Our Approach

Management positions the strengthening of compliance and risk management as a key issue in enabling SMBC Group to fulfill its public mission and social responsibilities as a global financial group. We are therefore working to entrench such practices into our operations as we aim to become a truly outstanding global group.

Compliance Management

SMBC Group seeks to maintain a compliance system that provides appropriate instructions, guidance, and monitoring for compliance to ensure sound and proper business operations on a group-wide and global basis. Measures have been put in place to prevent misconduct and quickly detect inappropriate activities that have occurred to implement corrective measures.

SMBC Group has established the Compliance Committee, which is chaired by the Group CCO responsible for overseeing matters related to compliance. This committee comprehensively examines and discusses SMBC Group's various work processes from the perspective of compliance.

In addition, SMBC Group formulated Compliance Program to provide a concrete action plan for practicing compliance from the perspective of groupbased management. The Board of Directors and the Management Committee annually determines the Group Program and receives its progress updates from the Group CCO to which they give instructions to the entire organization when needed. Group companies develop their own compliance programs based on the Group program and take necessary steps to effectively install compliance frameworks.

The Company receives consultations and reports on compliance-related matters from Group companies, providing suggestions and guidance as necessary to ensure compliance throughout the Group.

From the perspective of global-based management, compliance departments for major overseas offices have been recognized within the Compliance Unit, which facilitated to develop an integrated group-based compliance management framework for overseas offices.

Compliance Systems at SMBC Group

Compliance Systems at SMBC Group 拡大画像を表示する

Initiatives for Supporting Healthy Risk Taking and Appropriate Risk Management

In order for companies to coexist with society and develop sustainable growth, it is crucial to take an appropriate amount of risks and to maintain appropriate risk management, including compliance. In particular, financial institutions should emphasize compliance and risk management, considering its public mission and the heaviness of the social responsibility.

Based on this recognition, management positions the strengthening of compliance and risk management as a key issue in enabling SMBC Group to fulfill its public mission and social responsibilities. SMBC Group is therefore devoted to improving its systems in these areas in order to become a truly outstanding global group.

Specifically, SMBC Group has defined the Principles of Action on Compliance and Risk to serve as guidelines for executives and employees in practicing compliance and risk management. Continuous reviews are carried out to improve compliance with these guidelines and to ensure their effectiveness.

Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT)

SMBC Group recognizes the importance of preventing money laundering and terrorist financing (ML/TF), and therefore, undertakes every effort to prevent ourselves and employees, from engaging in, and/or providing assistance to, the commission of ML/TF.

SMBC Group strictly complies with AML/CFT regulations by establishing a Group Policy and by implementing effective internal control systems in each of the Group companies to ensure that our operations are sound and appropriate.

The Group Policy and systems are implemented in accordance with the requirements of the relevant international organizations (e.g. the United Nations, the Financial Action Task Force Recommendations) and the laws/regulations of relevant countries including Japan in which the Group has operations (e.g. U.S. "Office of Foreign Assets Control Regulations").

The AML/CFT measures implemented across the Group include, but are not limited to, the following:

  • SMBC Group has established an organizational structure and internal processes and controls for AML/CFT framework including Know Your Customer (KYC) and Customer Due Diligence (CDD).
  • SMBC Groups' KYC/CDD (including non-face-to-face CDD) are conducted in accordance with applicable laws and regulations, and its procedures include screening against lists of persons designated to be involved in acts of terrorism or other crimes, by the resolutions of the United Nations Security Council and applicable laws and regulations in other jurisdictions where the Group has operations.
  • SMBC Group applies appropriate risk mitigation measures to its customers and transactions, according to the level of ML/TF risk. When customers and/or transactions which present a higher risk of ML/TF, such as involvement of foreign politically exposed persons (PEPs), based on the applicable laws and regulations, stricter measures will be taken, which include the approval of senior management.
  • SMBC Group keeps relevant documents and records relating to the AML/CFT measures undertaken in accordance with applicable laws and regulations.
  • SMBC Group provides appropriate training, on an ongoing basis, to ensure that all employees are familiar with the AML/CFT obligations and requirements.

