Message from Senior Management
Ever since becoming a wholly-owned subsidiary of Sumitomo Mitsui Banking Corporation on October 1, 2009, we have focused on the continuous expansion of our business in the retail divisions and the creation of new business in the wholesale divisions as the main securities company of Sumitomo Mitsui Financial Group.
We have enhanced our services to individual clients, while steadily establishing a framework that enables us to respond to various needs of corporate clients. In overseas markets, following the start of our securities business in London, we also expanded such businesses in New York, Hong Kong, and Shanghai. We newly established the Research Head Office, which directly relates to corporate client business, and have also strengthened our trading capabilities of equities and bonds. We will continue to enhance our business platform so that we can provide more value added solutions to meet the financial needs of various clients precisely and promptly.
As of April 1, 2011, Nikko Cordial Securities Inc. renamed itself as SMBC Nikko Securities Inc. The new company name represents our strong determination to provide high quality services to the clients of both companies as a member of Sumitomo Mitsui Financial Group by exercising professional skills and knowledge in cooperation with Sumitomo Mitsui Banking Corporation (SMBC). Keeping the spirit of a “cordial” attitude, which Nikko Securities had used in its company name for 10 years, as the very fiber of each of our employees, we will strive to offer our clients the highest level of satisfaction and security to promote the trust that we have earned from so many people for over 90 years.
All of our directors and employees will continue to give first priority to our clients and make an all-out effort to become the No.1 comprehensive securities company in Japan.
We would very much appreciate your understanding and continued support over the years to come.
Chairman President & CEO Shigenobu Aikyo Eiji Watanabe
2 3 Management Philosophy A Member of Sumitomo Mitsui Financial Group
In June 2009, the former Nikko Cordial Securities Inc. set up Nikko Cordial Securities De-merger Preparatory Company Ltd., and on October 1, 2009, succeeded all of the operations (excluding Management Philosophy selected assets and liabilities) of the former Nikko Cordial Securities Inc. and certain businesses, including the domestic debt and equity underwriting businesses, of Nikko Citigroup Limited (current Citigroup Global Markets Japan Inc.) by means of an absorption-type corporate demerger. On October 1, 2009, after succeeding such businesses, Nikko Cordial Securities De-merger Preparatory To provide higher value, based on a customer-first principle. Company Ltd. renamed itself as Nikko Cordial Securities Inc. to start as a new securities and investment banking firm, with retail and wholesale business arms. To seek to be a company that grows together with our customers, As of October 1, 2009, Sumitomo Mitsui Banking Corporation acquired all the shares in the and inspires their supreme trust. renamed Nikko Cordial Securities Inc., and through this operation, the renamed Nikko Cordial To fulfill a role as a sound financial intermediary in order to contribute Securities Inc. became a member of Sumitomo Mitsui Financial Group. to the development of both capital markets and our society. As of April 1, 2011, Nikko Cordial Securities Inc. renamed itself as SMBC Nikko Securities Inc. To create a work environment in which each employee demonstrates individuality under a sense of unity, while respecting diversity.
History
Our company has served clients for more than 90 years since it started business as Kawashimaya Shoten in July 1918. It made a fresh start in October 2009 as a member of Sumitomo Mitsui Financial Group. As one of the largest full-line financial groups in Japan, we will provide high-quality products and services to our clients.
