MONEX GROUPINTEGRATED REPORT 2022

Who We are?

The Diversification
Diversification ofof “Money”“Money” andandThe
Individual Self-fulfillment
Self-fulfillment
Individual
In 2010 in Florida, a programmer exchanged 10,000 bitcoins for two pizzas. It was the first time in history that a blockchain-based crypto asset wasrecognized to have economic value. Now in 2022, there are more than 10,000 types of crypto assets with a market value well over 100 trillion yen.
Blockchain technology is rapidly revolutionizing the concept of currency, assets (“money”) and economic activity. In an era where “money” is dynamicallychanging, we at Monex Group want to work with our customers as lifelong partners and provide a wide variety of solutions so they can manage their“money” in line with their values and realize self-fulfillment.
Blockchain uses consensus algorithms and programs to secure a reliable and trustworthy system that democratically manages “money.” The emergenceof a system that issues and manages “money” without the backing of a centralized authority or power has created economic value in things that until now
were difficult to assess – way of thinking, rights, ownership, information, convenience, trust, feelings, experience, personal connections and other things.
Through programming, we are seeing the birth and circulation of countless types of “money” backed by different values. In the future where this trend will
only grow, we will need to know how to safely and smoothy manage (own, exchange, utilize, invest, borrow, lend, etc.) diverse forms of “money” in line with
our values. Furthermore, with the circulation of all types of value as “money,” we will need to identify a growing range of intangible things as assets or
debt, such as a scientific thought process acquired through education, individuality, health and time. What will we perceive as having value? What types of“money” shall we earn and how? Where, with whom and for what will we use it? In addition, what types of assets or debt will we have and at what juncture
in our lives? As part of our corporate philosophy of realizing individual self-fulfillment, we at Monex Group believe it is very important for the good ofsociety that all people have a way to control these factors according to their will and desire. For this, we need a strong and stable infrastructurereconstructed using blockchain technology, convenient and easy-to-use applications that appropriately manage the diversifying concept of “money,” theright knowledge and highly transparent information. Financial institutions, including our own company, must add to their existing brokerage and crypto
asset exchange services and develop and provide numerous new solutions to achieve this.
Since our founding, Monex Group has designed innovative ways of managing “money” for an ever-changing future. With a clear awareness of our role, our
responsibilities and the expanding possibilities, we will actively pursue businesses that enable individual self-fulfillment.

Monex Group, Inc. | Integrated Report 2022

01

Who We are?

Corporate Philosophy

Always a step ahead of the “Y” in “MONEY,”
our name MONEX expresses our desire toembrace all people who are engaged at
the forefront of our future.
With state-of-the-art Information Technology, globally universal
values and a sense of professionalism, Monex Group designs
innovative ways of managing money and realizing individual
self-fulfillment for an ever-changing future. Our ultimate goal is to
optimize each person’s lifetime balance sheet.

Monex Group, Inc. | Integrated Report 2022

02Who We are?

CONTENTS
Who We are?
01
02
03
04
06
07
08
09

The Diversification of “Money” and Individual Self-fulfillment
Corporate Philosophy
Contents / Editing Policy
At a Glance
History | Growth Trajectory
Process of Creating Value for the Monex Group
Materiality Issues to Achieve Our Corporate Philosophy
Identifying & Promoting Materiality Issues

Corporate Value Resources
28
29
30
31
32
33

Information Disclosures Based on TCFD
Cyber Security
Risk Management
Creating Value Offering to Facilitate Individual Self-fulfillment
Human Resources Strategy
ART IN THE OFFICE
Employee Education & Social Contribution Through Art

34 Corporate Governance
34
37
40
41
42
43

Overview of Corporate GovernanceDiscussion on Governance
Skill Matrix of the Board Members
Management Team
Stakeholder Engagement
Our Profound Thanks to the Late Mr. Nobuyuki Idei and
Our Plans Going Forward

Increase Corporate Value

Financial Section

10 CEO Message
14 Co-CEO / CFO Message
18 Segment Strategy

44
47
50
52
54
55

19
22
24
26
27

Japan Segment
US Segment
Crypto Asset Segment
Asia-Pacific Segment
Investment Segment

Editing Policy

Management Discussion & Analysis [Profit & Loss]
Management Discussion & Analysis [Balance Sheet]
Business KPIs
Past 11 Years
Stock Information
Overview of Group Companies

Monex Group, Inc. | Integrated Report 2022

03

This report was created based on the
Company’s policies with due
consideration of the IR Framework,
released by the International Integrated
Reporting Council and the Guidance forCollaborative Value Creation issued by
Ministry of Economy, Trade and Industry.
The report was made up to show theGroup’s unique business model andmanagement strategies and to enable thereader to gain an overall perspective of
the Monex Group.
Reporting Period
Fiscal year under review: April 1, 2021 toMarch 31, 2022
(including some activities that started from
April 2022)
Organization under review
Monex Group, Inc. and Group Companies
Detailed Information on Financial Results
Refer to the Annual Financial Statements fordetails on the Annual Financial Statements in
March 2022.
WEB For Investors | IR Library |Integrated Report / Annual ReportWho We are?

At a Glance
The Monex Group is made up of 5 segments. They include a domestic online securities business that offers a stable revenue stream, a U.S. based
online securities business that is backed up by an army of engineers, a crypto asset business that will help propel growth globally, an Asia-PacificSegment and an Investment Segment. Our three main segments: Japan, the U.S. and the Crypto Asset, in particular, have continued to growsteadily, supporting the consolidated revenue of the Group to grow by +21% annually on average over the last 3 years.
Japan Segment

US Segment

Asia-Pacific Segment

Crypto Asset Segment

Investment Segment

The Amount Equivalent to Operating Income and ROE
Total Operating Revenue After Deducting Financial Expenses and Cost of SalesFYE March 2019

FYE March 2022

(First fiscal year
after Coincheck joined the Group)¥0.8 billion¥0.4 billion¥2.1

billionAll 5 segments
Revenue¥28.6

over past 3 years¥ 47.4 billion¥25.2

billion

Percentage from Percentage fromoverseas
crypto asset
locationsbusiness¥0.5 billion

29%

Average annual
growth ratebillion¥18.9¥1.2 billion(Billions of Yen)billion+21%

All 5 segments
Revenue¥ 83.5

34%

¥30.1
71%

billionNumber of Employees

66%

6%

40%

4.05 54

million accounts(FYE Mar. 2022)

6%

%

1,480
persons(FYE Mar. 2022)

31%

15.0

20

13.4
14.9

10.0

3.9

1.5

10
5

2.7
FYE
Mar. 2019

15

5.2
0

FYE
Mar. 2020

Third-Party Evaluations

Assets in Custody

3%

14%

ROE

23.8
17.3

FYE
Mar. 2021

FYE
Mar. 2022

Started to make upfront investments in Coincheck and TradeStation
Group for the fiscal year ended March 2022. At present, however,the Group is shifting to control its investments and spending tosecure profits to ensure resilience under tough market conditions.

4%

1%

20.0

0

¥23.1 billion

Number of Customers

The amount equivalent tooperating income

5.0billion

(%)

25.0

18%

¥8

Approx.
trillion(FYE Mar. 2022)

73%

51%

Monex Group, Inc. | Integrated Report 202204Who We are?

At a Glance
Japan Segment
Main Business

Crypto Asset Segment

Financial instruments
business in Japan

Monex, Inc. established in 1999 is one of five
major online securities businesses, whichcurrently make up 90% of the value traded by
Japanese retail investors. Monex’s goal is totransition to an asset management model andincrease revenue apart from the Japaneseequity commission fees.

Total operating revenue after deducting financial
expenses and cost of sales
The amount equivalent to operating income
Operating income margin(Billions of yen)
40.0

Monex Asset Management, Inc.

17

17

20.0

Monex, Inc.

(%)
20

30.0

25.7

29.1

24.3

11

2.7

0

15

30.4

10

11

10.0

P.19: Segment Strategy |Japan Segment

Main Business

5.0

2.7

5

5.2

The TradeStation Group was first founded asa trading systems company in 1982. Later after
transitioning to an online securities business,
the TradeStation Group joined the Monex
Group in 2011.
TradeStation made large upfront
investments during the last fiscal year, and islooking to secure profits starting this fiscal
year.

TradeStation
Crypto, Inc.

20.0

P.24: Segment Strategy |Crypto Asset Segment

23.0

10

19.3

0

0

23.6

15

19.9

10

Financial instruments
business in Hong Kong
and Australia

Hong Kong-based Monex Boom Securities
merged with the Monex Group in 2010 and has
developed an online securities business withaccess to stock from 12 different markets.
Monex Securities Australia was formed in 2018
and uses the backbone system of Monex
Boom Securities can provide services at a low
running cost.

20.8

2.1

3.8 8

2.1

2.0

-6.0
FYE
FYE
FYE
FYE
Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022

Monex Boom
Securities (H.K.) Limited

Monex Securities
Australia Pty Ltd

P.26: Segment Strategy |Asia-Pacific Segment

Monex Group, Inc. | Integrated Report 2022

05

20

0.3

0

FYE
FYE
FYE
FYE
Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022

Investment Segment
Main BusinessCorporate venture
capital businessMonex Ventures’ principal VC investment
business is supported by three investment
arms. In addition to the active investments andsupport for the companies we invest in throughthe MV1 Investment Limited Partnership,
Monex Ventures is now promoting investment
through the new MV2 fund.
MV1 Investment
Limited Partnership
Monex Ventures, Inc.

0

48
13.7 40

-2.7

5

3.2

(%)
80
60

20.0

13.7

Main Business

(%)
20

14

28.6

66

-10.0

10.0

-10.0

P.22: Segment Strategy |US Segment

11(Billions of yen)
30.00

Total operating revenue after deducting financial
expenses and cost of sales
The amount equivalent to operating income
Operating income margin(Billions of yen)
30.0

Total operating revenue after deducting financial
expenses and cost of sales
The amount equivalent to operating income
Operating income margin

10.0

Coincheck, Inc.

Asia-Pacific Segment

Financial instruments
business in the U.S.

TradeStation
Securities, Inc.

Coincheck joined the Monex Group in 2018 andoffers services as a Cryptocurrency Exchange
Agency to as many as two million customers
that are primarily younger customers.
The Coincheck trading app has the highest
number of downloads in Japan.

FYE
FYE
FYE
FYE
Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022

US Segment
Main Business

Cryptocurrency exchange
business in Japan

MV2 Investment
Limited Partnership

P.27: Segment Strategy |Investment Segment

Who We are?

History | Growth Trajectory

Executing Growth Strategies in Our Main Subsidiaries
to Increase Corporate Value for the GroupAs stock brokerage commissions were deregulated and the Internet began totake hold in people’s home, Monex was established, embracing the idea of“Providing retail investors equal access to capital markets like institutional
investors.” Thereafter, Monex boosted its corporate value by expanding ourdomestic footprint through M&A activities, developing brokerage services globallyfrom 2011 and jumping into the crypto asset business in 2018. We revised our
corporate philosophy in 2021 to “Optimize each person’s lifetime balance sheet.”
In addition to extending our business services beyond finance, we are pushing
more growth strategies in our main subsidiaries and are fully committed to thesemeasures to increase not only the corporate value but stock price for the Group.

Entered crypto asset business, to actively playa leading a role in unlocking a futurewith blockchain technology.

RevisedCorporate Philosophy

Offering global operations that move acrossnational boundaries to provide value tocustomers in a borderless world.

April 2021

New Beginning
October 2017

Global Vision
October 2010

April 2018

Acquired 100% of
Coincheck (Japan)

Developed general securities, offering shares,
bonds, investment trusts and FX. Expanded
through M&A to maximize the value provided.

Pushing growthstrategies insubsidiaries toincrease corporate
value for Group

June 2011

Acquired 100% of TradeStation (U.S.)

Establishment
April 1999

Actively Engaged in M&A (2004 to 2010)(Billions of
Yen)

90

Acquired 100% of Boom Group (Hong Kong)• Nikko Beans, Inc.
• Tokyo Forex• Orix Securities Corporation

April 1999

Monex, Inc. established

Overseas Launch of
Online Securities Business

80
70

Engage in Crypto Asset
Related Business

Domestic M&A in Online Securities Business

60
50

New
GrowthView of Operating Revenues
after Deducting Financial Expenses

40

Crypto Asset Segment

30

US Segment/Asia-Pacific Segment

20Japan Segment

100

December 2010

1999

FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
FYE
Mar. 2000 Mar. 2001 Mar. 2002 Mar. 2003 Mar. 2004 Mar. 2005 Mar. 2006 Mar. 2007 Mar. 2008 Mar. 2009 Mar. 2010 Mar. 2011 Mar. 2012 Mar. 2013 Mar. 2014 Mar. 2015 Mar. 2016 Mar. 2017 Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022

Monex Group, Inc. | Integrated Report 2022

06

FYE
Mar. 202X

Who We are?

Process of Creating Value for the Monex Group

Realizing Our Corporate Philosophy and Offering New Value for
Each Individual and Society
Since our founding, Monex Group has endeavored to bring value to individuals and to construct asustainable society based on our forward-looking visions. Monex Group enjoys the benefits of anautonomous and diverse work force and possesses technical expertise that is reflected in the in-housebackbone system found in each business. We also have astrong management system that oversees the Group
companies that are decentralized by region and business
BUSINESS MODEL
domain. These three strengths have enabled us to promote
P.19
Japan Segment
our business model as we
continue to provide valuethat helps individuals
achieve self-fulfillment andalso create a positive impact
on society by focusing on
key materiality issues.

VISION
Corporate Philosophy
P.02

Medium- to long-termbusiness strategy“Global Vision”“New Beginning”

Human
resources

OUTCOME
Materiality
P.08-09

Creating an advanced
business foundation
to support
sustainable growth

Looking to promote an asset management
model and shake free from an over-reliance oncommission revenue from Japanese equities.

INPUT

US Segment

P.32

P.22

More than 1,500
employees with various
experience, expertise andlocalities

Offering a premium trading platform foractive traders.

Management

Use our clout as Japan’s top crypto asset
exchange service provider to break into
the metaverse and Web3.

Crypto Asset Segment

P.40

Our Board of Directors andexecutive team work intandem to transform thestrength of our diversity
into a unifying force whiledriving us forward

Asia-Pacific Segment

Diversified “Money”

Creating equitable
work conditions fordiversified personnel
to promoteautonomous activity

P.24

Creating value tofacilitate individual
self-fulfillment

P.26

Running online brokerage services inHong Kong and Australia.

Individual
Self-Fulfillment
P.01

Future society that
Monex Group envisions
New technologies beginning withblockchain will accelerate our advancement
toward the future and a society that values
the different perspectives of individuals. The
individuals that live in this new society will
navigate ways on how to manage morediversified types of “money” and how toachieve self-fulfillment.

Technical expertise
In-house systems,
engineers who employ
cutting-edge technology
and their technicalexpertise

Investment Segment

P.27

Numerous investments into startups with seedmoney or in their early stages. Successfully
exited many investments including IPOs.

ALLOCATIONGOVERNANCE

Corporate Governance

P.34-43

Risk Management

P.30

Financial Control (MD&A)

Monex Group, Inc. | Integrated Report 202207

P.44-49

Compliance WEB ESG Information | Ethics and ComplianceWho We are?

Materiality Issues to Achieve Our Corporate Philosophy
TargetCreating an advanced
business foundation to
support sustainable growth
Our advanced business foundation
offers comprehensive support
throughout the process to create
value from the allocating capital toproviding value to society, with thegoal of increasing corporate value
sustainably.

Creating equitable work
conditions for diversified
personnel to promoteautonomous activity
We endeavor to make a fair andequitable working environment fordiversified personnel and theirdifferent working styles, and ensure
the well-being of “personnel,” ourmost valuable asset, in order toachieve our corporate philosophy.

Creating value to facilitate
individual self-fulfillment
In addition to pursuing innovationin our main business, the financial
domain, and acquiring newcustomer demographics, we are
striving to create business that
falls in line with our new corporate
philosophy “realizing individual
self-fulfillment and optimizing each
person’s lifetime balance sheet.”

Priority Item

Risk

Opportunity

Main Measure

Data Security &Privacy

System failure or error causes loss of customer
confidence, and mishandling of personal
information adversely affects brand reputation
and/or causes economic loss.

Set up Monex Group CSIRT (Computer Security Incident ResponseTeam), integrate a 2-factor verification and comply with theamendments to the Act on the Protection of Personal Information.

Corporate
Governance

Success probability of management’s strategy
drops due to execution, checks and balances
and/or monitoring functions not being
appropriately implemented.

Set up 60% of Board with outside, independent directors, assign
lead independent director and select Board members based on
skill matrix and diversity.

AML &Anti-corruption

Loss due to an undeveloped or non-existentanti-money laundering system regulated by therelevant authorities and/or system meant to curtail
excessive entertainment from outside parties.

Risk Management

Poor risk management system causes anaccident, or its inability to mitigate loss leads todegradation of corporate value.

Recruiting &Human
Development

Personnel strategy that does not follow ourcorporate philosophy leads to a drop in retention
and/or work productivity as well as adversely
affects the brand value.

Promote sustainable growth of our corporate
value by improving our work productivity.

Carry out surveys to engage employees, conduct position-based
training and implement support system to acquire qualifications.

DEI

Late adoption of DEI approach leads to drop in
recruitment appeal, employee retention andwork productivity as well as adversely affects
the brand value.

Ensure competitive edge in personnel by
improving recruitment appeal, work
productivity and brand value and by creating
innovation through improving the well-being of
employees.

Set up the DEI Global Steering Group, disclose percentage offemale managers and disclose pay gap information.

Labor Practices

Increase in turnover rate and a drop in work
productivity due to no improvement in work
environment (working style).

Improve work environment, recruitment appeal
and work productivity.

Establish telecommuting regulations, and integrate a flex timesystem (alternative work schedule) as well as an open layout touse any desk space.

Innovation

Provide completely new and innovative service
to create new customer demographics andgain opportunities for revenue.

Based on our track record of developing and expanding ourbusiness domains (such as going from online securities in Japanto rolling out global operations and expanding into a crypto asset
exchange service provider), we amend our corporate philosophy
with the goal to achieve individual self-fulfillment and optimize
each person’s lifetime balance sheet.

Sustainable
FinanceUse asset management services related toclimate change as a means to develop
opportunities for revenue.

Set up Monex Climate Impact Fund, and provide Monex eGreen
Fintech as well as renewable energy investment advisory services.

Improve customer satisfaction level by
renewing the value offered to match thecustomers’ demands.

Establish “Responsible Products and Services Offering Policy” andconstruct a system that reflects customer needs into productdevelopment in order to continuously improve products andservices.

Improve Financial
Literacy

Extending the range of our customer base andincreasing the trading volume leads to more
opportunities to generate revenue with anincrease of customers using our services.

Open Monex University (U.S. equities course, crypto assets courseand FX course), and expand investment information services.

Financial
Inclusion

Extend the range of our customer base byenhancing the accessibility to minority
demographics.

Push to acquire new customer demographics in each Group
company (“Takusu Kabu” at Monex, Inc. targets new customers
among senior citizens, and NFT business expansion at Coincheckattracts customers that are not crypto asset traders).

Customer
Usability

Loss of opportunity to acquire customers orgrow business.
Delay in supporting requirements from societyor regulators adversely affects brand value.

Advanced governance system and Group-widerisk management reflects potential value ofMonex Group more directly in corporate value

Implement corruption prevention training in both Japanese andEnglish, and disclose anti-bribery and internal reporting system tothe outside.
Identify in a timely manner the amount of risk using a Group VaR(Value at Risk), and be informed of the risk control status using aGroup RCM (Risk Control Matrix).

