Message from Our President & CEO

President & CEO

Tetsuya Kubo

Ever since becoming a member of Sumitomo Mitsui Financial Group in October 2009, our

company has made steady progress as the core securities company of the group, enhancing its

corporate structure with a focus on the ideals of “a full-line securities company,” “global,” and

“banking-securities collaboration.” In the retail business, we have expanded our product lineup

and strengthened our service system to respond to the diversifying needs of individual clients. In

the wholesale business, we invested our managerial resources in the development of business

structures, and as a result won big deals and global deals.

Our vision is to become a leading Japanese full-line securities company capable of offering high-

quality financial products and services globally. With this aim, we will expand our business

further under the Medium-term Management Plan spanning the three years beginning in April

2013, which we see as our growth stage.

Focusing on “speed & scale,” we will promote growth strategies by pursuing high-level securities

expertise and creating an innovative banking-securities collaboration model so that we may

establish a solid market presence and be highly evaluated by our valued clients.

We will continue to provide higher value services to our clients, based on a principle of

“customer-first,” and aim to achieve the highest degree of satisfaction and sense of security. As a

member of the Sumitomo Mitsui Financial Group, we will enhance collaboration with Sumitomo

Mitsui Banking Corporation so that we can deepen the trust that has been built up between us

and so many people in our company’s 95-year history.

We would appreciate your continued patronage and support.

2 3

A Member of the Sumitomo Mitsui Financial GroupManagement Philosophy

History

Shareholding Ratio 100%

Shareholding Ratio 100%

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 to all of the operations (excluding 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 by means of an absorption-type corporate demerger. On October 1, 2009, after succeeding to these businesses, Nikko Cordial Securities De-merger Preparatory 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.

As of October 1, 2009, Sumitomo Mitsui Banking Corporation acquired all the shares in the renamed Nikko Cordial Securities Inc., and through this operation, the renamed Nikko Cordial Securities Inc. became a member of the Sumitomo Mitsui Financial Group.

As of April 1, 2011, Nikko Cordial Securities Inc. renamed itself SMBC Nikko Securities Inc.

Management Philosophy

To provide higher value, based on a customer-first principle.

To seek to be a company that grows together with our customers,and inspires their supreme trust.

To fulfill a role as a sound financial intermediary in order to contribute to the development of both capital markets and our society.

To create a work environment in which each employee demonstrates individualityunder a sense of unity, while respecting diversity.

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 securities company in Japan, we will provide high-quality financial products and services to our clients.

4 5

1918 July Kawashimaya Shoten founded

1920 April Reorganized as Kawashimaya Shoten Co., Ltd.

June The former Nikko Securities Co., Ltd. established

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 Listed its shares on the second sections of the Tokyo Stock Exchange, Osaka Securities Exchange, and Nagoya Stock Exchange

1970 February 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)

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 tender offer 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 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.

SMBC Nikko Securities provides clientswith comprehensive financial services and high value-added solutionsas a full-line securities company to meet the many and varied needs of our clients.

Over more than 90 years since its foundation in July 1918, SMBC Nikko Securities has developed solid relationships of trust with individual and corporate clients.

With the move to become a member of the Sumitomo Mitsui Financial Group, SMBC Nikko Securities can collaborate with Sumitomo Mitsui Banking Corporation, which has a huge business network and high credibility in addition to the expertise and solid client base developed over many years.

In both the retail and wholesale business areas, we will pursue business opportunities through banking-securities collaboration and offer advanced financial products and services based on our collective capabilities. Additionally, under strategic alliance agreements with Moelis* and Citigroup, we are in an advantageous position with their global business networks and resources.

* Moelis & Company is a global investment bank that provides financial advisory, capital raising and asset management services to a broad client base including corporations, institutional investors, and governments. With more than 580 professionals, Moelis & Company serves its clients through offices in New York, Beijing, Boston, Chicago, Dubai, Hong Kong, Houston, London, Los Angeles, and Sydney.

(As of April 30, 2013)

6 7

SMBC Nikko is one of the leading full-line securities company in Japan covering all client segments with a broad range of financial products and services through its international network.

For individual clients, we deliver high-quality asset management consulting services to support best outcomes for their financial objectives in either of two service courses we offer. Under the “General Course,” clients can trade financial products while receiving advice, investment information and face-to-face consulting from assigned professionals through our nationwide network of 109 branches, while for the “Direct Course,” clients can trade equities on a discounted brokerage commission through our on-line trade or call center services.