1918 July Kawashimaya Shoten founded 1920 April Reorganized as Kawashimaya Shoten Co., Ltd. June The former Nikko Securities Co., Ltd. established Shareholding Ratio 100% 1943 September The former Kawashimaya Securities and Kawashimaya Shoten Co., Ltd. merged with and name changed to Kawashimaya Securities 1944 April The Nikko Securities Co., Ltd. established 1948 November Registered as a securities business under the Securities Exchange Law 1949 April Became official member of Tokyo Stock Exchange, Osaka Securities Exchange and Nagoya Stock Exchange 1951 June Completed registration as a securities management company under the Securities Investment Trust Law 1961 October The Company listed its shares on the second sections of the Tokyo Stock Exchange, Osaka Securities Exchange and Nagoya Stock Exchange 1970 February The Company listed its shares on the first sections of the Tokyo Stock Exchange, Osaka Securities Exchange, and Nagoya Stock Exchange (delisted in January 2008 when the Company became a wholly-owned subsidiary of Citigroup) Shareholding Ratio 100% 1999 March Nikko Salomon Smith Barney Limited (later to become Nikko Citigroup Limited), an investment banking joint venture with Citigroup, started operations 2001 March Nikko Securities De-merger Preparatory Company established October Nikko Securities De-merger Preparatory Company took over the entire securities business and other operations from The Nikko Securities Co., Ltd. changed its name to Nikko Cordial Securities Inc. The Nikko Securities Co., Ltd. was renamed Nikko Cordial Corporation as a holding company. 2007 May Became Citigroup’s subsidiary through the public offering of shares of Nikko Cordial Corporation (later becoming a wholly-owned subsidiary through a triangular share exchange) September Registered as first-class financial instrument dealer, second-class financial instrument dealer, and investment advisor/agent under the newly enforced Financial Instruments & Exchange Law. 2008 January Registered as an investment manager under the Financial Instruments & Exchange Law 2009 June Nikko Cordial Securities De-merger Preparatory Company Ltd. established October Nikko Cordial Securities De-merger Preparatory Company Ltd. took over all of the operations of the former Nikko Cordial Securities Inc. and certain businesses of Nikko Citigroup Limited (current Citigroup Global Markets Japan Inc.) and was renamed Nikko Cordial Securities Inc. Became a member of Sumitomo Mitsui Financial Group upon the transfer of shares to Sumitomo Mitsui Banking Corporation 2011 April Nikko Cordial Securities Inc. changed its name to SMBC Nikko Securities Inc.
4 5 Over more than 90 years since its foundation in July 1918, SMBC Nikko Securities has developed solid relationships built on trust with individuals and corporate clients. With the move to become a member of Sumitomo Mitsui Financial Group, the Company, which holds know-how acquired over many years and a solid client base, can collaborate with Sumitomo Mitsui Banking Corporation, which boasts a huge business network and high credibility. In both the retail and wholesale business areas, we will seek integration of banking and securities businesses and provide clients with advanced financial services based on our collective capabilities. Under a business alliance agreement with Citigroup, we will continue to utilize their global business network and other resources.
SMBC Nikko Securities will provide clients with integrated financial services and high value-added solutions that meet the many and varied needs of our clients.
6 7 Summary of Business
We provide individual clients with high-quality consulting services to meet their diversified asset management needs at 109 branches nationwide. We offer two types of courses. Under the General Course, clients can trade financial products by receiving advice and investment information from a person in a charge position at a branch. For the Direct Course, clients can trade equities on a discounted brokerage commission through our on-line trade system or call center. We provide a wide variety of financial products and services to precisely meet clients’ diversified needs through the following channels: branches, the call center, and the on-line trade system. For Corporate clients, we have set up divisions according to business type in order to meet various clients’ needs in each business category. We provide higher value to corporate clients from unlisted companies to corporations and financial institutions and public-service corporations to In the investment banking business, our highly professional staff offer corporate local public authorities and government organizations through various clients solutions on M&A and fundraising to support their corporate strategies in services in cooperation with specialized sections. the global age. In the financial product business, we offer trading capabilities and financial products to meet the various needs of our clients, including institutional investors. Our research service is a platform on which we offer leading information based on our original research. In August 2010, we newly established Equity Research SMBC Nikko Securities will provide clients Division to analyze earnings and stock price trends of individual companies and with integrated financial services and high value-added solutions business sectors and provide investment information. In our overseas markets, SMBC Nikko Capital Markets Limited and SMBC that meet the many and varied needs of our clients. Nikko Securities America, Inc., subsidiaries of SMBC in the United Kingdom and the United States respectively, provide securities business services, including underwriting activities (SMBC Nikko Capital Markets Limited), arrangement of Samurai bonds, M&A advisory and Japanese stock broking, in collaboration Over more than 90 years since its foundation in July 1918, SMBC Nikko Securities has developed solid with us. In addition, SMBC Nikko Securities (Hong Kong) Limited provides relationships built on trust with individuals and corporate clients. Japanese stock broking and M&A advisory services, and SMBC Nikko Investment With the move to become a member of Sumitomo Mitsui Financial Group, the Company, which Consulting (Shanghai) Limited offers M&A advisory related services. These overseas holds know-how acquired over many years and a solid client base, can collaborate with Sumitomo Mitsui arms will continue to offer high quality financial services to their clients on a global Banking Corporation, which boasts a huge business network and high credibility. basis. In both the retail and wholesale business areas, we will seek integration of banking and securities To meet the diversified needs of our clients, we strive to provide high value- businesses and provide clients with advanced financial services based on our collective capabilities. Under added financial products and services and solutions and continue to be a strategic a business alliance agreement with Citigroup, we will continue to utilize their global business network and partner for clients. other resources.
