Disclosures

1. Sumitomo Mitsui Banking Corporation (“SMBC”) in the U.S.

SMBC is a foreign banking organization incorporated under the laws of Japan. SMBC maintains state-licensed branches in New York, New York; Los Angeles, California; and San Francisco, California; and representative offices in Chicago, Illinois; Dallas, Texas, Houston, Texas; Menlo Park, California; and White Plains, New York. SMBC is supervised by the states in which it maintains branches and representative offices, the Board of Governors of the Federal Reserve System, and the Financial Services Agency of Japan.  

 

SMBC does not accept deposits from the general public. SMBC is not a member of the Federal Deposit Insurance Corporation (“FDIC”), and deposits placed with SMBC are not insured by the FDIC.

 

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT OR ESTABLISHING A NEW CUSTOMER RELATIONSHIP

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person, including any legal entity, that opens an account or establishes a customer relationship. Federal law also requires all financial institutions to obtain, verify, and record information that identifies the beneficial owners of a legal entity that opens an account or establishes a customer relationship. 

 

What this means for you: When you enter into a new customer relationship with SMBC, SMBC will ask for your name, address, date of birth, and other identification information. When you enter into a new customer relationship with SMBC on behalf of a legal entity, SMBC will ask for the legal entity’s name, address, and taxpayer identification number, and may ask for certified articles of incorporation and other identifying documents of the legal entity. SMBC will also ask for the names, addresses, dates of birth, and other identification information of the beneficial owners of the legal entity, and may ask for other identifying documents of such beneficial owners. This information will be used to verify the identity of the legal entity and its beneficial owners. If required information or documentation is not provided, SMBC may be unable to open an account or establish a relationship. 

 

USA PATRIOT ACT CERTIFICATION

Pursuant to the Sections 5318(j) and 5318(k) of Title 31 of the United States Code, as added by sections 313 and 319(b) of the USA Patriot Act of 2001, SMBC has posted a Global Certification for use by any financial institution that requires a Patriot Act Certification from any SMBC office or branch. Please use this Global Certification in place of requesting individual SMBC offices or branches to provide a separate certification.

 

Global USA Patriot Act Certification | Sumitomo Mitsui Banking Corporation (smbc.co.jp)

 

Notice to all customers regarding the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006

The Unlawful Internet Gambling Act (UIGEA) of 2006 prohibits the U.S. branches of Sumitomo Mitsui Banking Corporation (SMBC) from processing restricted transactions through your business account. Restricted transactions are transactions in which a person accepts credit, funds, instruments or other proceeds from another person in connection with unlawful Internet gambling.

 

The UIGEA, prohibits any person engaged in the business of betting or wagering (as defined in the Act) from knowingly accepting payments in connection with the participation of another person in unlawful Internet gambling. The United States Department of the Treasury and the Federal Reserve Board has issued a joint final rule, Regulation GG, to implement this Act.

 

As defined in Regulation GG, unlawful Internet gambling means to “place, receive or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet where such bet or wager is unlawful under any applicable federal or state law in the State or Tribal lands in which the bet or wager is initiated, received or otherwise made.”

 

As a customer of SMBC, these restricted transactions are prohibited from being processed through your account or banking relationship with us. If you do engage in an Internet gambling business and open a new account with us, we will ask that you provide evidence of your legal capacity to do so.

 

FOREIGN EXCHANGE TRANSACTIONS

This disclosure applies only to Sumitomo Mitsui Banking Corporation New York Branch.

1. Compliance with laws, regulatory requirements, and market practice

Sumitomo Mitsui Banking Corporation (hereafter “The Bank’’) will comply with applicable domestic and overseas laws and regulations, market standards to be complied with, and proper market practices when entering into Foreign Exchange (FX) transactions.

 

2. Roles and capacities of the Bank: Acting as Principal

The Bank engages in FX transactions with customers as an at-risk principal, on an arm’s length basis, for its own account. A principal is a type of market participant who acts on its own behalf as counterparty to its customer. Hence, prices offered by the Bank to a customer and the executed price based on an agreement between that customer and the Bank will be solely applied to a specific transaction based on that agreement. The Bank does not act as broker, agent, fiduciary, advisor, or in any similar capacity on behalf of customers in connection with FX transactions. Statements made to customers should not be construed as recommendations or advice as the customer’s advisor.

 

Our receipt of an order from a customer or any indication by us that we are working an order does not create a contract between us and a customer. No transaction or other contract will result from an order until and unless we respond to the customer that we have filled or executed against some or all of the order, at which point the customer will assume the risks associated with the filled or executed order, including market risk and credit risk.

 

We may look for market opportunities that both satisfies the terms of a customer’s order and allows us to make an appropriate return on the transaction, including while executing other transactions to satisfy our own, competing trading interests and responding to competing orders from other counterparties. As such, except to the extent that we have agreed to different terms of execution with a customer, we will exercise our reasonable discretion in entering into a transaction with a customer based on its order, including with respect to fill quantity, execution time, prioritization, and whether to pre-hedge or enter into such transaction electronically, manually, on aggregated basis with other orders or using internal or external sources of liquidity. Due to FX transactions with customers, the Bank will hold FX positions and from time to time execute a hedge transaction(s) in the FX market to cover and control the risks arising from these transactions with the customers.

 

Also, the Bank may decide to enter into pre-hedge transactions in a manner the Bank deems proper at its discretion in order to effectively execute the customers’ orders and/or to manage the Bank’s own risks. In addition, the Bank may enter into a full-hedge transaction(s) for a certain customer’s order(s) depending on currency pairs and transaction types. Aforementioned risk hedge related transactions will be carried out by the traders who are duly authorized to execute at the Bank’s discretion.

 

In general, the execution price applied to a certain transaction with a customer may not be identical to the price at which the Bank executes to cover its position in the FX market. This difference is due to the fact that the Bank has no assurance to be able to execute the cover trade at the same price and/or amount in the FX market.

 

In addition to the cover transactions that the Bank will execute to control the risk exposure, the Bank will also conduct proprietary trading for its own account. This proprietary trading will be carried out by the duly authorized traders according to the Bank’s risk control guidelines.

 

3. Information services

The Bank may provide market forecast reports to its customers as part of research services for discussion purposes only. Such reports will be prepared based on information that the Bank determines credible, but it will not guarantee the accuracy and completeness of that information. The forecast and outlook therein just indicate the Bank’s views at that timing, and could be altered without any notice. The view and outlook for the FX market should be determined by each customer at its own responsibility.

 

Further, the Bank, as one of the market participants, may conduct its own FX trading based on a different market view from that of those expressed in such publicized reports.

 

4. Factors relating to the price

The executable prices offered by the Bank will be determined based on actual market price as determined by the Bank in its commercially reasonable discretion, which depending on the circumstances may be a bid, offer, mid-market, market-on-close, last-traded, or other price, as well as various factors. Descriptions of the factors relating to the prices on typical transactions are as follows:

 

(i) Actual market rate based transaction

This rate may take into account (but is not limited to) the following factors:

  • Product type and market in which the transaction would occur, such as: (i) the trading venue; (ii) the type of order; (iii) the size and direction of the transaction; (iv) market conditions, including market events, the extent and pace of price changes and time of execution; (v) transparency of the market, including actionable and visible liquidity, trading volume and available external venues or platforms; and (vi) the accessibility of third-party quotations and other pricing information;
  • Internal costs, such as hedging costs, funding costs, fees, capital costs and overhead;
  • Customer- and transaction-specific factors, such as: (i) the volume, types, size, frequency or speed of trading; (ii) the potential market impact of the customer’s trading activity; (iii) the customer’s credit quality and the Bank’s credit exposure to the customer; (iv) specific terms of the transaction or governing documentation; and (v) the extent and nature of the customer’s business relationship(s) with the Bank; and
  • Applicable legal or regulatory requirements.

The relevant impact of each individual factor on the price of a transaction will differ depending upon the specific circumstances of that transaction. As a result, the Bank may quote different prices to different counterparties or at different times for the same or substantially similar type of transaction.

 

(ii) Telegraphic Transfer Middle Rate (the “TTM”) based transaction

In Japan, the Bank may provide offers based on the “TTM”.

 

The TTM will be the actual market rate as determined by the Bank at approximately 9:55 AM Tokyo time each business day. The Bank also determine buying/selling rate (TTB/TTS), by adding a spread applied to respective currency. The spread is determined based on costs incurred in relation to the transaction (such as one for position management) and fee.1

 

Further, the Bank may provide certain favorable treatments applicable to certain specific customers based on certain factors such as the volumes of transactions and type of services. The Bank will transact with customers after the applicable rates are respectively specified and are agreed, but in general, such favorable treatment (if applicable) and other factors relating to the prices will not be disclosed to the customers at each time of transaction.

 

For pricing derivative products such as FX derivatives or currency swaps, the Bank will take into consideration various risks associated with each transaction in addition to the costs to execute the transaction.

 

In the case where a customer requests the Bank enter into an FX transaction at a reference price provide by any third-party, the Bank will enter into such a transaction only when the Bank determines it to be acceptable. In such a case, the Bank will manage the applicable transaction in an appropriate manner.

 

1In principle, the TTB/TTS will be applied by the Bank to the designated transactions (small lot, etc.) during the applicable time zone in the applicable day in Japan, but please note that the Bank may change the TTM/TTB/TTS at any time to reduce its risk if there are fluctuations in the market rate.

5. Risk factors

FX transactions involve the following risks. Other products such as foreign currency deposits or loans and other products or services that have FX exposure will also contain such risks.

 

(i) Price change risk (market risk)

The FX market is comprised of a variety of market participants using various venues and mediums such as dealing via phone or electronic brokering systems on a bilateral and “off and on” basis. Consequently, the price determination process in the FX market is different from exchanges which are subject to disclosure requirements and other rules.

 

The executable rate fluctuates constantly depending on various factors such as currency pairs, time zones and market liquidity which can affect the number of participants and transaction volume at any given time. The market rate can also change significantly within a short timeframe due to events such as changes in monetary policies or occurrences of geopolitical events.

 

The Bank will proceed to manage and mitigate the above-mentioned risks arising from FX transactions with customers upon the execution of the trade or in certain circumstances even before the execution. Therefore, in general, customers will not be able to change or cancel the FX transaction (including similar market products) offered by the Bank after acceptance. Should the Bank agree to change or cancel the transaction upon request from the customer, the Bank may charge to the customer fees and costs, including, but not limited to commissions, reconstruction costs, settlement costs, and any other damages incurred by the Bank as a result of the cancellation. Please refer to the terms and conditions, agreements, or any other documents (if any) for further details.

 

(ii) Other risks

FX settlements between the customers and the Bank can be disrupted if the credibility of the Bank or the Bank’s nostro agent bank deteriorates, or the Bank or its nostro agent bank goes bankrupt or insolvent. The settlements can also be disrupted if the Bank’s settlement system has technical issues. Such disruption can also be caused by system errors or failures by the FX settlement facilities or financial institutions that are participants of FX settlement facilities.