For corporate clients, we have set up divisions according to business type in order to accumulate knowledge and best meet clients’ specific business needs. Those designated divisions strive to provide corporations, financial institutions, public-service corporations, local public authorities, government organizations or any type of wholesale clients with higher value delivered through teamwork across products, regions and divisions.

Outline of the Business

In the investment banking business, our professional staff offers corporate clients M&A and financing solutions to support their business strategies in the global age.

In the financial product business, we offer trading capabilities and financial products to accommodate 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 established the Equity Research Division to research and analyze earnings and stock price trends of sectors and companies to provide investment information.

In overseas markets, SMBC Nikko Capital Markets Limited and SMBC Nikko Securities America, Inc., consolidated subsidiaries of SMBC in the United Kingdom and the United States respectively, jointly provide underwriting activities, arrangement of Samurai bonds, Japanese stockbroking and M&A advisory, etc. in collaboration with us. In addition, SMBC Nikko Securities (Hong Kong) Limited and SMBC Nikko Securities (Singapore) Pte. Ltd. provide Japanese stockbroking and M&A advisory services, and SMBC Nikko Investment Consulting (Shanghai) Limited offers M&A advisory related services. These overseas arms, together with other subsidiaries and affiliates, will continue to offer high quality financial services to clients on a global basis.

To meet the diversified needs of our clients, we are committed to providing a wider range of high value-added financial products and services and solutions to be a long-term strategic partner for clients.

Shanghai

Jakarta

Sydney

Hong Kong

Singapore

LuxembourgLondon

New York

SMBC Nikko Capital Markets

Nikko Securities Indonesia

SMBC Nikko Bank(Luxembourg)

SMBC NikkoInvestment Consulting

(Shanghai)

SMBC Nikko Securities America

SMBC Nikko Securities(Singapore)

SMBC Nikko Securities(Hong Kong)

SMBC Nikko Capital Markets,Sydney Office

98

We have established a service network for

domest ic c l ients based on 109 branches

nationwide.

To capture investment opportunities in global

economic growth for domestic clients, we tout

“From Japan to the World” as a key philosophy and

offer various financial products, including equities,

bonds, investment trusts, annuity and insurance

products, and Nikko Fund Wrap/SMA., a custom-

made asset management service.

We aim to be the best partner for clients in

asset management with high-quality consulting

services meeting their investment purposes and

risk tolerance.

Our branches each have a privacy-conscious

space where we provide consulting services so

that clients who visit our branches can consult us

on asset management with utmost confidence.

We of fer clients three channels in which to

complete transactions. Clients can choose a

channel for their convenience.

● Branches

Our 109 branches nationwide provide various

services that meet the needs of clients, including

asset management consulting services, account

startups, and administrative procedures.

● Call Center

At the Nikko Contact Center, our designated staff,

who have received high evaluations from third-

party organizations, handle orders for equity

trading and respond to inquiries from clients. The

center facilitates clients who do not have access to

physical branches.

● On-line Trade

We have upgraded Nikko EZ Trade so that

clients can trade more comfortably at their own

convenience while having access to a variety

of financial products and abundant sources of

investment information.

In addition, we are improving our structure in which

assigned staff and professional teams, such as

the Equity Advice Center and the Investment Trust

Assist Center, jointly support clients in accordance

with their needs. This multiple support structure is

unique to SMBC Nikko.

Under the management philosophy of “to

provide higher value, based on a customer-first

principle,” we continue to strive to improve the

quality of client service. We have received high

evaluations from third-party organizations, as

detailed below.

We form par tnerships with individuals and

companies in other industries to offer clients a

wider range of distribution channels for financial

products by providing infrastructures such as

systems and financial product information and

business support. The individuals and companies

we partner with share our philosophy of remaining

close to clients and treating clients with trust and

sincerity while being equipped with expert financial

know-how.