8 9 Individual Clients
Retail Sales Network Versatile Support System to Meet the Various Needs We have established a service network for of Individual Clients domestic clients based on 109 branches nationwide. We offer clients three channels in which to To capture investment opportunities in global complete transactions. Clients can choose a economic growth for the future and realize channel that suits their needs. international diversified investment, we tout From ● Branches Japan to the World as a key philosophy and offer Our 109 branches nationwide provide various various financial products, such as equities, bonds, services that meet the needs of clients, including investment trusts, annuity and insurance products, asset management consulting services, account and a custom-made asset management service, startups, and administrative procedures. Nikko Fund Wrap/SMA. ● Call Center We aim to be the best partner for clients in At the Nikko Contact Center, our specialized staff, asset management by providing high-quality who have received high evaluations from a third- consulting services after taking into account party organization, handle orders for equity trading clients’ investment purposes and risk tolerance. and respond to inquiries from clients. The center Our branches each have a privacy-conscious facilitates clients who do not have access to space where we provide consulting services so physical branches. that clients who visit our branches can consult us ● On-line Trade on asset management with utmost confidence. We have upgraded Nikko EZ Trade so that clients can trade at their own convenience using their Financial Product Intermediary own judgment while having access to a variety Business of financial products and abundant sources of investment information. As a leader in the financial product intermediary business, we form partnerships with individuals In addition, we will improve on our system in which and companies with unique specialties to offer a person in charge and specialized sections, such clients various distribution channels for financial as Equity Advice Center and the Investment Trust products by providing infrastructures such as Assist Center, jointly support clients in accordance systems and financial product information and with their needs. This multiple support system is business support. The individuals and companies unique to SMBC Nikko Securities. we partner with share our philosophy of remaining Under the management philosophy of placing close to clients and treating clients with trust and clients first to provide them with ever higher sincerity while offering expert financial know-how. value, we continue to strive to improve the quality of customer service. We have received high Services to Clients evaluations from third-party organizations, as detailed below. From Japan to the World
SMBC Nikko Securities will provide high-quality consulting services and solutions Retail sales network Evaluations from third-party organizations (sample) 109 branches nationwide in cooperation with specialized sections to meet our clients’ needs. ・ Won the highest award in the contest of Best Contact Center of The Year 2010 ・ COPC-2000® CSP standards Obtained certification for Inbound Customer Contact Center Services (2008) Obtained certification for Outbound Customer Contact Center Services (2010) Call center Clients On-line trading ・ CRM Best Practice Award (held under the sponsorship of by CRM Association Nikko Contact Center Nikko EZ Trade Japan) Won the award for three consecutive years (from 2008 to 2010) ・ National Telephone Manners Contest (held under the sponsorship of by Japan Telecom Users Association) Support by sales divisions and branches and specialized sections Won the prize for five consecutive years (from 2006 to 2010) ・ HDI Benchmarking (held under the sponsorship of HDI-Japan) Equity Advice Center Won 3 Stars Customer Service, the highest rating, for five consecutive years Investment Trust Assist Center (from 2006 to 2010)
10 11 Owners of Companies Corporate Clients and Executives and Employees of Listed Companies
Corporations and Financial Institutions