 

Currency control and/or restrictions imposed by governments and/or the relevant central banks may also impact customers’ FX transactions and settlements therefor.

 

6. Execution of orders

The Bank will quote the executable rate upon receipt of an order from the customer. The rate will be offered based on the actual market rate determined by the Bank, with due consideration of the management of any associated risks when executing the transaction.

 

The Bank, depending on the type of transaction, will decide whether to enter into the transaction or not based on the tradable amount limits predetermined by the Bank per each customer. The bank controls the tradable amount limits based on each transaction amount, term, and currency, etc. and such limits are reviewed from time to time based on the usage record and the credit condition of the respective customer. The Bank may decline to enter into the transaction if the applicable tradable amount limit will be exceeded by accepting the order. The Bank may also decline to enter into the transaction due to the market conditions without regard to the tradable amount limits.

 

The Bank will manage the limit price orders in accordance with the execution procedures pre-agreed with the customers. However, the Bank may not execute the order if the Bank determines that actual market rate has not reached the limit price designated by the customer.

 

Additionally, since the Bank holds various orders from multiple customers, the sequence of executed orders may not be the sequence of orders received from the customers. Even in the case whereby there are multiple identical orders in regard to currency pair, buy/sell instruction and rate, some of the orders may not be executed. Such decisions will be made by the duly authorized traders in a reasonable manner as determined by the Bank, based on information sources that the Bank deems credible, the Bank’s execution experiences, market liquidity, and traders’ positioning, among others.

 

The Bank carries out various market transactions for the purpose of risk management and proprietary trading, and including pre-hedging. This may result in the Bank executing its own trade near or at the prices triggering the customers’ stop-loss orders. In that case, such Bank’s transaction(s) may influence the rate referenced in the customer’s order and can trigger the customer’s stop loss order as a result. Also, in executing an order by a customer, the Bank may aggregate the order with orders by other customers and the Bank’s orders.

 

The Bank has the final and absolute authority in regard to the setting of the transaction amount limit, and the manner of execution, including the decision whether to enter into the transaction or not and the method and timing of execution, and as stated such authority will be exercised in a fair and reasonable manner. The Bank will not disclose the details of the exercise of such authority to any customer individually.

 

The Bank may provide the customers with the specific order execution services utilizing an algorithm, and in such cases the Bank will make efforts to disclose and explain to the customers the terms and conditions of such services appropriately. Where the Bank receives or executes a customer’s order through electronic infrastructure, such infrastructure may record the date and approximate time of the receipt of, or execution against, respectively, such order. These records are subject to the impact of latencies, including operational latencies or other latencies that may be inherent in, or result from, the messaging or communication channel through which orders are delivered to, or received by, us.

 

7. Electronic trading platform

The Bank provides FX trading via electronic platform services via the Internet or a dedicated circuit to corporate customers. Such services may include any single dealer platform operated by the Bank as well as multi-bank platforms operated by third parties. Please refer to the applicable terms and conditions for such services for further details.

 

In regard to an electronic trade, if an electronic message offering a transaction by a customer is not received by the Bank’s system by the prescribed cutoff time, there will be no transaction regardless of the reasons for the non-receipt. If an electronic message offering a transaction by a customer is received by the Bank’s system by the cutoff time, the Bank will decide whether to execute the transaction pursuant to the Bank’s internal procedures within the prescribed time limit. Even where the Bank has indicated that a quote on the electronic trading system is tradable and has received from the customer via the platform confirmation of the customer’s intent to enter into a transaction at such rate, the Bank may decide that such a transaction is not executable. In such case, the Bank will notify the customer of such non-execution of the transaction.

 

In addition, where the market price for a transaction is at a level beyond a customer-specific threshold applied by the Bank’s trade acceptance logic after receipt of a customer’s request to trade, the Bank will reject the trade request pursuant to its “last look” policies. The Bank generally apply this last look price check symmetrically, in which case it will reject the trade regardless of whether the market price has moved against the Bank or against the customer. Last look allows the Bank to manage its execution risk without downgrading the quality of spreads and liquidity it offers to customers. In the absence of last look, the Bank would potentially have to protect itself by providing less depth of liquidity and wider spreads to counterparties using electronic trading platforms.

 

The Bank employs last look for the following primary reasons:

  • The Bank indicates prices to a broad customer base. Those indicative prices are based on, among other considerations, the Bank’s inventory and risk profile. Last look is in place in order to ensure that the Bank can manage our position and risk profile.
  • Communication latencies can cause requests to trade and indicative quotes to become stale. Additionally, some market data is not updated continuously in real time.
  • The Bank checks the credit status of its customers and its credit exposure to the customer, which may change in real time.
  • The Bank undertakes other customer-based checks, such as customer authorization to engage in a particular transaction, to fulfill our risk management objectives and regulatory obligations.
  • Along with risk management, regulatory, and staleness checks, the Bank performs a price check.

The Bank generally applies last look immediately upon, and in some cases after a brief time delay following, receipt of a customer’s order, although the application of last look may vary across different platforms. The Bank may take into consideration a variety of factors in setting last-look parameters, including: product type and platform on which the transaction would occur; the customer’s historical trading characteristics and preferences; and the extent and nature of a customer’s business relationship(s) with the Bank. While a customer’s trade request is pending, subject to completion of last look, The Bank does not engage in any trading activity on the basis of that specific trade request or utilize that information for the purposes of adjusting its pricing.

 

Notwithstanding the provisions of Clause 4 above, the quotes indicated via platform by the Bank may be formulated based on quotes provided by multiple reliable liquidity providers. The Bank will not disclose the identity of each liquidity provider who provides the Bank with the market rates.

 

For your information, in addition to the risks stated in Clause 5 above, the transactions using the electronic trading platform of the Bank or a third party may be subject to a delay of notice of the receipt of the order or the notice of the execution or non-execution of the transaction attributable to the third party’s system or the circuit conditions.

 

Where the Bank provides specific order execution services utilizing an algorithm, the pricing, speed and likelihood of executing an order using such electronic execution algorithms can vary depending on the particular algorithm’s parameters.

 

Prior to using an electronic execution algorithm, a customer should independently assess the suitability of the algorithm and any associated parameters for its needs based on all information available to the customer and its advisers.

 

By using an electronic execution algorithm, a customer assumes the risks generally associated with algorithmic execution and strategies, including, but not limited to: that market conditions may prevent the algorithm from functioning in accordance with its strategy, parameters, risk controls or the customer’s expectations; the potential vulnerability of algorithmic order execution to the conduct of other market participants trading on the platforms where the algorithm sources liquidity; and technological or operational delay, failure or malfunction at any level or from any source (including, but not limited to, external platforms, the customer’s trading connection or interface, our interfaces, systems or network) that directly or indirectly impact the functioning of the algorithm.

 

As a result of delays in the dissemination of price updates, market infrastructure, communication and internal processing latencies, short-lived trading discrepancies may exist between the externally sourced prices utilized by the Bank’s algorithms and current pricing on the relevant external platforms.

 

The Bank’s selection of a platform or other liquidity source for an algorithm or routing prioritization may present certain conflicts of interest. Specifically, algorithms may be designed to access both external and internal sources of liquidity. The Bank may derive additional benefits from that activity, including, among others, reduced transaction costs when we use internal liquidity and ownership or other economic interest (such as the right to receive payments or other fees or revenue sharing) in an external venue or platform where we trade to pre-hedge or pre-position against a counterparty’s order (including trades involving such counterparty’s use of one of our electronic execution algorithms). It is our policy to conduct this activity in a manner designed to avoid disadvantaging such counterparty. All compensation or other economic interests resulting from such arrangements will accrue to the Bank’s account and not the counterparty’s account.

 

8. Conflict of interest management and other governance systems

The Bank will follow its conflict of interest management policy, when entering into FX transaction with customers. The Bank’s conflict of interest management policy is available at the Bank’s website.

 

Outline of the Bank’s Conflict of Interest Policy

 

The Bank has adopted the following control systems in order to manage risks (including conflict of interest) for the FX transactions.

 

(i)Training of the duly authorized traders dealing with the FX transactions

 

The Bank provides adequate training to both traders and other employee participating in FX transactions. The training covers relevant laws and regulations, compliance as well as the code of conduct including the conflict of interest management.

 

(ii) Monitoring by the risk management department and the audit department

The Bank’s risk management department properly monitors the transactions to prevent inappropriate market transactions. The independent audit department also performs internal audit reviews to establish appropriate governance system on a periodic basis.

 

(iii) Management of transaction information

The Bank takes all necessary measures to adequately manage the customers’ transaction information. If the transaction information includes the confidential information, the Bank will take care of such information pursuant to the applicable information control system such as the limited sharing of the information to the extent necessary in the Bank. The Bank also adopts the timely recording system of the receipt of the order from a customer and the execution of a transaction as much as practicable depending on the type of the transaction.

 

(iv) Risk Management

The Bank aims to manage its own risks appropriately based on its trading strategies, its position, foreseeable risks, and market liquidity etc.

 

9. Confidentiality

The Bank is bound by contractual and regulatory obligations relating to confidential information and has adopted policies and procedures to assist it in meeting these obligations. Where consistent with these obligations:

  • The Bank may make use of information provided to it as principal in order to effectuate and risk manage transactions, as well as for other risk management purposes. Specifically, unless otherwise agreed, the Bank may use the economic terms of a transaction (but not the counterparty identity) in order to evaluate and/or source liquidity and/or execute risk-mitigating transactions or determine what prices the Bank quotes to third parties. Such use could adversely affect the customer who provided the information to the Bank. In addition, as part of the Bank’s obligations as a regulated entity, the Bank shares customer and transaction information as required by its global regulators.
  • The Bank analyzes information regarding executed transactions on an individual and aggregate basis for a variety of purposes, including credit and market risk management, sales coverage, and counterparty relationship management. Unless otherwise agreed, the Bank may analyze, comment on, and disclose anonymized and aggregated information regarding executed transactions, together with other relevant market information, internally and to third parties, as market color. The Bank may also use such anonymized and aggregated information in products, services or data that the Bank offers as part of its business. 

The Bank conducts the foreign exchange business in compliance with the FX Global Code established by the Global Foreign Exchange Committee.

 

Please refer to the following disclosure materials in the format recommended by the FX Global Code.

Disclosure Cover Sheet

Statement of Commitment to the FX Global Code

2. SMBC Canada Branch

Customer Complaint Information

We Can Help–Resolving Your Complaints

Please let us know if you have any questions, complaints or concerns about your dealings with Sumitomo Mitsui Banking Corporation, Canada Branch.


Talk to us

You may address your complaint or problem to your Account Officer or our Senior Compliance Officer.
 