Monex Group, Inc. | Integrated Report 2022

08

Who We are?

Identifying & Promoting Materiality Issues
Given the Group’s big advancements in growth strategies and our PL structure, we recently updated the materiality issues. The materiality matrix below
reflects the current “Importance to Stakeholders,” which was confirmed in a questionnaire given to clients, employees and stakeholders, as well as the “Impact
on the Monex Group Business,” which was quantitatively and qualitatively analyzed based on the current status. Going forward, we will continue to carry out
educational activities in the company, engage with stakeholders and expand the scale of relevant businesses in order to increase the level of importance foritems like “Optimize Lifetime Balance Sheet” and “DEI,” which are closely aligned with the corporate philosophy and goals of the Group.

Materiality Matrix Identification Process(as revised July 2022)
Major

Material Issues

Significant

Importance to Stakeholders• Risk Management *1• Customer Usability• Sustainable Finance• Data Security & Privacy• Corporate Governance• AML & Anti-corruption• Innovation• Recruiting & Human Development• Improve Financial Literacy• Financial Inclusion• Diversity, Equity & Inclusion• Labor Practices

STEP2 Evaluation of Importance

Vertical axis:
Questionnaires were sent to customers, shareholders, andemployees (total number of responses: approximately 3,700)
regarding the issues identified as a high priority in STEP1.

• Community Development• Human Rights Protection• Fair Financial Transactions• Tax Policy• Climate Change

Horizontal axis:
We measured and evaluated the financial impact (froma quantitative perspective) and the impact on the realization of
our corporate philosophy (from a qualitative perspective) of ourefforts on each item.

Moderate• Optimize Lifetime Balance Sheet *2• Policy Advocacy• Procurement Management• Water Consumption• Waste Management• Effluent Management• Ecosystem Conservation• Air Pollution
Moderate

STEP1 Identification of material issues

Referring to the survey items of ESG evaluation organizations
and frameworks such as SASB and GRI guidelines, we quantified
the priorities for the material issues that we had previously set
forth.

STEP3 Identification of materiality

Significant

Major

Impact on the Monex Group Business

STEP4 Discussion and Decision by the Board*1 Risk Management includes risk control and management of the impact from climate change.
*2 Includes STEAM education and custodian of whole genome information offered by group companies named Viling, Inc. and Genex, Inc. respectively.
Note: Monex Group strives for saving energy in its crypto related businesses and does not operate any mining business at the moment.

Monex Group, Inc. | Integrated Report 2022

Based on the results of STEP2, the internal task force of thecompany held discussions and developed a new materiality
matrix divided into 9 quadrants. Both the vertical and horizontal
axes are expressed in three levels: “Moderate,” “Significant,” and“Major.” The items in each quadrant are listed in descendingorder of impact value, with the items framed by a white square
being our new most important items for which we will promote
initiatives.

09

The decision was made after explanations and hearings with theperson in charge of each material issue, as well as consultingwith the CEO and other executive officers, and reporting anddiscussion at the Board of Directors meeting.

Increase Corporate ValueCEO Message

Aiming to increase the Group’s overall corporate
value, by embracing a DEI approach andensuring subsidiaries execute each growthstrategy autonomously in order to expand
business over the medium- and long-terms
Monex Group (hereafter referred to as “Group”) posted a record year of total
operating revenue* for the fiscal year ended March 2022, with the Japan, US
and Crypto Asset Segments showing steady growth. In light of thisperformance, the Group is pushing a new strategy to achieve sustainablemedium- and long-term growth, with a succession plan for management inplace, our main subsidiary scheduled to be listed in the U.S. and realizing
new business opportunities. We shall build upon the foundations of eachsegment, ensure a timely transition to a decentralized global outlook
embodied by the up-and-coming Web3, and continue to create new
businesses. Through these measures, we will accomplish the goal of ourrenewed corporate philosophy and “realize individual self-fulfillment foran ever-changing future and optimize each person’s lifetime balance
sheet.” We shall increase corporate value and contribute to society atlarge with value only Monex Group can offer.
* Total operating revenue after deducting financial expenses and cost of sales

Oki Matsumoto

Representative Executive Officer
President & Chief Executive Officer
Monex Group, Inc.

Monex Group, Inc. | Integrated Report 2022

10

Increase Corporate ValueCEO Message

Promote Management Succession and Roll Out Measures
for Further Growth

Accelerating globalization of crypto related businesses

Clarify measures to take without changing the Group’s value approach

The fiscal year ended March 2022 was filled with many critical actions to foster further
growth. In our management system, a two-man CEO system was put in place with theformer COO Yuko Seimei being designated one of the Co-CEOs, as part of a push toenhance our succession system. We announced our plans for one of our main subsidiaries
in the crypto business Coincheck Group, Inc. (hereafter referred to as "Coincheck Group"), anintermediate holding company of the Group and a parent company of Coincheck, Inc.
(hereafter referred to as "Coincheck") as well as TradeStation Group, Inc. (hereafter referred
to as “TradeStation”) to become listed in the U.S. market via a SPAC merger. Our asset
management model continues to make progress in our domestic online securities
subsidiary Monex, Inc. (hereafter referred to as “Monex”), and aside from the crypto asset
trading, Coincheck also launched an NFT business.
Generally speaking, Monex Group is bustling with activity, but we do not believe that thecorporate activities are sufficiently reflected in the stock price of the company. We
understand the reason why these activities have not translated completely to returns for theshareholders is because there are not enough measures in place to accurately reflect themin the stock price. By listing our subsidiary on the market through a De-SPAC transaction,
this public platform offers more opportunities to adequately explain the Monex Group’sbusinesses and strategies to the market. This platform also helps fill in any gap between thecompany’s fundamentals and the market’s evaluation of the company. In turn, this will
increase the corporate value of the subsidiary and connect it to the stock price of thecompany, making it a crucial strategy for management going forward.
We have plans to list our subsidiary Coincheck Group on NASDAQ via a De-SPAC
transaction. Coincheck Group is a company that uses cutting-edge technology, such as
Web3 and blockchain, to create new businesses. To achieve this, it is essential to not only
have personnel familiar with this leading technology and information but also identify
promising partners. To that end, the NASDAQ listing will elevate the company to a position
to facilitate these tasks. If a leading start-up company presents itself in the crypto asset
market, we believe that a listed position gives us the flexibility to use shares to buy them out.
There are no companies in this field that are listed on world exchanges such as NASDAQ.
Therefore, if Coincheck Group is listed, it would give us a tremendous advantage to secure
personnel, identify partners, get information and acquire technology. In a two-man CEO
system, I myself would direct resources particularly for developing new business andglobalizing crypto related businesses that have huge hidden potential.

Much of TradeStation’s business is comprised of retail investors in the U.S., and being
listed in the U.S. market could have boosted the company’s visibility and recognition evenmore, also giving customers a sense of security. With these advantages in mind, weannounced in November 2021 our plans for TradeStation to be listed on the NYSE via a
De-SPAC transaction. However, in August 2022 we decided to forgo being listed on the
NYSE via a SPAC merger based on multiple factors, including poor economic and market
conditions.
Note that we still use a sum of the parts approach to ascertain the corporate value ofthe Monex Group, that is, summing the individual value of each subsidiary, and we believethat identifying the value of each is an important step to help improve the overall value of
the Group. Going forward, we are steadily pursuing listing Coincheck Group on NASDAQ,
while TradeStation will give due consideration to the current market conditions and revise
its strategy to ensure further growth.
It is evident which steps we must complete as a group to achieve growth for the fiscal
year ended March 2023 and beyond. With regard to Coincheck, we must create a
Coincheck Group, get it listed on NASDAQ, globalize operations quickly and roll out thebusiness, which is still unavailable domestically, to accelerate growth. In the Japan
Segment, we are promoting an asset management model and are responding to theneeds of our customers, by following suit and lowering the commission fees of cashtransactions of Japanese equities. In the US Segment, we shall pursue a profit-driven
growth strategy using the strength of our services for active traders. In addition, Monex
Group even changed top management to a two-man CEO system to pave the way for
future growth of the overall Group. We are excited to see what results we can produce inthe coming year.
Monex Group has been confronted with dramatic changes, and now Web3 is on thecusp of overturning our global perspective and shaking the technology foundations thathave been characterized and led by Web1 and Web2 for the last 20 years. Of course, wemust adapt to this technological change, and will strengthen each of our segment’s
businesses and the management team that drives them to ensure our position in thisnew world.
P.22: Segment Strategy | US Segment

P.24: Segment Strategy | Crypto Asset Segment
Monex Group, Inc. | Integrated Report 2022

11

Increase Corporate ValueCEO Message

Giving universal access to services to enrich the lives of individuals
at a time when the concept of MONEY is evolving

Changes in society’s framework present big opportunities for Monex
Web3 is knocking on the door of a new world. This presents a fantastic opportunity for
Monex Group, but not without risk. Web3 features technology that espouses a
decentralized perspective and direction. Traditionally, stock exchanges have offered acentralized location to buy and sell stocks, and therefore are the only locations whereliquidity is generated and the price of items is determined. However, the Web3 platform is
not centralized but decentralized, providing transactions that are executed freely andavailable at various locations. When this comes to fruition, it may upend the foundation of
our main business, online securities. However, this does not mean equity trading that drives
economic activity will be lost, even if the concept of an exchange becomes obsolete.
Monex Group will need to investigate, develop and provide the services and financial
instruments that will be required in that environment. To enjoy the benefits of this transition,
we must first transform the business of the Monex Group, and as a result, we think theGroup should act early and incorporate Web3 technology and the perspective it offers.
The question “What opportunities are there with Web3?” is reminiscent of the samequestion posed 20 years ago “What type of business can you do with the Internet?” Web3 isan incredibly broad concept, and there is still nothing that stands out as identifiable. I am
personally trying to understand the perspective that Web3 brings to the table, but it isequally important for management to incorporate young personnel who have the same
perspective. The former outside director Naofumi Yamada was assigned to an executive
officer position exactly because we believe it is critical for our management team to include
personnel who already understand this new technology and hold this perspective.
As this new world inches closer, it may be challenging for Monex Group to conductbusiness under this climate. However, if the basic framework of society changes, that
represents a golden opportunity for Monex Group. How Monex Group embraces these
exciting changes and rides that momentum will shape our destiny for the next 10 years.
And, unless we continue to face this change with a sense of urgency, it really has thepotential to threaten our future.
P.40: Corporate Governance | Skill Matrix of the Board Members

Society where many individuals can reap the rewards through ideas
and technology
When Monex was founded, our vision was manifested in our name “Replacing the ‘Y’ in
MONEY with an ‘X’ to create the future of finance,” and we have taken a firm stance to“Design innovative ways of managing money in this new era.” However, now the conceptof MONEY itself is changing. Something new other than money and with“exchange-value” has emerged. And as a result, we must include this value when
designing innovative ways of managing money in this new era.
In 2021, we revised our corporate philosophy and announced that the Monex mission
not only aimed to increase the balance of customer assets but also support the
self-fulfillment of customers. As mentioned in our corporate philosophy, being active in
online securities as well as getting involved in crypto and other new businesses will havea significant impact on optimizing each person’s lifetime balance sheet. If we can createa system using crypto assets and blockchain to support various economic activities
without going through the existing bank system, then we can offer a greater chance forindividuals to have a better life in this new era, and that is at the core of our corporate
philosophy.
Monex Group does not offer special service to a select number of customers but
endeavors to provide high quality service to as many customers as possible. For
instance, Monex, Inc. overcame many obstacles to finally give individual traders accessto a variety of services that used to be only available to institutional investors. That
approach is the same one adopted by our subsidiary Viling Inc., which is involved with the
new business of STEAM education. This educational approach is not an advanced
program only available to select children, but aims to create an environment with equal
access to good quality education. Genex, Inc., which is involved in the genomics platformbusiness, also aims to create a system that allows anyone, even people with incurable
diseases, access to the appropriate treatment. And, all Monex Group’s businesses are
made in the same image. Monex’s legacy is using ideas and technology to make aservice, which had limited access to only certain people, accessible to everyone.
Contributing to society in this image is the purpose that drives Monex.

Monex Group, Inc. | Integrated Report 2022

12

Increase Corporate ValueCEO Message

Embracing DEI approach and using the sum of each subsidiary andtheir independent managements to increase our corporate value

Striving for group management with true balance between
centralized and decentralizedCompanies cannot survive with a management that does notprioritize ESG and sustainability

Governance becomes vital to maximize the group’s output and to improve the corporate
value and stock price of Monex Group. The Group is also aiming for a decentralized
governance, which is aligned with the perspective of Web3. At present, the younger
generation holds a decentralized perspective on things. In other words, this younger
generation does not wish to be a cog in the wheel for a big corporation but has a stronger
desire to wield power from the perspective of an independent organization. Evidence of thistrend can be seen in the top students choosing not to work as government officials or in big
corporations. There are more and more people who no longer wish to “Serve the powerful for[their] own good” and who no longer pursue something overly centralized, and therefore, we
believe that a decentralized management is required for the future.
Now, if efficiency is compromised by adopting a decentralized approach, then ultimately,
returns will also go down. Of course, a centralized system will certainly improve efficiency andimprove the P/L. While having a decentralized perspective and approach is important, having
a unifying force in corporate management is also needed. We must strike the right balance
between a centralized and decentralized approach, such as our holdings organization
assuming certain functionality like improving efficiency and lowering costs overall. A
company is a living thing and constantly evolves in a dynamic way. Bearing that in mind, we
will strive to realize a group management system that follows the Monex way.
Ever since Monex was founded, we have always stayed true to our values, which isessentially the same concept as the DEI (Diversity, Equity & Inclusion) approach that iscurrently being adopted all over the world. While there may be organizations who do notembrace a DEI approach but still have been able to achieve high performance results, on thewhole, I believe that this carries a high risk. Yet with a DEI approach, even if people havedifferent types of abilities and levels of performance, if all employees give 100% or even 105%,no company can compete with that. On the one hand, it is important to entertain different
opinions with a DEI approach, but even still, one must keep in mind the direction that acompany or business should take. Being part of management, I must decide on that direction,
keep the employees informed of our intent and get everyone on board to drive forward.

We shall continue to focus resources on ESG and sustainability initiatives. ESG andsustainability are not social initiatives that are supported by leftover resources, but are
absolutely critical to get ahead as a company. Unless management prioritizes ESG andsustainability, funding will dry up, incorporating younger customers and personnel will beharder and the company will not survive. I may be oversimplifying things, but if we are notsustainable, we cannot compete with our rivals and ultimately will be unable to contributeto our stakeholders.
In terms of our succession plan, I am the type of person who prefers to have thesuccessor shadow me and I believe I can present things clearly. If I see something thatruns contrary to my perspective, I will point it out and discuss it with my successor.
However, I have no intention of overstepping my role and tainting things too much.
Nonetheless, I will ensure a DEI policy is followed to train the successors in the
management team. While a transfer from the founding management team to thesuccessors will have its challenges, having a smooth and successful succession will help
us achieve our goal of sustainable medium- and long-term growth and continuing to
improve our corporate value.
P.09: Identifying & Promoting
Materiality Issues

P.32: Human Resources Strategy

Monex Group, Inc. | Integrated Report 2022

13

Increase Corporate Value

Co-CEO / CFO Message

Using both business andfinancial strategies to tackle
issues that confront the Groupto ensure continuous
sustainable growth
Monex Group has its eye on the future, laying down plans tolist a subsidiary on the NYSE and rolling out various othergrowth strategies. Going forward, the framework of thefinancial industry and society as a whole will undergo amajor transformation, to which we ourselves must adapt
accordingly. During this transition, we will face a number of
obstacles that we must overcome to ensure growth. As the
Co-CEO and CFO, I am committed to building a company,
using both business and financial strategies to tackle issues
that confront the Group, while making bold and strategic
growth investments, in order to enhance the corporate value
and ensure sustainable development. In addition, we arelooking to the young leaders who will lead the next
generation of Monex Group and pass them the baton to steer
management into the future.

Yuko Seimei

Representative Executive Officer
Co-Chief Executive Officer
Chief Financial Officer
Monex Group, Inc.

Monex Group, Inc. | Integrated Report 2022

14

Increase Corporate Value

Co-CEO / CFO Message

Breaking away from our conventional securities business to accelerate
growth and maintain a management team oriented toward the future

Creating a system to raise revenue regardless of external conditions
With my appointment starting as Co-CEO from April 2022, I am now in charge ofmanaging Monex Group with the same authority as Matsumoto. Our company’s portfoliofeatures three main areas: “Global securities business,” “Wealth management business”
and “Crypto business.” Our tandem roles include Matsumoto as the driving force behindthe “Wealth management business” and “Crypto business” as well as new businesses, andI oversee the “Global securities business” and the Group’s growth strategy. In addition, as
the CFO, I am also in charge of the Group’s financial strategy and ESG related matters.
The Monex Group started from securities business, which has propped up our M&A
strategy that drives our growth. Our securities business not only creates cash flow but has
allowed us to build networks and acquire personnel, and leveraging them has brought in
the TradeStation Group, Boom Securities as well as Coincheck under the Monex Group’s
wing. While we did struggle a bit with the TradeStation Group in the red, we were able toovercome that thanks to the earning power of Monex, Inc. and the steady revenue that it
has brought.
Our securities business still plays a key role, but I would never say that it is in stablecondition. To begin with, the performance of the securities business has always beensignificantly swayed by the market. When there is higher volatility, customers trade more
actively, but when the market does not really fluctuate, trading becomes stagnate. Having
our performance tied to that volatility is not sustainable. Therefore, creating a system that
can increase revenue regardless of the external conditions is a pressing issue for us. Right
now, we are in the midst of establishing an asset management model, where we use theassets from the customer to earn revenue.
Recently, the decentralized finance (DeFi) concept is gaining momentum, and 10 or 20
years from now, stocks may be bought and sold without using a securities firm or
exchange. Just because cash flow is being created right now does not mean we should
be complacent. We must look to the future and find a way to break away from our
traditional securities business and continue to grow. Beyond our first step to transitioning
to an asset management model, we must also think of our next strategy and implement it.