After grasping their priorities and potential needs, Private Banking we provide total solutions to clients such as corporations and financial institutions based on our Our private banking services mainly consist of abundance of experience, market knowledge, and consulting services to clients including owners a variety of financial products and services in close of listed companies. We provide custom-made cooperation with financial product division and proposals to each client and strive to realize these investment banking division. To respond to clients’ proposals by using all available resources. We aim inquiries and requests on various matters including to be an indispensable part of clients’ business fund-raising, fund management, and employee by offering various support measures such as benefits, we will offer strategic backup services providing solutions on the preservation of client’s based on solid relationships of trust. assets, fund management, and the effective use We also offer our clients a window to cutting- of clients’ assets and proposals of specialized edge corporate management and asset management financial products. through guidance on market information and various seminars. Workplace Sales Companies Planning IPO We provide executives and employees of listed companies with proposals on wealth building in We provide client companies with all the support accordance with clients’ life plans. Our proposals they need until they go public, such as guidance include advice on financial products and services and advice at the time of initial public offering and based on clients’ risk tolerance in a market suggestions about capital policy, group strategy, environment that is changing every day. We also and information disclosure. We also offer solutions propose management of severance allowances including M&A and the likes to increase clients’ after retirement and reallocation of assets. corporate value, preserve their assets, and transfer their businesses in a stable manner.
Public-Service and Non-Taxable Corporations
We offer clients, including public-service corporations, local public authorities and government organizations, wide-ranging consulting services based on our abundant experience. Based on multi-faced approaches in cooperation with specialized sections, we provide the following solutions: providing materials that support clients’ bond investment; suggesting investment policies in view of the needs of competent authorities and clients such as nationwide public-service and non-taxable corporations. We also offer services such as portfolio analysis by using the asset management and analysis system, NBA (Nikko Bond Analysis).
12 13 As a Partner for Executing Corporate Strategy
In the investment banking business, we focus on corporate clients and offer them optimal solutions to meet their various needs and the market environments they operate in. Our staff, dominated by experts with excellent track records in M&A and fund-raising, provide services to thoroughly support corporations at home and abroad using business know-how accumulated through our long experience. As a good business partner that strongly supports corporations, we continue to provide high value-added services by making full use of an extensive network centering on Sumitomo Mitsui Financial Group.
M&A Advisory
We provide advice on M&As, an important option in the corporate strategy these days, including acquisitions, mergers, capital and business alliances, and business restructurings, to meet each client’s needs. We support all operations: proposal of an M&A, business valuation calculation, due diligence, preparation of contracts, and closing. After precisely grasping the key concerns, such as related laws and systems, industry trends, the business environment, and the global situation, we form a specialist project team that includes staff who are fully conversant with the industry and M&A advisory operations to offer the most appropriate advice to clients.
Underwriting Equities and Bonds
To respond to financing needs, which are indispensable to achieve long-term business targets, we offer various direct financing solutions, centering on public offerings, underwriting of Investment Banking various bonds, and liquidation of owned assets. We provide all types of services related to fund-raising We offer corporate clients solutions on M&A and fund-raising operations: proposal of an optimal-fund raising to support their corporate strategies in the global age. scheme, marketing management to investors, decision of optimal conditions, and documentation.
14 15 Equities
We provide various types of equity-related products and services to individual and corporate clients including institutional investors. Our trading system offers an extended range of services to respond to clients’ various needs. Regarding derivatives such as futures and options, we meet clients’ various needs by handling not only trading at the exchanges, but also OTC derivative trading. We continue to strengthen our Sales & Trading system to improve our order execution capability.
