Governance | Compliance
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.
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.
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.
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.
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 April 2018, Nomura Group established a dedicated Anti-Money Laundering Department. The department was renamed the Ethics and Discipline Department in April 2019 as part of an integrated approach to tackling financial crimes including AML/CFT. Nomura will continue working to implement effective controls and enhance measures to further strengthen its group-wide compliance framework.
Concrete measure on Anti-Money Laundering
Nomura Securities Co., Ltd. conducts a strict verification process of the customer identification including non-face to face business which at minimum includes the capturing of;
- the name, address, birth date, purpose and intended nature of the transaction and occupation(natural persons),
- the name and the location of the head office or principal office, purpose and intended nature of the transaction, description of the business and substantial beneficial owner, as per requirements set out in the "Act on the Prevention of Transfer of Criminal Proceeds". Where non-face-to-face transactions occur, additional due diligence is carried out to mitigate any risks.
Furthermore, a risk based approach is considered and strict customer due diligence process is implemented to 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 company conducts transaction screening for unfair transactions such as market manipulation, intentional market making, insider trading, transactions using fictitious names. If a potential unfair transaction is detected through the transaction screening process, we will take appropriate steps to alert the customer, as necessary.
Overseas offices also work on preventing unfair or suspicious transaction by implementing AML/CFT measures through customer identification, suspicious transaction reporting and robust controls for high risk transactions.
AML/CFT documents such as verification process of customer identification and transaction screening is maintained in line with regional policies and procedures.
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
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
- 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 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.