Forming a management team that can make strategically bolddecisions to raise the Group into a 100 billion JPY business
There are a number of topics that must be addressed to ensure growth going forward.
Monex Group has leveraged the resources accumulated by Monex, Inc. to globalize
operations and make advances in the crypto business. Right now, we are looking to list a
subsidiary onto the NYSE via a De-SPAC transaction to create more efficient financing.
This financial institution has developed a diversified business portfolio globally, and I
believe that the Company has produced amazing results, whose equal cannot really befound anywhere else. However, what we do over the next 30 years is far more important
than what we did over the last 20. Our CEO Matsumoto has led us up to this point, but
creating a management that can usher us into the future remains a central issue.
The management teams for each Group company can decide on their own how toresolve the issues that they face. However, the situation changes when considering theGroup as a whole. At present, the Group’s revenue exceeds 80 billion JPY and we have set
a goal to reach 100 billion JPY. For the company to reach 100 billion JPY, can we groworganically or do we engage in more mergers and acquisitions. At times, it is necessary to
scrap rather than build up. How should we use our limited resources toward our goal andrealize our vision? I believe we need to discuss this thoroughly without depending
disproportionately on our founder Matsumoto, and form a management team that can
decide on what to do without relying on a certain person too much.
One of Monex’s strengths is how we have adopted a DEI (Diversity, Equity & Inclusion)
approach throughout the Company. There is never just one absolutely right answer. We
believe in a philosophy where there is meaning and value behind everything. Innovation isneeded to achieve our corporate philosophy and goals that the Group has set, andinnovation is not possible without a DEI approach. Developing into the company we are
striving to be is entirely based on this premise. Going forward, we will continue to focus on
hiring and training personnel following a DEI approach, and create an organization thatcan grow sustainably.
P.32: Human Resources Strategy

Monex Group, Inc. | Integrated Report 2022

15

Increase Corporate Value

Co-CEO / CFO Message

Investing in growth to create new business while managing risk
appropriately and using a definitive financial strategy

Increasing market capitalization is critical even for M&A

Create a business foundation that can maintain a high ROE level

It is also important to manage risk in order to spur further growth. Our company used toonly manage a domestic online securities business, which made it easy to manage risk.
However, now our business has been developed worldwide and operates in morecountries, and new businesses are being added to the portfolio. This forces companies totake different risks on different fronts. While a company should take risks, it is becoming
far more difficult, compared to before, to understand what the appropriate risk should be.
And unless we recognize that, shareholders will not get their returns and we will be unable
to create an environment where employees can work with security. In addition, if the
Coincheck Group is able to get listed via a De-SPAC transaction in the near future, then theMonex Group will become a listed company that has a U.S. listed company under ourumbrella. How to provide governance for the Group as a listed company under thesecircumstances is extremely challenging, but I believe that we have to make amanagement system that can attract wide support from all types of investors.
The Group’s risk control system must strengthen communication with each company
even more, and ensure there are reports that predict the potential risk rather than looking
at risk that is after the fact. This does not mean we should never take risk. Rather, wemust foster a mutual understanding with each company about how to measure theamount of risk in order to take the appropriate risk. How we quantify the actual risk andthe system we must implement is a fundamental issue going forward.
We must use this system to take the right risks so we can make bold, strategic
investments for growth. Creating new business is the most important growth investment
for the Group. Right now, our portfolio features 3 main businesses, and creating anotherone has been a principal topic going forward. One way we can do this is through M&A. If
we make an acquisition with cash alone, we cannot benefit much from that leverage, but
the bigger we make our market capitalization, the more effective our M&A will be. As aresult, raising market capitalization is not just to invest in growth but is necessary.

We are updating our financial strategy to ensure it always adapts to the external
environment. The ideal amount of our cash position also changes depending on thebusiness environment. Therefore, we must strive to always have a precise understandingof the situation and hold the appropriate amount of capital. After constantly hearing fromtraders and investors, we changed the strategy of our business activities between the firstand second half of the last fiscal year. During the second half of the fiscal year, wetransitioned to a strategy where we applied some cost control to build up profits. I believethat this flexibility during the fiscal year is a strength of the Monex Group.
The return on equity (ROE) must be above the minimum capital costs. The current
capital costs of Monex Group are increasing due to the impact of the crypto business, butthat still does not amount to 10%. Therefore, our goal is to push up the ROE to at least
10% and ideally up to 15%. Our revenue still remains dependent on the market, and thereality is that it is difficult to maintain the ROE at a high level. My mission is to create afoundation so that the Monex Group overall can generate reoccurring revenue even whenthe market is poor. If the Group is able to achieve that foundation, the ROE will alsostabilize and I think it will be easier to draft better financial strategies, for example, on how
we maintain our leftover capital.
The global economy is currently unstable, but if a large scale financial crisis were tooccur, I think it would have minimal impact on the finances of Monex Group. The Group is
not trading based on our own position. While we have working capital which is always
required in the securities business, our system can raise a certain amount of funding frombanks. Being able to borrow a lot is also a sign of business doing well. Apart from that, wehave minimal external capital and have taken no financial risk as far as the balance sheet
goes. Even if there were a global financial crisis, while there is concern about revenue
slipping from less customer activity in our securities business, fundamentally speaking,the financial foundation of the Group will not become damaged.
P.44-49: Management Discussion & Analysis

Monex Group, Inc. | Integrated Report 2022

16

Increase Corporate Value

Monex sustainability depends on how capital is invested for the next
generation and how that is continued

Co-CEO / CFO Message

Committed to TSR to meet expectations of traders and investors

Sustainability is the most critical issue in management

The majority of capital investment for Monex Group is systems investment. It is safe to
say that the management strategy and systems investment is more or less equal. For
example, right now Monex, Inc. is transitioning to an asset management model and we aretrying to strengthen a service tailored to periodic purchase in an investment trust based ona global investment portfolio. As a result, we should be investing in systems development
now and do what we can to keep that timeline. My role is to make sure that our strategic
investment, return objective and timeline are in sync with each Group company.
We are concentrating on diversifying our business investments. These investments ofcourse include M&A, with our subsidiary Monex Ventures carrying minority stakes inroughly 100 companies, and we are also allocating funds to our own internal R&D. Our
strategy is designed to lower our risk as much as possible by distributing the funds foreach project and staggering the timeline. In addition, we have set objectives and rules forwhen to pull out at the time of our investment. We will periodically monitor whether thoseconditions are met and manage the effectiveness of our investments against ourmanagement decisions.
Beyond growth, the stock price needs to be lifted, but there are also traders andinvestors who are expecting a dividend payout. We have announced our commitment to a
total shareholder return (TSR), and we do not want our customers’ expectations to stop at
dividends but extend into capital gains. We are currently applying a sum-of-the-parts(SOTP) approach to help us see and ascertain our true corporate value, which I think ishigher than when our stock price was in the 1,000 JPY range.

Moving forward, sustainability is something that Monex Group should still focus on. The
fact is that implementing a sustainability approach throughout all businesses ischallenging. In our pursuit of ESG, our revenue will not necessarily increase over the shortterm. However, as a company, any stance that is interested only in immediate profits isextremely unfair to those in Monex Group who will take over the reins in the future. Is it
possible to create a business foundation to continue growth into the future? The
underlying theme in the answer to that question lies sustainability. How should we invest
capital for the next generation to ensure Monex Group continues development and does
not adopt a defensive posture? Taking this into account and how we put this into action issustainability realized in Monex Group, and we recognize this as the highest priority topic
in management.

TSR (Over 5 Years)(%)
350

Monex Group (including dividends)
TOPIX (including dividends)

334.2

263.9

300
250
200
150
100

193.7

180.9

144.7

172.4

50

104.7

105.1

Mar. 2018

Mar. 20190Mar. 2017

100.1

159.5

93.7

Mar. 2021

Mar. 2022

64.5
Mar. 2020* Total shareholder return (TSR) for the previous 5 years shown above is calculated using the closing price value for the last
day of each respective term.

Monex Group, Inc. | Integrated Report 2022

17

Increase Corporate ValueSEGMENT STRATEGY
Implement growth strategy using
strengths from each segment toelevate the value across the entire
Monex Group.
Monex Group draws upon cutting edge
technology for innovation, takes advantage of its
diversified work force and embraces amanagement approach that can transformdiversity and independence into a unifying force
that helps propel us forward. Our business groupfeatures 5 business entities that aredecentralized around the world and drive each
respective business independently. This section
introduces each segment, offering an overview ofour online securities being rolled out in Japan, theU.S., China (including Hong Kong) and Australia
as well as a summary of our Group subsidiaries
including one of the biggest crypto asset
exchange service providers in Japan.

19 Japan Segment
22 US Segment
24 Crypto Asset Segment
26 Asia-Pacific Segment
27 Investment Segment

Monex Group, Inc. | Integrated Report 2022

18

Increase Corporate Value

Segment Strategy

Japan Segment
Strengthen our “Asset management model” to help build assets,
diversify revenue streams and evolve as a financial institution
Segment Summary

Review of fiscal year ended March 2022

Monex, Inc. runs an online securities business and lies at the heart of theJapan Segment. Since our founding, we have provided a wide range ofadvanced financial products and services as well as customer education,with the goal of presenting retail investors with an investment
environment on par with institutional investors. As of March 2022, Monex,
Inc. reached 2.19 million accounts, with assets in custody totaling ¥6trillion. A large part of this customer demographic is looking to build
assets over the medium- to long-terms.
Thanks to a collaboration with another Group company theTradeStation Group, Monex, Inc. offers advantages with U.S. equities
services by providing a number of different trading methods, including
extended-hours trading. We have given high priority to providing
investment information, such as our own original analysis tool andseminars led by a special consultant of foreign equities. This environment
essentially gives our retail investor customers in Japan the same accessto trading U.S. equities as Japanese equities.
One unique advantage that we have is our backbone brokeragesystem was developed in-house. While many brokerage firms rely on
vendors to build and maintain a system, we do not. The flexibility ofdeveloping the system internally gives us more control and mobility to
add new services and eliminate those costs that incur from an
outsourcer. Another benefit is being able to partner with other financial
institutions via API connections with other companies.
Apart from our online securities business, the segment is putting
weight behind the field of asset management, with Monex AssetManagement, Inc. for assets and Japan Catalyst, Inc. as the investment
advisory arm.

During the fiscal year ended March 2022, the market price impacted by
COVID-19 had settled down, and at the end of the fiscal year, a sense of
uncertainty had clouded the future of the market, leading to a decrease in
brokerage commissions on Japanese equities. However, there was more
revenue thanks to asset-based revenue (recurring revenue based on thebalance) going up like earnings from margin trading and management
fees from mutual funds. Since we announced our plan to push toward an
asset management model in the fiscal year ended March 2020, thebreakdown in our revenue has changed, including an increase in assets
like U.S. equities and mutual funds in particular, and our assets in custodygrew 1.5 times in approximately 2 years, topping off at 6 trillion JPY. U.S.
equities only made up 8% of our brokerage commissions in the fiscal year
ended March 2020, but now account for 22% in the fiscal year ended
March 2022.

Brokerage commissions

Revenue from brokerage commissions(other than U.S. equities)
U.S. equity commissions
U.S. equities percentage inoverall brokerage commissions(Millions of Yen)

16,000

22

(%)

25
20

12,000

18

15

8,000
10
4,000

3

5

8

5

0

0

FYE
FYE
FYE
FYE
FYE
Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022
Monex Group, Inc. | Integrated Report 2022

19

Yuko Seimei

Representative Director & President
Monex, Inc.

Increase Corporate Value

Segment Strategy

Japan Segment

Promoting an asset management model to diversify revenue streams
We are promoting our asset management model in order to reinforce our revenue base by building
up mutual funds and the margin trading balance as well as stimulating U.S. equities trading. The
revenue structure for the Japan Segment up until now has been an issue due to a heavy reliance on
Japanese equity commission fees that is easily impacted by market price fluctuations. Now, thecommission fee ratio based in Japanese equities has relatively decreased, producing a morebalanced revenue structure. Revenue coming from another source other than brokeragecommissions for Japanese equities made up 59% of operating revenue in the first quarter of the
fiscal year ended March 2021 but two years later jumped to 78% in the first quarter of the fiscal
year ended March 2023.

Total Operating Revenue

Financial income

FX & fixed income

Mutual fund management fees
Brokerage commissions for foreign equities

Other

Brokerage commissions for Japanese equities(Millions of Yen)

10,000

59

63

(%)

Operating revenue breakdown from other sources besides
Japanese equity commission fees

100

78

80

64

60

65

65

67

69

60

5,000

Strengthening our asset management model to meetcustomer expectations
Presently in Japanese society, there are greater expectations on financial services where
customers expect these services to increase their assets. This trend is not just due to economic
instability from COVID-19, but also due to other factors such as insufficient post-retirement savingsin our super aging society and anxiety about public pensions. Despite this backdrop and in order for
us to meet the customers’ expectations, we believe that we must depart from our brokerage modelthat depends on trading volume, like the number of purchases and sales. It is imperative totransform our business model to an asset management model that focuses on increasing
customer assets. Our asset management model helps customers make an ideal portfolio thatmeets their needs. We offer our customers the ability to diversify their risk preferences through our
products and services to optimize their portfolio. Customers can diversify the timing of theirinvestments (Periodic Investment), the markets (US, Japan) they target and use leveraged products
to increase their risk profile investing in margin or leveraged products.
After we announced our push toward an asset management model at the end of March 2020,
our assets in custody steadily rose, and the breakdown of those assets have also become morediversified. For example, Japanese equities made up 75% of the assets in custody at the end of
March 2018, but by the end of March 2022, that percentage dropped to 49%. This reflects
customers diversifying their portfolios more, a trend that can be characterized as desirable andpositive.

Assets in Custody40(Trillions of Yen)

20

6

Japanese equities

Foreign equities

Bonds

Deposits received and other

7

6.1
5.1

5
0

0

2021/3 2021/3 2021/3 2021/3 2022/3 2022/3 2022/3 2022/3 2023/3
1Q
2Q
3Q
4Q
1Q
2Q
3Q
4Q
1Q

Investment trust

4

4.1

4.0

3.8

3
Ratio ofJapanese
equities

2
1

49%

75%

0

Mar. 2018

Monex Group, Inc. | Integrated Report 2022

Ratio ofJapanese
equities

20

Mar. 2019

Mar. 2020

Mar. 2021

Mar. 2022

Increase Corporate Value

Segment Strategy

Japan Segment

Bringing down commission fees to the lowest level withmajor online securities

Continuing to offer new products and services to build customer assets

Up until now, Monex, Inc. has always focused more on increasing the added value in our services
versus lowering the price of commission fees. Good examples of this added value include trying tobe the first to offer products not available at other brokerage firms or providing information that
helped customers decide on their investments. However, we circled back to the idea that we should
work toward lowering fees to customers as much as possible to promote our asset management
model. Since setting our policy to promote an asset management model, we have lowered thecommission fees as shown below and now our commission fee plan like the major online
securities* is at the lowest level. This enables us to appeal to the needs of customers who prioritize
low cost fees, and we expect this will boost our new accounts and assets in custody.
* Major online securities: au Kabucom Securities, SBI Securities, Matsui Securities, Rakuten Securities and Monex, Inc.

December 2019

Transaction fees waived for the purchase of mutual funds

June 2020

Some commission fees waived for Japanese equities(margin trading, ETFs, REITs)

November 2020

Lowered commission fees for Japanese equities(daily flat commission fee and commission fee pertransaction in margin trading)March 2021

Some commission fees waived for Japanese equities(execution price less than 100 thousand yen for
cash equity trading)July 2021

Some commission fees waived for Japanese equities(buying commission fees in One-Share service(share less than one unit) for cash equity trading)August 2021

Lowered commission fees for Japanese equities(commission fee per margin trading transaction)

March 2022

Lowered commission fees for Japanese equities(commission fee per cash equity trading)

As a measure to reinforce our asset management model, we began expanding our informative andcommunication channels. In addition to kicking off our wealth management service, we started acomprehensive business partnership in financial instruments intermediary services with theShinsei Bank Group in January 2022. Monex Group made its start as an online securities business,but going forward, we will roll out more services combined with informative and communication
support so that we can meet the needs of a super ageing society and provide services that are inlockstep with the customer.
On another front, Monex Asset Management offers discretionary investment services andmanages activist funds. Our partnerships with local banks and other financial institutions provides
support and backing that has helped us expand our invested assets steadily. Our assets undermanagement for the fiscal year ended March 2022 was 3.2 times higher than the previous year,
reaching 65.7 billion JPY and hit 75 billion JPY in September 2022.
We must understand the goals of our customers as they try to build their assets and thenprovide the financial instruments and services that is appropriate for the estate planning. We arereminded again now more than ever that figuring out how to achieve this is key.

AUM ofall services:

AUM of Monex Asset Management(Billions of Yen)¥

Approx.

70

3.2

60

65.7billion

times more
year-over-year50
AUM ofall services:40¥20.6 billion

30
20
10
0

Jun.
2020

Monex Group, Inc. | Integrated Report 2022

21

Sep.
2020

Dec.
2020

Mar.
2021

Jun.
2021

Sep.
2021

Dec.
2021

Mar.
2022

Increase Corporate Value

Segment Strategy

US Segment
Pursuing effective marketing using our strengths andshifting to a growth strategy focused on better profitability
Segment Summary

Review of Fiscal Year Ended March 2022

Based in Florida, TradeStation Group was founded in 1982 as acompany dedicated to developing software for traders. During
the early 2000s, TradeStation shifted its business model tobecome an online broker and joined the Monex Group in June
2011. TradeStation provides transactions for equities, ETFs,
stock market index options, commodities and futures, futuresand options as well as crypto assets. The trading platform forthese transactions has been developed for desktop, web andmobile devices and can also be accessed via an API from athird-party platform.
TradeStation’s advanced trading platform and analysis tools
have garnered high praise in the online securities industry withnumerous awards. This advanced technology has won overenormous support from individual active traders as well as
institutional investors, with active traders leading a larger
segment of our customer base. In 2017, we also overhauled ourfinancial instruments and branding strategy in order to gain more
support from casual traders and millennial traders. By March
2022, we expanded our customer base with a total of 180
thousand accounts and more than 12 billion USD of assets incustody.

In the fiscal year ended March 2022, there was a slight decline in
our USD based income. The market impacted by COVID-19 had
settled down, its volatility had decreased and it was accompanied
by an underlying drop in stock prices through the end of the fiscal
year due to factors such as the Russo-Ukrainian War.
While TradeStation had not engaged in extensive advertising
up until now, we announced our intent to become listed via a
De-SPAC transaction in November 2021 (*In August 2022, it was
decided not to pursue plans to become listed. See next page.),and as a result, invested heavily in marketing. We also actively
hired more staff to expand the customer base and increased thenumber of accounts by 26% in one year.
Total Customer Accounts(Accounts)

200,000

183,403145,887

150,000
100,000

74,81090,579107,692

50,0000Mar. 2018 Mar. 2019 Mar. 2020 Mar. 2021 Mar. 2022

Monex Group, Inc. | Integrated Report 2022

22

John Bartleman

President and Chief Executive Officer,
and Member of the Board of Directors
TradeStation Group, Inc.

Increase Corporate Value

Segment Strategy

US Segment

Shifting Strategy to Focus on Securing Profits
TradeStation announced plans to be listed on the NYSE via a De-SPAC transaction in
November 2021. However, we decided to forgo being listed on the NYSE via a SPAC
merger in August 2022 due to multiple factors, such as changes in the economic
landscape and no foreseeable improvement in market conditions in the near future.
TradeStation has amassed more staff, and specifically engineers to develop
financial instruments and services, and has invested in extensive marketing in order toattract a wider selection of customers. Yet, after looking at the investment results andmarket conditions in the fiscal year ended March 2022, we altered our strategy andstarted cost-cutting measures, limiting marketing expenses and targeting more
effective means of increasing accounts. We prioritized our established strengths andfocused on acquiring and maintaining accounts in the active trader market, shifting to a
growth strategy centered more on profitability. Nevertheless, to continue to foster large
scale growth, TradeStation will look to gain customers through API connections that
we have been working on in recent years, offered by TradingView and other similar
platforms.
The U.S. interest rates offer short-term advantages in terms of revenue.

TradeStation holds 2.9 billion USD in deposits received as of the fiscal year ended
March 2022, and those returns are attributed to TradeStation. The deposits received
are stable and if interest rates rise 1%, that will add 20 to 30 million USD in interest
income on an annual basis. When considering the net financial income for this fiscal
year ended March 2022 was approximately 37.7 million USD, it is clear that a rise ininterest rates will have a tremendous impact on income. Due to continued low interest
rates in recent years, the net financial income has been stagnated. Yet, with moreaccounts and more funding available from deposits received, any rise in U.S. interest
rates is expected to increase income.
The commission-fee based income has been stable for TradeStation even in a bearmarket, because our customer base has many active traders. Going forward, armed
with our advanced platform and analysis tools, we will focus more on gaining highquality accounts and increasing profits per account.
As described above, TradeStation has shifted from a strategy of spending money toincrease income to a strategy that now focuses on securing profits. Before adopting
this strategy to invest in extensive marketing, the fiscal years ended March 2019, 2020
and 2021 had been profitable. We expect to get back in the black pre-taxes in the fiscal
year ended March 2023 by cutting costs and improving profitability.

