Corporate Governance | Compliance

Nomura Group works to prevent behavior that may give rise to suspicion of violations of legal regulations. Should such issues arise, all related information is promptly transmitted to management without exception, and systems have been put into place to deal with these appropriately. In addition, in accord with the Regulations of Nomura Group Management Structure, all Group companies comply with laws and regulations that have been enacted for the industries where they engage in business activities and supervise compliance based on their internal regulations. In addition, improvements have been made to unify Group companies' compliance systems, for example with the appointment of Compliance Officers and the creation of Compliance Hotline.
To further strengthen the system for internal controls at the Group's companies both in Japan and overseas, on April 1, 2007, the Group created the position of Group Compliance Officer, fostering cooperation within the Group by holding regular Nomura Group compliance meetings and global compliance meetings which will help to ensure an effective system of controls.

Appointment of a Group Compliance Officer

To create a substantially stronger system for internal supervision activities at all Nomura Group companies in Japan and internationally, a Group Compliance Officer was appointed on April 1, 2007, with overall responsibility for Group compliance.

Compliance Officers

Each domestic Nomura Group company in Japan has a Compliance Officer charged with ensuring that compliance is a strong part of the corporate culture and that business operations adhere to all laws and regulations.
Matching each company's system, some Group companies appoint Compliance Officers for each department, while others appoint one or several Compliance Officers for each division or for the entire company. Compliance Officers are responsible not only for monitoring adherence to laws and regulations, but also for ensuring that activities conform to social standards from the standpoint of corporate ethics. Nomura Group Compliance Officers attend annual training seminars. These events reinforce awareness of their responsibilities and raise awareness within Nomura Group of the need to observe a unified compliance policy and set of regulations.

Compliance Hotline

Nomura Group employees in Japan who have become aware of actions that may violate laws and regulations are able to report their concerns directly to NHI management through a Compliance Hotline. This hotline also allows such reports to go directly to an outside director as well as a legal supervisor (an independent legal attorney), in addition to the designated executive officer at NHI, information may be given anonymously, and employees have been informed that measures are in place to ensure that individuals who give their name when reporting violations do not suffer any negative consequences from their actions.

Addressing Legal Risk Globally

Because Nomura Group conducts business on a global scale, adequate measures are taken with regard to legal risks associated with overseas compliance and cross-border transactions.
Nomura Group is heightening its professional expertise concerning the regulatory environment for its international activities. We are also refining skills in the development of cross-border products and services that take into account the requirements of laws and regulations of various regulatory regimes.
Overseas legal risk is managed primarily on a regional basis. As part of the management of legal risk associated with global business activities, Nomura Group periodically holds a global legal conference and a global compliance conference. These provide a forum for examining problems involved with crossborder and other business activities.

Nomura Securities Compliance Structure

Nomura Securities Co., Ltd. has established a Compliance Program, which is a detailed action plan for compliance, and developed its compliance structure based on this program. In addition to initiatives for the overall Group, a Compliance Committee is also in charge of establishing the internal controls system and discussing important matters involving internal controls, in order to enhance the compliance system. As measures aimed at enhancing compliance awareness, Compliance Officers have been appointed in all branch offices and departments, and training and study sessions are provided for all employees.
Branch offices and departments hold monthly compliance awareness sessions concerning compliance-related topics provided by the head office. Training is provided using materials prepared for each branch office in a format for easy comprehension by employees, with Q&A sessions also used to clarify topics. Charged with making employees more aware of compliance and communicating compliance-related information, Compliance Officers are also required to participate in annual Compliance Officer training, and strive to respond to the continuously evolving social environment and ever-changing needs.

Compliance Committee

• The Compliance Committee is made up of 11 officers including the CEO, the Internal Administration Supervisor, and two outside lawyers acting as legal advisors.

Compliance Management at Departments and Branch Offices

• In accordance with Japan Securities Dealers Association regulations, Internal Controls Officers are assigned within front-office departments and Compliance Officers are assigned at each department and branch office.

Compliance Hotline

• The Nomura Securities Compliance Hotline provides another means, separate from the Nomura Holdings channels, for Nomura Securities employees to submit information directly to the Internal Administration Supervisor and external lawyers.
  These lawyers are the legal supervisors of Nomura Securities' Compliance Committee. Employees who report violations to the Compliance Hotline can choose to remain anonymous. Employees are also informed that measures are in place to ensure they are completely protected from any negative consequences should they use their real names.

Nomura Securities Compliance Hotline

Compliance Training

• Compliance manuals designed to ensure a clear understanding of laws and regulations are made available via Nomura Securities' intranet, providing a compliance education framework for all directors, officers, and employees.
  Training programs are conducted in accordance with the duties of employees, and training materials are used for monthly training sessions at branch offices. Reports on the implementation of these sessions are submitted to administrators.