・ WontwoThreeStars,thehighestrating,intheSupportPortal/CustomerContactCenterratingsurvey;wonThreeStarsintheCustomerContactCentersectorforsevenconsecutiveyears,thefirstsuchtriumphinhistory(2006-2012)

・ WontheFiveStarRecognizedCenterBenchmarkAward intheHDIFiveStarProgram,thefirstsuchtriumphinJapan(2012)

・ Wonthehighestawards intwosectorsoftheCorporateTelephoneMannersContestfortwoconsecutiveyears(2011-2012)

・ WonanawardintheNationalTelephoneMannersContestforsevenconsecutiveyears(2006-2012)

・ WontheCRMBestPracticeAwardforfiveconsecutiveyears(2008-2012)・ WontheBestContactCenterofTheYearawardforthreeconsecutiveyears(2010-2012)

・ WonthesilverprizefortwoconsecutiveyearsintheBestOutboundCampaignintheAsia-PacificsectoroftheContactCenterWorldAwards(2011-2012)

・ ObtainedcertificationforCOPC®CSPstandards(2008-2012)

Retail Sales Network

Financial Product Intermediary Business

Services to Our ClientsFROM JAPAN TO THE WORLD

SMBC Nikko Securities provides high-quality consulting services and solutions

through teamwork across products, regions and divisions to respond to our clients’ needs.

Evaluations from third-party organizations (sample)

Versatile Support Structure to Meet the Various Needs of Individual Clients

Clients On-line tradingCall center

Retail sales network

Support by sales divisions and branches and specialized sections

109 branches nationwide

Equity Advice CenterInvestment Trust Assist Center

Nikko EZ TradeNikko Contact Center

Individual Clients

10 11

Owners of Companies,and Executives and Employeesof Listed Companies

Corporate Clients

As the main pillar of our private banking services,

we offer consulting services to clients including

high-net-worth individuals, such as owners of listed

companies. We make custom-made proposals to

each client and strive to realize these proposals

by using all available resources. We aim to be

an indispensable partner for clients by offering

various support measures such as solutions to the

preservation of client’s assets, fund management,

and the ef fective use of clients’ assets and

proposals of custom-made financial products.

After grasping their priorities and potential needs,

we provide total solutions to corporate clients such

as listed corporations and financial institutions

based on our abundance of experience, market

knowledge, and a variety of financial products and

services through teamwork with financial product

divisions and investment banking divisions.

To respond to clients’ inquiries and requests

on various matters including financing, fund

management, and employee benefits, we will offer

strategic backup services.

We a lso of fe r our c l ients a window to

cutting-edge corporate management and asset

management through guidance on market

information and various seminars.

We prov ide c l ient companies wi th a l l the

support they need until they go public, including

guidance and advice for initial public offering and

suggestions about capital policy, group strategy,

and information disclosure. We also offer solutions

including M&A to increase clients’ corporate value,

preserve their assets, and transfer their businesses

in a stable manner.

We offer public-service corporations, local public

authorities and government organizations or

any other public-sector clients, a wide range

of consulting services based on our abundant

experience. Via multi-faced approaches through

teamwork with professional teams, we provide the

following solutions: providing materials that support

clients’ investment; suggesting investment policies

in view of the needs of clients such as nationwide

public-service and non-taxable corporations.

We also offer services such as portfolio analysis

by using NBA (Nikko Bond Analysis), our asset

management and analysis system.

We provide executives and employees of listed

companies with proposals on wealth building in

accordance with clients’ life plans. Our proposals

include advice on financial products and services

meeting their risk tolerance in volatile markets.

We also propose management of severance

allowances and reallocation of assets af ter

retirement.

Private Banking

Corporations and Financial Institutions

Companies Planning IPO

Public-Service Corporationsand Non-Taxable Corporations

Workplace Sales

12 13

We provide advice on M&As as an important

option in business strategy, including acquisitions,

mergers, capital and business alliances, and

business restructurings, to meet each client’s

needs. We suppor t all major steps in M& A:

proposal of an M&A, business valuation, due

diligence, preparation of contracts, and closing.

Based on the feasibility study identifying the key

concerns, such as related laws and systems,

industry trends, the business environment, and

the global situation, we form a specialist team that

includes staff who are fully conversant with the

industry and M&A advisory operations to offer the

most appropriate advice to clients.

To respond to financing needs identified to achieve

long-term business targets, we offer various direct

financing solutions, centering on Uridashi /public

offerings, underwriting of various bonds, and

securitization of owned assets. We provide all major

types of services related to financing: proposal of an

optimal-funding structure, marketing management

to investors, decision of optimal conditions, and

documentation.