Senior Compliance Officer
Sumitomo Mitsui Banking Corporation, Canada Branch
222 Bay Street, Suite 1400, P.O. Box 172
Toronto, ON M5K 1H6
 
If you are not satisfied with the action taken by Sumitomo Mitsui Banking Corporation, Canada Branch to resolve your concern, we encourage you to call or write to the relevant external independent body.


Resolution through external bodies

Ombudsman for Banking Services and Investments (OBSI)

Sumitomo Mitsui Banking Corporation, Canada Branch is a member of the Ombudsman for Banking Services and Investments. This is an independent external complaints body, approved by the Ministry of Finance, responsible for assisting banking customers with their concerns.
 
The Ombudsman for Banking Services and Investments will accept your request:

  • If you are not satisfied with the action taken by us to resolve your complaint;
  • If we have taken longer than 90 days to investigate and respond to your concern from the date it was received by our Senior Compliance Officer.

Once you have provided the relevant consent to the OBSI, we will fully co-operate with their investigation and provide them with all the information we have related to your complaint. You may contact the OBSI in writing at 20 Queen Street West, Suite 2400, P.O. Box 8, Toronto, ON M5H 3R3; by email or by calling 1-888-451-4519 or through its website.


Financial Consumer Agency of Canada (FCAC)

Financial Consumer Agency of Canada is responsible for ensuring that all financial institutions comply with federal consumer legislation and will investigate any complaint or concern that relates to a possible breach of that legislation. You may contact the FCAC in writing at 427 Laurier Ave. West, 6th Floor, Ottawa, Ontario K1R 1B9; by calling 1-866-461-3222 or through its website.
 


Customer Complaints Resolution

As required by the Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations SOR/2013-48, Sumitomo Mitsui Banking Corporation, Canada Branch confirms that we did not receive any complaints in 2019, 2020 and 2021.
 


Uninsured Deposit Notice

Deposits with the Sumitomo Mitsui Banking Corporation, Canada Branch are not insured by the Canada Deposit Insurance Corporation (CDIC).

 

Statement on Coercive Tied Selling

Coercive Tied Selling

The Bank Act requires banks to inform customers in plain language that coercive tied selling is illegal.

 

What is Coercive Tied Selling?

 

Section 576.1 of the Bank Act prohibits banks from practicing coercive tied selling. More specifically, it is against the law for a bank to “impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the bank and any of its affiliates, as a condition for obtaining another product or service from the bank". You cannot be unduly pressured to buy a product or service that you don’t want, from an authorized foreign bank or one of its affiliates, to obtain another bank product or service from the authorized foreign bank.
 
The following two examples will help to explain coercive tied selling and what is not allowed.
 
Your bank’s mortgage specialist tells you that you qualify for a home mortgage. However, you are also told that the bank will approve your mortgage only if you transfer your investments to the bank or its affiliates. You want the mortgage, but you do not want to move your investments.
 
Your bank’s credit officer tells you that you qualify for a Registered Retirement Savings Plan (RRSP) loan. However, you are also told that the bank will approve the loan only if you use the money to buy the bank’s mutual funds. You want the loan, but you want to invest the money somewhere else.
 
Both of the above practices are against the law. If you qualify for a product, a banking representative is not allowed to excessively pressure you to buy another unwanted product or service as a condition of obtaining the product you want.
 
What is Our Commitment to You?
 
We expect all employees at Sumitomo Mitsui Banking Corporation, Canada Branch to comply with the law by not practicing coercive tied selling. We urge you to let us know if you believe that you have experienced coercive tied selling in any dealings with us. You can find out how to contact us below
 
What is Not Coercive Tied Selling?
 
Most businesses, including Sumitomo Mitsui Banking Corporation, Canada Branch, look for tangible ways to show their interest in your business and appreciation for your loyalty. Sales practices, such as preferential pricing and bundling of products and services, offer potential and existing customers better prices or more favorable terms. These practices should not be confused with coercive tied selling, as defined by the Bank Act. Many of these practices will be familiar to you in your dealings with other businesses.
 
What is Preferential Pricing?
 
Preferential pricing means offering customers a better price or rate on all or part of their business. For example, a printer offers a lower price for each business card if you buy a thousand cards instead of a hundred. A shoe store offers a second pair of shoes at half price.
 
Similarly, a bank may be able to offer you preferential pricing – a higher interest rate on investments or a lower interest rate on loans – if you use more of its products or services. The following two examples will help to explain preferential pricing in banks.
 
After approving your application for a home mortgage from the bank, your bank’s mortgage specialist tells you that this mortgage would be available at a lower interest rate if you transferred your investments to the bank or its affiliates.
 
After approving your application for an RRSP loan, your bank’s credit officer offers you a lower interest rate if you use the loan to buy the bank’s mutual funds.
 
The above practices are acceptable. The approval of your mortgage and RRSP loan is not conditional on your taking another bank product or service. Rather you are offered preferential pricing to encourage you to give the bank more business.
 
What is Bundling of Products and Services?
 
Products or services are often combined to give consumers better prices, incentives or more favourable terms. By linking or bundling their products or services, businesses are often able to offer them to you at a lower combined price than if you bought each product on its own. For example, a fast-food chain advertises a meal combination that includes a hamburger, fries and a drink. The overall price is lower than if you bought the three items separately.
 
Similarly, banks may offer you bundled financial services or products so that you can take advantage of package prices that are less than the sum of the individual items.
 
The following example will help to explain the bundling of bank products and services.
 
You plan to open a bank account that charges you for individual transactions. The banking representative offers you a package of services that includes a comparable bank account, a credit card with no annual fee and a discount on purchasing traveller’s cheques. The total price for the package is less than if you purchased each part of the package separately.
 
Bundling products in this way is permitted because you have the choice of buying the items individually or in a package.
 
How Do We Manage Our Credit Risk?
 
To ensure the safety of their depositors, creditors and shareholders, banks must carefully manage the risk on the loans and credit cards they approve. Therefore the law allows us to impose certain requirements on borrowers as a condition for granting a loan - but only to the extent necessary for us to manage our risk.
 
The following example will help to explain how banks manage such risk.
 
You apply for an operating loan for your business. To manage the risk associated with the loan, your bank requires your business to have an operating account with the bank as a condition for obtaining the loan.
 
The above example is legal and appropriate. Having your business’ operating account at the bank allows your bank to assess possible risks associated with your business’ cash flow and manage the risk associated with the loan.
 
At Sumitomo Mitsui Banking Corporation, Canada Branch, our requirements for borrowers will be reasonable and consistent with our level of risk.
 
How Can You Contact Us?
 
Please let us know if you have any questions, complaints or concerns about your dealings with Sumitomo Mitsui Banking Corporation, Canada Branch.
 
You may address your complaint to your Account Officer or our Senior Compliance Officer.
Senior Compliance Officer
Sumitomo Mitsui Banking Corporation, Canada Branch
222 Bay Street, Suite 1400, P.O. Box 172
Toronto, ON M5K 1H6
 
If your complaint involves a legislated consumer provision, you may contact the Financial Consumer Agency of Canada (FCAC) toll-free at 1-866-461-3222, or in writing

  • at its office at 427 Laurier Ave. West, 6th Floor, Ottawa, Ontario K1R 1B9; or
  • through its website

Please see Customer Compliant Information for more details.

 

Notice Providing of Charges Applicable to Deposit Account

SUMITOMO MITSUI BANKING CORPORATION, CANADA BRANCH

STANDARD FEE SCHEDULE FOR BUSINESS ACCOUNT SERVICES

*All fees are in Canadian Dollars with exception for those who only hold USD accounts (fees in US Dollar).

Effective: October 1, 2020

(1) Deposit

ITEM

STANDARD FEE

Official cheque issue

$15.00 per cheque

NSF cheque (cheque returned)

$20.00 per cheque

Stop payment

$35.00 per cheque

Cheque drawing on own account

$ 0.75 per cheque

Deposit cheque on account

Nil

Monthly statement by mail

Nil

Monthly statement by fax/email

$10.00 per month

Special statement on request

$10.00 per account

Daily account movement advice by fax/email

$30.00 per month

Daily account movement advice by SWIFT (MT940/950)

$50.00 per month

Early cancellation of term deposit / loan

$50.00 per month + interest cost

Overdraft administration

$25.00 prime + 2% interest

Certificate of balance / confirmation

$25.00 other-negotiable


(2) Transfer Remittance

 ITEM

 STANDARD FEE

 Outgoing transfer*

 $30.00

 Cable advice*

 $10.00

 Internal transfer – between accounts held at SMBC, Canada Branch

 $10.00

 Stop payment / cancellation

 $40.00

* Payments that are in settlement of Loan, Deposit or Foreign Exchange transactions made with our Bank for the Customer’s own account will not be subject to Outgoing Transfer Fee and Cable Advice Fee.

 

STANDARD FEE SCHEDULE FOR TRADE-RELATED SERVICES

(1) Import Letters of Credit, Acceptances & Collections

 ITEM

 STANDARD FEE*

 L/C Opening

 0.25%, min $100

 L/C Amendment

 $50

 L/C Cancellation

 $100

 Sight Payment

 0.125%, min $75

 Usance Payment

 0.25% per month, min $75

 L/G

 Negotiable

 Collection Items Paid (Sight)

 0.25%. min $75, max $250

 Collection Items Paid (Usance)

 Above plus $15

 Cable (additional to above fees)

 $25


(2) Export Letters of Credit & Collections

 ITEM

 STANDARD FEE*

 L/C Advising

 $50

 L/C Confirming

 Negotiable, min $100

 L/C Amendment

 $50

 L/C Cancellation

 $50

 Transfer

 0.125%, min $250

 Payment Commission

 0.125%, min $75

 Acceptance Commission

 0.125%, min $75

 Collection Commission

 0.3%, min $75, max $250

 Tracer

 $25

*Standard fees are charged in the currency of the transaction.

