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Overview of Our Trust and Banking Services and Business A Transaction Structure That Responds to Customers’ Global Business Markets and Global Business Unit Enhancing services that leverage our overseas network to support customers’ global business Mitsubishi UFJ Trust and Banking’s market services cover investment in government bonds, stocks, and other securities in the world’s major financial markets, and balance sheet management through necessary procurement of funds in yen or foreign currencies. Our foreign currency exchange services provide customers with exchange transaction services 24 hours a day using our locations in Tokyo and overseas. In ever-fluctuating foreign exchange markets, we provide support for reducing the exchange risk of corporations, institutional investors, and other customers in Japan and overseas. The globalization of Japanese corporations is accelerating. The areas where they are advancing and the types of deals they are making are diversifying and becoming more complex, and they require a high level of service in the area of foreign exchange transactions. Further, owing to the worldwide drop in interest rates, domestic and international investors are seeking high returns and turning to new investment products, and we also have to satisfy the needs of those investors. We will continue to enhance our lineup of new products and services to meet such customer needs. Serving as Infrastructure for Customers Expanding Their Business Globally Iwao Nagashima Chief Executive, Markets and Global Business Unit The environment surrounding economies at home and abroad is constantly changing and is increasingly unclear, as evidenced by the slowdown in emerging countries’ economies, the rise in geopolitical risk*, and the adoption of a negative interest rate policy by the Bank of Japan. The Markets and Global Business Unit supports sound bank operation by MUTB through a variety of marketable transactions, including bonds, foreign exchange, and derivatives (financial derivative instruments). At the same time, the unit addresses the foreign exchange transaction needs of customers expanding their business globally, with attentive service provided through a network that includes our overseas branches. As the cross-border deals of corporations diversify, providing customers with a variety of foreign currency trading opportunities has become an important business. We are building a structure enabling transactions with customers 24 hours a day, in cooperation with our branches in Tokyo, London, and New York, for scenarios such as a New York branch handling service for a customer who wishes to conduct transactions at night in Tokyo. The value of inter-company trade has reached a huge scale, so that a move of JPY 0.01 in exchange rates has a large impact on transaction amounts and can cause clients to make unexpected losses. We strive to provide improved service to customers expanding their business globally, by, for example, providing them with market information so they can make the right trade at the right time. 24-hour trading structure New York market 21:00 6:00 Tokyo Time London market Tokyo market 15:30 Attentive Service for Global Asset Management While quantitative easing continues worldwide, a variety of new financial products are created each day to satisfy investors’ needs, and many are managed in the form of investment trusts or funds. We focus on foreign exchange* transactions in funds, aggressively engaging in sales through the deployment of full-time customer dealers and the use of online foreign exchange transaction systems. As cross-border transactions expand in funds managed by domestic and overseas investment firms, the foreign exchange transaction needs of these funds are diversifying and becoming more complex. We are actively undertaking the strengthening of businesses ancillary to such funds. We quickly assess increasingly diverse and complex needs, and, in addition to the development of foreign exchange transaction schemes matched to fund operation, provide high value-added services such as the provision of timely market information. Moreover, as customers wish to conduct transactions at different times depending on their locations, we offer global and seamless service through cooperation with our overseas branches. Fund scheme example Fund Mandates Administrator, Trustee Management Instructions Investment Manager Entrust Forex Orders Funds Settlement Custodian (Custody Bank) MUTB (Forex Bank) Securities Settlement Securities Orders Brokers * Foreign exchange generated by management of foreign currencies in trust assets * The risk of an increasingly unclear outlook for specific local economies or the global economy overall due to heightened political or military troubles in a region. 21 Mitsubishi UFJ Trust and Banking Report 2016 Mitsubishi UFJ Trust and Banking Report 2016 22