Financial Services Agency

August 3, 2012 Financial Services Agency NOMURA Administrative actions against joint-stock companies 1. NOMURA As a result of an inspection by the Securities and Exchange Surveillance Commission of the stock company (hereinafter referred to as “the Company”), the following facts of legal violations were recognized, and on July 31, 2012, a recommendation was issued to seek administrative action. was broken. ○ At our company, we are not taking the necessary and appropriate measures to prevent unfair trading in the management of corporate information related to the public offering of new shares, as described below. Acts of soliciting customers by providing corporate-related information regarding sales and other transactions were recognized. (1) Business operation status where necessary and appropriate measures are not taken to prevent unfair trading regarding the management of corporate information related to the public offering The internal control department was overconfident that the development and operation of the corporate information management system was appropriate and that no problems could arise. It was recognized that the check-and-balance function was not sufficiently exercised, such as not sufficiently grasping the actual situation and confirming compliance with laws and regulations. In addition, the executives and employees who are responsible for establishing and operating a legal compliance system and a proper management system for corporate information did not have the recognition that should be required in light of their responsibilities, and responded inadequately from beginning to end. It did not fulfill the role required of a financial instruments business operator and market gatekeeper to identify and analyze the problem at an early stage and take appropriate measures in light of the intent and purpose of the Financial Instruments and Exchange Act. Institution for transmitting information beyond the Chinese wall Investor sales department staff thoroughly implemented a profit-first sales system within the department, resulting in a lack of awareness of legal compliance within the department and a public offering of capital. The management of corporate related information related to this was incomplete. Staff members of the institutional investor sales department have a simple idea that it is okay to guess the name of a company without asking for the name of the company. It has become the norm to actively acquire corporate information related to a project or information that can be used to infer the name of a brand and use it in sales activities. C. Active acquisition of information from the sales side to in-house analysts Institutional Investors Staff in charge of hedge funds in the sales department persistently contacted in-house analysts to obtain information related to public offerings that could be known, and made public offerings. We actively obtained corporate information related to capital increase projects. In addition, some in-house analysts simply responded to the status of checks by the trading management department regarding issues scheduled for a public offering. d) Information sharing within the institutional investor sales department Within the institutional investor sales department, regarding corporate information related to public offerings acquired by staff, when mentioning the name of the company, add remarks such as "rumored". It was decided that there would be no problem if we did so, and information related to corporations related to public offerings was shared within the department. (2) Acts of soliciting customers by providing corporate-related information for the sale and purchase of securities and other transactions, etc., and other inappropriate business operations (a) Director a, who constantly obtained corporate-related information from the department holding corporate-related information, disclosed corporate-related information related to the public offering of Company A shares (hereinafter referred to as "Company A information"). ), and together with his subordinate, Section Manager b, solicited customers to buy and sell shares of Company A and apply for public offering of new shares by providing information on Company A to customers before the information on Company A was made public. Is recognized. In addition, it is recognized that Manager a solicited another customer to apply for the acquisition of new publicly offered shares of Company A by providing information on Company A to other customers before the information on Company A was made public. (b) Member c, who has obtained corporate information related to the public offering of Company B shares (hereinafter referred to as "Company B information"), will provide the customer with Company B information before the Company B information is made public. It is recognized that he solicited an application for the acquisition of new publicly offered shares of Company B's shares by providing them. (c) After collecting information from in-house analysts, etc., and obtaining corporate information related to the public offering of Company C shares (hereinafter referred to as "Company C information"), the d member will inform the customer that Company C information is It is recognized that he solicited trading of Company C shares by providing Company C information before it was made public. B.Other inappropriate business operations (a) There were multiple cases where there was a high possibility that customers were solicited by providing corporate information related to the public offering of new capital. (b) Multiple cases were identified in which there was a possibility that corporate information related to public offerings was provided to customers. In terms of the fact that the actual conditions of (1) and (2) above were not understood, effective management and supervision of the management system of corporate information by the Company's management were not sufficiently carried out, and the business management system was insufficient. recognized that it was nothing. In addition, the management system of corporate information related to public offerings such as (1) and (2) B above at our company does not take necessary and appropriate measures to prevent unfair trading. and falls under Article 123, Paragraph 1, Item 5 of the Cabinet Office Ordinance on Financial Instruments Business, etc. based on Article 40, Item 2 of the Financial Instruments and Exchange Act. Furthermore, the act of soliciting customers by providing corporate-related information for the sale and purchase of securities and other transactions, as in (2) a above, is prohibited under circumstances where deficiencies are recognized in the management system of corporate-related information at the Company. It is recognized as a corporate act and falls under Article 117, Paragraph 1, Item 14 of the Cabinet Office Ordinance on Financial Instruments Business, etc. based on Article 38, Item 7 of the Financial Instruments and Exchange Act. recognized as a thing. 2. Based on the above, the following administrative actions were taken against our company today. ○ Business improvement order based on Article 51 of the Financial Instruments and Exchange Act (1) Ensure implementation and establishment of recurrence prevention measures in the internal investigation report. (2) Periodically report the implementation status of recurrence prevention measures. (3) Regularly verify the effectiveness of recurrence prevention measures and report the verification results. (Note) If any items are found to be inadequate as a result of verification, the reason and improvement policy shall be reported. (4) Regarding (1) to (3) above, the deadline for the first report shall be August 10 (Friday). Thereafter, the deadline shall be within 15 days after the end of the quarter. Regardless of the deadline above, reports should be submitted as needed.