Effective: October 1, 2020

 

Fee Schedule

E-MONEYGER® Online Banking Services

 

 Basic

 (No Fund Transfers)

 Standard

 (With Fund Transfers)

 One time Set up Fee

 Waived

 Waived

 Monthly Maintenance Fee

 C$50.00

 C$70.00

 Initial System Administrator Token

 Includes 1

 Includes 1

 Initial User Token

 Includes 1

 Includes 2

 Additional User Token

 Actual Cost

 Actual Cost

 Fund Transfers(outgoing)

 N/A

 C$25.00

 

EFT Fee Schedule
(Direct Transmission)

 

 Price (CAD)

 Unit

Initial fee (one-time)

 EFT Implementation

 $200.00

 One Time Fee

Monthly/Recurring fee

 EFT Monthly Maintenance

 $50.00

 Per Account

 File Processing

 $10.00

 Per File

 Electronic Payment

 $0.25

 Per Payment

 Each Report formatted delivered (Delivery Notification)

 $1.00

 Per File

 Optional fee (charge per occurrence)

 Returned Payment

 $10.00

 Per Payment

 Investigation/Traced Payments

 $50.00

 Per Investigation

 Payment errors held for correction for 40 days

 $0.25

 Per Payment

 Report and Data Delivery

 $10.00

 Per Report

 Payment Modified Online

 $2.00

 Per Payment

 Payment Reversed (by Bank) upon client’s request

 $30.00

 Per Payment

 Bulk Maintenance (Change/Delete/Reversal)

 $20.00

 Per File

 Bulk Maintenance (Change/Delete/Reversal) 

 $1.00

 Per Payment

 Blocked File (insufficient funds, excessive errors)

 $150.00 

 Per File


Sumitomo Mitsui Banking Corporation, Canada Branch

222 Bay Street, Suite 1400, P.O. Box 172

Toronto, Ontario M5K 1H6, Canada

Main Tel: 416-368-4766

Fax: 416-367-3565

 

3. SMBC Leasing and Finance, Inc.

SMBC Leasing and Finance, Inc., Corporate Structure

SMBC Leasing and Finance, Inc., is incorporated in the state of Delaware, USA, with a London Branch registered in England and Wales. SMBC Americas Holdings, Inc., a Delaware corporation (“SMBCAH”) directly owns 100% of the voting shares of SMBC Leasing and Finance, Inc.  

 

SMBCAH is a wholly-owned subsidiary of Sumitomo Mitsui Banking Corporation, a Japanese banking institution (“SMBC”), and SMBC is in turn a wholly-owned subsidiary of Sumitomo Mitsui Financial Group, a financial services conglomerate that is also incorporated in Japan.

 

SMBC Leasing and Finance, Inc., Business

SMBC Leasing and Finance, Inc., purchased its UK based subsidiary, SMBC Leasing (UK) Ltd., from SMBC Leasing Company Limited (Japan) on June 22, 2006. SMBCLF and its subsidiaries are engaged in the leasing of personal or real property, or acting as agent, broker or adviser in leasing of such property, in net, full-payout leasing transactions and making, acquiring or servicing loans and other extensions of credit such as would be made by a commercial finance company of the kind permitted for bank holding companies under the US Bank Holding Company Act and Regulation Y of the United States Federal Reserve System.
  

Slavery and Human Trafficking Statement 

Modern Slavery Act 2015 of the United Kingdom

Background

The Modern Slavery Act 2015 (the “Act”) of the United Kingdom requires certain businesses to provide disclosure concerning their efforts to address the issues of Slavery and Human Trafficking in their supply chain. The disclosure is intended to provide customers the ability to make better, more informed choices about the products and services they buy and the companies they support, and has been prepared in accordance with the UK Home Office statutory guidance1 on complying with Section 54 of the Act.

 

This document comprises the Slavery and Human Trafficking Statement of SMBC Leasing and Finance, Inc. (“SMBCLF”), its London Branch and its UK subsidiaries (collectively, “SMBCLF-UK”) for the financial year ended 31 December 2020.  

 

SMBCLF-UK's stance on Slavery and Human Trafficking

As part of SMFG, SMBCLF adheres to the group commitments to Corporate Social Responsibility (CSR), and the SMFG Statement on Human Rights, which reiterates the ethical responsibility to help protect and promote human rights.

 

SMBCLF-UK is committed to maintaining and improving systems and processes to mitigate the risk that it might be involved, wittingly or unwittingly, in the commission or facilitation of Slavery and Human Trafficking in any part of its operations, supply chain (including customers, contractors and suppliers), products, services and staff activities. SMBCLF-UK is committed to maintaining and improving systems and processes to mitigate the risk that it might be involved, wittingly or unwittingly, in the commission or facilitation of Slavery and Human Trafficking in any part of its operations, supply chain (including customers, contractors and suppliers), products, services and staff activities.

 

SMBCLF-UK also expects its staff, suppliers and business partners to adhere to the same high standards and to take reasonable steps to ensure that other third parties they do business with adhere to those standards as well.

 

Governance

SMBCLF-UK adheres to the Anti-Slavery and Human Trafficking Policy and Procedures of SMBC’s EMEA (Europe, the Middle East and Africa) Division. These policies and procedures provide appropriate and detailed guidance to SMBCLF-UK's staff on what constitutes an offence and the controls in place to mitigate the risk that SMBCLF-UK may be directly or indirectly involved in the commission or facilitation of Slavery and Human Trafficking.

 

SMBCLF-UK also adheres to SMBC EMEA Division’s Financial Crime governance framework, which includes an Antimoney Laundering/Combating of Terrorist Financing (AML/CTF) Policy, Anti-Bribery and Corruption (ABC) Policy, AntiFraud Policy, and Gifts and Entertainment (G&E) Policy. The Anti-Slavery and Human Trafficking Policy is aligned to, and is supported by, these policies.

 

Risk Assessment

The SMBC EMEA Division has enhanced its risk assessment of countries, industry sectors, goods and products, which have been reported to be involved in the potential commission or facilitation of slavery and human trafficking. Specifically, the assessment of goods and industry sectors has been updated in line with the United States Department of Labor – Bureau of International Labor Affairs (ILAB) list of goods produced by child labour or forced labour.
  

Due Diligence

SMBCLF-UK is required to conduct appropriate checks in order to obtain reasonable assurance that customers, business partners, suppliers, and other third parties are not involved in the commission or facilitation of Slavery and Human Trafficking.

 

SMBCLF-UK requires specific anti-slavery due diligence to be undertaken on all its counterparties, and applies consistent due diligence measures for Slavery and Human Trafficking, whereby suppliers, contractors, customers and any other business partners are all subject to the same level of identification, verification, and risk evaluation. In addition, in the course of conducting due diligence processes, all customers, business partners, suppliers and other third parties are subject to adverse news screening, incorporating specific terms relevant to Slavery and Human Trafficking.

 

Supply Chain

SMBCLF-UK expects its suppliers to undertake ethical business practices, particularly in, but not limited to, economic sectors where there are higher risks of Slavery and Human Trafficking. SMBCLF-UK takes appropriate steps to verify, evaluate and mitigate the risk that Slavery and Human Trafficking may occur in its supply chain. In particular, SMBCLFUK performs due diligence on suppliers and contractors at the start of a business relationship and subsequently on a periodic basis. This due diligence process includes, but is not limited to, an analysis of the activity carried out by the suppliers and contractors and a detailed review of publicly available information, in order to identify instances that may give SMBCLF-UK cause for concern.
 

Customers

SMBCLF expects its customers to undertake ethical business practices, particularly in, but not limited to, economic sectors where there are higher risks of Slavery and Human Trafficking. SMBCLF-UK takes appropriate steps to verify, evaluate and mitigate the risk that their products or services may be used by a customer for the commission or facilitation of Slavery and Human Trafficking.

 

As part of its on-boarding and periodic customer due diligence processes, SMBCLF-UK performs a series of checks on its customers, including, but not limited to, an analysis of the activity carried out by the customers and a detailed review of publicly available information, in order to identify instances that may give cause for concern.

 

Staff

In order to ensure proper understanding of the risks posed by Slavery and Human Trafficking in the context of SMBCLFUK’s supply chains and business, SMBCLF-UK's staff responsible for the above areas have received training on Slavery and Human Trafficking and the requirements of the Act.

 

All staff are encouraged to report any instances of suspected Slavery and Human Trafficking identified in any part of SMBCLF-UK’s business activities, either through their standard reporting lines, or through the whistleblowing programme of SMBC’s EMEA Division that is also available to SMBCLF-UK.

 

Slavery and Human Trafficking

As used in this Statement, the term “Slavery and Human Trafficking” refers to a variety of offences, including but not limited to:

  • Slavery, servitude and forced or compulsory labour;
  • Sexual exploitation, including all offences contemplated in the Part 1 of the UK Sexual Offences Act 2003;
  • Removal and trafficking of organs outside the context of authorised health treatments;
  • Securing services or other type of benefits by force, threats or deception; and
  • Securing services or other type of benefits from children and vulnerable persons.

Contact

Questions, comments and requests regarding this Statement are welcomed and should be addressed. leaseadmin@gb.smbcgroup.com
  

Approval

This Statement was approved by the Board of Directors of SMBCLF on September 14, 2021 and has been signed on behalf of the Board by Mr. Stephen Perry, President of SMBC Leasing and Finance, Inc.
 

Modern Slavery Statement in accordance with the Modern Slavery Act 2018, Commonwealth of 
Australia

 

1. SMBC Leasing and Finance, Inc. as Reporting Entity

SMBC Leasing and Finance, Inc. (ARBN 602 309 366) (SMBC-LF) is the reporting entity giving this modern slavery statement (Modern Slavery Statement) in accordance with the Modern Slavery Act 2018 (Cth) (the Act). The Act requires SMBC-LF to provide disclosure concerning its efforts to assess and address the risks that modern slavery practices may be occurring in its operations and supply chain and the operations and supply chains of any entities that it owns or controls.  

2. SMBC-LF’s structure, operations and supply chains

SMBC-LF is an international leasing and finance company incorporated in the State of Delaware, USA.  

Sumitomo Mitsui Financial Group, Inc. 

SMBC-LF is a wholly-owned indirect subsidiary of Sumitomo Mitsui Financial Group, Inc. (SMFG) and is part of the SMFG group of companies (SMFG, together with its subsidiaries and affiliates are referred to as “SMBC Group”). SMFG is a publicly listed company. SMFG’s common shares are listed on the first section of the Tokyo Stock Exchange and the Nagoya Stock Exchange. SMFG’s American Depositary Receipts are also listed on the New York Stock Exchange. As at 31 March 2020, SMFG’s capital was 2,339.9 billion yen. 

SMBC Group is a global financial group that develops operations in a wide range of fields including banking, leasing, securities, credit cards and consumer finance. SMBC Group is comprised of four business units: the Retail Business Unit, the Wholesale Business Unit, the International Business Unit and the Global Markets Business Unit.  

 SMBC Group's overseas network currently comprises 137 branches and offices in 40 countries and regions. As at 31 March 2020, SMBC Group had approximately 86,443 permanent employees. 

Further information on SMBC Group’s business can be found in SMFG's annual report and financial statements, which can be accessed at: https://www.smbc.co.jp/global/

 

SMBC-LF operations

SMBC-LF specializes in originating, structuring, arranging and investing in structured asset-based, tax efficient and accounting driven financings in the US and worldwide. SMBC-LF has offices in four (4) countries with approximately 53 employees. SMBC-LF has operations in Australia, the United Kingdom, Germany and the United States of America. As a subsidiary of Sumitomo Mitsui Banking Corporation (“SMBC”), SMBC-LF supports an extensive global network of SMBC group entities which SMBC either owns or controls. These group entities operate throughout these regions providing the financial services and credit related businesses to SMBC’s global network of customers. Further information on SMBC’s business, including a list of SMBC’s principal domestic subsidiaries, principal overseas subsidiaries and principal affiliates and a summary of the main businesses of these companies can be found here:

https://www.smbc.co.jp/global/aboutus/business; and
https://www.smbc.co.jp/global/aboutus/profile/group/

As at 31 March 2020, SMBC employed 27,957 employees.

