Objectives and background
The social impact assessment and management platform operated by IMPACTLAKE Co. Ltd. (hereafter referred to as ‘the Company’) is required to operate with certainty of information and transparency of processes, as well as high compliance literacy of the parties involved, as it plays a part in the function as an infrastructure in the financial and capital markets. The business must be operated with certainty of information, transparency of processes and a high level of compliance literacy of all parties involved. In light of this situation, the company manages conflicts of interest or activities that may lead to conflicts of interest in accordance with this policy, depending on the nature, characteristics and scale of the business, in order to ensure that the interests of stakeholders are not harmed.
Assumptions
The Social Impact Assessment & Management Platform itself, which is operated by our company, is neutral in its positioning and only discloses and publishes information on both investors and businesses (issuers) based on the intention of or in agreement with the parties concerned, We will not disclose or publish information on the platform that differs from the parties’ intended purpose.
At the same time, we will not use customer information obtained for the purpose of providing services to customers for any other purpose without their individual consent or our confirmation that they have already disclosed the same or higher level of information.
We are not an external evaluation organisation that provides scoring or rating services, but an organisation that works to maximise the interests of individual companies, including customer advisory services. Therefore, the neutrality and independence required by the platform provided by the company differs from the evaluation process and criteria of general external evaluation institutions and the neutrality and independence of opinions, etc., and is based on the premise that compliance with customer wishes regarding the handling of information and the accuracy of information content are guaranteed. The conflict of interest policy has been established on this premise.
Methods of managing conflicts of interest
The Company shall work to prevent the adverse effects of conflicts of interest and to ensure that the interests of the parties concerned are not harmed by selecting or appropriately combining the following methods.
- The method of separating the department in charge of the conflict of interest or the conduct that may cause a conflict of interest (Specified Conduct) from other departments.
- The method of excluding the person in charge of the conflict of interest or the conduct (specified conduct) that may cause a conflict of interest or the conduct (specified conduct) that may cause a conflict of interest from the person in charge.
- The method of changing the conditions or methods of the conflict of interest or the conduct (specified conduct) that may cause a conflict of interest or the appearance of a conflict of interest.
- The method of discontinuing the act (specified act) that involves or may involve a conflict of interest.
- The method of disclosing the fact that the interests of the person concerned may be prejudiced by the conflict of interest or the conduct (specified conduct) that may cause a conflict of interest or the appearance of a conflict of interest.
Types of conflicts of interest
In addition to complying with the prohibited acts stipulated by law, the company manages conflicts of interest appropriately by categorising conflicts of interest or acts that may lead to conflicts of interest by appropriate means in advance as follows, in order to prevent damage to the interests of the parties concerned even in cases not falling under such prohibited acts.
- Duty-of-loyalty type: Where there is a possibility that the Company or its related parties may obtain an economic benefit or avoid an economic loss at the expense of the customer. Or where, when dealing with a customer, an inducement in the form of money, goods or services is or will be obtained from a person other than the customer, other than in the form of normal commissions or expenses.
- Self-agency type: Where the Company or a related party of the Company acts as the counterparty to a transaction with a customer who should be protected.
- Two-side agency type: Where the Company or a related party of the Company enters into a transaction on behalf of the counterparty of a customer who should be protected by the Company or the Company’s related party.
- Competitive transaction type: Transactions in which the Company or a related party of the Company is in competition with the counterparty of a customer who should be protected by the Company or a related party of the Company.
- Information use type: Transactions in which the Company or its related parties obtain their own profit through the use of non-public information of a customer who should be protected by the Company or its related parties.
- Transaction internalisation type: Where the Company or its related parties are involved in the same transaction in multiple capacities, so that transactions cannot be expected to be conducted on the same terms and conditions as normal transactions.
Key examples of possible conflict of interest risks and countermeasures
Whether or not there is a potential conflict of interest should be determined according to the specific circumstances of each case, but a policy has been formulated in advance for the risks and possible incidents assumed in the course of business operations, as set out below.
| Potential risks in business operations | Conflict of interest types | Response policy |
| Cases where information obtained from either the operator (issuer) or the investor is used to provide services to the other, subject to the agreement of the operator (issuer) or the investor. | Two-side agency type Information use type | Clarify the source of the request (the beneficiary of the service) in each case and ensure that fees are collected from only one party. |
| Cases where our services, including advisory services, are provided to both a particular investor and that investor’s portfolio companies. | Two-side agency type | Thorough information management, etc., through separation and independence of relevant internal organisations, and maximisation of profits for each customer. |
| Cases in which we conduct sales activities and propose various services on our own to customers with whom we have a relationship through our collaborators (consulting firms, etc.). | Competitive transaction type | Certain rules are set and agreed in the contractual relationship with each of the partners (consulting firms, etc.). |
| Other possible cases | Conflict of interest types | Response policy |
| To make personal gain or avoid loss in the purchase or sale of securities or other transactions through the use of non-public information obtained in the course of duties, etc. | Duty-of-loyalty type Information use type | Disclosure/non-disclosure management for each piece of information based on customer intent, thorough information management through separation and independence of relevant internal organisations, prohibition of insider trading, etc. |