Bonds
Our comprehensive strengths—a high level of capability to structure products, offer attractive primary products, and present timely research information—enables us to provide products to an extensive sales network. We develop various types of bond trading businesses to meet clients’ diversified investment needs. We also offer financial solutions to satisfy a wide range of clients’ needs by engineering and providing various derivative products, derivative-containing products such as structured notes, and securitized products that require the latest financial engineering technique and risk management capability.
Asset Management Products
We develop and offer asset management products such as investment trusts, insurance, and fund wraps. We gather specialists in each field and aim to develop one-of-a-kind innovative products after grasping current market trends and clients’ needs. Basing on our best product policy, we offer clients new options for international diversified investment by developing a variety of products with fund Financial Products management companies and insurance companies at home and abroad. We will respond to various clients’ needs by strengthening our financial product development capabilities and our trading system. Asset management products
Investment trusts Insurance Wrap account
Globally balanced Variable annuity Custom-made Domestic equity insurance globally diversified Global equity Fixed-amount investment services, annuity insurance Domestic bond etc. Global bond Foreign-currency annuity insurance Alternative funds Business annuity insurance
16 17 Businesses Operated Jointly with Sumitomo Mitsui Banking Corporation (SMBC) We have implemented various joint operational measures with SMBC since we started operations as a member of Sumitomo Mitsui Financial Group on October 1, 2009.
Jointly Developed Investment Trusts Integration of Services The new investment trust products developed jointly Offered by SMBC Friend Securities by SMBC Nikko Securities and SMBC were launched in Collaboration with SMBC on the market. Both companies will continue to In January 2011, we will take over the services for develop and market more attractive financial retail clients currently being offered by SMBC Friend products. Securities Co., Ltd. in collaboration with SMBC. We will offer clients higher-level services by utilizing the know-how and human resources SMBC Friend Securities has cultivated through collaboration with SMBC and the strength of the brand and its capabilities to offer products and sales supports that SMBC Nikko Securities, which aims to become a global integrated securities company, has developed.
Installing SMBC’s ATMs at Commencement of Branches of SMBC Nikko Securities Joint Wealth Management We have installed ATM In July 2010, we announced that SMBC Nikko machines that accept SMBC’s Securities, SMBC, and Barclays Bank PLC had cash cards at our Main Branch, reached an agreement to commence joint operations as well as the Ikebukuro, for wealthy individuals in Japan. With effect the Yokohamaekimae, Nagoya, business model, we provide investment solution Osaka and Kobe branches, etc. through our division in charge to clients introduced We analyze the rapidly changing global economy We plan to increase the number by SMBC, utilizing the unique strengths and the Research and market trends from various perspectives and of branches with ATM machines know-how of Barclays Wealth, a leading global promptly offer the latest domestic and international by monitoring ATM usage. wealth manager part of the Barclays group. We provide high value-added information information in an easy-to-understand format. to support clients’ investment strategy. Regarding information on fixed income products, including analysis on the domestic Customer Referral Service Commencement of and international macro economy and financial We have commenced a customer referral service in Banking Agency Business markets, we provide clients with a variety of partnership SMBC. We will offer clients introduced We have received a license to trade as a banking information on bond markets and credit reports by SMBC the most appropriate products and agency business (SMBC as the bank to which we on domestic corporate bond issuers as well services to specifically meet their needs. We also belong) from the Kanto Finance Bureau. We started as Samurai bonds (overseas companies and refer our clients to SMBC when they request us to do our banking agency business from October 2010 sovereign nations). To provide clients with high- so. after concluding a business collaboration agreement quality investment opportunity, we also offer with SMBC. To meet a variety of clients’ needs, we the NBA (Nikko Bond Analysis) service, which will jointly offer clients high value-added products enables diverse portfolio management, analysis, and services. and proposal. We have received a high evaluation from many clients. Regarding information on Financial Instruments Expansion of Securities Business equity, we have organized equity research team Intermediary Service Activities in London and New York in which competent top-ranking analysts provide As an agent for SMBC, we started a financial We are engaged in business collaboration with institutional investors at home and abroad with instruments intermediary service for corporate SMBC Nikko Capital Markets Limited and SMBC expert information on earnings and stock price clients in January 2010 and for individual clients in Nikko Securities America, Inc., SMBC’s subsidiaries trends of individual companies and business April 2010. We have been offering clients financial in London and New York respectively, to jointly sectors in addition to overall equity market products and services that meet clients’ fund provide securities businesses including underwriting information analysis. We continue to expand the management needs by capitalizing on our strengths (only in London), arrangement of Samurai bonds, scope of equity research in order to continuously with a lineup of products and infrastructure designed M&A advisory and Japanese stock broking. These upgrade our information providing service. for securities operations. overseas affiliates provide expanded and high quality services to clients on a global basis. 18 19 CSR Initiatives
SMBC Nikko Securities promotes CSR initiatives using our position as financial service company primarily in the following four initiatives: Environment Conservation Initiatives, Financial and Economic Education, Regional Contribution, and Support of Disaster Victims.
