 3.4
Custody Bank of Japan, Ltd. (securities investment trust account) 52,456 3.2
JPMorgan Securities Japan Co., Ltd. 35,784 2.2
Sumitomo Life Insurance Company 24,512 1.5
Custody Bank of Japan, Ltd. (trust account 7) 23,041 1.4

(as of June 30, 2021)

  • The ownership ratio in the total number of investment units issued and outstanding is rounded down to the nearest second decimal place.
  • As of July 27, 2020, JTC Holdings, Ltd., Japan Trustee Services Bank, Ltd. and Trust & Custody Services Bank, Ltd. merged into and changed its name as Custody Bank of Japan, Ltd.

Compensation of the Accounting Auditor

The audit compensations, etc. of the Accounting Auditor in the 39th Period (July 1 to Dec 31, 2020) is as follows.

Title Name Total compensation in the 40th
Accounting Auditor Limited liability, KPMG AZSA LLC 15,000 thousand yen

※No record of payment of non-audit fees

In accordance with the regulations of auditing firms based on the Certified Public Accountants Act, management is as follows:

  • Executive Directors may not be involved in the auditing of more than seven accounting periods; the Chief Executive Director for more than five periods.
  • Engagement partners may not be involved in the auditing of more than five accounting periods after substitution; the chief engagement partner for more than one period after substitution.

Fines Due to ESG Issues in Audited Accounting

There were no fines due to ESG issues from January 1, 2020, to December 31, 2020.

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