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. We have developed a structure with experts with excellent track records in M&A and financing to provide services to comprehensively support corporations at home and abroad by leveraging our business knowledge 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 the network expanding around the Sumitomo Mitsui Financial Group.

M&A Advisory

Underwriting Equities and Bonds

Investment BankingWe offer corporate clients M&A and financing solutions

to support their business strategies in the global age.

As a Partner for Executing Business Strategy

14 15

Asset management products

Investment trusts Insurance Wrap account

Globally balancedGlobal equityDomestic equityGlobal bondDomestic bondAlternative funds

Variable annuity Fixed annuityForeign-currencyannuityVariable permanentinsuranceFixed permanentinsuranceBusiness insurance

Service of composingan appropriate Custom-made portfolio, etc.

Financial ProductsWe will respond to various clients’ needs

by strengthening our financial product engineering and our trading capabilities.

We provide comprehensive services and products

to clients through a global network. We develop

an extended range of services and trading system

to respond to clients’ various needs. In addition

to equities, we meet clients’ various needs by

providing an extensive lineup of high quality

derivative products. We continue to strengthen our

Sales & Trading capabilities, delivering information

based on the research conducted by the Equity

Research Division and improving our trading

capabilities with leading technology.

Our comprehensive strengths—a high capability

to structure products, offer attractive primary

products, and deliver timely research information—

enable 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 techniques and risk management

capabilities.

We develop and offer asset management products

such as investment trusts, SMA, and insurance,

and offer services as the management and the

provider of Wrap accounts. We allocate specialists

with expertise and aim to develop one-of-a-kind

innovative products based on the current market

trends and clients’ needs. Under our best product

policy, we offer clients new options for international

diversified investment by developing a variety of

products with fund management companies and

insurance companies at home and abroad.

Equities

Bonds

Asset Management Products

16 17

ResearchWe provide high value-added information

to support clients’ investment strategies.

We analyze the rapidly-changing global economy

and market trends from various perspectives and

promptly and clearly deliver the latest domestic

and international information.

In addition to analysis of the domestic and

international macro economy and f inancial

markets, for information on fixed income products,

we provide clients with a variety of information

on bond markets and credit reports on domestic

corporate bond issuers as well as Samurai bond

issuers. To provide clients with high-quality

investment opportunities, we also offer the NBA

(Nikko Bond Analysis) service, which enables

portfolio management, analysis, and proposal.

We have received a high evaluation from many

clients. Regarding information on equities,

we have organized equity research teams in

which competent top-ranking analysts provide

institutional investors at home and abroad with

expert information on earnings and stock price

trends of sectors and companies in addition

to overall equity market information analysis.

We continue to expand the scope of our equity

research in order to continuously upgrade our

information-delivering capabilities.

We have implemented various joint operational initiatives with SMBC since we started our business as a member of the Sumitomo Mitsui Financial Group on October 1, 2009.

Banking-securities Collaborationwith Sumitomo Mitsui Banking Corporation (SMBC)

SMBC Nikko Securities is a dealer in financial

products and offers SMBC a rich variety of financial

products and infrastructure facilities for securities

trading. Through SMBC, we provide corporate and

individual clients with products and services suited

to their asset management needs.

F i n a n c i a l P ro d u c t I n t e r m e d i a r y Service

SMBC Nikko Securities and SMBC refer their clients

to each other according to client needs. As a group,

both companies provide products and services

best suited to their clients. SMBC Nikko Securities

provides various financial products and services to

clients referred to it by SMBC, while SMBC provides

various banking products and services to clients

referred to it by SMBC Nikko Securities.

Client Referral

Automated teller machines (ATM) have been installed

at our Main Branch, as well as at the Ikebukuro,

Yokohama-ekimae, Nagoya, Osaka and Kobe

branches, etc., to support SMBC’s cash cards and

Nikko cards.

Installing SMBC’s ATMs atBranches of SMBC Nikko Securities

“Bank & Trade” is an Internet-based service

connecting a client’s cash management account at

SMBC Nikko Securities with his/her ordinary deposit

account at SMBC. This service is useful for asset

formation. One of its features is account aggregation

which gives clients access to a single screen

showing their account balances at both companies

on a real-time basis.

Bank & Trade

Since October 2010, certain SMBC Nikko Securities’

branches have served as SMBC’s agent. Their

job includes opening accounts for Japanese yen

ordinary deposit and Japanese yen time deposit at

SMBC and responding to various other client needs.

