Governance | Compliance

Nomura Group has established an appropriate compliance framework, and insists on compliance with all applicable laws, rules and regulations in all Group companies and departments.

Fundamental Approach

Compliance is a top management priority for Nomura Group, and the Code of Ethics of Nomura Group defines our fundamental policy on compliance. The management and employees of the Group pledge to abide by the rules stated in this code once each year. Also, we have established Nomura Founding Principles and Corporate Ethics Day as a day for management and employees annually to reaffirm our corporate culture and corporate ethics, underpinned by Our Founder's Principles.

You may report to us your concerns regarding our accounting, internal accounting controls or auditing matters via the feedback link below.

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Request to Nomura Group Outsourced Service Providers

Nomura Group outsources various operations to outside providers. In order to fulfill our social responsibility, we are requesting our outsourced service providers to understand the purpose of the "Code of Ethics of Nomura Group" and act in accordance with it. As such, we ask that you take the time to read the code by accessing the link below.

If after reading the code you become aware of any issues that you feel we should know about, please contact us via the feedback link below.

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Compliance Framework

We have appointed a Group Compliance Head to oversee compliance for the Group as a whole along with a Group Compliance Department that provides support. In addition, Compliance Officers have been assigned to each Group company to strengthen our internal controls in response to global business development, and to develop and maintain the respective compliance structures of each Group company, including overseas offices.

Compliance framework

Image: compliance framework

Nomura Securities' Compliance Structure

In addition to Group-wide initiatives, Nomura Securities has established a Compliance Program as a detailed action plan, and put into place a compliance framework based on this program.

  • A Compliance Committee chaired by the President oversees Company-wide initiatives and is in charge of establishing and deliberating on important issues related to internal controls.
  • The Company has established the post of Internal Administration Supervisor to monitor compliance issues in line with Japan Securities Dealers Association's rule
  • The Company has established the posts of Sales Officers, Internal Controls Officers and Compliance Officers
  • The Compliance Division strengthens and improves legal and regulatory compliance as well as the internal controls system by formulating internal rules and disseminating them throughout the Company.

Legal Compliance Measures

Maintenance of compliance framework and enhancement of management systems

In all Group companies and departments, Nomura Group complies with applicable laws and regulations and endeavors to prevent the occurrence of activities that may be construed as illegal by establishing effective control measures. In the event that such issues arise, they are reported in full to management-level officers without delay, and organizations and systems are structured to respond appropriately.

When actions that may impair trust in the capital markets and major violations of legal regulations occur that may have a major impact on the Company's reputation and financial position, after due investigation and confirmation, related information is made available on the Company website.

Compliance Hotline

In order to ensure an effective compliance framework at each Nomura Group company, the firm has established and implemented a robust structure that includes a point of contact that is independent from management. This is to ensure any disclosure of activities by Nomura Group employees that infringe on the "Code of Ethics of Nomura Group" or relate to malpractice including potential legal/regulatory violations or suspected activities regarding accounting or accounting audits are received and dealt with in line with internal policies, procedures and regulatory requirements.

Nomura employees who have become aware of potential legal or regulatory violations are able to report their concerns to persons designated by Nomura Holdings, including outside attorneys, through the Nomura Group Compliance Hotline (informants may report through external and independent channels and have the option of remaining anonymous). The hotline is available 24 hours a day, seven days a week, and is fully bilingual (English and Japanese).

We use internal communication channels such as the intranet to ensure that employees are familiar with the Compliance Hotline and encourage them to use the reporting system as necessary. We believe this will contribute to building a healthy corporate culture and further enhance awareness of ethics and professional conduct.

In FY2018, there were 31 calls received via the Compliance Hotline, and in all cases a thorough review was conducted and appropriate measures were taken.

Carrying out Compliance Training

Nomura Securities conducts comprehensive compliance training for all Executive Officers and employees on topics such as the prevention of money laundering and insider trading, firewall regulations, and guidelines for managing customer information.

Nomura Securities' Primary Initiatives

  • Training for sales officers, internal controls officers, and employees of internal controls departments, as well as quality improvement training for securities sales representatives
  • Training for branch managers, general administration managers, new employees, newly appointed personnel, and others, aimed at increasing knowledge and deepening the understanding of compliance
  • Supplementary compliance education and drills during various training sessions and meetings
  • Training for Compliance Officers
  • Monthly Compliance Hour* at branch offices and departments

To ensure that each and every employee throughout the Company understands the need for full compliance, training sessions are held once a month in the branches and offices of Nomura Securities.