Response to Anti-Social Forces

SMBC Group has established a basic policy stipulating that all Group companies must unite in establishing and maintaining a system that ensures that the Group does not have any connection with anti-social forces or related individuals.

Specifically, the Group strives to ensure that no business transactions are made with anti-social forces or individuals. Contractual documents or terms and conditions state the exclusion of antisocial forces from any business relationship. In the event that it is discovered subsequent to the commencement of a deal or trading relationship that the opposite party belongs to or is affiliated with an anti-social force, we undertake appropriate remedial action by contacting outside professionals specializing in such matters.

Basic Policy for Anti-Social Forces

  1. 1.Completely sever any connections or relations from antisocial forces.
  2. 2.Repudiate any unjustifiable claims, and do not engage in any “backroom” deals.
    Further, promptly take legal action as necessary.
  3. 3.Appropriately respond as an organization to any anti-social forces by cooperating with outside professionals.

Customer Information Management

Group has established Group policies that set forth guidelines for the entire Group regarding proper protection and use of customer information. All Group companies adhere to these policies in developing frameworks for managing customer information.

Group companies establish and disclose privacy policies for their measures regarding the proper protection and use of customer information and customer numbers. Appropriate frameworks are established based on these policies.

Internal Reporting Systems and Hotline for Inappropriate Accounting and Auditing Activities

SMBC Group has Internal Reporting Systems and whistle-blowing systems designed to promote self-correction through early detection and rectification of actions that may violate laws and regulations* . All of our stakeholders within and beyond our company can report issues/concerns through the Internal Reporting Systems. Our internal stakeholders that can utilize this mechanism are all the Group employees listed below:

  1. a.Employees, including contract employees, employees during their trial or probation period, temporary-hired employees and part-time employees.
  2. b.Part-time employees and employees on temporary contracts that are dispatched by outside service providers who work at SMBC Group and Group Companies, or are employees of other companies seconded to SMBC Group and Group Company offices.
  3. c.Employees of service providers to which businesses operations have been outsourced, and employees of business agents.

Employees can report issues/concerns anonymously to the lawyer, designated as the external channel within our Internal Reporting System. In response to raised issues/concerns, appropriate steps are taken to maintain the confidentiality and the privacy of the employees who submitted the report. Any form of retaliation against the employees as a result of a report is strictly prohibited. If any form of retaliation is confirmed, strict measures, including disciplinary action, will be taken. Furthermore, overseas branch offices have their own internal reporting systems, which allows local employees to report issues/concerns in their local languages.

Investigation is conducted for all the issues/concerns raised through Internal Reporting Systems. The results of such investigations, progress regarding corrective actions taken in response, as well as regular updates regarding the Internal Reporting Systems are reported to the Compliance committee, the Group Management Committee, and the Audit Committee on a regular basis. In FY2019, throughout all our Group companies, we received 269 reports through the Internal Reporting Systems from internal and external stakeholders.

  • * Specifically, any violations of the Principles of Action on Compliance and Risk (SMFG) , human rights as set out in the International Bill of Human Rights, and the International Labor Organization's (ILO) Declaration on Fundamental Principles at Work can be reported to Internal Reporting Systems.

Sumitomo Mitsui Financial Group Accounting and Auditing Hotline is aimed at strengthening the Group's self-correction function by encouraging early detection and rectification of improper actions relating to accounting, accounting internal controls, and auditing at the Group. The hotline can be used from inside or outside the Group to report accounting and auditing irregularities .

SMFG Accounting and Auditing Hotline/Designated Dispute Resolution Agencies

SMFG Accounting and Auditing Hotline

Reports may be submitted by regular mail or e-mail to the following addresses.

Mailing address

SMFG Accounting and Auditing Hotline
Iwata Godo Attorneys and Counselors at Law
10th floor, Marunouchi Building
2-4-1, Marunouchi, Chiyoda-ku, Tokyo
100-6310

E-mail address
smfghotline@iwatagodo.com

  • The hotline accepts any alerts of inappropriate activities concerning accounting and auditing at the Company or its consolidated subsidiaries.
  • Anonymous reports are also accepted; however, if possible, providing personal information such as your name and contact information would be appreciated and helpful.
  • Please provide as much detail as possible for such inappropriate activities. An investigation may not be feasible if adequate information is not provided.
  • Personal information will not be disclosed to any third parties without your consent, unless such disclosure is required by law.