Advertising Expenses

Net Financial Income(Millions of U.S. Dollars)(Millions of U.S. Dollars)

25

12

22.7

20

18.1

8.3

5

3.7

3.9

4.3

2021/3
1Q

2021/32Q

2021/33Q

5.7

2021/34Q

2022/3
1Q

2022/34Q

2021/3
1Q

2021/3
2Q

Monex Group, Inc. | Integrated Report 2022

23

8

10.2

10.6

10.0

8.8

8.4

6

11.2
5.4

9.7

8.6

15
10

10

4
2

0

0
2022/32Q

2022/33Q

2021/33Q

2021/34Q

2022/3
1Q

2022/32Q

2022/33Q

2022/34Q

Increase Corporate Value

Segment Strategy

Crypto Asset Segment
Beyond crypto asset trading, looking to expand new business with blockchain
and pushing a global strategy moving forward
Segment Summary

Review of fiscal year ended March 2022

Coincheck provides a crypto asset exchange service and is one of thelargest class crypto asset exchanges in Japan. As of the end of
March 2022, there are more than 1.62 million verified accounts, 60%of which are held and owned by younger customers in their twenties
and thirties. In addition, Coincheck’s services do not just offer crypto
assets but new services are being rolled out in terms of both asset
class and protocol, including a trading platform that supports NFTs*1and primary listings (IEO*2) of crypto assets.
The corporate mission of Coincheck, Inc. is “making the exchangeof new values easier.” Since the launch of the crypto asset trading
service “Coincheck” in August 2014, Coincheck, Inc. has been
providing customers with opportunities to become familiar with the“exchange of new values” by offering a service that is easy to use foreveryone, regardless of their financial literacy. As crypto assets andblockchain technology continue to evolve every day, the “exchange of
new values” is being realized more and more by individuals. However,the benefits that new technology brings only reaches some people,
generating a disparity brought on by information literacy. Coincheck
will continue creating better services so that any user can feel morefamiliar and acquainted with the “exchange of new values” broughtfrom crypto assets and blockchain technology and see the futuretransformation evolving by the new technologies emerging next.

During the first half of the fiscal year ended March 2022, the crypto
asset trading was quite active and NFT and IEO businesses also
expanded a lot. This contributed to record setting revenue after
Coincheck joined Monex Group. In addition, as competitors havereinforced marketing and began using TV commercials, Monex Group
has also begun using our unique internal marketing resources tomaintain a firm hold on the market share of Japanese accounts. Our
customer base has grown, the sales value at the marketplace has
increased by approximately 30% since the last fiscal year and therevenue also went up as a result. The NFT business expanded, andwe undertook the first IEO in Japan.
With the goal to grow business further, the Coincheck Group(CCG) was formed, a plan to list the company on NASDAQ was
announced in March 2022 and a policy was set forth to bring inpersonnel, technology and capital from around the world. The fiscal
year ended March 2022 was a year of progress, that took us beyond
crypto asset trading, expanded blockchain related business, and led
to a major decision geared toward the future.

*1 Non-Fungible Token*2 Initial Exchange Offering: Method to help raise capital for a company
through which a crypto asset exchange service provider oversees the token vetting
process and sale.

Total Operating Revenue After Deducting Financial Expenses
and Cost of Sales(Billions of Yen)

30.0

28.6

25.0

20.8

20.0
15.0
10.0
5.0
0

2.1
FYE Mar. 2019

3.8
FYE Mar. 2020

Monex Group, Inc. | Integrated Report 2022

FYE Mar. 2021

24

FYE Mar. 2022

Satoshi Hasuo

Representative Director & President
Coincheck, Inc.

Increase Corporate Value

Segment Strategy

Crypto Asset Segment

Listing Coincheck Group on NASDAQ
Coincheck has led Japan for three years in a row for the most mobile app downloads and isvying to secure the most accounts held by a crypto asset exchange service provider in Japan.
The crypto asset business is vulnerable to the market conditions much more than the
securities business, but we shall grow trading values by building up the client base. We shalltake advantage of our in-house marketing system to acquire new accounts by carefully
watching the market conditions and adapt our marketing accordingly. During the last fiscal
year, we actively advertised featuring TV commercials. However, while the market is down, welook at the cost-effectiveness and develop our marketing carefully. We also earmarked
resources for new businesses, such as the NFTs, IEOs and the metaverse in the last fiscal
year, but we focused on adding new currencies for the fiscal year ended March 2023, making
more options available to our customers.
The NFT business uses Coincheck’s crypto asset trading, allowing us to conduct
cross-selling by using the customer base and the platform for trading crypto assets to settle
NFT transactions. Furthermore, providing NFTs that are trending globally is an extremely

Number of App Downloads /Number of Verified Customer Accounts

strong advantage.
Completing the first IEO in Japan the last fiscal year was the subject of much discussion
at that time. We have one IEO scheduled for the fiscal year ended March 2023 and will focus
resources on new funding going forward. Seeing crypto assets and NFTs being used forbusiness specifically in listed companies is becoming increasingly common. As we move
forward, Coincheck will adapt and support these needs.
Coincheck has grown in Japan in the field of blockchains and crypto assets, yet it isimperative to press forward with a global strategy in the fields of blockchains, crypto assets
and NFTs for even more growth. To embrace this expansion, we established Coincheck
Group, Inc. (CCG) as a holding company for Coincheck and the merger with the U.S. SPAC
company Thunder Bridge Capital Partners IV, Inc. (THCP) will enable us to list CCG onto the
NASDAQ. We are looking to create many more growth opportunities through our alliance with
THCP, growing organically, through M&A and partnerships with other companies. First, we willsecure capital in the U.S., the largest capital market in the world, hire personnel globally,
implement a world strategy and then drive toward the next stage.

Deepen Existing Offerings

Broaden Digital Asset Solutions

Number of App Downloads
Number of Verified Customer Accounts(Million DL)

499

500
400
300

372
286

(Million accounts)

162

120

180
150
120

94

90

200

60

100

30
0

0
Mar. 2020

Mar. 2021

Mar. 2022

Marketplace/
IEO
Continue to growcustomer baseand revenue toretain #1 market
share position,build onfirst-of-its-kind IEO
launch, andexpand supported
token coverage

NFTs

Web3

Institutional

Financialservices
adjacencies

Build the leading
NFT platform inJapan bypartnering with
content creatorsand gaming
companies

Build new services
supporting the
Coincheck digitalasset ecosystemboth organicallyand through M&A

Capture nascentand growing
institutional
interest,
capitalizing on
Coincheck’s
trusted brandname in the crypto
space

Explore newfinancial service
businesses thatwill appeal to theyoung Coincheckcustomer base,such as payments
and commerce
enablement

Monex Group, Inc. | Integrated Report 2022

25

On-rampservices
Provide on-ramp
services between
fiat, crypto, otherdigital assets, andvarious user
applications

International
Add talent andcapabilities incrypto-friendly
geographies,
including in Asiaand across theworld, and launchinternationally(HoldCo structure)

Increase Corporate Value

Segment Strategy

Asia-Pacific Segment
Developing online brokerage services in Hong Kong, Australia and China
Pooling resources through Group synergy to boost revenue
Segment Summary
The Asia-Pacific Segment is comprised mainly of threecompanies: Monex Boom Securities in Hong Kong and Monex
Securities Australia in Australia, as well as a joint venture thatprovides technology that supports online brokerage transactions
for securities firms in mainland China. Monex Boom Securities
was founded in Hong Kong in 1997 as the first online brokeragefor retail investors in the Asia-Pacific region. This firm offers
securities services with access to 12 regional stock markets inthe world and 6 currencies that make it easier to performsettlement operations.
Support covering 12 markets and 6 different currencies

China
Korea
Hong Kong
Thailand
Malaysia
Singapore

United States

Japan
TaiwanPhilippines
Indonesia

Review of fiscal year ended March 2022 andsteps going forward
After growth in the Chinese economy slowed down, the Hong
Kong market flattened out for the fiscal year ended March 2022.
Despite this, the Asia-Pacific Segment stayed in the black. In
Monex Boom Securities, in addition to Honk Kong stocks, U.S.
equities trading with TradeStation Group, Inc. acting as anintermediary, is gaining popularity, and a synergy effect can beseen in the Group here.
Monex Boom Securities is a core business in the Asia-PacificSegment and has grown to a level of providing stable income.
Yet, there is an urgent issue confronting the segment, that is,creating a structure with Monex Securities Australia whichstarted its online securities business from 2018, so that theentire segment can continuously post consistent profits. We are
currently considering using the securities business in Hong Kongas a segue to approach retail investors in mainland China’s
market, but we are also weighing the risks that are involved.
Furthermore, we are looking to use the interaction andcooperation of Monex Boom Securities and Monex Securities
Australia by applying a shared marketing strategy and reducing
any redundant costs shared by both, in order to pursue a synergy
effect to achieve stable profit growth.

Australia

HKD

USD

RMB

AUD

JPY

SGD

Monex Group, Inc. | Integrated Report 2022

26

Ivan Law

Chief Operating Officer
Monex Boom Securities (H.K.) Limited

Increase Corporate Value

Segment Strategy

Investment Segment
Expertise built from a wealth of investment experience todiscover and support innovative startups
Segment Summary
The investment business segment is made up of Monex Ventures, Inc.,
Monex Edison Investment Limited Partnership, MV1 Investment Limited
Partnership and MV2 Investment Limited Partnership. Drawing on our
history of countless investments, we use our expertise to find newcompanies to invest in. Our talented personnel also fosters active growth.
This expertise and personnel have cemented our unique position andnetwork. While we mitigate risk by limiting our funding on a single
investment, we also focus on investing in companies in the early stages,
such as with seed funding, as well as provide incubation support for thecompanies we invest in. Our investment portfolio covers a broad range ofareas, for example: existing industries that undergo digital transformation
using technologies like financial and legal technologies, nursing or
healthcare where future demand is expected to grow, as well as
e-commerce and online marketplace businesses that are also expected to
grow sustainably.

Main past investments
Companies listed on Tokyo Stock Exchange that
Monex Ventures invested in
LIFENET INSURANCE COMPANY (March 15, 2012)
Uzabase, Inc. (October 21, 2016)
Money Forward, Inc. (September 29, 2017)
Mental Health Technologies Co., Ltd. (March 28, 2022)

Review of fiscal year ended March 2022 andsteps going forward
The MV1 Investment Limited Partnership established in January 2019has finished placing its funds into new investments. As of the end of
March 2021, there are a total of 58 investments. We hold a number ofpromising investments that may go public as future IPOs. Certain
companies that we invested in were able to take advantage of changes inpeople’s behavior during the COVID-19 crisis. This led to big advances intheir businesses, allowing us to record gains on those investments basedon their valuations. In addition, we were able to successfully exit a numberof investments, including one IPO exit, for the fiscal year ended March
2022. Furthermore, we established the MV2 Investment Limited
Partnership in April 2021 and have steadily increased the number of ourinvestments. This fund and these investments are strategically focusedon companies in business domains that offer services to local businesses
and on the XR* field that will play a key role going forward with more time
being spent in virtual reality. However, the business climate is harsh forinvestments in inbound related businesses. To combat this, our venture
capitalists are helping advise and provide complete support to thosefailing companies we invest in, including a transformation to a businessmodel that incorporates domestic needs, in order to rebuild theirbusinesses.
As technology continues to permeate throughout society, our newly
formed fund targets further business expansion and looks to advance into
areas with a social impact that helps solve social issues while ensuring
economic benefits. The fund focuses its investments into areas hoping toresolve major social issues that have been difficult to overcome to date.
Yet, we are not only after a return on our investments, but at the sametime, our goal is also to maximize the social impact that is created byfinding new business investments and helping increase the value of thecompanies we invest in.
* XR (Extended Reality): General term for image processing technology. It refers toa technology field that creates new experiences by combining real and virtual environments.

Monex Group, Inc. | Integrated Report 2022

27

Seiichiro Wada

Representative Director
Monex Ventures, Inc.

Corporate Value Resources

Information Disclosures Based on TCFD
Monex Group recognizes the importance of climate related financial disclosures and is not only
on board with the TCFD (Task Force on Climate-related Financial Disclosures) but is committed
to expanding the disclosure of information based on this.

Governance and Risk Control

CausesMonex Group is fully engaged in ESG activities, spearheaded by the
ESG/Sustainability Task Force, which is a cross-functional team within thecompany. The ESG/Sustainability Task Force reviews and identifies overallsustainability issues, including environmental issues (E) such as climate change,and social issues (S) such as innovation and human capital resources. The ESG
initiatives are regularly reported to the Board of Directors for approval and the Task
Force engages all group companies to work on resolving issues and advocates for
information disclosure. In addition, the risk assessment related to climate change iscarried out in the risk control system in each Group company along with the otherrisks and reports those findings regularly to the Board.

Strategy (Scenario Analysis)
We have identified major risks and business opportunities from climate crisis, andanalyzed the impact on our business as of 2030. Based on the scenarios publishedby the IPCC and the IEA, two scenarios were analyzed: the 4°C scenario, in which
the average temperature rises 4°C by 2100 compared to the average temperature
before the Industrial Revolution; and the 1.5°C scenario, in which the averagetemperature rise is controlled to less than 1.5°C through carbon neutral initiatives.
In the 4°C scenario, we have confirmed the expansion of physical risks such as
floods and storm surges due to the intensification of abnormal weather. In the
1.5°C scenario, with the background of potential demands in capital markets ofproducts which responds to climate change, such as ESG funds, and innovations inrenewable energy business, we expect increased business opportunities within thegroup, and we believe our responses to climate change reduces turnover rate of ouremployees which leads to decreased costs for recruitment. However, it isexpected that the cost of companies will increase due to the introduction of policy
regulations such as new tax systems such as electricity prices and carbon tax.

4°C

Scenario

Risk Impacts

1.5°C

Scenario

Countermeasures

Impact Level

Intensified abnormal
weather

Damages to theequipment or business
operation suspension due
to the intensification ofabnormal weather

Small

Formulation of business
continuity plan andpreliminary examinationof emergency response
measures

Introduction ofcarbon pricing

Increased operating costs
due to introduction ofcarbon tax and emissions
trading transactions forthe transition to acarbon-free society

Small

MediumEfforts to reduce GHG
emissions, including
setting reduction targets
and introducing
renewable energy to thegroup companies

Changes in energy costs
due to growing demand
for renewable energy
and energy conservation

Increased operating costs
due to increased energy
costs from main powercompanies

Small
小Medium中Introduction ofrenewable energy

Changes in recruitment
costs associated withlower turnover due toenvironmental initiatives

Reducing recruitment
costs as the company’sefforts toward theenvironmental initiatives
lowers employee turnover–

MediumGroup-wide ongoing
efforts to address
climate change

MediumNote) Impact level High: More than 100 million JPY Medium: Between 10 million and 100 million JPY
Small: Less than 10 million JPY

Energy consumptionFYE Mar. 2018 *1

FYE Mar. 2019 *1

FYE Mar. 2020 *2

FYE Mar. 2021 *2

Electricity consumption (kWh)1,083,817

1,070,792

4,179,741

3,865,377

Indirect energy consumption (kL)

272

269

1,014

963

Scope 1: Direct emissions (t-CO2)

–

–

30

25

Scope 2: Direct emissions (t-CO2)

530

524

1,831

1,678

Scope 1 + Scope 2

530

524

1,861

1,704

Note 1) The scope 1, 2, and 3 classifications follow The Greenhouse Gas Protocol (GHG Protocol)
WEB Greenhouse Gas Protocol

Note 2) Consumption and emission factors from “Implementation Ordinances for Global Warming Policies (Japan)” and“the Law Concerning the Rational Use of Energy (Japan)”
Note 3) The electric energy consumption in both US Segment and Asia-Pacific Segment are converted into energy
consumption volume with the crude oil equivalent standard in Japan (t-CO2/kWh) for the estimated calculation.
*1 The figures for the fiscal years ending March 2018 and 2019 are calculated from the energy consumption generated
from the offices in the Japan Segment*2 The figures for the fiscal years later than March 2020 are calculated from all the energy consumption generated fromthe offices and data centers in all the segments

Monex Group, Inc. | Integrated Report 2022

28

Corporate Value Resources

Cyber Security
Cyber Security Measures

Main measures to ensure cyber security

The Monex Group, as a leader in the online securities and crypto asset businesses, considers
cyber security as one of its most important issues. In light of the diversification of its
businesses within the group, the Group recognizes the necessity to take stronger measuresthan ever before to address increasingly serious cyber threats.
With global business operations, the Group is striving to protect customers’ informationand customers’ assets from increasingly serious cyber security threats and enable
customers to securely conduct transactions. It is enhancing comprehensive cyber security
measures by referring to supervisory guidance established by the Japanese Financial
Services Agency for financial instruments business operators and the US National Institute of
Science and Technology (NIST) SP 800 series of publications.
Monex Group’s subsidiaries conduct risk-based assessments to take appropriate
information security measures in accordance with risks, develop countermeasures fordiscovered risks, and conduct continuous improvement activities. These activities include
audits conducted at least once a year by Monex Group. These assessments are internal andfrom external parties as well, adding to the reliability of our risk management activities. In
addition, we plan to invest in minimizing business risks as a continuous effort to strengthen
our system, such as applying vulnerability diagnoses and Red Team testing in response torecent changes in the risk environment.

Information security and preventing unauthorized access
We are continuously striving to strengthen day-to-day information security measures byutilizing intelligence from external specialist institutions and monitoring cyber security. In
addition, we are performing analysis and taking steps to minimize damage and quickly
recover from damage. CSIRTs play a central role in the acquisition of information on
dangerous threats and the analysis of causes, the minimization of damage and responses for
rapid recovery in the event of an “emergency” when a cyberattack is detected.
We implement measures in multiple stages (multi-layer defense) such as implementing
multiple mechanisms for detecting and defending against unauthorized access andmalicious programs such as computer viruses. In addition, these measures are reviewed as
appropriate to address the occurrence of new threats.
As a crypto asset exchange service provider, Coincheck constantly works to reinforce
security. We ensure the customers’ crypto assets are safe and secure by managing all
amounts with cold wallets. We prevent fraud by guarding customer access with a two-factor
authentication and using a system that monitors the sending of crypto assets. Furthermore,
our wallet management technology and unauthorized access countermeasures have beencultivated in our role as a crypto asset exchange service provider, and have helped strengthen
the security of NFTs used in the new domain called the metaverse. We shall continue toensure the customer feels comfortable and safe when using the marketplace.

Cyber Security System
We are creating a global system for responding to events and reducing damage arising due tocyberattacks throughout the entire Monex Group. Centered on the Monex Group CSIRT(Computer Security Incident Response Team) established within the Monex Group, CSIRTs
have also been established in Monex Securities and Monex Group companies. Throughcooperation between the Monex Group CSIRT and the CSIRTs in group companies, we arestrengthening governance and CSIRTs in each company perform the functions for protecting
the operations, information assets and systems of as we promote cyber security measures
along the four axes of organizational operation, system response, human response andexternal collaboration.

Cyber security training and partnering with relevant parties
As we are devoted to improving our information security, and in accordance with the “Monex
Group Information Security Basic Policy,” we hold ongoing training seminars on the required
measures and on trending threats related to the information security for all employees andpositions. Specifically, we carry out internal activities for all employees, such as providing
e-learning and training to assess their response capabilities as well as issuing warnings andreminders related to information security. At the same time, we are prepared for threats andemergencies through our participation in training and cyber seminars hosted by the Financial
Services Agency and Financials ISAC (Information Sharing and Analysis Center) Japan.
In addition, Monex Group has constructed a system to collect and share information
related to vulnerabilities and threats, which we gather from our collaboration with information
network organization in the finance industry Financials ISAC, from our participation in the
Nippon CSIRT Association as well as from our relationship with computer security relatedgroups such as JPCERT/CC (Japan Computer Emergency Response Team/Coordination
Center).