Offering High-Quality Financial Services

Nomura Securities seeks to enhance the quality of financial products and services offered to customers under the Guidelines for Financial Instruments Business Supervision. To this end, the firm has implemented various initiatives which include the following:

Nomura Securities' Primary Initiatives

  • Appointing officers to oversee internal controls, compliance, etc., and developing systems to ensure compliance and the appropriateness of operations
  • Thoroughly screening account openings and conducting proper examinations when underwriting securities
  • Carefully reviewing product details and taking action to provide accurate and comprehensive information
  • Conducting sales and solicitation activities in compliance with the Financial Instruments and Exchange Act and laws and regulations governing each operation with an overall understanding of the customer's knowledge of financial instruments and financial status
  • Structuring systems that establish guidelines for sales to senior customers and requiring compliance with these guidelines
  • Ensuring thorough compliance with laws, regulations, and internal rules through compliance training

Ensuring fair financial business practices

Eliminating Anti-Social Forces

In order to eliminating anti-social forces, the Nomura Group outlines in "Code of Ethics of Nomura Group", Nomura must reject all transactions with anti-social forces or groups, and our fundamental policy is to eradicate all ties with anti-social forces. The "Code of Ethics of Nomura Group" is applicable to all management and employees globally.

Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)

Nomura group has established the Code of Ethics, which requires all employees to understand and comply with the letter and spirit of all applicable laws, rules and regulations including AML. Nomura has also established the Nomura Group Anti-Money Laundering and Counter Terrorism Financing Guidelines. The firm continues to enhance its group-wide governance framework through observing international regulatory trends such as the Financial Action Task Force's (FATF) recommendations on AML/CFT.

In addition, whilst giving due consideration to the laws and regulations of each country, we have established specific minimum standards that must be complied with. These standards are applicable to the entire Group covering important areas such as customer due diligence and measures against sanctions.

In April 2018, Nomura Group established "Anti-Money Laundering Department", a department dedicated to AML/CFT. Additionally, the department was reformed into "Financial Crime Department" in April 2019 with the aim of establishing the integrated governance structure on the initiatives taken by Nomura Group as a whole, and establishing the effective compliance framework.

Concrete measure on Anti-Money Laundering

Nomura Securities Co., Ltd. (NSC), in accordance with "Act on the Prevention of Transfer of Criminal Proceeds" and NSC's risk assessment based on a risk-based approach, conducts a customer due dilligence including (but not limited to), for individual customers: the name, address, date of birth, purpose of the transactions, occupation, etc. or for corporate customers, the name, the location of the head office or principal office, purpose of the transaction, nature of the business and beneficial owners, etc. In addition, NSC requires obtaining additional information from the customer and/or the approval of senior management according to the risk inherited in the transaction. Where online transactions occur, additional due diligence is conducted to mitigate risks.

Furthermore, enhanced due diligence is conducted for high-risk transactions, such as transactions with foreign Politically Exposed Persons (PEPs) and those who reside in designated high-risk countries from an AML perspective.

Moreover, the Firm conducts transaction monitoring using a specific system on a daily basis for potential unfair trading in relation to money laundering, financing of terrorism, market manipulation, intentional market making, transactions using fictitious names and insider trading. If a potential unfair transaction is detected through the transaction monitoring, we will request for additional information as necessary and take appropriate steps such as; alerting the customer, request for additional information, restricting transactions and/or terminating the contract.

Overseas offices are also working on preventing unfair trading by taking AML/CFT initiatives based on a risk-based approach through measures such as customer due dilligence, suspicious transaction reporting and enhanced due dilligence on high-risk transactions.

AML/CFT-related documents such as records of verification at the timing of transaction and transaction screening are kept in line with regional policies and procedures (for Japan, the retention period is seven years in principle.).

In accordance with the audit plan formulated using the risk assessment method, the internal audit department periodically examines the effectiveness of AML/CFT initiatives and compliance with AML/CFT program.

Anti-Bribery and Corruption

As outlined above, Nomura Group’s Code of Ethics requires all employees to understand and comply with the letter and spirit of all applicable laws, rules and regulations, which include anti-bribery and corruption and tax evasion.

Employees are able to report potential legal/regulatory violations such as bribery, as well as any activities that infringe on the Code of Ethics of Nomura Group through the Nomura Group Compliance Hotline.

Nomura Securities has established policies and procedures for providing gifts and entertainment to individuals including public officials and private sector groups. These policies and procedures are disseminated throughout the company to ensure fair business practices and prevent bribes. Gifts and entertainment are not provided to public officials and private sector groups in Japan who may have a vested interest. Where gifts or entertainment is provided to non-Japanese public officials, we determine the appropriateness in advance based on applicable local laws and regulations. Expense accounts are subject to regular monitoring to ensure they are used appropriately. In addition, training is conducted as appropriate to reinforce our corporate policies and procedures regarding gifts and entertainment.

Internal Audit division regularly investigates and assesses internal control on anti-bribery and corruption to ensure its effectiveness from a framework and appropriateness of operation perspective, and recommend business improvement based on the results.

Overseas offices also implement a report, approval process and procedures for gift and entertainment to public officials to strictly prohibit any unfair or suspicious transactions.