Banking Agency Business

Since July 2010, we have collaborated with SMBC

and Barclays Bank plc. With proprietary knowledge

and func t ions he ld by a wor ld-c lass asset

management team, Barclays provides an “Investment

Solution Service” to clients referred by SMBC

through SMBC Nikko Securities.

Joint Wealth Management

We are engaged in business collaboration with

SMBC Nikko Capital Markets Limited and SMBC

Nikko Securities America, Inc., SMBC’s subsidiaries

in the United Kingdom and the United States

respectively, to jointly provide underwrit ing,

arrangement of Samurai bonds, M&A advisory and

Japanese stockbroking etc. These overseas affiliates

provide expanded and high-quality services to

clients on a global basis.

Expansion of Securities Businessin London and New York

18 19

Handling environmentally conscious products

●Green Week

Green Committee

Executive office(CSR Section of Communications Division)

President & CEO

Divisions, branches, and group companies

Sharing information andcollaboration

SMBC Nikko Securities promotes CSR initiatives using its position as a financial services company primarily in the following four initiatives: Environmental Conservation Initiatives, Financial and Economic Education, Regional Contribution, and Support for Disaster Victims.

CSR Initiatives

In January 2010, to promote CSR initiatives, we

set up the Green Committee, a cross-sectional

committee, chaired by the President & CEO to set the

annual target for CSR initiatives, and improve internal

communication.

Through financial products, we actively of fer opportunities to invest in companies that take a pro-environmental business approach. In 1999, we started handling the Nikko Eco Fund, the first SRI (Social Responsibility Investment) fund in Japan to introduce a stance on environmental conservation. Since then, we have increased our lineup of environment-related investment trusts.In February 2010, we commenced handling the SMBC Nikko World Bank Bond Fund. This fund is the world’s first fund developed in cooperation 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.

*Green bonds in which this fund invests are a type of bond issued by the World Bank.

In addition to direct activities such as the reduction in

energy and paper consumption and waste discharge,

we are proactively promoting other initiatives taking

advantage of our position as a securities company,

including offering opportunities to invest in companies

taking pro-environmental approaches to business

so as to support companies in implementing their

environmental initiatives.

Recogniz ing the d isseminat ion of accura te

knowledge on securities and finance as the mission

of a financial services company, we promote financial

and economic education.

Employees at our headquar ters and branches

participate in cleanup and volunteer activities in

the hope of helping solve problems faced by our

regional communities and thereby contributing to

regional development.

We have donated relief supplies offered by in-

house volunteers and a por tion of the profits

from funds related to disaster-stricken regions

to support victims of natural disasters around

the world. We open bank accounts to gather

donations f rom our employees, encouraging

their participation. The company and employees

jointly participate in these activities.

To promote environmental conservation initiatives

effectively and efficiently, we set up environmental

management systems and acquired ISO14001*

cer tif ication in April 2001, becoming the f irst

Japanese company in the securities industry. We

have acquired ISO14001 certification for our business

operations in the Tokyo Dia Building to ensure our

performance of the initiatives.

In summer, we hold our Nikko Family Exciting

Experience Day, a special hands-on learning

program for elementary school students and their

families at our branches. Participants can visit

our offices and learn about the economy, the flow

of money, stocks, and the social role of financial

institutions.

We offer company visits and hold seminars so that

students and grown-ups can deepen their knowledge

of finance, economics and securities companies by

organizing a tour of the Tokyo Stock Exchange as

well as our headquarters and branches, and holding

seminars on the system of money and stocks and the

role of financial institutions.

We cooperate with our group company Nikko

Financial Intelligence, Inc., to provide universities

with courses on financial economics and securities

investment and send instructors to help students

acquire knowledge of securities as part of the liberal

arts.

*ISO 14001 is an international standard for a system which helps corporations ascertain the environmental impact of their business operations and assist them in making continual improvements in their environmental management through the Plan-Do-Check-Act methodology.

