CONFLICTS OF
INTEREST POLICY
July 26, 2023

Nomura Fiduciary Research & Consulting Co., Ltd.
Index Services Department0Purpose
Nomura Fiduciary Research & Consulting Co., Ltd. (NFRC) is a wholly owned
subsidiary of Nomura Holdings, Inc. (NHI) and one of an entity of Nomura Group.
NFRC offers fund analyses and assessments, investment advisory services, andasset management consulting services for individuals and for pension funds andother institutional investors and has started Index Business by taking over Nomura
Securities Co., Ltd. (NSC)'s Index Operations Dept. on February 1, 2023. NFRC iscommitted to fulfilling its fiduciary duty as a player in the investment chain byproviding services described above based on the basic philosophy that "We always
place our clients at the heart of everything we do." To this end, NFRC believes thatall directors, auditors, and employees must, with the highest degree of ethics andintegrity, act in the best interests of its clients.

NFRC provides various financial benchmarks, including the NOMURA-BPI family,
bond performance indices representative of the Japanese fixed income market, andthe Russell/Nomura Japan Equity Index series, an equity index family which is codeveloped and jointly owned with the Frank Russell Company (currently, FTSERussell). With regards to the NFRC’s indices, NFRC acts as a licensor andadministrator and the Index Services Department (ISD) is responsible for practicalactivities relating to the index administration.

Since it is engaged in a range of investment solution services as outlined above,NFRC, as an index provider, believes that it is crucial to identify, disclose, avoid ormitigate, and manage material conflicts of interest (CoI). NFRC identifies anddiscloses existing or potential CoI that could impair the independence and objectivityof ISD’s index determination or interfere with responsibilities to clients in the Conflictsof Interest Management Policy. It is available on NFRC’s web site and regularly
reviewed by the compliance department and updated where necessary. Furthermore,
NFRC has policies and procedures to avoid arbitrariness and/or sole discretion in
the index determination process and day-to-day operations. NFRC ensures that CoI
does not influence the indices determination by establishing the control frameworkover the CoI management.

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Transparent and Objective Rule-based Methodology
The NFRC’s indices are determined and calculated based on transparent, logical,objective, measurable, and quantitative rules which are available to clients and inthat appropriate oversight and approval processes are in place with regard to index
constituent selections (reconstitutions and rebalancing) and index maintenance(reflections of corporate action, free-float weighting adjustments, etc.). Theseprocesses help to avoid arbitrariness and/or sole discretion in the index
determination process at the earliest stage and hence mitigate risks related to CoI inday-to-day operations.

Control Framework
NFRC ensures that CoI does not influence the indices determination by establishing
the following control framework over the CoI management.
Specifically, NFRC:-works under a “Conflicts of Interest Policy”, which is designed to help prevent
existing or potential CoI from inappropriately influencing index determinations.

-complies with Nomura Group’s “Code of Conduct”, which all NFRC employees
are required to comply with. To enhance the awareness of compliance including“Code of Conduct”, all NFRC employees are required to take compliance training.

-uses a compliance hotline managed by Nomura Group for the reporting ofviolations of the “Code of Conduct” or suspicious conducts that may be violatinglaws and regulations, as a whistle-blowing system. Matters reported via thehotline are reported to the Internal Controls Committee of Nomura Group.

-sets forth the internal rules concerning personal investment by ISD’s employees
to prevent inappropriate conduct.

-stipulates in the compensation policies that compensations for employees
engaged in the index administration are not linked to the values of NFRC's Indices.

-has a robust index administration

governance structure, witheffective

supervisory and authorization processes over index determination processes2including methodology changes and index cessations (Refer to the “Index
Governance Framework”).
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stipulates in the internal rules on information security that information should not
be provided to those who are not permitted and has established a firewall overinformation flow between ISD and other entities within Nomura Group as well asother departments in NFRC in accordance with the internal rules on information
security.

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physically segregates the area for the team that takes care of the index
administration from other departments and restricts access to the area.

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restricts the staff who are engaged in the index development accessing theinformation related to the index determination.

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uses public information or information provided by third party vendors to calculate
the NFRC’s indices.

IndependenceWith the aim of ensuring the effectiveness of the above mentioned control frameworkin the face of potential CoI, the index administration is conducted solely by ISD, which
is fully independent from other departments in NFRC and other entities within
Nomura Group. With regards to the index administration, particularly the validity ofindex determinations and the methodologies used to make index determinations, ISD
acts in accordance with the governance structure in NFRC (Refer to “Index
Governance Framework”).

Provision of services to other entities within Nomura GroupIn terms of the provision of services, a license agreement is required for the use ofindex. As a policy, the standard agreement is used for all clients. This policy applies
to all the legal entities including the entities within Nomura Group. They shall be
subject to the same terms and conditions with Non-Nomura Group users.

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Price for the index determination
NFRC’s equity indices (including the Russell/Nomura Japan Equity Index family) arecalculated based on contract price in highly liquid exchange markets.
NFRC’s fixed income indices are calculated based on JS Price. JS Price generally
covers the index constituents of NFRC’s fixed income indices, however, when it is
not available, Nomura Price is an alternative source.
JS Price represents Japanese bond fair values determined based on the price fromNSC, and is established and managed by NSC and three third parties, Nikkei Inc.,
Nikkei Financial Technology Research Institute, Inc., and NRI. JS Price is validated
under the methodology and process established by the four parties, provided to
public users, and widely used as fair value of bonds. Nomura Price is provided by
NSC as an end-of-day bond price.

Separation and Independence of the function
In order to avoid CoI, the development and administration of NFRC’s indices arefunctionally separated and mutually independent. To ensure these nature, the roleand power of ISD staff are defined and restricted within their function. Staff who areengaged in the development may not be involved in the index determination process
and may not submit the application for the approval of index rules. Furthermore, theinformation and data on the index determination process are managed only by thestaff who are authorized by Head of ISD.

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Revision history

Revision dateDetails

March 27, 2019

First edition

March 31, 2020

Partial revision of “Control Framework”
Partial revision of “Independence” and addition of “Price forthe index determination”
Added “Provision of services to other entities within
Nomura Group” and “Separation and Independence of thefunction”
Changed the company name from “Financial Technology
Research Institute Inc.,” to “Nikkei Financial Technology
Research Institute, Inc.,”

March 17, 2022

Partial revision of “Control Framework”.

February 1, 2023

Revisions to overall text due to the business succession.

July 26, 2023

Partial revision of “Purpose”.

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