SMBC-LF in Australia

SMBC-LF established its presence in Australia in 2014 through its branch (ARBN 602 309 366) in Sydney, New South Wales.

SMBC-LF’s Australian operations are based in Sydney, New South Wales. SMBC-LF’s registered office in Australia is Level 40, The Chifley Tower, 2 Chifley Square, Sydney, New South Wales Australia.

In Australia, SMBC-LF provides financial advisory, lease financing, receivable purchases and asset backed debt financing for wholesale customers only. The Australian operations form part of the International Business Unit of SMBC Group.

Further information on SMBC’s global and Australian businesses can be accessed at: https://www.smbc.co.jp/global/; and https://www.smbc.co.jp/asia/australia/.

SMBC supply chain

As part of the SMBC group, SMBC-LF outsources a number of support services via service level agreements to the larger SMBC group entities, including SMBC Sydney Branch, in which office SMBC-LF is co-located. SMBC’s business is primarily undertaken in an office environment with the majority of its suppliers providing goods and services in connection with office premises (such as stationery supplies, cleaning services and food and refreshments supplies), financial, technology and other professional services and corporate travel. Given its geographic spread, SMBC’s supply chain is geographically diverse with suppliers from countries in which SMBC has operations. SMBC’s suppliers range from small businesses to international organisations, operating across the developed and developing regions in which SMBC has operations. Further, SMBC is connected with many thousands more organisations across the world via the supply chains of its first tier suppliers. By way of example, the main categories of suppliers and service providers (by aggregate dollar value for the financial year ending 31 March 2020) for SMBC Sydney Branch relate to information technology equipment and software; rent; information services; market research; hospitality (including business travel); telecommunications; and professional advisers. The arrangements SMBC Sydney Branch has with its suppliers are combination of long-term relationships with large multinational suppliers established and maintained as part of SMBC’s global operations and short term relationships with smaller local suppliers. This list is broadly reflective of the categories of suppliers and service providers of SMBC globally and the entities which it owns or controls.

3. SMBC-LF and SMBC’s risks of modern slavery practices in operations and supply chains

SMBC-LF uses the technology, policies and procedures provided by SMBC to identify and capture risks associated with modern slavery. SMBC conducts business internationally with operations spanning developed and developing countries and regions. Given the breadth of these operations, there is a potential risk that elements of the supply chain are engaging in modern slavery practices, particularly parts of the supply chain relating to the supply of goods and services. The risk is increased in relation to suppliers to SMBC’s operations in developing countries and regions. For example, SMBC operates in a number of jurisdictions rated as high risk for modern slavery by the Global Slavery Index. In these countries, jurisdiction risk means that some local suppliers have increased modern slavery risk when compared to similar suppliers from lower risk jurisdictions, such as Australia.

Using the Global Slavery Index 2018 as a source, SMBC has identified Information Technology services and software, manufacturing, agriculture, construction, mining, trade and service industries (such as hospitality and cleaning) as high risk sectors for modern slavery. SMBC operates in the banking and financial services industry and primarily within an office environment and therefore it does not operate in these sectors. However, and as noted above, SMBC relies on service providers who do operate in some of these sectors, most notably in IT services (including telecommunications) and hospitality and cleaning.

SMBC’s supply chain includes a number of products that have been linked with modern slavery. For example, according to the Global Slavery Index 2018, the number 1 product category at risk of modern slavery imported into G20 countries (by US$ value) are laptops, computers and mobile phones. SMBC’s operations rely heavily on the use of laptops, computers and mobile phones.

SMBC is working on further defining its supply chain risk, which is a significant undertaking given its operational footprint and the global nature of its supply chains. While SMBC (through its risk control processes; see section 4 below) aims to mitigate the risk that its suppliers are directly engaged in modern slavery, there is also a risk that suppliers have modern slavery risks in their own supply chains. This risk is particularly acute for suppliers operating in markets where there is a geographic modern slavery risk. SMBC is in the process of assessing where this risk, is present given its broad operations and supply chains.

SMBC-LF outsources certain functions to SMBC and third party service providers. For example, SMBC-LF engages various third parties to provide services, such as information technology systems development and document archiving. There is a risk that such providers have modern slavery risks within their operations and supply chain, particularly given that most of these services are heavily reliant on IT hardware and software. These entities are assessed for their approach to managing modern slavery risk.

SMBC continues its review of its modern slavery supply chain risk. It continues to consult with the group entities within its operational control (including SMBC-LF), given that such entities operate in the same financial services industry as SMBC, it believes that the modern slavery risks in its operations and supply chains is representative of the risks in the operations and supply chains of such group entities. It is also acknowledged that modern slavery risks can also arise through the operations and actions of SMBC-LF’s customers. SMBC-LF, therefore, may be linked to such risks, as either a provider of financial services. Again, where these customers operate within jurisdictions or sectors with a high risk of modern slavery, this risk is heightened. SMBC-LF and SMBC’s control processes in respect of these risks are set out in section 4 below.

4. SMBC-LF and SMBC’s actions to assess and address risks of modern slavery practices

SMBC Group’s commitment to human rights

SMBC Group believes that it has an ethical responsibility to promote human rights by showing respect for human rights through its own behavior and by sharing its ethos with its customers.

As a signatory to the United Nations Global Compact, the SMBC Group is committed to fulfilling the social responsibilities that are expected of it as a global financial group to create a society that is built on the utmost respect for human rights as directed by the "Universal Declaration of Human Rights," the "ILO Declaration on Fundamental Principles and Rights at Work," the "ISO 26000" guidelines on the social responsibilities of organisations, and the "Guiding Principles on Business and Human Rights" advocated by the UN Human Rights Council in 2011. Further information on SMBC Group’s commitment to sustainability can be found here: https://www.smfg.co.jp/english/sustainability/group_sustainability/management/.

SMFG has also published a Statement on Human Rights, which recognises the ethical responsibility of the SMBC Group to support and respect the protection of internationally proclaimed human rights and to prevent complicity on human rights violations. Further information in relation to SMBC Group’s commitment to human rights can be found here: https://www.smfg.co.jp/english/sustainability/group_sustainability/forrights/.

SMBC Group has positioned the sustainable development of society as a key issue and in October 2018 the establishment of its Corporate Sustainability Committee enables SMBC Group to better carry out related initiatives.

SMBC-LF and SMBC acknowledges its obligation to respect human rights and acknowledges its responsibilities in an evolving area. SMBC-LF and SMBC are committed to an ongoing review and assessment of its business practices and approach to human rights in light of changing global circumstances.

SMBC Group is committed to maintaining and improving systems and processes to mitigate the risk that it might be involved in the commission of slavery and human trafficking in any part of its operations, customers and supply chain (including contractors and suppliers), products, services and employee activities.

SMBC-LF and SMBC’s policies and procedures, including, where applicable, those relating to modern slavery risks, are reviewed on a regular basis for applicability and appropriateness. Screening for connections to jurisdictions with human rights issues is conducted on an ongoing basis. SMBC subsidiary in the UK (SMBC Bank International plc, SMBC BI) implemented an Anti-Slavery Policy in 2015. This was expanded in 2018 to the SMBC EMEA Anti-Slavery Policy and is applicable to all SMBC branches in the EMEA region including SMBC-LF’s EMEA operations.

The Policy states that in the spirit of best practice, SMBC seeks to ensure that slavery and human trafficking are not taking place in any part of its businesses or supply chains.

SMBC’s actions in connection with its workplace environment

SMBC seeks to provide a workplace free from any type of violation of employees' human rights, including but not limited to, forced labour, harassment and discrimination without distinction of any kind such as race, gender, sexual orientation, gender identity, religion, creed, national origin, disability, family status and birth status. This is reflected in SMBC’s numerous public statements on its commitment to protecting human rights as well as its employee codes of conduct and policy and procedure manuals in operation across its global network.

SMBC and its group entities within its operational control (including SMBC-LF) require their employees to adhere to the same high standards that it has committed to in respect of human rights, with employees agreeing as part of their employment terms to adhere to various codes of conduct and other organisational policies which require employees to comply with all applicable laws and regulations, which includes those relating to modern slavery.

SMBC and the group entities which it owns or controls (including SMBC-LF) have in place a whistleblower framework that includes an alarm line to rapidly detect and rectify legal violations, violations of bank rules, and cases of abuse of power. This extends to modern slavery concerns. SMBC in the Asia Pacific region, including Australia, has recently launched a new Whistleblowing Policy and external reporting platform in the region that enhances the confidentiality and protection of whistleblowers, including service providers and their employees, in accordance with the applicable whistleblowing legislation

Employees of SMBC and those of its group entities which it owns or controls (including SMBC-LF) are encouraged to identify and report immediately via SMBC's whistleblowing framework, without any negative repercussions, any conduct that the employee knows or reasonably believes would violate legal or regulatory requirements or ethical standards, which include such requirements and standards set out in internal policies and guidance in relation to human rights and modern slavery.

Additionally, in order to ensure proper understanding of the risks posed by modern slavery and human trafficking, SMBC will look to update its compliance training for its employees to include modern slavery and human trafficking risks. This type of employee training would be in addition to existing training that SMBC employees are provided in respect of human rights. SMBC’s consultation with the group entities within its operational control (including SMBC-LF) will look to extend this training to employees of these entities.

SMBC’s further actions in connection with its operations

SMBC group entities over which SMBC has operational control (including SMBC-LF) operate subject to internal group policies which require these entities to report any breaches of law to SMBC. On this basis, they are obliged to notify SMBC of any breach of law relating to slavery and other human rights issues.

Further, in accordance with applicable obligations under the Modern Slavery Act 2015 (United Kingdom) (UK Act), certain group entities within SMBC’s operational control, including SMBC-LF, have published Slavery and Human Trafficking Statements, which provide disclosures concerning their respective efforts to address the issues of slavery and human trafficking. These statements can be accessed here:

SMBC:

http://www.smbc.co.jp/aboutus/english/csr/

SMBCE:

http://www.smbcgroup.com/emea/about-us/corporate-disclosures/#trafficking

SMBC Nikko London: http://www.smbcnikko-cm.com/corporate/our-policies/slavery-trafficking.html.

SMBC-LF:

https://www.smbcgroup.com/americas/legal/#Slavery

Customers

The credit policy of SMBC Group prohibits granting credit to certain businesses and customers, which includes those who exhibit unacceptable practices from the perspective of public order and morals. There is a prohibition on the origination of loans for certain types of businesses where human rights abuses, such as child labour is, or may, be taking place or is likely to take place.