●Green Committee ● Environmental Conservation Initiatives● Financial and Economic Education ● Regional Contribution

● Support for Disaster Victims

ISO14001Environmental Management Systems

Nikko Family Exciting Experience Day

Company Visits and Seminars

S o c i a l c o n t r i b u t i o n a c t i v i t i e s b y n e w employees

Presenting Courses at Universities

We held “Green Week,” a period to enhance

environmental conservation and social contribution

a c t i v i t i e s , w i t h t h e a im o f d e e p e n in g th e

understanding of our personnel on environmental

conservation through actual par t icipation in

social contribution activities, while activating

communication between regional societies and our

personnel participating in such activities. We plan to

continue to implement the activities every year.The purpose is to foster a sense of unity among

new employees by giving them a chance to learn

the meaning and importance of social contribution

activities.

● Reconstruction Support for the Great East Japan Earthquake

20 21

(As of May 1, 2013)

Corporate Governance

In SMBC Nikko Secur i t ies, four statutor y

auditors (including three outside statutory auditors)

attend meetings of the Board of Directors, which

consists of 11 directors and decides the company’s

management policy, management plans, and other

important matters. In the Board of Directors’ meeting,

board members regularly receive reports from the

advisory council, which deliberates and examines

corporate governance matters including compliance,

risk management, and information systems, and

ensures the company’s operations are performed

appropriately. The statutory auditors also attend

the management committee, a decision-making

Fully recognizing our significant social responsibilities

as a player in the financial product market, we have

positioned compliance as one of the most important

management priorities, and constantly upgrade and

implement our compliance structure to be better

understood and trusted by other market participants

and by society as a whole.

Securities companies are exposed to various and

complicated risks, such as market risk, credit risk,

liquidity risk, operational risk including processing

risk and system risk, legal risk, and reputation risk.

We continuously enhance and implement our risk

management structure so that we can identify,

appropriately manage and control these risks to

maintain the company’s soundness and enhance

profitability.

body for the overall business, and other meetings

regarding the execution of operations to monitor

how directors perform their duties. Furthermore,

under the corporate governance structure, the

statutory auditors receive detailed reports, on

their independent authority, from the organizations

responsible for actual operations.

We adopt an executive officer system with the

aim of effective execution of the management plan

and other important operations that are approved at

the Board of Directors’ meeting while clarifying where

responsibility lies. Currently, 41 executive officers are

appointed by the Board of Directors.

Corporate Governance

Compliance Risk Management

(As of April 30, 2013)

Corporate Overview

Company Name SMBC Nikko Securities Inc.

Head Office 3-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8325, Japan

Phone Number +81-3-5644-3111　（Head office）Representative President & CEO Tetsuya Kubo

Date of Incorporation June 15, 2009

Commencement of Operations October 1, 2009 * *Took over all of the operations (excluding selected assets and liabilities) of the former

Nikko Cordial Securities Inc. and certain businesses of Nikko Citigroup Limited.

Financial Instrument Dealer Director of Kanto Local Finance BureauRegistration Number (Financial instruments firms) No.2251

URL www.smbcnikko.co.jp/en

Membership in Associations Japan Securities Dealers Association

Japan Investment Advisers Association

The Financial Futures Association of Japan

Type II Financial Instruments Firms Association

This material contains certain forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may materially differ from those contained in the forward-looking statements as a result of various factors. Important factors that might cause such a material difference include, but are not limited to, those economic conditions referred to in this material as assumptions.

In addition, the following items are among the factors that could cause actual results to differ materially from the forward-looking statements in this material: business conditions in the securities industry, the regulatory environment, new legislation, competition with other financial services companies, changing technology and evolving securities industry standards and similar matters.

The information contained in this material is based on data available as of May 1, 2013 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 (May 1, 2013) 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 is based on the former Nikko Cordial Securities Inc.

StatutoryAuditors

Head Office divisions andFront-Line Offices Nikko’s subsidiaries, etc.

Compliance Unit

ComplianceCommittee

Board of Directors

ManagementCommittee

Head of Compliance

Internal Audit Unit

Instruction, monitoring, and legal supports

AuditReport and consultation

ReportReport

Report Approval andreport

Request forresolution, report

Requestfor advice

Audit

Approval andreport

Audit StatutoryAuditors

Head Office divisions andFront-Line Offices Nikko’s subsidiaries, etc.

Risk Management Divisions

Risk ManagementCommittee

Board of Directors

ManagementCommittee

Head ofRisk Management

Internal Audit Unit

Application and report

AuditApproval andmonitoring

ReportReport

Report Approval andreport

Request forresolution, report

Requestfor advice

Audit

Request forresolution,report

Audit

22 23