Designated Dispute Resolution Agencies

For the handling of any complaints received from and conflicts with our clients, SMBC has executed agreements, respectively, with the Japanese Bankers Association, a designated dispute resolution agency under the Banking Act, and the Trust Companies Association of Japan, a Designated Dispute Resolution Organization under the Trust Business Act and Act on Provision, etc. of Trust Business by Financial Institutions and the specified non-profit organization of "Financial Instruments Mediation Assistance Center," one of the "Designated Dispute Resolution Agencies" under the Financial Instruments and Exchange Act.

Japanese Bankers Association

Contact information
Consultation office, Japanese Bankers Association
Telephone
numbers
(Japan)
0570-017109 or 03-5252-3772
Business hours
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm

Trust Companies Association of Japan

Contact information
Consultation office,Trust Companies Association of Japan
Telephone
numbers
(Japan)
0120-817335 or 03-6206-3988
Business hours
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:15 pm

Financial Instruments Mediation Assistance Center

Contact information
Financial Instruments Mediation Assistance Center
Telephone
number
(Japan)
0120-64-5005
Fax
(Japan)03-3669-9833
Business hours
Mondays through Fridays
(except public and bank holidays)
9:00 am to 5:00 pm

Anti-Bribery and Corruption

SMBC Group has developed the Anti-Bribery Compliance and Corruption risk control framework.

  • Group CEO has presented "Management's Commitment to the Prevention of Bribery and Corruption" and informed Group executives and employees to fully and completely comply with "Policies for Anti-Bribery (the "Policies")", in which the compliance to all applicable laws and regulations, the code of conduct, and the prevention of bribery and corruption are written.
  • SMBC Group has "Policies" to prohibit bribery and facilitation payments in any form. We also have other related rules and procedures require that the appropriateness of the circumstances, value and purpose shall be carefully considered prior to the provision or receipt of business entertainment or gifts and that the applicable approval procedures are strictly followed. In the event of a violation, the Policies clearly provide for disciplinary actions including punitive dismissal. The Policies require to document the business entertainment and provision/receipt of anything of value, as well as the implementation of related training, in a prompt and accurate manner.
  • SMBC Group conduct annual risk assessment to determine our risk profile by an assessment across our business, business partner, geographies and other risk factors, and to evaluate the effectiveness of mitigating internal controls. The result is reported to the management after identifying and understanding the bribery risks in the organization.
  • The "Policy" clarify the rules of appropriate due diligence prior to engaging new business relationships with third party including intermediaries, and to investment/M&A.
  • Monitoring on compliance with the "Polices" and other related rules and procedures is conducted periodically by the Compliance.
  • The Compliance run trainings for proper understanding of the content, purpose and operation of the "Policies" as well as other applicable external/internal rules and regulations. In addition, Group executive and employee shall sign the attestations that they will not engage in any bribery, corruption, or fraud in accordance with the policy.
  • The Board of Directors is responsible for overseeing the operation of overall compliance framework on a global group basis, including the compliance and the execution of the Policies, other relevant rules and regulations. Group CCO regularly report to the Board about the progress in prevention of bribery and corruption.

In FY 2020, there was no material case found to be in violation of the Policies, nor the cost of fine and reconciliation.

  • * Bribery refers to the acts of offering things of value (including, but not limited to, money, goods, services, entertainment, employment of family relatives, other tangible and intangible items having economic value regardless of their nature) with the intent of improperly influencing the recipient and the acts of receiving or demanding things of value with the intent of improperly providing benefits to the offeror.

Others

Group Tax Policy

SMBC Group has been committed to fulfilling its obligations for filing tax returns, making tax payments and reporting to the tax authority, whilst ensuring compliance with all tax laws, regulations and treaties across each jurisdiction.

In order to strengthen the tax compliance framework, SMBC Group has established the group tax policy.

Under this policy, SMBC Group will continue to fulfill its obligations for filing tax returns, making tax payments and reporting to the tax authority appropriately.

This policy was established based on a resolution of Group Management Committee and a report to Audit Committee and has been implemented under control of Group CFO and Group CCO.