In addition, by way of example, SMBC-LF, as part of its anti-money laundering compliance responsibilities, undertakes due diligence on its customers at both the on-boarding stage and at regular periods thereafter. This due diligence includes compliance specific database searches on customers in relation to adverse news, which would identify news in connection with sanctions and human rights violations. This also includes ongoing screening in respect of customers, customer associated parties and trade finance transactions for connections to jurisdictions with human rights issues.

Further, SMBC has been a signatory to the Equator Principles since 23 January 2006. The Equator Principles are a set of guidelines developed by private financial institutions for managing environmental and social risks related to financing large-scale development projects. The Equator Principles apply to project finance transactions, project-related corporate loans and bridge loans that are intended to be refinanced to project finance or corporate loans, regardless of the country or the sector. The Equator Principles are based on the environmental and social policies and guidelines of International Finance Corporation, the private sector arm of the World Bank. These policies and guidelines cover a variety of issues such as the environmental and social impact assessment process, pollution prevention, consideration of local communities and natural resources.

In accordance with the Equator Principles, SMBC has established internal environmental and social guidelines and procedures, and conducts environmental and social risk assessments, including in respect of potential adverse human rights impacts.

SMBC Group commissioned an independent external party (Ernst & Young ShinNihon LLC) to review a number of transactions for the year ended 31 December 2018 regarding their compliance with the Equator Principles, including

- 59 Project Finance transactions closed in 2018;

- 8 Project Related Corporate Loans closed in 2018; and

- 25 Finance Advisory Transactions mandated in 2018.

An Independent Assurance Report was issued by Ernst & Young ShinNihon LLC on 21 August 2019, wherein no adverse finding or non-compliance had been noted.

A list of the transactions reviewed and assured by Ernst & Young ShinNihon LLC (under the section ‘Transactions Subject to the Equator Principles (SMBC)’), the relevant Independent Assurance Report, as well as further information on SMBC’s commitment to the Equator Principles can be found here:
https://www.smfg.co.jp/english/sustainability/materiality/environment/risk/equator/.

 

SMBC’s actions in connection with its supply chain

Suppliers and service providers

SMBC will continue to consult with its offshore branches and group entities within its operational control (including SMBC-LF) with a view to determining whether the steps taken by such entities to assess and address the risk of modern slavery practices in their supply chains are appropriate having regard to the size and nature of their businesses. Certain SMBC branches and group entities (including SMBC-LF) within its operational control have frameworks in place to assess and address modern slavery risk in their supply chains and operations. Part of the consultation process with these branches and group entities, will consider whether these existing frameworks could apply to SMBC’s broader operations.

For example, SMBC-LF conducts screening of all new suppliers in its direct supply chain, including reviewing publicly available information, in order to identify instances that may give cause for concern in relation to slavery, human trafficking and other human rights issues and name screening on local and global sanctions lists. Reviews and assessments of all of its suppliers are undertaken on an annual basis. In the event of any adverse circumstances arising from this screening, SMBC-LF, where appropriate, will escalate the matter with the relevant supplier or law enforcement agency, subject to its obligations under law.

Further, SMBC and its related body corporates operating in the United Kingdom and the European Union markets (including SMBC-LF), conduct due diligence on their suppliers, contractors, customers and any other business partners in order to address slavery and human trafficking risk in its operations and supply chain. Where a relevant counterparty is subject to the UK Act, in pursuance of SMBC EMEA Anti-Slavery Policy, SMBC-LF seeks an Anti-Slavery Statement and confirm that such party is not involved in the commission or facilitation of slavery and/ or human trafficking. SMBC-LF’s due diligence processes include, but are not limited to, an assessment to determine if the relevant counterparty falls within the scope of the UK Act, an evaluation of where such third party is based and operates, an analysis of the business activities being carried out, and a detailed review of publicly available information, in order to identify instances which may give cause for concern in relation to slavery, human trafficking and other human rights issues.

For those counterparties who are in Europe but not in scope of the UK Act, SMBC-LF seeks an equivalent policy, document or statement relating to their commitment to Corporate Social Responsibility (CSR), Environmental, Social, and Governance (ESG) and human rights, etc. to provide reasonable assurance that they are not involved in the commission or facilitation of slavery and/ or human trafficking. Analysis is undertaken on the jurisdiction risk of the relevant counterparty having regard to its locations, operations and activities.

In essence, third parties, including suppliers, are expected to undertake ethical business practices, particularly in high risk sectors such as manufacturing, construction or service industries

Outsourcing

SMBC and group entities within its operational control (including SMBC L-F) operate subject to an outsourcing policy which expressly addresses modern slavery risks. Prior to outsourcing any relevant function to a third party, a due diligence assessment of modern slavery risk must be completed so as to confirm that the relevant third party is not engaged in modern slavery.

This due diligence process includes reviewing publicly available information such as the third party’s or its parent company’s website in respect of its policies or positions on the protection of human rights, as well as internet searches to determine whether there is any adverse news in respect of human rights violations. Outsourcing is expressly prohibited if the due diligence reveals that the third party is engaged or involved in modern slavery or any other human rights violations.

In FY2020, the SMBC Group outsourcing due diligence program was enhanced to ensure an assessment and monitoring of all vendors/service providers (regardless of whether the service is considered to be outsourcing) is undertaken at least annually. The three areas of focus include the Japanese Anti-Social Forces Screening, Anti-Bribery and Corruption Due Diligence and Modern Slavery Due Diligence.

Additionally, in FY2019, in Japan, SMBC expanded the scope of its outsourcing policy to apply to service providers, vendors and certain other suppliers

5. SMBC’s methods to assess effectiveness of actions to assess and address modern slavery risks

Upon finalisation of the consultation process with SMBC branches and group entities within its operational control (including SMBC-LF) and the implementation of a modern slavery risk management framework (i.e. policies, control processes, training and ongoing monitoring program), it is intended that the framework and the risk control activities that have been undertaken as part of the framework (i.e. the results of customer, supplier and outsourcing monitoring, any internal audits or other examinations) will be regularly (and at a minimum, annually) reviewed and evaluated for effectiveness. Consistent with the assessment of other SMBC policies, effectiveness will be determined on an assessment as to:

Modern slavery has been introduced in the SMBC Group global compliance risk assessment framework. Consistent with the SMBC Group global compliance risk assessment program effectiveness is determined on an assessment as to:

• appropriate design of relevant policies and procedures to ensure compliance and risk management; • how well the control processes have operated, including timeliness and comprehensiveness;

• the extent of employee training that has been conducted;

• the outcomes from monitoring and validation procedures; and

• the timeliness of remedial action taken for any issues arising.

Enhancements may be made as considered necessary as a result of these assessments.

6. SMBC’s consultation process with its subsidiaries and other controlled entities

SMBC and the group entities within its operational control (including SMBC L-F) operate in accordance with a compliance risk assessment framework. As a result of the consultation undertaken to prepare this statement, consideration is being given to including modern slavery risk as a new category of assessment in the compliance risk assessment framework, which would operate in conjunction with a global policy.

Approval

This Statement was approved by the SMBC-LF Board of Directors on 30 June 2021 and has been signed on behalf of the Board by Mr. Stephen R. Perry, President of SMBC-LF.

4. SMBC Rail Services LLC

SMBC Rail Services LLC is the entity which executes SMFG’s U.S. operations railcar operating lease business. SMBC Rail Services LLC engages in comprehensive transportation services including providing railcar related full-service leases, net leases, and finance leases to a broad range of industries, including, but not limited to, energy, steel, agriculture, aggregate/cement, petrochemical, forest products, consumer goods, and plastics. 

 

Three types of leases are currently offered to customers:

  • full service operating leases;
  • net operating leases;
  • finance leases;

The majority of SMBC Rail Services LLC’s assets on December 31, 2020 constituted full service operating leases. Under these leases, which are generally for a term of one to fifteen years, SMBC Rail Services LLC is responsible for the maintenance expenses, insurance and taxes associated with the operation of the rail cars.

5. SMBC Nikko Securities America, Inc.

Regulatory Notices

SMBC Nikko Securities America, Inc. (“SMBC Nikko”) appreciates your business and takes this opportunity to provide you with the following important disclosures.  This notice is for informational purposes and does not require a response. SMBC Nikko may modify the practices described in this letter due to changes in law or regulation, or because of industry or other developments.

 

SMBC Nikko is regulated in the U.S. by the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”), the Municipal Securities Rulemaking Board (“MSRB”), and is a member of the Investors’ Exchange LLC (“IEX”), NYSE Arca, Inc. (“Arca”), the Cboe BYX Exchange, Inc., the Cboe BZX Exchange, Inc., the Cboe EDGA Exchange, Inc. and the Cboe EDGX Exchange, Inc. Copies of SMBC Nikko’s audited financial statements will be provided upon request to any customer (as defined in FINRA Rule 2261).

 

Anti-Money Laundering

Summary of Anti-Money Laundering (AML) Related Information
Company Status with Regulators

SMBC Nikko is a registered broker-dealer with the SEC and a member of the securities self-regulatory organizations, FINRA, and MSRB. As such, SMBC Nikko is considered a "covered financial institution" for purposes of the U.S. Bank Secrecy Act, as amended by the USA PATRIOT Act and is subject to the regulations thereunder, as well as the rules and oversight of the federal regulatory agencies and self-regulatory organizations listed above.

 

Our policy is to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities. Money laundering generally is defined as engaging in acts designed to conceal or disguise the true origins of criminally derived proceeds so that the unlawful proceeds appear to have been derived from legitimate origins or constitute legitimate assets.

 

Customer Identification Program

To help the government fight the funding of terrorism and money laundering activities, federal law requires us to obtain, verify and record information that identifies each person or entity who opens an account. When you open an account, we are required to ask for certain identifying information such as your legal name, address, and other information that will allow us to identify you. We also may ask to see identifying documents to verify your identity and to screen your name against various government databases.

 

Notice Regarding Entities Identified as Being of Primary Money Laundering Concern

Pursuant to U.S. regulations issued under section 311 of the USA PATRIOT Act, 31 CFR 103.192, we are prohibited from opening or maintaining a correspondent account for, or on behalf of, certain Specified Banks. The regulations also require us to notify you that your correspondent account (if applicable) with our financial institution may not be used to provide the Specified Banks with access to our financial institution. If we become aware that the Specified Banks are indirectly using the correspondent account (if applicable) you hold at our financial institution, we will be required to take appropriate steps to prevent such access, including terminating your account. 

 

Business Continuity Plan

SMBC Nikko has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to maintain flexibility in responding to actual events as they occur. With that in mind, we are providing you with this information on our business continuity plan.

 

We plan to quickly recover and resume business operations after a significant business disruption and respond by safeguarding our employees and property, making a financial and operational assessment, protecting the firm's books and records, and allowing our customers to transact business. In short, our business continuity plan is designed to permit our firm to resume operations as quickly as possible, given the scope and severity of the significant business disruption.