Monex Group, Inc. | Integrated Report 2022

29

Corporate Value Resources

Risk Management
Risk Control System

Market VaR

Keeping risk that affects our management within a permissible range helps us achieve
our business goals. Based on this approach, we appropriately identify, analyze, andevaluate the risks established in the “Rules of integrated risk control” and have devised
appropriate control systems for the different risks that confront the Monex Group andthe group companies.
Risk Type
Board ofDirectors
Regularly reporton risk control
development andoperational status

Risk Control
Manager
Appoint

CEO*2

Japan Segment

Responsible Party(Executive Officer)

Market-related Risk
Credit Risk
Liquidity Risk
Other Risk

Financial Controls

Information Security Risk

Information Security

System Risk

Quality Control

Administrative Risk
Legal Risk

Internal Controls

Reputation Risk

Corporate Communications

Disaster Risk

Crisis Management

US Segment*1

Crypto Asset
Segment*2

Asia-PacificSegment

Investment
Segment*1 The executive officer overseeing a segment decides on the specific control method and control system of thesubsidiaries related to each risk.
*2 When a risk develops or the risk’s probability is deemed high, the executive officer overseeing a segment reports this to
the risk control manager and to the executive officer(s) responsible for that risk(s).

We identify market risk as the potential losses sustained due to the price fluctuations in assets(stocks, interest rates, exchange rates, crypto assets, etc.) held by Monex Group. The amount ofrisk is calculated by multiplying the balance of assets at a base point in time by the rate of pricevolatility for each financial instrument. In the Group, most of the revenue reported is frombrokerage operations. Yet, only a small portion of those transactions is held for trading andreported as revenue, thereby limiting the market risk exposure.

Credit VaR
The credit risk is calculated based on the risk of the business partners and of clients, specifically on
the bad debts risk involving the transactions of financial instruments and crypto assets with eachpartner and client. The risk associated with business partners is based on the deposit balance inthe corresponding financial institutions as well as the balance of guarantee deposits and margindeposits made from trading financial instruments. The amount of the risk is calculated bymultiplying the balances by the default rate that is tied to the rating from an external ratingorganization that is issued to each financial institution. The amount of the risk associated withclients is calculated by multiplying the balance of the corresponding transactions by the default
rate, based on the history of bad debts incurred from financial transactions in each company where
credit was granted. The amount of risk is also calculated against the range of daily returns basedon previous returns.

Operation VaR
We identify operational risk as a cyber security risk, that is, the possible losses that could occur due
to a cyber attack or similar event. The amount of the risk is calculated by multiplying the walletbalance of the assets in custody for crypto asset trading by the risk probability of illegal moneytransfers (set for each cold wallet and hot wallet). Besides the operational risk noted above, we also
calculate the amount of risk by multiplying a set percentage by the annual operating revenue after
deducting financial expenses in each segment.
2

Risk Control Method1

Quantitative Risk Management for Group VaR

Monex Group calculates the Group VaR every month and performs quantitative risk
management in order to monitor whether the amount of risk across the entire Group iswithin the permissible range. Market risk is the maximum loss that can be sustained fora given probability (99% one-sided confidence interval) within a set time period (risk heldfor 2 weeks). The credit and operational risks are the maximum possible losses that arecalculated per the conditions noted above. That total value, which is the amount of risk
across the entire Group, is compared to the permissible risk range (half the amount after
deducting fixed-type assets from consolidated shareholders’ equity). This comparison
shows the company’s risk exposure, which is reported and checked by the directors
every month in the Board meetings.

Qualitative Risk Management for Group RCM & Main Measures

In addition to the quantitative risk management for the Group VaR, qualitative risk
management is performed for the Group by comprehensively calculating the residual
risk (Level of impact across group × Rate of occurrence / Control measures) andreporting that RCM (Risk control matrix) that is assessed to the Board.
Running an online financial instruments business and service, Monex Groupconsiders the most important risk, cyber security risk. To handle this, we have a global
system* in place headed by Monex Group CSIRT that works in conjunction with the
CSRIT offices stationed at each subsidiary. At the same time, for the wallet
management at Coincheck and TradeStation Crypto Inc. both of which run a crypto
asset trade business, we are also mitigating risk with the adequate management
system to battle illegal money transfers at each subsidiary.
*3 WEB ESG Information | Risk Management | Risk Definitions and Main Measures

Monex Group, Inc. | Integrated Report 202230

Corporate Value Resources

Creating Value Offering to Facilitate Individual Self-fulfillment

Always Customer-oriented

Responsible Product Offering

Based in an “Always customer-oriented” approach, Monex Group currently has thefollowing code of conduct in place: “We shall use the customer’s voice as our guiding
principle in corporate activities and shall always pay attention to maintaining andprioritizing communication, in order to provide the best financial services for each andevery individual.” In light of this code of conduct, we as a group established the Monex
Group Responsible Products and Services Offering Policy, and are committed toconstructing a system that is “Always customer-oriented” in each Group company.

Major Subsidiaries - Policy and Thinking
Major Subsidiaries

Specific Initiatives

Monex Securities(Monex, Inc.)

Monex Securities has established a “Customer-Oriented
Business Conduct Policy” and strives to provide products andservices based on key performance indicators (KPIs) such as
the customer satisfaction indicator. In addition, we are
improving our customer-oriented business operations bycreating a mechanism to collect feedback from customers
and implementing a PDCA cycle to utilize that feedback in the
product development and services offered.

TradeStation Group

TradeStation Group employees work together in ahigh-performance culture with the goal of providing its
customers with exceptional products and services. We focus
on the continuous improvement and innovation of products
and services. TradeStation Group keeps open lines ofcommunication with customers. Based on that customer
feedback, we have a process for evaluating our products andservices and for making changes as needed in order toimprove the customer experience.

Coincheck

Coincheck strives to build an operational structure that allows
us to respond to customer requests and inquiries promptly.
We hold weekly meetings to share customer feedback andmake product and service improvements that are ultimately
incorporated into the products we offer.

Responsible Products and Services Offering Policy
Business Management Policy
1 We shall create and provide financial products, education, healthcare, andother services that enhance individual well-being for an ever-changing future.

2 We shall disclose important information about risks and other factors of our

financial products and other services in an easy-to-understand manner.

3 We shall seek out and utilize customer feedback for the development andmanagement of our services to continuously refine our financial products,
education, healthcare, and other services.

4 As the holding company, Monex Group shall encourage subsidiaries to put into

place the above structure and have subsidiary top management take the lead inencouraging employees to actively participate in improving customer value.

PDF Feel free to reference the “Monex Group Responsible Products and Services Offering Policy” (PDF) to learn

about our basic thinking as well.

Monex Group, Inc. | Integrated Report 2022

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Corporate Value Resources

Human Resources Strategy
Rationale Behind Human Resources Strategy
in Monex Group
During an era when VUCA plagues the environment withbusinesses facing drastic changes on an irregular basis
and with uncertainty, it is essential for Monex Group to
formulate a human resources strategy in line with thechanges of a competitive setting, in order to grow ourcorporate value sustainably. Specifically, this translates
into clarifying the type of worker we require, building an
ideal portfolio of workers to foster business growth andconstructing an organization that secures and nurtures
personnel who can provide innovation and added value.
Monex Group embraces the understanding that eachand every employee collectively makes up the driving
force (human capital) that generates revenue, andincreasing their output leads to maximizing ourcorporate value. Therefore, we shall work harder toactively invest in opportunities where employees can
extend the breadth of their knowledge, skills andexperience.
In order to create a highly productive organization,
we have focused on a specific framework for our humanresources strategy:(1) Raise the ability of each and every employee(2) Create an environment where the output of each andevery employee is maximized(3) Promote autonomy and make a fair and equitableworking environment for diversified personnel andtheir different working styles

In addition, we will apply a portfolio management
approach to human resources to better understand in atimely manner which type of employee is needed, by
mapping out the skills and abilities required for eachdepartment and position. This portfolio management
approach will enable us to adapt and hire vital personnel
in our business strategy and assign the right person for
the right position.

Strengthening Human Resources Strategy and Human Capital (Japan Segment)
Human Resources
Strategy

PolicyMeasures Taken

IssuesDevelop and cultivate personnel
Personnel
development

Cultivate independent personnel

Instill corporate philosophy

Apply portfolio management approach to HR(Personnel development policy)
Cultivate digital personnel (IT personnel)
Train management personnel
Improve performance review system

Training anddevelopment

Design to encourage successful
experience and sense of growth• Create environment for learning
voluntarily• Build experiential learning model• Acquire basic skills and ability earlyon as member of society

Start portal site to learn basic skills andability as member of society
Introduce and setup support system for
employees to acquire qualifications
Implement position-based training

Perform assessment (Stimulate learning
motivation based in self-understanding)Talent management (Selection)

Personnel
reassignment

Ideal assignment (Assign to posts toimprove productivity)

Multi-track advancement system(general and specialist positions)

Systematizing job rotation and open
recruitment

Recruiting

Recruit external personnel withabilities to create value

Understand recruitment posting andpersonnel requirements

Apply portfolio management approach to HR
Acquire personnel with high level expertise (DX,marketing, development engineer, security andbusiness development, etc.)

Strengthen diversity of employment
style and flexibility in organization
overall to enrich private and public lives• Understanding and support of life
events that require flexibility or
adjustment of employment• Working environment without time or
location restrictions

Integrate telecommute working system
Introduce alternative work schedule
Create open layout to use any desk
space (partial)

Full-time telecommuting / remote working
Full-time alternative work schedule

Birth,
child-rearing andfamily care
support

Minimize impact on career track

Integrate reduced work schedule
Encourage male employees to takechild-care leave
Introduce babysitter system
Improve family care leave regulations

Extend eligibility of reduced schedules
Encourage male employees to take child-careleave (more than 60 days on average)
Performance review during child care and familycare leave

Mental healthcare

Maintain both mental and physicalhealthStress checkSet up internal/external reporting systemand harassment reporting system
System to promote safety and healthTrainer system and mentor system

Performance review centered solely onlevel of contribution to corporate value
and business performance.
Ensure mental and emotional health(Understand and respect perspectiveof others)

Formulate Monex Group Sustainability
Statement and Monex Group Human
Rights Policy
Achieve 100% retention rate aftermaternity leave
Disclose male-female ratio for averageannual salary

Ensure accessibility for all personnel (including
elderly and disabled), and employment rate ofpersons with disabilities
Support official documents in Japanese andEnglishUse older generation employees
Set up all-gender toilets

Work Environment

Employment
stylesDEI
Fair/Equitableworkingenvironment that
promotes
autonomy

Monex Group, Inc. | Integrated Report 2022

32

Corporate Value Resources

ART IN THE OFFICE Employee Education & Social Contribution Through Art

At employee workshop

Cover Artwork

Kanako Hiramatsu

Fountain Seen from the Inside / Kanako Hiramatsu

PROFILE

2022 / Acrylic paints, colored pencils, and crayons / H1600×W8400×D40 (mm)Born in Osaka in 1997. Finished Oil Painting Study,
Department of Painting, Fine Arts, Graduate School ofTokyo University of the Arts. With paintings and installation
arts as her artistic expression, Kanako Hiramatsu isfocused on re-imagining experiences of appreciating arts
as such experiences change in action. Major exhibitions
include Ghost of Peach (2021, Toritoki Haus Gallery, Tokyo),
Innocent-P- (2019, Kyoto International Conference Center,
Kyoto), Artist’s Tideland KYOTO (2019, Isetan Shinjuku,
Tokyo). Awarded Encouragement Prize for the Graduation
Exhibition of Kyoto University of the Arts in 2020.

This art piece is exhibited along the circular wall in the meeting room, adding further to its“fountain” motif expression. The design aims to show a place rich with variety where different
opinions clash and unite and where each individual sits together reacting to one another,mimicking the way a “fountain” is a collector of water’s motion spouting out and splashing. In thelast stage before being completed, employees participated in a workshop, making their own
works that were later incorporated into this piece. Their art experience and conversation with theartist Kanako Hiramatsu add a Monex character to the finished work.

ART IN THE OFFICE
ART IN THE OFFICE offers a chance and space for artists and business to come together, as part of our employee
education and social contribution program. It targets up-and-coming artists and is open to public entries that arepresented on the wall of Monex Group’s press room. We hope that new value can be created from this synergy produced
from art and the office.

WEB ART IN THE OFFICE

15th Anniversary

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33

ART IN THE OFFICE was started in 2008 and celebrates its 15 year
anniversary this year. This program will continue to exhibit pieces
from up-and-coming artists and offer a place that considers thevalue of diversity and creativity at Monex Group. Feel free to browse
through the videos and articles noted on the left to celebrate thisprogram’s 15 year anniversary.

Corporate Value Resources

Corporate Governance
Overview of Corporate Governance
Outline of Corporate GovernanceCommittee Structure with Nominating Committee

Board of Directors

Nominating Committee• Company withthree committees• Outside Directors
Make Up 60%• Lead Independent
Director

Compensation Committee

Oversight, checks
and balances,
proposals

Reporting,consulting,discussion

Audit Committee

We have structured the Board of Directors and Business Execution Divisions to focus on a
global approach with the specialized expertise required to carry out our management
strategies with a nimble posture that can adjust to drastic changes in the outsideenvironment. To ensure the different and multi-sided opinions generated from this type ofstructure are actively integrated into our management, Monex Group has been committed
to making the corporate governance mechanism more robust. For example, we adopted asystem called “company with committees” (presently, “company with three committees”)
in June 2013, and from June 2014, we made a system that keeps a constant majority ofoutside directors on the Board. With this system (“company with three committees”), it ispossible to speed up the decision-making process since a lot of the authority can bedelegated from the Board to the executive officers. At the same time, it is possible toenhance the Board’s oversight of the Business Execution Divisions and to realize more
effective corporate governance by taking full advantage of the independence and specificexpertise of the outside directors.

Monex Group
Executive Team
• Executive Officers• Business Subsidiary
Management• Executive Directors

WEB ESG Information | Corporate Governance | Corporate Governance Structure

Changes in Corporate Governance (since the company’s founding)
2000

2013

Institutional
designStructurewith boardof company
auditorsCommittee
structure

Committee structure with nominating committee, etc.

Total board
members

6

10

11

11

11

11

9

9

9

11

10

Outside directors

3

5

6

6

7

6

6

6

6

7

6

(6 persons/10 persons)

Percent of outside
directors on board

50

50

55

55

64

55

67

67

67

64

60

External

Advisory

Board *2

*1

Advisory
committees, etc.

2014

2015

2016

2017

2018

2019

2020

2021

2022

Percentage of Outside Directors
Nominating
Committee
Internal

60%

Internal

75%

Compensation
Committee
Internal

Audit
Committee(3 persons/
4 persons)(2 persons/
3 persons)

66%

100%

External

External

External(3 persons/
3 persons)

Adopted Corporate Governance CodeGlobal Management Committee

Setting Up a Lead Independent Director

Appointed lead independent director

Board diversity(foreign nationals,
women)

1

1

3

3

2

2

2

2

2

3

3

Percent offoreign nationals
and women

17

10

27

27

18

18

22

22

22

27

30

Total executives

─

6

6

6

11

12

11

10

9

9

9

*1 Shows annual data from the end of June after the General Meeting of Shareholders.
*2 1999 to 2013; discontinued after shifting to committee structure

Our distinctive approach to improving corporate governance at Monex Group lies in ourcommitment to strengthening governance spearheaded by our lead independent director.
Since a lead independent director was appointed in 2015, the lead independent director’srole in our system has been to listen to and summarize the opinions of the outside
independent directors and then communicate their candid and sometimes harsh input tothe executive team. This role plays a heavy hand in strengthening the Group’s governance,
acting like the core of a monitoring board, including hosting meetings from time to time
only in attendance by the outside directors and the CEO.

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Corporate Value Resources

Corporate Governance

Overview of Corporate GovernanceAnalysis and Evaluation of the Board’s EffectivenessSuccession Approach and Progress

The Board of Directors and the Nominating Committee analyze and evaluate theeffectiveness of the entire Board of Directors based on the results of an evaluationquestionnaire distributed to each director.

As shown in the “Analysis and Evaluation of the Board’s Effectiveness,” Monex Group
recognizes our Succession Plan of management as one of the most critical topics in our
corporate governance.
Given this view, Monex Group has proceeded with our succession of management by
appointing Yuko Seimei the position of Co-CEO, beginning from the current term. Oki
Matsumoto, the founder and CEO, will be overseeing the crypto asset business, newbusinesses and our wealth management business, while Seimei will take on the global
securities business. This marks the start of our system in which the authority and workloadof the CEO is shared by both.
Before Yuko Seimei’s ascension to the new Co-CEO position, she established theinvestment business after joining the Company, she successfully steered us through theacquisition of Coincheck and was the president of the Group’s subsidiary Monex Hambrecht(currently Monex Asset Management) as well as Monex, Inc. (current position). As a manager
of both subsidiaries, she has spearheaded a number of initiatives that have helped us improve
our corporate value time and time again, including keeping each business in the black andtaking decisive action to lowering commission fees at Monex, Inc. Furthermore, she has shown
her strategic prowess, unifying force and Group-wide stewardship as COO and CFO, while taking
full advantage of the authority and related duties as an executive officer, and helped steer andimprove the Group’s management. Taking into account her extensive and compelling record,
Yuko Seimei now holds the position of Co-CEO & Representative Executive Officer, possessing
and sharing the same authority as Oki Matsumoto.
In our main subsidiaries TradeStation Group and Coincheck Group, we have laid out asystem where each management team runs the respective businesses autonomously andindependently develops the management personnel in each company. In this way, we arepushing to deepen and enhance the Monex Group management that has various business
entities under its arm. In addition, each Group company steadily presses forward to also
cultivate the next generation of managers, actively delegating them posts, such as assigningyounger personnel to manager roles at each division and department level, or appointing ourelite employees (recruited straight out of university and internally tracked) to executive officer
positions.
Monex Group shall continue this course moving forward enhancing our management
system to ensure sustainable growth, by developing personnel from the management level tothe department and division level. In this process, the Nominating Committee discusses
社外
potential candidates to nominate to the Board or to management (i.e., representative
executives and executive officers), formulates “CEO Credentials” and a CEO successor
training plan, and then debates the CEO’s briefing on successor training.

WEB ESG Information | Corporate Governance | Officers | Evaluating Effectiveness of Board Meetings

Summary of Our Analysis and Evaluation Related to
the Board’s Overall EffectivenessEvaluation
Details

A questionnaire was distributed to each director between September
2021 and October 2021 to evaluate the Board of Directors. Based on thequestionnaire’s results, the effectiveness of the entire Board wasanalyzed and evaluated by the Nominating Committee and the Board of
Directors in October 2021.

Analysis and Evaluation Results
No issues were identified regarding the effectiveness of the Board of Directors or thecomposition and effectiveness of the various committees. No issues were identified
regarding the size of the Board of Directors or the balance between internal andexternal directors (11 directors, including 7 independent outside directors). Based on
discussions at past meetings of the Board of Directors and the Nominating
Committee, there was a consensus that the current balance between internal andexternal directors should be maintained, but that a Board of Directors with a capacityof about 9 members would be desirable. On the other hand, with regard to thediversity of knowledge, experience, and generation of each director, it was shared thatknowledge and expertise in finance-related areas such as fintech, crypto assets, asset
management, and investment banking, English language skills and overseas
experience due to accelerated globalization at subsidiaries, and the appointment offemale directors were all considered necessary. In addition, there was a suggestion toconsider generational changes in the Board of Directors and replacement of outside
directors, taking into account the attributes of the next generation of management
executives, from the perspective of the Succession Plan, which is an important issue
in corporate governance.