● New Green Committee ● Environment Conservation Initiatives ● Financial and Economic Education ● Regional Contribution We set up the Green Committee, a cross-sectional In addition to direct activities such as the reduction in committee to promote CSR initiatives, in January energy consumption and paper and waste discharge, Recognizing the dissemination of accurate knowledge Employees at our headquarters and branches 2010. The President & CEO himself chairs the we are promoting such initiatives taking advantage on securities and finance as the mission of a financial participate in cleanup and volunteer activities with committee, which sets the annual target of CSR of our position as a securities company, including service company, we promote financial and economic the aim of contributing to regional society. initiatives, and improves internal communication. by offering society an opportunity to investing in education to foster individual investors. companies that take pro-environmental approach to business so as to support such companies to Nikko Family Exciting Experience Day President & CEO implement their environment initiatives. In summer, we hold Nikko Family Exciting Experience ISO14001Environmental Management Systems Day, a special hand-on learning program for Green Committee elementary school students and their families at our To promote environment conservation initiatives branches. Participants can look around our office effectively and efficiently, we set up environmental and learn about the economy, the flow of money, Sharing information Sharing information and collaboration and collaboration management systems and acquired ISO14001* stocks, and the social roles of financial institutions. certification in April 2001, becoming the first Divisions, branches, and group companies Japanese company in the securities industry. We ● Support of Disaster Victims have acquired ISO14001 certification for the Kabuto- cho Nikko Building and the Tokyo Dia Building that We have donated relief supplies offered by in-house houses our headquarters function to strengthen our volunteers and a portion of the profits from funds initiatives. related to disaster-stricken regions to support victims
*ISO 14001 is an international standard for a system which of natural disasters around the world. We open bank helps corporations ascertain the environmental impact of accounts to gather donations from our employees, their business operations and assist them in making continual Company Visits and Seminars encouraging their participation. The company and improvement in their environmental management through the employees jointly participate in these activities. Plan-Do-Check-Act methodology. We offer company visits and hold seminars so that students and laypeople can deepen their knowledge ● Green Week Handling environment-conscious products of securities firms and securities investment. We We held “Green Week,” a period to enhance hold seminars on the system of money and stocks We actively offer opportunities to invest in environment conservation and social contribution and tours of the Tokyo Stock Exchange and our companies that take a pro-environmental business headquarters and branches. activities, with the aim of deepening the approach through sales of financial products. In understanding of our directors and employees 1999, we started handling the Nikko Eco Fund, the on environment conservation through actual first SRI (Social Responsibility Investment) fund Presenting Courses at Universities participation in social contribution activities, while in Japan to introduce a stance of environment activating communication between regional societies conservation. Since then, we have increased our We help foster future investors and human resources and participating directors and employees. We plan lineup of environment-related investment trusts. that will shoulder the securities industry by presenting In February 2010, we commenced handling of the to continue to implement the activities once a year. courses on securities investment and dispatching SMBC Nikko World Bank Bond Fund. This fund instructors through Nikko Financial Intelligence, Inc., is the world’s first fund developed in cooperation a group company. with the World Bank to invest in World Bank green bonds. A portion of the profits from this fund are donated to UNICEF and the Japanese Red Cross. We collectively refer to bonds designed to contribute to environment protection as green bonds. We aim to contribute to global environment conservation by limiting the use of funds raised by green bonds to loans related to environmental preservation and conservation.