 

Our business continuity plan addresses: data backup and recovery; all mission critical systems; financial and operational assessments; alternative communications with customers, employees, and regulators; alternate physical location of employees; critical supplier, contractor, bank and counter-party impact; and regulatory reporting.

 

Varying Disruptions

Significant business disruptions can vary in their scope, such as only our firm, a single building housing our firm, the business district where our firm is located, the city where we are located or larger region. Within each of these areas, the severity of the disruption also can vary from minimal to severe. In a disruption only to our firm or a building housing our firm, we will transfer our operations to our U.S. back-up site when needed and expect to recover and resume business within 24 hours. In a disruption affecting our business district or city, we will transfer our operations to our back-up site. Should a disruption affect both our main and U.S. back-up facilities, a London-based affiliate of the firm would perform the functions with respect to customer obligations existing at such time. If we are able to operate from our U.S. back-up facility, we plan to continue in business, and notify our customers through means still available to us. If the significant business disruption is so severe that it prevents use of both U.S. facilities, our London-based affiliate will close out existing positions.

 

The recovery and business continuity plans of SMBC Nikko are subject to modification without notice. Updates will be mailed to our customers.

 

SMBC Nikko does not and cannot guarantee that for every event or business disruption: (i) such plans will be successfully implemented; or (ii) such plans, if implemented will be sufficient and appropriate to avoid, deter, or mitigate the event or business disruption. In addition, because SMBC Nikko is dependent upon various infrastructure systems (e.g., transportation, telecommunications, exchanges, industry utilities), our ability to implement these plans may be impacted by issues with such infrastructure systems.

 

Securities Exchange Act Rules 606 and 607

Securities Exchange Act Rule 606 - Routing Statistics 

SMBC Nikko publishes quarterly reports pursuant to SEC Rule 606(a) broken down by calendar month, containing certain required statistical information regarding the routing of held, non-directed customer orders in Regulation NMS stocks and listed options in NMS securities, including the nature of any relationship SMBC Nikko has with each venue. In addition, customers of the firm may request in writing details on NMS stock and option non-directed orders in NMS securities including the identity of the venue and the time of execution for the prior six months as required under 606 (b)(1). SMBC Nikko may also provide additional routing and execution reports of the customer’s NMS stock orders submitted on a not held basis for the prior six months under 606 (b)(3) within seven days of customer’s request.

 

To obtain a copy of our publicly disclosed SEC Rule 606 Report, visit IHS Markit website here.

 

To obtain a copy of our publicly disclosed SEC Rule 606 Report prior to 2020, visit IHS Markit website here.

 

Securities Exchange Act Rule 607 - Disclosure of Payment for Order Flow 

SMBC Nikko does not receive payment for order flow. In its efforts to provide for best execution, SMBC Nikko may route customers’ equity orders to one or more exchanges, alternative trading systems, electronic communications networks and other market centers. Certain of these execution venues offer cash credits/rebates or charge fees for orders depending on whether the orders provide to or take liquidity from the market. Periodically, the amount of credits/rebates that SMBC Nikko receives from one or more such execution venues may exceed the amount that the Firm is charged.

 

FINRA Rule 2266 – SIPC Information

Pursuant to FINRA Rule 2266, we are required to notify you of the following:

  • Customers may obtain information about insurance provided by the Securities Investor Protection Corporation or SIPC, including the SIPC brochure, by contacting SIPC
  • SIPC’s  website address and telephone number 1-(202) 371-8300

FINRA Rule 2267 – Investor Education and Protection 

FINRA runs a public disclosure program known as BrokerCheck that provides information about brokerage firms and their registered persons. To obtain an investor brochure that includes information about BrokerCheck or to obtain additional information, contact the FINRA public disclosure hotline at (800) 289-9999 or visit the BrokerCheck website or FINRA’s general website.

 

FINRA Rule 5270 - Prohibition on Front-Running of Block Transactions

SMBC Nikko is generally prohibited from trading for its own account while in possession of an imminent (non-public) customer block order transaction (material market information) or providing such information to other investors or market participants, prior to the time the block transaction has been made publicly available (e.g. reported executed) or, due to the passage of time, the order information has become stale or obsolete. 

 

Rule 5270 does not preclude principal transactions that SMBC Nikko can demonstrate are unrelated to the block order information. These may include transactions:

  • where the Firm has established information barriers designed to prevent disclosure of such information;
  • to correct bona fide errors;
  • to offset odd-lot orders; or
  • to purchase or sell individual or related securities or derivatives to unwind a facilitation position, or to hedge / pre-hedge the Firm’s risk in preparing for and executing block orders.

To manage its risk, SMBC Nikko may trade as principal at the same time and at the same price level in fulfilling your block order. SMBC Nikko may also trade along with your block order in the underlying security or related securities (derivatives) to the extent that its principal trading activity hedges or mitigates risk. In such cases, SMBC Nikko will seek fair and equitable allocations of order fills between your account and its principal account.

 

Trading in Securities Subject to a Distribution (SEC Regulation M, Rule 105) 

SEC Rule 105 of Regulation M generally prohibits any person that sold short securities subject to a public securities offering within a specified period of time immediately preceding the pricing of the offering from purchasing the securities in that offering. For additional information on Rule 105, please see the SEC’s adopting release, available here. We rely on your obligation to understand and comply with the provisions of Rule 105 as it pertains to your trading activity when you seek or accept an allocation in a public securities offering from SMBC Nikko.

 

FINRA Rule 5310 – Best Execution

In any equity transaction for a customer, SMBC Nikko will use reasonable care in seeking to obtain the most advantageous terms reasonably available under the circumstances for the execution of a customer’s order. In determining where to send customers’ orders SMBC Nikko takes into consideration, among other things, the size and type of order, the terms and instructions of the order, the trading characteristics of the security, the character of the market for the security, the accessibility of quotations, transaction costs, the opportunity for price or size improvement, the speed of execution, the availability of efficient and reliable order handling systems, the level of service provided by the market venue and the customer’s overall objectives with respect to the market conditions at the time of the order. SMBC Nikko regularly reviews transactions for quality of execution.

 

FINRA Rule 5320 – Trade Along, Not Held Orders 

Customer equity orders received by SMBC Nikko are deemed “Not Held” orders unless you (customer) specifically request and provide other specific order instructions. A “not held” order means you are giving SMBC Nikko time and price discretion in seeking to obtain the best execution of your order.

 

When handling “not held” limit orders for institutional customers, SMBC Nikko is not required to display or protect the limit order. SMBC Nikko may trade for its own account at prices equal to, or better than, those of “not held” orders and orders of 10,000 shares more unless the institutional customer opts into rule 5320 protection from SMBC Nikko trading at prices equal to or better than those of the institutional customer’s order. Clients may “opt in” to the Rule 5320 protections by providing written notice to their SMBC Nikko sales representative. Notwithstanding the foregoing, SMBC Nikko makes every reasonable effort to provide you with the best execution possible.

 

Handling orders on a Not Held basis also means that SMBC Nikko may on occasion simultaneously conduct same-side principal trading in the same or related products while your order is outstanding. Principal trading while in possession of a customer order is allowed and may occur with knowledge of the customer order, as pre-positioning and anticipatory hedging for the overall benefit of the customer order.

 

Guaranteed Benchmark Orders 

We may receive orders from you and/or other clients for equity securities where we agree to execute in a principal capacity all or a portion of the order at a guaranteed price. That price may be based on a benchmark such as VWAP or the official closing price for the security. We make every reasonable effort to facilitate your guaranteed price orders but may not, under certain circumstances, execute such orders fully or at all (e.g., a primary exchange fails to publish a closing price, the inclusion of the security on our restricted list, a trading halt (regulatory or otherwise), or another regulatory restriction. In order to minimize or offset the risk of such guaranteed price transactions, we may engage in hedging or other positioning activity prior to executing your order, including but not limited to buying or selling the security(ies) that is/are the subject of the order or buying or selling an option or a future on the underlying security or basket of securities. While it is possible that such risk mitigating activities or other client activities could impact the benchmark price or the market for the security(ies) that is/are the subject of the order and, consequently, your costs or proceeds on the transaction, we will make every reasonable effort to minimize such impact. Any profit or loss from our risk mitigating activities will accrue to SMBC Nikko.  

 

Regulation SHO Fail-to-Deliver Buy-In Requirement 

Customers are advised to make every effort to settle their transactions timely.  

 

In the event that you sell equity securities “short” through SMBC Nikko and the securities are not delivered to SMBC Nikko by the settlement date (T+2), borrowed securities must be received or the short position must be bought-in by no later than the opening of trading on the morning after settlement date (T+3). Customers who fail to timely deliver securities sold short will be required to pay for purchased securities. Customers who are unable to resolve failed delivery of securities to satisfy a short sale position may be prohibited from effecting further short sales in the security.

 

In the event that you sell equity securities ("long") through SMBC Nikko and the securities are not delivered to SMBC Nikko by the settlement date (T+2), delivery must be made no later than before the opening of trading on T+5.   

 

SMBC Nikko may impose other conditions or limitations on trading should the client exhibit a pattern of fails.

 

Trading Indications of Interest and Trade Advertising 

As used in this context, an IOI is an expression of trading interest that contains one or more (but not all) of the following trade elements: security name, size, side, capacity, and price. The use of an IOI is intended to solicit contra-side interest. We may submit an IOI to another market participant or trading venue. IOIs may be disseminated over electronic trading systems or through direct connections to clients' order management systems. When submitting IOIs, we will adhere to service providers' guidelines and guidance issued by regulators, including whether we designate an IOI as “natural”, (a client order or principal order effected to facilitate a customer order). We use certain service providers (e.g., Bloomberg) to advertise trade executions. You may opt out of advertising your executions and/or submitting IOIs by contacting your SMBC Nikko sales representative.

 

Large Trader Identification - SEC Rule 13h-1 

SEC Rule 13h-1 defines certain investors ("Large Traders") that in the aggregate effect transactions in NMS securities that are equal to or greater than: 

  • During a calendar day, either two million shares or shares with a fair market value of $20 million; or
  • During a calendar month, either twenty million shares or shares with a fair market value of $200 million. 

Customers who are registered as Large Traders are required to notify SMBC Nikko and provide their Large Trader Identification Number (“LTID”).   SMBC Nikko monitors its customers for compliance with SEC Rule 13h-1’s large trader registration requirement. SMBC Nikko keeps records of the activity of all of its customers and is obligated to report large trader transaction information to the SEC upon request. SMBC Nikko will notify customers who have not provided it an LTID if the customers’ activity triggers the large trader thresholds at SMBC Nikko and of their obligations and the self-identification requirements under Rule 13h-1.

 

Rule 15c3-5 and Market Access 

SEC Rule 15c3-5 requires broker-dealers that access or provide access to exchanges or alternative trading systems to establish, document and maintain a system of risk management controls that are reasonably designed to manage the financial, regulatory and other risks in connection with market access. SMBC Nikko has in place controls that will reject orders that exceed pre-determined risk parameters.