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Corporate Value Resources

Corporate Governance

Overview of Corporate Governance
Remuneration System of Directors andExecutive Officers
The Monex Group has opted for a governance system called“company with three committees” that offers a high degreeof separation between the management oversight and theexecutives. Per this setup and as prescribed in the
Companies Act, the Compensation Committee decides on
the Monex Group’s policy related to compensation and also
on the specific compensation for each director and executive
officer. The Compensation Committee is made up of 3
directors (2 of which are outside directors, as of September2022) and is chaired by the outside director Jun Makihara.
The Compensation Committee holds meetings when theneed arises. Further information on our policy related to the
remuneration of the board members and executive officers isnoted on the following page of our website.

Overview and policy concerning remuneration for executive officers/directors and executive officers(Fiscal year ended March 2022)

Basic Remuneration

Short-Term
Incentive Remuneration

Medium-and-Long Term
Incentive Remuneration

Compensation
Breakdown

70%

Summary

The salary range (¥1.5 to ¥3
million monthly salary) is
pre-established and the exact
amount is decided on an individual
basis by the Compensation
Committee. This amount isdetermined depending on whether
an executive also fulfills a dual role
as a director in the Monex Group,on his/her position within theMonex Group and on whether an
executive also fulfills a dual role asa Board member or officer in a
Monex Group subsidiary.

The profits for the Monex Group
from a single fiscal year arereflected in this compensation.
The payout is decided by theCompensation Committee, who
generally use 2% of the year’s
profit attributable to owners of theMonex Group (¥13.017 billion for
the fiscal year ended March 2022)
as a guide.

The Compensation Committee uses atleast 10% of the basic remuneration as
a guide to decide on an amount. This
incentive system reinforces an
executive’s ongoing commitment
toward improving the corporate value
over the medium-to-long term by using
remuneration based on stock that is
restricted on transfer during a certain
time period (or “restricted stock”).

This amount is a fixed amountplus an amount commensurate to
his/her post.

This is an incentive for improving
performance during a single fiscal
year. The total amount of the
incentive shall be determined by
the company’s performance andthen shall be allocated based on
merit for the duties andperformance of each Board
member or officer.

This is an incentive for improving thecorporate value over the
medium-to-long terms, and shall beallocated to each Board member orofficer in shares restricted ontransfer.*1

WEB ESG Information | Corporate Governance | Officers |Officer Remuneration System

30%

PolicyBreakdown of Remuneration, etc. (Fiscal Year Ended March 2022)
Basic Remuneration

Short-Term
Incentive Remuneration

Medium-and-Long Term
Incentive Remuneration¥86 million¥16 million¥17 million*2

not holding a dual position
as a director¥76 million¥41 million¥13 million*2

Outside &Independent Director¥71 million¥22 million*2–

Executive Officer

holding a dual position
as a director

Executive Officer*1 In lieu of allocating shares restricted on transfer to directors who reside outside of Japan, phantom stock shall also be allocated, and the amount paid shall becalculated from the standard stock price of the Company.
*2 All medium- and long-term incentive remuneration here is non-monetary (restricted stock). However, the period of restriction on transfer is one year for restricted stock
granted to the outside directors and it is posted as an expense for the fiscal year under review. Therefore, this is included in the Short-Term Incentive Remuneration in Japan.

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Corporate Value Resources

Corporate GovernanceDiscussion on GovernanceMonex Group Board of Directors
Continues to Pursue the Essence ofManagement

Oki Matsumoto

Representative Executive Officer
President & Chief Executive Officer
Monex Group, Inc.

Since our founding, Monex Group has pursued agovernance system centered on forward-looking anddiversity. This begs the question, how are issues
debated and what is the decision-making process in
the Board room? To get a feel for what actually goeson, we had a discussion on various topics with Oki
Matsumoto, the Chairman of the Board and CEO, andNobuo Domae, outside independent director since2016 and chairman of the Nominating Committee.

Monex Group, Inc. | Integrated Report 2022

37

Nobuo Domae
Outside Director(Independent)Corporate Value Resources

Corporate GovernanceDiscussion on Governance
What is the atmosphere like in the Monex Group(hereafter referred to as “Group”) Board of
Directors?
Domae: The outside directors speak frankly to everyone whengiving their opinions in the Board meetings. I often hear thatoutside directors at other companies just make superficial, formal
comments to show that they did something, but that is not thecase here. In addition, if something cannot be decided according
to the rules and regulations, then we complete and pass a written
resolution first, in order to devote more time discussing thesubstance in the meetings. If a measure is believed to pass and iswithout risk, a written resolution is sent out beforehand to theother Board members and then is passed right then and there.
This allows us to manage the meetings more efficiently andopens up more time for discussion.
Matsumoto: The Board adopted this style based on arecommendation from the internal directors more than ten years
ago. At that time, the company still did not have committees likethe current committee structure with a Nominating Committee,
etc. And, I received a request to change the Board to a different
format. Rather than just having meetings based on reports fromeach department, they wanted me as the CEO to present major
issues that impact the company as a whole and have discussions
on them. That request initially prompted me to integrate a CEO
report. I tried to keep that report concise between 1 and 3 pages

long, covering the issues that the Board would then discuss.
Domae: There are also Boards at other companies that get into
discussions about operations. For example, on one Board that I
previously experienced, there was a Systems Department thatwould report on its development and their schedule, and all the
directors, including the outside directors, would discuss issues
related to individual operations at the meeting. I wondered if thisformat was really the most efficient way, and furthermore, wasthis really supposed to be part of the director’s role in the firstplace. In contrast, Monex Group tends to be fairly straight forwardwith the role of the directors, where the Board has a mandate tooversee top management.

What makes the Board at the Group distinct fromothers?
Matsumoto: The Board at the Group does not get involved withthe operational details of the company but focuses on big picture
discussions. However, if one were to ask if the Board leans more
toward checks and balances or running management, we are arare case among Japanese corporations, leaning more toward
strategic business management, where the Board discusses
actual strategy and makes decisions on it.
Domae: That is definitely what it should be. It is unproductive forthe secretariat of the Board of Directors to spend time and energy
on matters that do not require discussion at the meetings.
Matsumoto: The highest decision-making body in the Group is
the Board of Directors. A basic organizational structure tends tohave a General Meeting of Shareholders, a Board and then a CEO.
If one had to say which is actually the most powerful among
those three, I would say that the Board of Directors is in ourGroup. In terms of influence, Nobuyuki Idei also played a big roleon the Board in deciding overall strategy.
Domae: When I first joined the Board, Mr. Idei really stirred things
up asking “Mr. Matsumoto, are you enjoying the way things are?”or “Are you really running Monex to do things this way?”
Matsumoto: Mr. Idei came at me and told me “It is yourMonex Group, Inc. | Integrated Report 2022

38

responsibility to try something new” and strongly urged me to“present what you think the Board should be looking at anddeciding.” Ultimately, the current format and style of the Board is
the result of that action. As a result, our Group’s Board often gives
direction to executive management or modifies policy. For
example, during one particular fiscal period there was a proposal
to not pay out dividends, and a claim came out of the Board of
Directors. Thereafter, a measure to pay out dividends was quickly
created by the Finance Department during the Board meeting andpassed and announced on that same day.
Domae: Recently, executive management has been attempting
to get one step ahead and create a measure that would impact
the Board of Directors. I get the feeling that the Board is pressing
executive management to stay on top of things, and that is also
very typical of Monex Group.

What steps have you taken to make the Board
function properly?
Matsumoto: I believe that achieving a good balance of Board
members is crucial. Diversity on the Board is extremely important,and having a variety of personalities among the outside directors
is particularly helpful.
Domae: That is absolutely right. The Board would lean more
toward a role of checks and balances, unless there areforward-thinking, aggressive members or those with the frame ofmind that it is “Better to have tried and failed than to have nevertried at all.”Corporate Value Resources

Corporate GovernanceDiscussion on GovernanceMatsumoto: I believe that both offense and defense are needed,
and it is critical to have those “qualities” that are not part of theskill set of our directors. I feel that Monex Group has always tried
to ensure that all type of qualities must be represented and heard
on the Board. In addition, Monex Group appointed Jun Makihara
as the lead independent outside director. To give someperspective, if outside directors only make comments when they
are motivated, like when they have a motivational level of 50
percent or more, as it were, then there is a chance that no
discussion takes place even if their motivational level is at about
49 percent. However, with our lead independent director, he has
put in place an executive session, where the CEO has a chance todiscuss matters with the outside directors (but without the internal
Board members) allowing them to express their opinions freely.
The opportunities afforded with executive sessions boost the
motivation of outside directors, making it easier for them to speakout and ensuring active discussion. In that sense, the existence ofthe lead independent outside director is absolutely key.
Domae: When there is a tense atmosphere and it is hard toparticipate in the Board discussion, the lead outside director Mr.
Makihara steps in to confront Matsumoto with a firm tone, paving
the way for everyone to speak out more easily and contribute. I
also believe that Mr. Makihara plays a tremendous role on the
Board.

What business risks does Monex Group face right
now and what countermeasures have you taken?
Domae: Any significant structural changes in society pose apotential risk to Monex Group, and I think they should be thefocus of Board discussions. Our focus should not be to simply
raise the short-term performance levels, but discuss the
structural issues that are behind them. For example, if securities
brokerages are changing, we should be discussing how to adapt
to these changes. Executive management is in charge ofperformance levels, and therefore I believe that the Board of
Directors should help lead the company down a path based on

those structural changes in society.
Matsumoto: The Board at Monex Group tends to discuss therisks of not doing something more than the risks of doing
something. In the last 2 to 3 years, one of the bigger topics of
discussion on the table is having another CEO. In this example aswell, discussions about the risk of not having another CEO weremore frequent. Previously, when we were looking to expand into
the U.S. market or to enter into the crypto business, the Board
discussions continued to ensue but remain centered on the risks
of not doing something. In the first place, our field of businesshas never been one that just grows like an escalator without
actively doing anything. The Group must constantly develop ways
to carve out new growth. As the Board puts pressure and argues
about the risks of not doing something, executive management
always responds after careful thought and consideration, and thatback-and-forth has always characterized us at Monex. Up until
now, I have stood at the head of the table, but going forward, weneed to create an internal system that will continue to pursue
challenges without fearing changes regardless of who is at thetop, and that is what I am committed to doing right now.

What current ESG issues do you see and what
will be your approach going forward?
Matsumoto: I think that the Board still needs more discussion
concerning ESG.
Domae: The truth is that ESG as it relates to the financial
industry is ambiguous, and it is difficult to identify andunderstand what we should do. The other day, there was talkabout launching a fund to promote ESG in a company, not a fundthat invests into a business involved in ESG. I believe that this isexactly what financial ESG looks like. And, I would like us tothink about how our business can contribute to this.
Matsumoto: I think that the power of money will offer
tremendous influence on promoting ESG. As an investor andthe owner of a financial company, I think it is important tomanage the ESG-related funds being keenly aware of their

Monex Group, Inc. | Integrated Report 2022

39

power. In addition, I think that there are many things that can bedone, such as explain to our retail investors and customers that“their investment has the potential to change society.” Apart from
that, the most consequential issue that concerns sustainability in
the Group is “personnel.” The most important topic in ourcompany is how to make the Monex Group which is essentially acluster of personnel, into a sustainable entity. Our attempt thus
far has included a DEI approach, the appointment of young
leaders as well as implementing a succession plan. I believe it isequally important for shareholders and stakeholders tounderstand and share our fervor in this endeavor.
Domae: I think it is wonderful that Monex Group actively
supports young workers and leaders. One example of this
support is the ascension of an employee fresh out of college andwho is now an executive officer. However, even if a young leader
was appointed out of the blue, it does not necessarily mean thathe or she can be effective right away. This appointment
demonstrates our commitment and is the result of spendingtime to develop a younger worker properly. As previously
mentioned, the sustainability of personnel is the most criticalissue, and I believe we must continue bringing this up in the
Board meetings as well.

Corporate Value Resources

Corporate Governance
Skill Matrix of the Board Members
Name

Position

Experience and Expertise
Financial industry

Attendance Record for FYE March 2022

Accounting and Board ofMarketing Technology Management internal controls Directors

Committee

Oki Matsumoto

Chairman of the Board

16/16

Meetings of the Nominating Committee: 3/3
Meetings of the Compensation Committee: 5/5

Yuko Seimei

Member of the Board

14/14 *3—

Takashi Oyagi

Member of the Board

16/16

—

Naofumi Yamada

Member of the Board

14/14 *3

Meetings of the Nominating Committee: 3/3 *3
Meetings of the Audit Committee: 8/8 *3

Jun Makihara

Lead Independent Director *1

16/16

Meetings of the Nominating Committee: 3/3
Meetings of the Compensation Committee: 5/5

Fujiyo Ishiguro

Independent outside director

16/16

Meetings of the Nominating Committee: 3/3

Nobuo Domae

Independent outside director

16/16

Meetings of the Nominating Committee: 3/3 Meetings of the Audit Committee: 3/3 *3
Meetings of the Compensation Committee: 4/4 *3

Masaaki Koizumi

Independent outside director

16/16

Meetings of the Audit Committee: 11/11

Shiho Konno

Independent outside director

16/16

Meetings of the Audit Committee: 11/11

Ungyong Shu

Independent outside director *2——*1 The Company’s outside directors and independent directors voted to appoint Makihara as the Lead Independent Director effective from April 2015.

*3 Attendance while on Board*2 Appointed as a new member of the board at the General Meeting of Shareholders held on June 25, 2022.

Basic composition of Board is diverse
Since our founding, Monex Group has always prioritized
DEI (Diversity, Equity & Inclusion) in our managerial
approach. I believe that diversity is representative evenon our Board of Directors, which provides an ideal model
since it is the highest managerial body in the company.
The backbone of diversity is to avoid partiality toward
one group, such as a specific gender, country, region orage range. This diversity is part of our core process forappointing candidates. One example of this, as far as age
is concerned, can be seen in our appointment of adirector in his early thirties. Diversity is the mother ofinnovation, and it brings constructive discussions to thetable. We are convinced it helps provide more thoroughrisk management, leads to more sustainable growth overthe medium- and long-terms and is also linked to higher
corporate value for the Group.

INTERVIEW

Shooting for cutting-edge
technology and innovation

Digest all information without
prejudice to help ensure the best
decision-making

Naofumi Yamada

Ungyong Shu

Member of the Board, Executive Officer

Recently, crypto assets and the fringe markets, genericallyreferenced as Web3, are suddenly gaining a lot of attention andcontinuing to change rapidly. For example, the NFT industry hasreached a value of several trillion yen in a very short span, andeven at this very moment, we can see signs of an unknown,
nascent market taking shape. In this type of society, thecompetitive edge of an organization rests in its “ability tocontinuously learn” and its “ability to adapt to change.” I will use
my experience to help the Group research cutting-edge
technology and realize innovation.

Monex Group, Inc. | Integrated Report 2022

40

Outside Director

After my appointment as an outside independent director, anurgent issue confronted the Board about the appropriateness oflisting a U.S. subsidiary on the NYSE. Only after holding detailed
discussions with all relevant parties did the Board come to a
final decision in early August of 2022. Governance at Monex
Group is not just a formality, rather this experience proved it tobe real and effective. Going forward, I am committed to help
ensure the best decision-making, where we digest all available
information without holding any prejudices so that the Group’s
potential is reflected accurately in the stock price.

Corporate Value Resources

Corporate GovernanceManagement Team As of August 31, 2022 (number of shares held as of March 31, 2021)
Oki Matsumoto

Yuko Seimei

Chairman of the Board, Member of the Nominating Committee,
Member of the Compensation Committee
Representative Executive Officer, President and Chief Executive Officer

Member of the Board, Representative Executive Officer,
Co-Chief Executive Officer and Chief Financial Officer●

Term of office: 17 years●●

Number of shares owned: 7,566,500 shares

Term of office: 1 year●

Number of shares owned: 166,700 shares

Important concurrent positions at other organizations

Important concurrent positions at other organizations

Representative Director and President, Monex, Inc.

Chairman of the Board of Directors, TradeStation Group, Inc. (the Company’s wholly owned subsidiary)
Chairman and Managing Director, Coincheck, Inc. (the Company’s subsidiary)
Outside Director, Mastercard Incorporated(the Company’s wholly owned subsidiary)
Director, TradeStation Group, Inc. (the Company’s wholly owned subsidiary)

Takashi Oyagi

Naofumi Yamada

Member of the Board, Executive Officer●

Term of office: 11 years●

Member of the Board, Executive Officer

Number of shares owned: 510,600 shares●

Term of office: 1 year●

Number of shares owned: 6,900 shares

Important concurrent positions at other organizations

Important concurrent positions at other organizations

Director and Chief Strategic Officer, TradeStation Group, Inc.
(the Company’s wholly owned subsidiary)

Executive Director Chief Strategy Officer, Coincheck, Inc. (the Company’s subsidiary)
Patent Attorney, Socidea Intellectual Property OfficeDirector, PKSHA Workplace Inc.

Jun Makihara

Fujiyo Ishiguro

Independent outside director

Outside Director, Member of the Nominating Committee,
Member (Chair) of the Compensation Committee, Lead Independent Director●

Term of office: 16 years●

Independent outside director

Outside Director, Member of the Nominating Committee●

Number of shares owned: 20,000 shares

Term of office: 8 years●

Number of shares owned: 16,900 shares

Important concurrent positions at other organizations

Important concurrent positions at other organizations
Outside Director, Philip Morris International Inc.

Director, Chief Evangelist, Netyear Group Corporation
Outside Director, WingArc1st Inc.
Director of the Board (Outside), SEGA SAMMY HOLDINGS INC.
Outside Director, The Shoko Chukin Bank, Ltd.

Nobuo Domae

Masaaki Koizumi

Director, TradeStation Group, Inc. (the Company’s wholly owned subsidiary)(Outside Director in substance)

Independent outside director

Outside Director, Member (Chair) of the Nominating Committee,
Member of the Audit Committee, Member of the Compensation Committee●

Term of office: 6 years●

Independent outside director

Outside Director, Member (Chair) of the Audit Committee●

Number of shares owned: 36,900 shares

Term of office: 4 years●

Number of shares owned: 6,900 shares

Important concurrent positions at other organizations

President & Representative Director, Ryohin Keikaku Co., Ltd.

Certified Public Accountant, KOIZUMI C.P.A. OFFICE
Outside Statutory Auditor, K.R.S. Corporation
Statutory Auditor, TSUKUI CAPITAL CORPORATION

Shiho Konno

Ungyong Shu

Important concurrent positions at other organizations

Independent outside director

Outside Director, Member of the Audit Committee●

Term of office: 4 years●

Independent outside director

Outside Director, Member of the Audit Committee

Number of shares owned: 6,900 shares●

Important concurrent positions at other organizations

Term of office: New appointment●

Number of shares owned: 0 shares

Important concurrent positions at other organizations

Attorney-at-law, Shiho Konno Habataki Law OfficeOutside Director, LIXIL Corporation

Representative Director, Core Value Management, Co., Ltd.
Outside Director, Dai-ichi Life Holdings, Inc.
Outside Director, Sojitz Corporation

Monex Group, Inc. | Integrated Report 2022

41

Corporate Value Resources

Corporate Governance
Stakeholder Engagement
Engaging Traders& Investors

Q& A

Q

As part of our engagement with the market involving the exercise of voting rights, Monex Group holds
ongoing discussions about the proposals presented in the General Meeting of Shareholders withinstitutional investors.
The following Q&A covers proposals presented in the General Meeting of Shareholders for this fiscal year.