Management for conflicts of interest and prevention of insider trading

We consolidate information in the Group Compliance Department to manage conflicts of interest and insider information with a global perspective.

Firmwide Commitment to Corporate Ethics

The management and employees of the Group pledge to abide by the rules stated in the Code of Ethics of Nomura Group once each year. Also, we have established Nomura Founding Principles and Corporate Ethics Day as a day for management and employees annually to reaffirm our corporate culture and corporate ethics, underpinned by Our Founder's Principles.

Nomura Securities delivers an ethics training once a year for management and employees. The training is intended to give all employees a substantially heightened understanding of workplace ethics through the exchange of views and ideas by employees. The Firm's management and employees ensure professional ethics and compliance part of the core values of the plan to address determined challenges at the outset of each fiscal year. If concerns are identified, the assessor provides suitable guidance and reflects this evaluation results in the employee's remuneration package.

Customer Protection and Information Security

Under applicable laws and regulations, including the Financial Instruments and Exchange Act and the Personal Information Protection Act, Nomura Group works to properly protect customers' assets and information.

Proper segregation of customer assets

In accord with applicable laws and regulations, including the Financial Instruments and Exchange Act, Nomura Securities properly segregates the assets of its customers from the assets of Nomura Securities itself.

Nomura Group Information Security Policy

Appropriate management of client data is essential in order for the Nomura group to keep the trust of our clients and shareholders. This policy sets out basic principles for safeguarding the security of information. Each company in the group maintains its own supplemental rules based on the policy and continually improves the management of information supplied to clients according to business requirements. Executive officers and employees can review our information security regulations on our intranet.

Nomura Securities has prepared internal regulations that include rules regarding insider trading to strictly manage information related to corporate clients.

Information Security Management

Under the Nomura Information Security Management Regulations, Nomura appoints a Chief Information Security Officer from the executive officers. The Chief Information Security Officer takes responsibility as personal data management supervisor defined by the Financial Services Agency and strives to ensure Information Security.

All Nomura Holdings, Inc., Nomura Securities Co., Ltd., Nomura Asset Management Co., Ltd., and The Nomura Trust and Banking Co., Ltd. department and branch office heads serve as Information Security Managers and are responsible as personal data controllers. These Information Security Managers are responsible for the security and proper management of information assets handled by their work area and for properly providing their staff with advice and guidance in this regard.

Security Measures for Online Services

In order to accommodate the diverse needs of its clients, the Nomura Group provides a wide range of its services over the Internet. These services use the latest, most advanced encryption technologies to ensure that important client information is always safeguarded. Furthermore, we have strengthened surveillance of our in-house systems and implemented new security systems in order to prevent illegal access from external parties or information leakages caused by cyberattacks, which have become increasingly threatening in recent years.

Personal Information Protection

The Nomura group handles personal information about its many customers with care, and efforts regarding personal information are very important. We handle customers' personal information with extreme care, complying with personal information protection-related laws and regulations as well as the Nomura Group Privacy Policy and the aforementioned information security-related rules.

Nomura Securities Co., Ltd. appointed an Information Security Manager and a checker for each department to thoroughly safeguard personal information, including the Individual Number, by overseeing the management or handling of the following items.

  • The status of personal information management before leaving the office
  • Electronic files containing personal information
  • Personal information ledgers
  • Contractor pledge forms, statements, etc.
  • Procedures controlling the removal of client information outside the company
  • Responses to disclosure requests
  • Training and other activities related to information management
  • IDs/passwords
  • E-mail correspondence with parties outside the company and information terminals
  • Corporate information
  • External recording media
  • Information the company delivers by fax
  • Access logs during late night hours and holidays

Nomura Group Privacy Policy

Nomura Group Tax Policy

Nomura group sets out Nomura Group Tax Policy for the appropriate tax governance.

Nomura Founding Principles and Corporate Ethics Day

Following the series of insider trading incidents related to public offerings in 2012, Nomura Securities announced business improvement measures on June 29 in 2012, and these have been fully implemented. Going forward, to ensure that our efforts are maintained and sustained, Nomura Securities will take the necessary measures to prevent this incident from having an effect on its reputation and, by implementing fully adequate improvement measures with the cooperation of all management and staff, will work to prevent a recurrence and recover public trust. Nomura is also working to substantially reinforce and improve its internal controls systems.

Nomura Group, which celebrated its 90th anniversary in 2015, has established Nomura Founding Principles and Corporate Ethics Day. This provides an opportunity each year for all of us to reflect on our corporate culture and corporate ethics based on Our Founder's Principles and remind ourselves of the actions that have brought scrutiny upon the firm. Every year on Nomura Founding Principles and Corporate Ethics Day, we take measures for everyone in each Group company, including overseas offices, to think about Nomura's founding principles and corporate ethics to ensure we never repeat the mistakes of the past.

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