 

U.S. Treasury Securities Fails Charge 

SMBC Nikko follows the U.S. Treasury Securities Fails Charge Practice published by the Treasury Market Practices Group (“TMPG”) and the Securities Industry Financial Markets Association (“SIFMA”). Accordingly, any failure by you to deliver Treasury Securities by settlement date in transactions we have with you is subject to a Fails Charge as published by TMPG and SIFMA.

 

FINRA Rule 2265 - Extended Hours Trading Risk Disclosure 

While extended hours trading can provide customers with greater opportunities to trade securities and manage their portfolios, it also involves material risks that are specific to extended hours trading.

 

Extended Hours Trading Risk Disclosure Statement

  • You should consider the following points before engaging in extended hours trading. "Extended hours trading" means trading outside of "regular trading hours." "Regular trading hours" generally means the time between 9:30 a.m. and 4:00 p.m. Eastern Standard Time.
  • Risk of Lower Liquidity. Liquidity refers to the ability of market participants to buy and sell securities. Generally, the more orders that are available in a market, the greater the liquidity. Liquidity is important because with greater liquidity it is easier for investors to buy or sell securities, and as a result, investors are more likely to pay or receive a competitive price for securities purchased or sold. There may be lower liquidity in extended hours trading as compared to regular trading hours. As a result, your order may only be partially executed, or not at all.
  • Risk of Higher Volatility. Volatility refers to the changes in price that securities undergo when trading. Generally, the higher the volatility of a security, the greater its price swings. There may be greater volatility in extended hours trading than in regular trading hours. As a result, your order may only be partially executed, or not at all, or you may receive an inferior price when engaging in extended hours trading than you would during regular trading hours.
  • Risk of Changing Prices. The prices of securities traded in extended hours trading may not reflect the prices either at the end of regular trading hours, or upon the opening the next morning. As a result, you may receive an inferior price when engaging in extended hours trading than you would during regular trading hours.
  • Risk of Unlinked Markets. Depending on the extended hours trading system or the time of day, the prices displayed on a particular extended hours trading system may not reflect the prices in other concurrently operating extended hours trading systems dealing in the same securities. Accordingly, you may receive an inferior price in one extended hours trading system than you would in another extended hours trading system.
  • Risk of News Announcements. Normally, issuers make news announcements that may affect the price of their securities after regular trading hours. Similarly, important financial information is frequently announced outside of regular trading hours. In extended hours trading, these announcements may occur during trading, and if combined with lower liquidity and higher volatility, may cause an exaggerated and unsustainable effect on the price of a security.
  • Risk of Wider Spreads. The spread refers to the difference in price between what you can buy a security for and what you can sell it for. Lower liquidity and higher volatility in extended hours trading may result in wider than normal spreads for a particular security.

 

MSRB Rule G-10 – Investor Education and Protection

SMBC Nikko is subject to the regulations and rules on municipal securities activities established by the SEC and MSRB. Note that in addition to having educational material about the municipal securities market, the MSRB website has an investor brochure that describes the protections that may be provided by the MSRB rules and how to file a complaint against SMBC Nikko or a SMBC Nikko representative with the FINRA Investor Complaint Center. To obtain a copy of MSRB Rules, contact the MSRB at (202)-838-1500 or visit MSRB website.

 

Municipal Entities and Obligated Persons Disclaimer

If you are a municipal entity or obligated person, (a) SMBC Nikko is not recommending to you any action; (b) SMBC Nikko is not acting as an advisor to you and does not owe a fiduciary duty pursuant to Section 15B of the Securities Exchange Act to you with respect to the information and material contained in this communication; (c) SMBC Nikko is acting for its own interests; and (d) you should discuss any information and material contained in this communication with any and all internal or external advisors and experts that you deem appropriate before acting on this information or material.

 

Telephone Recording Disclosure

SMBC Nikko records certain phone lines of our sales and trading personnel. Please note that these recordings may be made without the use of a spoken warning, tone, or similar notification. Please be advised that participation in such calls by your employees or representatives constitutes consent to such recording where consent is required under applicable law.

 

Privacy Disclosure

SMBC Nikko Securities America, Inc. aligns its information privacy policy with the SMBC Americas Division policy. See the disclosures here

 

Disclosure to Canadian Clients Under National Instrument 31-103

As a client of SMBC Nikko, resident in a jurisdiction of Canada, you are advised that we operate as a dealer or adviser in your jurisdiction under an exemption from the dealer and adviser registration requirements contained in National Instrument 31- 103 - Registration Requirements and Exemptions (NI 31-103) and, as such, we are not required to be and are not a registered dealer or adviser in your jurisdiction.

As required, in order to operate under the international dealer and international adviser exemptions, we wish to notify you of the following:

  • Our head office is located at 277 Park Avenue, Fifth Floor, New York, New York, 10172; and
  • You may face difficulty in enforcing legal rights you may have against us because we are resident outside of Canada and all or substantially all of our assets are situated outside of Canada.

Purchaser Representations

As a condition of providing our services to you, you are deemed to represent to us that you are, (i) purchasing as principal; (ii) an accredited investor, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and (iii) a permitted client, as defined in NI 31-103. Any resale of the securities you acquire in this offering must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

 

Statutory Rights

Securities legislation in certain provinces or territories of Canada may provide you with remedies for rescission or damages if the offering document used in connection with an offering (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by you within the time limit prescribed by the securities legislation of your province or territory. You should refer to any applicable provisions of the securities legislation of your province or territory for particulars of these rights or consult with a legal advisor.

 

Underwriting Conflicts

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33- 105), we are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with an offering.

 

Contact Information

Please contact Legal Department if you have any questions.

 

Agent for Service

We have appointed Agents for Service in Canada as indicated in the table below:


For more information or if you have any questions, contact us at:

SMBC Nikko Securities America, Inc.

277 Park Avenue, 5th Floor New York, NY 10172

Attention: Compliance Department

 

Transparancy & Reporting

Pursuant to the Financial Instruments and Exchange Law of Japan, effective as of March 1, 2016, a person who has submitted a notification regarding Specially Permitted Businesses for Qualified Institutional Investors, etc. is required to make available to the public certain information. Information on the following entities can be obtained upon request:

 

If you would like to obtain information, please send an email to WaterLily@smbcgroup.com.

 

Disclosure of Terms of Dealing for Foreign Exchange Transactions | Add to Product

Disclosure of Terms of Dealing for Foreign Exchange Transactions 

Please contact your relationship manager if you have any questions.

6. SMBC Capital Markets, Inc.

SMBC Capital Markets, Inc. was provisionally registered as a swap dealer with the Commodity Futures Trading Commission on December 31, 2012. We are a member of the National Futures Association. We are a United States subsidiary of Sumitomo Mitsui Banking Corporation (Japan).

 

None of the information and opinions contained herein is intended to form the basis for any investment or trading decision, and no specific recommendations are intended. The products and transactions described herein are not suitable for every investor. Such products and transactions are only suitable for sophisticated and knowledgeable professional users of financial instruments and are structured and customized to the needs and objectives of each investor. The information and opinions contained herein have been prepared for informational purposes only and do not constitute an offer to sell, or solicitation of an offer to purchase, any security, any commodity futures contract or commodity-related product, any derivative product, or any trading strategy or service described herein. Opinions contained herein are subject to change without notice.

 

Investors must undertake independent consultation, evaluation, and review with their own tax, legal, accounting, credit, trading, and regulatory experts and advisers as relates to their asset, liability, and risk management objectives and risk tolerance. Investors must make investment, hedging, and trading decisions based upon advice from their advisers as deemed necessary and their own evaluation, judgment, and conclusions as to the potential economic benefits and risks, the appropriateness in light of their financial circumstances, business affairs, and risk management capabilities, and the conformity to their policies and objectives, and not upon any view expressed by SMBC Capital Markets, Inc. or any affiliate thereof. SMBC Capital Markets, Inc. and its affiliates are not acting as fiduciaries or financial or investment advisers to investors.

 

SMBC Capital Markets, Inc. and its affiliates make no guarantee, assurance, or representation whatsoever as to the expected or projected success, profitability, return, savings, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of any security, any commodity futures contract or commodity-related product, any derivative product, or any trading strategy or service described herein. SMBC Capital Markets, Inc. and its affiliates may own securities, commodity futures contracts or commodity-related products, or derivative products, or be party to other contractual arrangements, that may increase in value as a result of products and transactions described herein.

 

SMBC Capital Markets, Inc., its affiliates and personnel also may (i) perform services for or solicit business from the issuers of securities, commodity futures contracts, commodity-related products, or derivative products from time to time described herein; (ii) have long or short positions in, buy and sell, and otherwise invest in such securities, contracts and products; and (iii) act upon and use the information and opinions set forth herein, to the extent otherwise permitted by applicable law, before such information and opinions are published herein.

 

Representative terms and elements of pricing and structuring of products and transactions described herein are for informational purposes only and have been prepared from sources believed to be reliable. Neither SMBC Capital Markets, Inc. nor any of its affiliates accepts liability for any loss arising from the use of or makes any representation as to the accuracy or completeness of the terms and conditions of products and transactions described herein. Finalized terms and conditions are subject to further discussion and negotiation and will be determined in part on the basis of pricing and valuation models, data, and assumptions that are proprietary to SMBC Capital Markets, Inc. and its affiliates. No assurance can be given that a product or transaction can, in fact, be executed on any representative terms indicated herein.

 

Certain of the products and transactions described herein may be offered by brokers and dealers affiliated with SMBC Capital Markets, Inc., including SMBC Nikko Securities America, Inc., which effects securities transactions with US persons.

 

The products and services provided by SMBC Nikko Securities America, Inc. and other members of the Sumitomo Mitsui Banking Corporation Group are available to investors subject to applicable limitations in the various jurisdictions in which those companies are authorized to conduct business.

 

Certain assumptions may have been made in the analysis contained in the information and opinions described herein which have resulted in the returns detailed herein. No representation is made that any returns indicated will be achieved. Changes to the assumptions may have a material impact on any returns detailed. Past performance is not necessarily indicative of future returns.

 

SMBC Nikko Capital Markets Limited and SMBC Derivative Products Limited are authorized and regulated by the Financial Conduct Authority (FCA). The investments discussed or recommended in the information may be unsuitable for investors depending on their specific investment objectives and financial position. This information is not intended for, and the services outlined here are not available to, persons who would be classified as retail customers by the FCA Conduct of Business Sourcebook. The price or value to which these materials relate, either directly or indirectly, may fall or rise against the interest of investors. Where an investment is denominated in a particular currency, changes in rates of exchange may have an adverse effect on the value, or price of, or the income derived from the investments. Income from investments may fluctuate.

 

Additional information is available upon request.