Explain the proposal for
appointing directors.

Last year, the executive officer Yuko Seimei and
Naofumi Yamada originally from PKSHA Technology
were appointed as internal and external directors,
respectively. We considered the changeover of external
directors for long-term service and making theinternal/external Board ratio 3:6 for a total of 9 directors. This
last April in accordance with our business strategy and plan tolist subsidiaries on the U.S. stock exchange, Seimei was
appointed a Co-CEO and Yamada was appointed a dual role as
an internal director and executive officer in order to pushbusiness forward harder. At the General Meeting of
Shareholders in June, we took a step forward in improving theoutside director ratio and the succession of outside directors
by appointing Ungyong Shu as an outside and independent
director.

A

Q

Explain the policy about the term length of
a director.

The longest serving current director is Makihara with
14 terms. In the Monex Group Nominating Committee,
which includes personnel with outside directorial
experience in a U.S. listed company, while the term length issomething that we should think about, we believe that making
a substantial contribution to improve corporate value andgovernance of the Board is even more important. Of course
Monex Group bases its selection of candidates mainly on theircharacter, yet for the company to improve corporate value
sustainably, we believe that a succession that includes achangeover in outside directors is also required. Therefore, wewill promote a more dynamic succession of outside directors
going forward while taking into account the changeover time.

AQ

Can you share the progress made regarding
the management succession?

With the appointment of Seimei as the Co-CEO in April,
her scope of management has been expanded to theonline securities business in Japan and in the U.S.
Therefore going forward, the founder and CEO Matsumoto will
be able to invest more resources in the expansion of
Coincheck globally and into new business development. While
this Co-CEO system advances the internal succession further,
we were also able to make progress on the succession ofoutside directors. Based on criteria for selecting candidates
with expertise in M&A and risk management, Shu wasappointed outside director and can draw from his wealth ofexperience as an outside director and auditor for large, listedcompanies.

AQ

It was stated that the appropriate
number of directors on the Board is 9.
Has that policy changed?

The transition period in the succession must overlap
so that new appointments can learn about the Monex
Group while the current directors are still serving.
However, our policy going forward takes into account theappropriate number of directors for an effective Board and will
stay close to a capacity of 9 directors. It is also worth notingthat since Seimei began sharing the CEO position in April, there
are now more chances for her to facilitate the Board meetings
and this has led to active discussions even with more than 9
directors participating. On the Nominating Committee and on
the Board, we will discuss whether the current 9 directors isthe appropriate capacity as quickly as possible going forward.

ESG questionnaire for shareholders
and clients
We distributed a questionnaire to stakeholders to gauge
the importance of each issue related to ESG andsustainability with the goal of sustainably increasing thecorporate value. Based on the responses provided byapproximately 3,600 participants (Shareholders: Approx.
2,000, Clients: Approx. 1,000 and Employees: Approx.
600), the Board discussed the priority of materiality topics
as well as issues going forward. As Monex Group eyes
medium- to long-term growth, the management team will
actively engage with the stakeholders to hear and collate
their feedback and then hold constructive discussions
around that.

Briefing for retail investors
Together with the earnings announcement for eachquarter, Monex Group holds an online results briefing forretail investors. After our CEO as well as our Co-CEO goover the performance and the state of the business, we
provide an opportunity for the retail investors and the
management team to engage in a direct dialogue,
allowing time for the team to listen to their feedback andto personally field most of their questions.

A

WEB Earnings announcement for retail investors covering fiscal year ended

March 2022 (video) (Japanese version only)

Monex Group, Inc. | Integrated Report 2022

42

Corporate Value Resources

Corporate Governance

Our Profound Thanks to the Late Mr. Nobuyuki Idei and
Our Plans Going Forward
The outside independent director at Monex Group Nobuyuki Idei passed away
in June of 2022. In the late 1990s when we initially started Internet financial
services, which was still a nascent field with many unknowns, Mr. Idei was thefirst to advocate it and was instrumental as if playing a parental role in the birthof Monex Group. Monex was able to launch these services thanks in no smallpart to the support of Mr. Idei, who was the President of Sony Corporation at
the time.
Thereafter, Mr. Idei continued to be involved in the management of Monex
Group. From 2013, he became an outside director who held a lot of weight withhis suggestions to the Board, at times he led discussions and even pushed us
to challenge ourselves. Seven years ago, he was also the one who pressed us
to launch a project called “Monex Zero” with the goal of coming up with new
businesses besides our online securities. Through this project, we took noticeof the tremendous potential in blockchain and also decided to merge with
Coincheck and go after the crypto asset business. Of course, Mr. Idei as always
pushed us forward in this endeavor, and despite being the eldest member on
the Board, he was the most future oriented.
We feel a profound sense of gratitude for the leadership that Mr. Idei
offered to us. We hope to continue his legacy
of innovative ideas and actions as well as
Oki Matsumoto
Representative Executive Officer
keep his spirit and future oriented approach
President & Chief Executive Officer
alive.

Mr. Nobuyuki Idei
Former Outside Director

Monex Group, Inc.

EPISODE

1999

1999

2019

2019

At a press conference whenMonex was founded. Matsumoto
and Sony made headlines with
their joint investment.

Mr. Idei, the President of Sonythen, visits the Monex office.

Discussion on future technology
trends in an interview at Monex’s
20th anniversary.

Mr. Idei on the Board of Directors.
Outside director Fujiyo Ishiguro ison his left.

Monex Group, Inc. | Integrated Report 2022

43

Ensuring the Legacy ofNobuyuki Idei Lives on
Fujiyo Ishiguro

Independent Outside Director

At the Board meetings, Mr. Idei sat next to me and always
looked a bit scared of me. His expression seemed a little
funny, and at one time, even prompted me to ask “What?”
But it was actually me who was scared. Mr. Idei often would
speak last in the room and probe us with “Do you think thisis really a good idea?” and then speak of more active
growth strategies. Every time I spoke up during themeetings, I would glance at Mr. Idei, checking his
expression for approval.
On the Monex Group Board, Mr. Idei fit perfectly into hisrole like a glove, offering advice to management as a deep
thinking strategist constantly focused on growth plans. My
personal view is that there should be someone who is older
than the president on the Board to help monitor
discussions. Mr. Idei played this part for Monex and his
incredibly active approach really produced growthstrategies for the management team.
His absence has really hit me harder than I could haveever imagined. His impact will stay alive in me, as I will ask
myself and continue to challenge my views as a director,
wondering if I am looking at a future that it is in line with theone that he envisioned. I will ensure his legacy lives on,
striving to get that approving face from the great man who
sat next to me.

Financial Section

Management Discussion & Analysis

Profit & Loss

(Performance Results & Policies Going Forward)

Monex Group businesses are made up of five segments: Japan, US, Crypto Asset,
Asia-Pacific and Investment Segments. This section covers our understanding of thecurrent financial status of Monex Group for profit and loss (PL) and cash flow during the
fiscal year ended March 2022.

Consolidated Financial Results Record High in Operating Revenue(Millions of Yen)FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

Year on Year

Consolidated total operating
revenue after deducting
financial expenses

47,90073,69583,54913%

Consolidated selling, generaland administrative expenses

42,83549,861

68,60138%

Consolidated profit before
income taxes

4,131

21,29620,801

-2%

4%

17%

13%

-4pt

ROE

For the fiscal year ended March 2022, operating revenue*1 came to ¥83.549 billion, a 13% increase
year on year and posting a record high for the second year in a row. There was a marginal rise of
1% in commissions received, totaling ¥37.361 billion. However, active crypto asset trading gave rise
to a 24% increase in the net trading income for a total of ¥30.477 billion. More margin trading
based income boosted the financial income to ¥18.886 billion for a 23% increase. In all, theseincreases had a significant impact on the rise in operating revenue.

FYE Mar. 2019

FYE Mar. 2022

<1st fiscal year since
Coincheck joined the group>¥2.1

billion¥18.9
billionProfit3 main segments *2

25.2¥46.2 ¥billion
billionFor previous
three fiscal years

CAGR

+21%

¥28.6 3 mainProfit¥30.1
segments *2
billion81.8¥

billionbillion¥23.1 billion
Japan Segment

US Segment

Crypto Asset Segment

Since the inception of the Crypto Asset Business in the fiscal year ended March 2019, each of ourthree main segments has grown steadily every term, generating an average annual growth rate of+21% over the past 3 years for the total revenue of the said segments.
*1 Total operating revenue after deducting financial expenses and cost of sales*2 Revenue was calculated cancelling out the transactions between Group companies from the segments’operating revenue after deducting financial expenses and cost of sales.

The graph below shows the fluctuation in revenue and expenses between the fiscal years ended
March 2021 and 2022. During the fiscal year ended March 2022, we were active in marketing andstrengthened our workforce to accelerate growth, and posted temporary expenses related to listinga subsidiary via a De-SPAC transaction. Yet, a boost in revenue absorbed these costs, producing a
consolidated profit before income taxes of ¥20.801 billion, which was on par with the previous
fiscal year.
(Millions of Yen)
40,00035,00030,00025,00020,00015,00010,000
5,000
0

1

2

2,807

21,2969,855

FYE Mar. 2021
Consolidated profit
before income taxes

3

3,788

4
5

-8,522-1,524

6-2,7297-1,948820,801-2,222FYE Mar. 2022
Consolidated profit
before income taxes

1 Total operating revenue after deducting financial expenses and cost of sales
Operating revenue had an increase of ¥7.799 billion for Crypto Asset Segment and an increase of ¥1.339
billion for the Japan Segment.
2 Increase in gains on sales of DeFi tokens“Monex Group, Inc.” in the Japan Segment sold off tokens in a DeFi*3 project that we invested in order todevelop a blockchain business.
3 Expiration of the earn-out *4 clause¥3.788 billion resulted from earn-out and was posted as other financial expenses in the fiscal year ended
March 2021. However, the earn-out term expired during the same period and therefore will not be posted
as an expense starting from the fiscal year ended March 2022.
4 Advertising expenses
In order to accelerate growth particularly in the US and Crypto Asset Segments, we engaged actively inmarketing to acquire new accounts. As a result, advertising expenses increased by ¥4.66 billion for the US
Segment and ¥3.69 billion for the Crypto Asset Segment.
5 One-time compensation & benefits related to De-SPAC listing
As part of our efforts in restructuring capital for listing the Coincheck Group via a De-SPAC transaction, wecancelled stock options that we usually issue and posted a temporary expense in personnel expenses.
6 Other compensation & benefits
Personnel was increased to strengthen our sales system and management system particularly in the US
and Crypto Asset Segments. Between March 2021 and 2022, there was an increase of 224 people in the
US Segment and 65 people in the Crypto Asset Segment.
7 Professional fees
Compensation for experts such as attorney and accountant fees rose due to preparations needed for the
De-SPAC listing of our subsidiary.

8 Other expenses*3 Decentralized finance (DeFi)*4 Earn-out summary: The earn-out maximum shall be one half of Coincheck’s total net income for a period of 3 years
between the fiscal years ended March 2019 and 2021. The amount shall be calculated after deducting for the specified
business risk and then paid out to former shareholders.

Monex Group, Inc. | Integrated Report 2022

44

Management Discussion & Analysis(Performance Results & Policies Going Forward)

Financial Section

Profit & Loss
(Millions of Yen)

Consolidated Cash FlowFYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

Cash flows from operating activities

34,454-63,818

51,701(Profit before income taxes +Depreciation and amortization)

12,25329,44529,219Cash flows from investing activities-7,068-7,158-6,026

Cash flows from financing activities-48,399

95,483

13,763

Net increase/decrease in cash andcash equivalents-21,10324,50659,438Cash and cash equivalents atthe beginning of period

150,926

158,765-2,080127,832

Effect of exchange rate change on cash andcash equivalents
Cash and cash equivalents at
the end of period

Japan Segment

Business entity: Monex, Inc., etc.

Increase revenue steadily by diversifying revenue andincreasing assets in custody(Millions of Yen)FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2022

Year on Year

Total operating revenue after
deducting financial expenses

24,34229,09930,438

5%

186,683

Brokerage commissions
from Japan equity

9,152

12,462

10,339

-17%

3,412

7,337

Brokerage commissions
from U.S. equity

723

2,578

2,687

4%

186,683

253,458

Mutual fund agency fees

1,565

1,459

2,212

52%

Net financial income

6,601

6,605

8,729

32%

Selling, general andadministrative expenses

21,671

24,13625,2505%Note) Due to an accounting policy change (starting from the fiscal year ended March 2022) in the way demand deposits
with restrictions on use (related to IAS 7) are recognized as cash and cash equivalents, the numerical values usedhere reflect the said accounting policy change, which has been applied retroactively for the fiscal year ended March
2021.

Since any increase or decrease in assets and liabilities related to securities trading, etc., impacts
the business cash flow, that cash flow fluctuates drastically depending on the trading activity of thecustomers. When looking at the total for profit before income taxes, depreciation and amortization,
without considering the aforementioned impact, it amounted to ¥29.219 billion in the fiscal year
ended March 2022 and stayed at the same level as the fiscal year ended March 2021. The balanceon loans for margin transactions rose sharply, posting a negative business cash flow for the fiscal
year ended March 2021, totaling minus ¥63.818 billion. Yet, there is low risk in the capital recovery
of loans on margin transactions and one can expect sufficient return. Therefore, one might evensay that a brokerage firm prefers a rise in the balance of loans on margin transactions.
Cash flow generated from investment activity relies mainly on the acquisition of software
assets, such as the online securities system.
Cash flow generated from financial activity depends mainly on funding for increasing customer
trading, such as for margin trading. Since trading fluctuates depending on the market conditions,
we come up with the necessary funding in order to ensure there is always sufficient liquidity. Notethat the majority of loans is tied to assets with high security, liquidity and profitability, such as loans
for margin transactions. Therefore, one could say that actual net interest-bearing liabilities (netdebt) is small.

System related expenses

10,716

10,83011,071

2%

Other revenue andexpenses, etc. (net amount)

-420

2,313

6,777

193%

Segment profits(profit before income taxes)

2,251

7,276

11,96564%

In the Japan Segment, “Asset-based revenue,” which can provide consistent revenue, increased
from balance of mutual funds building up. The balance of mutual funds* in Monex, Inc. topped ¥1trillion. Year on year, the mutual fund agency fees increased by 52% for a total of ¥2.212 billion, thebalance of margin trading (average balance outstanding) increased by 22%, and the net financial
income increased by 32% for a total of ¥8.729 billion. U.S. equity trading continues to perform well,reaching a record high of 25% of all brokerage commissions in the 4th quarter. Japanese equity
commissions came to ¥10.339 billion, a 17% drop in the same period. However, that loss in revenue
was offset, for example by asset-based revenue, with operating revenue after deducting financial
expenses, etc. reaching ¥30.438 billion (up 5% in same period).
In terms of expenses, payment fees based on trading volume increased due to expanding IFA
and PB businesses as well as more accounts that were transferred over from Shinsei Bank in
January 2022. For system related expenses, we strengthened our U.S. equity services, producing arise of 2% during the same period. In addition, with a selling profit of ¥3.956 billion for DeFi tokens,other revenue and expenses (net amount) reached ¥6.777 billion.
As a result of the factors above, the segment profits came to ¥11.965 billion, up 64% year on
year.
* Balance of Japanese registered mutual funds (excluding MRF), foreign registered mutual funds (excluding MMF),
iDeCo and ON COMPASS

Monex Group, Inc. | Integrated Report 2022

45

Management Discussion & Analysis

Financial Section(Performance Results & Policies Going Forward)

Profit & Loss

US Segment

Business entity: Tradestation Group etc.

Investing actively in marketing and strengthening personnel toachieve medium- to long-term growth

Crypto Asset Segment

Business entity: Coincheck etc.

Highest operating revenue* since joining the Group.
Moving forward with preparations for De-SPAC listing.

(Thousands of U.S. Dollars)

FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2021

Year on Year

Total operating revenue after
deducting financial expenses

183,080

215,978

209,144-3%

Brokerage commissions

81,367

106,508

100,104-6%

Other commissions

31,58962,71464,723

Net financial income

60,47436,837

Selling, general andadministrative expenses

164,579

185,996(Millions of Yen)FYE Mar. 2020

FYE Mar. 2021

FYE Mar. 2021

Year on Year

3,812

20,822

28,62137%

Net trading income

3,528

19,96026,14431%

3%Commission received

287

853

1,494

75%

37,7192%

Selling, general andadministrative expenses

3,502

7,129

14,909109%

262,437

41%

Advertising expenses

264

2,055

5,745

180%

-17

-3,825

157

-

293

9,868

13,87041%

Total operating revenue after
deducting financial expenses

Advertising expenses

11,04917,39557,733232%

Compensation andbenefits

Other income and expenses(net amount)

66,43572,07988,021

22%

Other income and expenses(net amount)Segment profits(profit before income taxes)-2,267120

4,000

3,234%

Segment profits(profit before income taxes)

16,23330,101-49,293-

In the US Segment, there was less market volatility, as indicated by a 26% drop in the VIX index year
on year, resulting in less equity trading for the TradeStation Group. Other commissions and net
financial income increased, but the total operating revenue after deducting financial expenses
came to 209.144 million USD (down 3% in same period).
However, in order to achieve medium- to long-term growth, we invested actively in marketing to
get new accounts and strengthened personnel to enhance our products and services. In same
period, advertising expenses came to 57.733 million USD (up 232%), compensation and benefits
reached 88.021 million USD (up 22%) and selling, general and administrative expenses totaled
262.437 million USD (up 41%).
As a result of the factors above, the segment profit and loss came to negative 49.293 million
USD (last fiscal year was 30.101 million USD).

In the Crypto Asset Segment, the number of verified accounts in Coincheck increased 35% year on
year, the marketplace trading values of crypto assets rose 29% and the net trading income reached¥26.144 billion, up 31%. In addition, revenue grew from new businesses such as IEOs and NFTs
with commission fees reaching ¥1.494 billion (up 75% year on year), and total operating revenue
after deducting financial expenses came to ¥28.621 billion (up 37%), a record high since joining theGroup.
Selling, general and administrative expenses totaled ¥14.909 billion (up 109%), with theadvertising expenses targeting new accounts and the compensation and benefits associated with
the De-SPAC listing both rising.
As a result of the factors above, the segment profits came to ¥13.87 billion, up 41% year onyear.
* Total Operating Revenue After Deducting Financial Expenses and Cost of Sales

Monex Group, Inc. | Integrated Report 2022

46

Management Discussion & Analysis(Performance Results & Policies Going Forward)

Financial Section

Balance Sheet

Monex Group has subsidiaries inside and outside of Japan that run a financial instruments
business, and our balance sheet structure has features that are different from a standard
business company. This section covers the fundamental structure and features of theconsolidated balance sheet for Monex Group, our understanding of Monex Group’s current
financial status at the end of the fiscal year ended March 2022 and our capital allocation
approach.

Consolidated Balance Sheet Structure,
Financial Strategy & Capital Policy
Business investments and shareholder returns over medium- to long-terms
1 Consolidated Balance Sheet Structure
The consolidated balance sheet of Monex Group covers ¥1.6 trillion in total assets as of the end of
March 2022. Approximately half includes cash from customers and deposits for segregation ofreceived guarantee money. The other remaining half includes assets related to customertransactions, such as margin trading, and many of those assets straddle both sides of the books asboth liabilities and assets. This has been broken down for easier understanding in the consolidatedbalance sheet table below. The table rearranges and tallies the items from the consolidatedbalance sheet for financial accounting.
Net debt (¥18.8 billion - ¥3.4 billion = ¥15.4 billion)
Cash and cash equivalents (holding company)

3.4(Billions of Yen)

18.8

Bonds and loans payable (holding company)

Segregation of cash (deposits received) from customers
Cash segregated as deposits（Segregation of cash (deposits received)from customers）

843.6

Deposits received and Guarantee
deposits received (Mainly cash

940.9

Liabilities related to securities trading, etc.