20 21 Corporate Governance Corporate Overview
Company Name SMBC Nikko Securities Inc. Head Office 3-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8325, Japan Corporate Governance System Phone Number +81-3-5644-3111 （Head office） Representative President & CEO Eiji Watanabe At our company, four statutory auditors (three of body for the overall business, and each meeting Date of Incorporation June 15, 2009 whom are outside statutory auditors) attend meetings regarding the execution of operations to grasp how of the Board of Directors, which consists of 16 directors perform their duties. Furthermore, the Commencement of Operations October 1, 2009 * directors and decides the company’s management statutory auditors receive detailed reports, on their *Took over all of the operations (excluding selected assets and liabilities) of the former policy, management plans, and other important independent authority, from each organization that is Nikko Cordial Securities Inc. and certain businesses of Nikko Citigroup Limited (current matters. In the Board of Directors’ meeting, the responsible for performing operations. Citigroup Global Markets Japan Inc.) board members regularly receive reports from the We adopt an executive officer system with the Financial Instrument Dealer Director of Kanto Local Finance Bureau advisory council, which deliberate and examine aim of effective execution of the management plan Registration Number (Financial instruments firms) No.2251 corporate governance matters including compliance, and other important operations that are approved at URL www.smbcnikko.co.jp/en risk management, and information systems, and the Board of Directors’ meeting while clarifying where ensure the company’s operations are performed responsibility lies. Currently, 39 executive officers are appropriately. The statutory auditors also attend appointed by the Board of Directors’ meeting. Membership in Associations Japan Securities Dealers Association the management committee, a decision-making Japan Securities Investment Advisers Association The Financial Futures Association of Japan
(As of April 1, 2011)
Compliance System Risk Management System
Fully recognizing significant social responsibilities Securities companies are surrounded by various and as a player in the financial product market, we have complicated risks, such as market risk, credit risk, positioned compliance as one of the most important liquidity risk, operational risk including processing management priorities, and constantly upgrade and risk and system risk, legal risk, and reputation risk. implement our compliance system to enhance the We continuously enhance and implement our risk understanding and trust of market participants and management system so that we can recognize, society as a whole. appropriately manage and control these risks to maintain the company’s soundness and enhance profitability.
Audit Statutory Board of Directors Auditors Board of Directors
Request Report Request Request for advice Report Request for resolution, for advice for resolution, report report
Compliance Management Report Report Risk Management Committee Management Committee This material contains certain forward-looking statements. Such forward-looking statements are not Committee Committee guarantees of future performance and involve risks and uncertainties, and actual results may materially differ
Report Report from those contained in the forward-looking statements as a result of various factors. Important factors that Audit might cause such a material difference include, but are not limited to, those economic conditions referred to in Compliance Unit Internal Audit Unit Risk Management Divisions this material as assumptions.
Report and Instruction, monitoring, Audit Approval and monitoring Application In addition, the following items are among the factors that could cause actual results to differ materially consultation and legal supports and report from the forward-looking statements in this material: business conditions in the securities industry, the Head Office divisions Nikko’s subsidiaries, etc. Head Office divisions regulatory environment, new legislation, competition with other financial services companies, changing and Front-Line Offices and Front-Line Offices Nikko’s subsidiaries, etc. technology and evolving securities industry standards and similar matters.
The information contained in this material is based on data available as of March 15, 2011 and this material is intended to provide information for a general description of SMBC Nikko Securities Inc. Any information and opinions contained in this material reflect our judgment as of the date of presentation of the material (March 15, 2011) and are subject to change without notice. No guarantees, representations, or warranties are made as to the accuracy or completeness of such information. Reference information contained and shown in this material for the period before September 2009 are based on the former Nikko Cordial Securities Inc. ( As of December 31, 2010)
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