Action Plan and Progress Report Regarding Customer-Oriented Business Conduct
1. Executive Summary
BNP Paribas, Tokyo Branch and BNP Paribas Securities (Japan) Limited (hereinafter, “BNPP Japan”), have established a Policy based on the Customer-Oriented Business Conduct principles as they were established by FSA in April 2017.
In order to promote and ensure that we make progress in light of this policy, BNPP Japan has been, and is taking the actions described hereunder.
2. Principles and Actions
1. Common KPIs
Please note that neither BNP Paribas, Tokyo Branch nor BNP Paribas Securities (Japan) Limited carries out any selling of investment trusts within the scope of common KPIs.
2. Our Action Plan and Status (As of June 26, 2023)
Customer’s Best Interest
Principle 1 : “Pursuit of the Customer’s Best Interest”
|With the purpose of striving to meet the needs of our Clients, we established and are periodically updating a suitability framework for the relevant Business areas.||Framework in place.|
Periodic reviews carried out on an on-going basis.
|We have a global policy specifically addressing the protection of interest of Clients.||Framework in Place.|
Periodic Reviews carried out on an on-going basis.
|We make sure that our Clients’ feedback (including complaints) is properly taken into consideration and that actions (including remediation) are taken when needed. Also, we monitor any issue impacting the level of service to our clients and take appropriate remedial action in a timely manner.||Carried out on an on-going basis.|
100% of client complaints handled within the timeframe set out by internal policies.
Training on client complaints handling assigned and completed by 100% of relevant staff.
Conflicts of Interest
Principle 2 : “Appropriate Management of Conflicts of Interests”
|We established a specific framework for the handling of conflicts of Interest.||Framework in place and Policy publicized.|
Reviews carried out as appropriate, and 100% of conflicts confirmed non-present or cleared prior to engagement Conflict of Interest Policy:
BNP Paribas, Tokyo Branch
BNP Paribas Securities (Japan) Limited
Training on Conflict of Interests assigned and completed by 100% of relevant staff.
|In addition to the general framework around the control of Conflicts of Interests, we have specific frameworks and controls around Personal Account Dealing, Gifts & Invitations and Outside Business Activities, aiming at preventing potential conflicts of interests from occurring through our activities and our employees’ activities.||Framework in place. Reviews carried out as appropriate.|
Controls carried out on an on-going basis.
Commissions, Fees and Other costs
Principle 3 : “Disclosure of commissions and other costs”
|We have established a framework around transacting with appropriate commission, fees and other costs for our Clients taking into account potential end-investors. This framework shall be reviewed and amended as necessary to be in line with the market environment. Commissions, fees and other costs incurred by our counterparties are disclosed where necessary.||Framework is in place, and the process is carried out as set out in our internal procedures.|
Principle 4 : “Provide important information about financial products/services in a way which Customers can easily understand”
|We provide our Clients with product specifications which we believe to be easy to understand, and have systematic reviews of any written materials used for marketing to ensure continued quality of their content.||Framework in place, and carried out on an on-going basis.|
Note) As stated within our Policy on Customer-Oriented Business Conduct, under “4. Provide Important Information About Financial Products/Services in a Way Which Customers Can Easily Understand”, we do not transact with individual clients, and therefore we do not create nor provide the Important Information Sheet. Reflecting this point, we have indicated “not conducted” with regard to Principle 5, Notes (2) and (4) in our correspondence chart.
Products and Services Suitable for our Customers
Principle 5 : “Provide suitable financial products/services to Customers”
|In order to ensure proper suitability of our products to our Clients, we carry out a thorough and detailed KYC process to understand the needs and status of our Clients.||Framework in place, and carried out for new Clients as well as existing Clients, as set out in our internal policies.|
|In the case of distribution business, we have procedures in place to conduct due diligence on our distributor clients (KYD, Know Your Distributor) to check their process for suitability analysis and selling framework.|
Additionally, we also periodically check the business situation and selling framework etc. of the distributor clients with whom we have continuous business relationships.
|Framework in place, and carried out as set out in our internal procedures.|
|We have policies and procedures which we follow, including our product governance process established locally and globally, in ensuring the suitability of the product to our Clients, as well as detailed reviews of new transactions, products or activities, involving scrutiny and approval from all control functions (Legal, Risk, Compliance, etc.) as well as from the management||Framework in place, and carried out for new products/activities, as set out in our internal policies.|
In the past 12 months (April ’22 – March ‘23) 100% of the new transactions, products or activities were reviewed in accordance with the relevant framework or policies.
Compliance Training: 100% of all staff
|For cases where we are in the capacity of structuring financial products to be sold through distributors to end investors, in response to the latest “Principles on Customer-Oriented Business Conduct” issued by FSA, we provide the required information of target clients’ investor type to whom the product is expected to be sold.||Framework in place, and we conduct the required information provision.|
|We proactively provide information on the basics around financial transactions to clients, based on their investor type.||Conduct Dilemma Session: 100% of all client facing staff who are deemed required to participate.|
Note) As stated within our Policy on Customer-Oriented Business Conduct, under “5. Provide Suitable Financial Products/ Services to Customers”, we carry out business with corporate and institutional customers, and the way we deal with our customers reflects their nature and their level of sophistication, and we provide products or services as well as required information etc. in relation to such products or services, considering factors such as the client’s investment purpose, experience, knowledge, expertise and financial status etc. Additionally, we do not transact with individual clients, and therefore we do not propose financial products or services based on customers’ life plan. (Please note that where we have indicated “partially conducted” with regard to Principle 6, Note (1) and (3) in our correspondence chart, it means that we will take the necessary action, as and when required, as set out in the Note, as per explained in the previous sentences.)
Principle 6 : “Protecting Customers’ confidentiality”
|We have a framework to ensure confidentiality and take appropriate measures where necessary. This includes strict respect of information barriers within the BNP Paribas group.||Framework in place, and carried out on an on-going basis.|
Appropriate Incentives to our Employees
Principle 7 : “Appropriate incentives provided to employees”
|We raise continuous initiatives in order to further strengthen conduct and ethical values among employees in general, with a focus on Client facing employees.|
We give to our staff the relevant training multiple times a year to achieve this goal.
We have established a framework on the evaluation of staff performance that requires all employees to act, behave appropriately and comply with the general ethical standards expected by BNP Paribas Group and relevant regulatory authorities (“Conduct Rating”). The Conduct Rating is taken into account to the compensation process under the supervision of senior management.
|Framework in place and carried out on an on-going basis|
During the past 12 months (April ’22 – March ’23), the following, amongst others, have been carried out: Training on Protection of Interest of Clients: 100% of relevant staff Training on the Code of Conduct. 100% to all staff Performance review and evaluation conducted based on the Code of Conduct: 100% of all staff Conduct Dilemma Session: 100% of all client facing staff who are deemed required to participate.
* Training refers to both periodical training and ad-hoc training.
3. Continuous Review and Improvement
At BNPP Japan, we consider Conduct as a journey for which we need to continuously move forward and improve our setup, actions, policies and mind set.
This is why we will continue not only to review our actions and our staff’s actions, but also to take further initiatives. Communication will be made in due course on such initiatives as well as to update on our progress.