200.0

(deposits received) from customers)

Assets and liabilities related to securities trading, etc.
Assets related to securities trading, etc.

(Loans to customers for margin trading, etc.)

Assets related to crypto assets

346.6(Loan and possession of crypto assets forcustomer transactions)

76.3

Cash and cash equivalents (subsidiaries)(Cash collateral received

Liabilities related to crypto assets(Loan and holding of crypto assets forcustomer transactions)

73.5

250.1

Bonds and loans payable (subsidiaries)

243.8

24.9

Other liabilities

24.7

63.0

Equity106.0

Other assets and liabilities
Other assets

Fixed-type assets and equity capital
Fixed-type assets*

Total assets

1,607.8

Total liabilities and equity

Net debt (net interest-bearing liabilities)
Bonds and loans payable for the Monex Group came to ¥262.6 billion, but ¥243.8 billion of thatamount is funding for our business subsidiary to carry out securities trading, etc. Therefore, manyof those liabilities straddle both sides of the books as both liabilities and assets. For example, whena customer for Monex, Inc. buys equities on credit, the purchasing amount is a loan for margintransactions posted as an asset, and the funds raised through bonds and loans payable isallocated there. Since loans on margin transactions are secured by collateral with high liquidity,
there is low probability of bad debt loss and there is sufficient return. Therefore, the ¥243.8 billion inbonds and loans payable for our securities subsidiary, etc. is linked with high security, liquidity andprofitability assets. For that reason, in the consolidated balance sheet table breakdown, ourapproach excludes it from the net debt (net interest-bearing liabilities).
On the other hand, ¥18.8 billion of the bonds and loans payable belongs to Monex Group as theholding company, which does not carry out securities trading itself. Since cash and cash
equivalents belonging to Monex Group come to ¥3.4 billion, after deducting that, the actual net debt
totals ¥15.4 billion.

Segregation of cash (deposits received) from customers
The majority of the ¥940.9 billion in deposits received and guarantee money is cash (deposits
received) from customers, etc. In accordance with laws and regulations, the cash segregated as
deposits comes to ¥843.6 billion, making up approximately half of the ¥1.6 trillion in total assets.

Assets and liabilities related to securities trading, etc.
Assets and liabilities related to securities trading, etc. include loans for margin transactions
previously mentioned, trading securities for selling to customers and the derivative assets andliabilities that are the product of providing FX transactions to customers. None of them represent
proprietary trading that targets a pure investment return. As a result, the risk is limited to pricefluctuation. For the assets and liabilities related to crypto assets as well, the loan and possession of
crypto assets are for trading with customers, and the loan is secured by collateral with highliquidity.
Since the balance of the assets and liabilities related to securities trading, etc. always changes
depending on the trading status of the customer, funding is provided from bonds and loans
payable, thereby securing sufficient liquidity. Our business subsidiaries hold ¥250.1 billion in cash
and cash equivalents against ¥243.8 billion in bonds and loans payable.

Fixed assets and capital¥63 billion in fixed-type assets can be categorized as the goodwill from the acquisition of a
subsidiary, intangible assets such as a backbone brokerage system and level 3 investments insecurities (non-listed shares, etc.), representing 60% of the ¥106 billion in total capital. The
acquisition of fixed-type assets is completely covered by equity capital, giving us high financial
solvency.

1,607.8* Property and equipment + Intangible fixed assets + Equity method investments + Level 3 investments in securities(non-listed shares, etc.)

Monex Group, Inc. | Integrated Report 2022

47

Management Discussion & Analysis(Performance Results & Policies Going Forward)

Financial Section

Balance Sheet

2 Financial Strategy and Capital Policy
Monex Group’s main focus is in the financial instruments business, and when looking at the Group
from the perspective of customer protection, it requires high financial solvency. Fixed-type assetsthat require a longer time for collection are all covered by capital, and the remainder is earmarked
for the following uses and its allotment has been decided taking into account the ROE. We aretargeting at least a 10% ROE.

1 Comply with regulations for maintaining equity capital in subsidiaries

dealing with financial instruments in and outside Japan

1: Comply with regulations for maintaining equity capital in subsidiaries dealing
with financial instruments in and outside JapanThe main subsidiaries of Monex Group are located in Japan, the U.S. and Asia and are involved insecurities trading, asset management and crypto asset trading. The Group’s subsidiaries also
strictly follow all regulations related to maintaining equity capital in each country. The regulations
vary in each country, but at the same time, each country also values financial solvency. Maintaining
the proper capital levels and the right liabilities and capital structure appropriate for the businessrisk is also required. For example, there is the capital adequacy ratio in Japan and the net capitalrule in the U.S.

Monex, Inc. (Japan)

2 Internal reserves for future business investment

Maintain 120% or more of the capital adequacy ratio

3 Shareholder return (cash dividends + acquisition of treasury stock)

Capital Adequacy
Ratio

Return on equity (ROE)
20

17.3

13.4

12.9

10

5

8.3
5.0

4.2

4.1

3.9

FYE
Mar.
2014

304.1%

327.8%

FYE
Mar.
2015

FYE
Mar.
2016

FYE
Mar.
2017

FYE Mar. 2021

FYE Mar. 2022

Net capital

147,900 thousand
U.S. Dollars

143,800 thousand
U.S. Dollars

Minimum required
equity capital amountto be maintained

11,400 thousand
U.S. Dollars

11,100 thousand
U.S. Dollars

Excess net capital

136,500 thousand
U.S. Dollars

132,700 thousand
U.S. Dollars

1.5

0.4

0
FYE
Mar.
2013

FYE Mar. 2022

TradeStation Securities, Inc. (U.S.)

(%)

15

FYE Mar. 2021

FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

The regulation requirement level is expected to become higher going forward for crypto asset
transactions that are provided by Coincheck and other similar companies.
These regulation requirements apply to each subsidiary, but we also adopted the approach offinancial solvency (required per these regulations) in our consolidated balance sheet. We ensurethat the Group maintains a sufficient “amount of equity capital that is not fixed” (difference after
deducting fixed assets from equity capital).

Monex Group, Inc. | Integrated Report 2022

48

Management Discussion & Analysis(Performance Results & Policies Going Forward)

Financial Section

Balance Sheet

2: Internal reserves for future business investment

Total cash dividend payout / Total amount of acquired treasury stock

Monex Group creates visions for the future and engages in business investments to achieve thosevisions. While we have a record of large business investments up until now such as acquiring thesubsidiaries TradeStation Group and Coincheck, both subsidiaries have been able to leveragevarious management resources in Monex Group for growth and significantly increased their value.

(Millions of Yen)

Total cash dividend payout

12,000Total amount of acquired treasury stock

10,0008,000• Joined Group in June 2011
• Takeover price:
411 million USD• Joined Group in April 2018
• Share transfer: ¥3.6 billion(Excluding earn-out)*1 Data as of the end of June 2011

Accounting
PeriodNumber of
Accounts

Assets in
Custody

Total Operating
RevenueFYE Mar. 2012

49 thousandaccounts*1

2.5 billion
US dollars*1

135 million
US dollars

230 thousandaccounts

12 billion
US dollars

209 million
US dollars

FYE Mar. 2019

830 thousandaccounts*2¥152.2 billion*2¥2.1 billion

FYE Mar. 2022

1.62 million
accounts¥481.0 billion¥28.6 billion

FYE Mar. 2022

*2 Data as of the end of March 2018

As advancements in technology continue to progress faster and faster, we believe our investments
need to continue being implemented at the appropriate time going forward.

3: Shareholder return (cash dividends + acquisition of treasury stock)

5,514

6,000
4,030

4,000
2,000

1,229
FYE
Mar.
2013

The dividend payout between the fiscal years ended March 2021 and 2022 was as follows and ourtarget is to steadily increase it.
FYE Mar. 2022

Interim dividends

4.50

7.60

Year-end dividends

7.50

7.70

Total

12.00

15.30

2,728
FYE
Mar.
2014

FYE
Mar.
2015

FYE
Mar.
2016

1,000
1,459
FYE
Mar.
2017

2,000
2,721
FYE
Mar.
2018

3,389

1,435

1,510

FYE
Mar.
2019

FYE
Mar.
2020

3,092

FYE
Mar.
2021

4,010

FYE
Mar.
2022

There is ¥262.6 billion in bonds and loans payable for funding from interest-bearing liabilities. 10%of that is financed directly from corporate bonds issued by the Monex Finance Corporation, a
subsidiary that handles the Group’s financing. The remainder is financed indirectly by syndicatedloans and commercial bank loans. Capital is primarily used for our financial instruments business,such as margin trading, and it is also allocated to mergers and acquisitions as well as business
investments. To ensure that our funding and fund operations are streamlined efficiently for theGroup overall, we will continue to monitor and revise the ratio of these direct and indirect financing
options in the future.

* Total shareholder return = (total capital gain + total dividends paid) /invested amountFYE Mar. 2021

2,359

0

The basic policy of Monex Group is to constantly pursue and increase our corporate value, byactively and appropriately investing in growth areas and strengthening our business foundation andat the same time maintaining a good balance of profit return to shareholders. Our policy onshareholder profit return is to provide stable dividend payout of at least ¥7.5 per share of cash
dividends semiannually and maintain a flexible posture to acquire treasury stock as decided bymanagement. In addition, we are looking to improve the TSR*.

Dividends per Share (Yen)

5,178

1,162

Monex Group, Inc. | Integrated Report 2022

49

Financial Section

Business KPIs
Total Accounts / Number of Verified Accounts / Accounts with Balances

Assets in Custody

The total number of accounts (Japan and U.S.), verified accounts (Crypto Asset) and accounts withbalances (Asia-Pacific) represent the number of our customers who trade (or can trade) or have assets incustody. This is one key indicator of our customer base that drives growth in our securities and crypto asset
businesses.

The assets in custody are one key indicator of our customer base that drives growth in our securities andcrypto asset business.

Japan Segment

US Segment

Total Accounts

Total Accounts(Thousand accounts)

2,500Japan Segment

US Segment(Thousand accounts)(Billions of Yen)

(Millions of U.S. Dollars)

200

8,000

15,000

183

2,186
2,000
1,761

1,818

1,856

1,937

150
108

100
1,000

4,000

91

4,229

4,059

3,751

75

5,000

0

0
FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2019

FYE
Mar.
2020

Crypto Asset Segment

Asia-Pacific Segment

Number of Verified Accounts

Accounts with Balances

FYE
Mar.
2021

FYE
Mar.
2018

FYE
Mar.
2022

(Thousand accounts)(Billions of Yen)

1,800

25

500
21

20

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

Crypto Asset Segment(Thousand accounts)

1,620

858

15

938

12

600

0
FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

13

5

100

12,488

FYE
Mar.
2021

9,505

69.3

FYE
Mar.
2019

FYE
Mar.
2020

0

FYE
Mar.
2022

While the market impacted by COVID-19 has settled down, our measures to acquire new accounts at eachcompany have been successful. The number of accounts in each of our three main segments: Japan, US and
Crypto Asset Segments, has grown substantially. In the Japan Segment, we were able to make big gains in
expanding our customer base through a comprehensive business partnership in the financial instrumentsintermediary business between Monex, Inc. and the Shinsei Bank Group. In the US and Crypto Asset Segments,
these gains were attributed to active marketing measures.

13,857

11,892

5,000
66.5

0
FYE
Mar.
2020

15,12415,00010,000
200

FYE
Mar.
2019

20,000

300

10

FYE
Mar.
2018

FYE
Mar.
2022

436.0
400

14

FYE
Mar.
2021

(Millions of HK Dollars)

481.0

22

0
FYE
Mar.
2019

5,420

Asia-Pacific Segment

1,205

1,200

5,534

0

0
FYE
Mar.
2018

FYE
Mar.
2022

5,182

2,000

50

500

10,336

10,000

5,132

1,500

12,029

6,066

6,000

146

FYE
Mar.
2021

FYE
Mar.
2022

FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

Assets in custody increased in each segment for Japan, US and Crypto Asset Segments, thanks to thesuccess of the Group’s initiative in gaining new accounts. In the Japan Segment, a transfer of accounts fromthe Shinsei Bank and our business model transition to the “asset management model” have both helped
accrue more assets in custody. In the US and Crypto Asset Segments, growth in the customer base hasboosted our assets in custody.

Monex Group, Inc. | Integrated Report 2022

50

Financial Section

Business KPIs
Profit Attributable to
Owners of the Company

Equity Attributable to
Owners of the Company

Total Assets(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

(Millions of Yen)

100,000

15,000120,000

1,800,000

Total Operating Revenue

14,35488,78380,00077,90580,329 78,994

53,635 52,175 53,226

1,200,000

76,210973,52060,000

6,730

40,0001,401,130

89,57390,00010,00060,0001,607,761

104,286

13,0175,000

1,027,849 1,022,934

600,000
30,0003,011

20,000
1,181
0

0
FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

0
FYE
Mar.
2018

FYE
Mar.
2022

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

0
FYE
Mar.
2018

FYE
Mar.
2022

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2018

FYE
Mar.
2022

FYE
Mar.
2019

FYE
Mar.
2020

Equity per Share Attributable to
Owners of the Company (BPS)

Earnings per Share Attributable to
Owners of the Company (EPS)

Return on Equity (ROE) /Operating Income Margin

Dividends per Share

(Yen)

(Yen)

(%)

(Yen)

60

40

391.64400

50.00

298.50 297.28 297.70

20

32.3
30

15.3

15

40

12.0

200

20

18.9

10

8.3

17.3

24.33
20
100

11.59
4.42

0

0
FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

FYE
Mar.
2022

55.82

347.67300

Net income on owners’ equity (ROE)
Operating income margin

FYE
Mar.
2021

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

FYE
Mar.
2018

Monex Group, Inc. | Integrated Report 2022

51

13.4

5.8
1.5

0
FYE
Mar.
2018

10.7

FYE
Mar.
2019

17.9

10

10.0

5.4

5

5.9

3.9
0
FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

FYE
Mar.
2018

FYE
Mar.
2019

FYE
Mar.
2020

FYE
Mar.
2021

FYE
Mar.
2022

Financial Section

Past 11 Years
Unit

FYE
Mar. 2012
JGAAP

FYE
Mar. 2013
IFRS

FYEMar. 2014
IFRS

FYEMar. 2015
IFRS

FYEMar. 2016
IFRS

FYEMar. 2017
IFRS

FYEMar. 2018
IFRS

FYEMar. 2019
IFRS

FYEMar. 2020
IFRS

FYEMar. 2021
IFRS

FYE
Mar. 2022
IFRS

Millions of Yen

32,29236,09054,72250,97554,27145,831

53,63552,17553,226

77,90588,783

Commission received

Millions of Yen

17,107

20,36733,54230,07932,152

26,34929,19625,741

25,37536,86437,361

Net trading income

Millions of Yen

6,199

6,974

8,011

6,242

6,671

4,498

3,865

6,461

8,550

24,50430,477

Financial income

Millions of Yen

8,382

8,195

12,583

13,987

14,61014,313

19,34919,242

18,57915,394

18,886

Sales

Millions of Yen

—

—

—

—

—

—

—

—

—

—

950

Other operating income

Millions of Yen

602

554

587

667

839

671

1,225

731

722

1,144

1,109

Category

Accounting item, sub-item and title display(IFRS/JGAAP)

Consolidated

Total operating revenue

Financial expenses

Millions of Yen

3,238

2,320

4,672

5,766

4,629

3,979

4,480

4,758

5,236

4,211

5,183

Total operating revenue after deducting
financial expenses/Net operating revenue

Millions of Yen

29,05433,76950,05145,20949,642

41,852

49,15547,41747,99073,69583,549Selling, general and administrative expenses

Millions of Yen

26,60530,35934,98137,143

41,39540,57839,853

44,69042,83549,861

68,601

Transaction-related expenses

Millions of Yen

8,865

10,223

12,235

13,236

13,862

11,281

11,963

12,051

11,975

15,986

26,742Compensation and benefits

Millions of Yen

6,051

8,503

9,613

9,538

10,651

10,393

10,854

13,111

13,413

15,614

19,866

System related expenses *1

Millions of Yen

9,074

9,701

10,77911,65913,343

15,685

14,742

16,437

14,79415,03916,441

Other

Millions of Yen

2,614

1,933

2,355

2,710

3,539

3,218

2,294

3,091

2,653

3,222

5,551

The amount equivalent to operating income/Operating income

Millions of Yen

2,448

3,410

15,069

8,066

8,247

1,274

9,302

2,727

5,155

23,833

14,949Other income/Expenses (net)Millions of Yen

204

3,588

1,825

△ 1,951△ 3,146

△ 203

△ 671

△ 937

△ 1,025△ 2,537

5,852

Profit before income taxes/Income before
income taxes and minority interests

Millions of Yen

2,585

6,998

16,895

6,115

5,100

1,071

8,631

1,790

4,131

21,29620,801

Profit/Income before minority interests

Millions of Yen

1,485

3,907

10,356

3,494

3,516

161

6,579

1,029

2,820

14,385

13,032

Profit attributable to owners of the company/
Net income

Millions of Yen

1,422

3,901

10,354

3,494

3,554

298

6,730

1,181

3,011

14,35413,017

Total assets

Millions of Yen

535,663

682,193939,270

1,055,242

888,116

936,776

973,520

1,027,849

1,022,934

1,401,130

1,607,761

Total equity

Millions of Yen

72,45979,66780,70186,93286,022

81,68780,49380,14277,024

90,524106,018

8.4

10.1

30.1

17.8

16.6

3.0

18.9

5.8

10.7

32.3

17.9

33,246

38,84735,65632,734

26,66022,81926,022

26,262

20,77933,091

5,376

Operating income margin
The difference between “Total equity” and“Fixed-type assets” *2%
Millions of Yen

Return on equity (ROE)

%

2.0

5.0

12.9

4.2

4.1

0.4

8.3

1.5

3.9

17.3

13.4

Earnings per share attributable to owners of
the company/Earnings per share (EPS) *3

Yen

467.451,301.73

35.76

12.15

12.46

1.06

24.33

4.42

11.59

55.82

50.00

Equity per share attributable to owners of
the company/Book-value per share (BPS) *3

Yen

24,093.09

26,583.96

280.52302.18302.03290.00298.50297.28297.70347.67391.64

Dividend per share *3, 4

Yen

200.00410.00

18.00

8.20

9.60

5.20

10.00

5.40

5.90

12.00

15.30

Total return ratio

%

260

31

103

68

109

827

100

291

163

22

31

*1 System related expenses: Rental and maintenance + Data processing and office supplies + Amortization and depreciation*2 Earmarked to fund the regulatory compliance of each group company, business investments and shareholder returns*3 Stock split was carried out. 100 shares are defined as 1 share unit on Oct. 1, 2013.

*4 Stock split was carried out. 100 shares are defined as 1 share unit and the above figures were adjusted retroactively for the
beginning of FYE Mar. 2014.

Monex Group, Inc. | Integrated Report 2022

52

Financial Section

Past 11 Years
Category

Accounting item, sub-item and title display(IFRS/JGAAP)

Unit

FYE
Mar. 2012
JGAAP

FYE
Mar. 2013
IFRS

FYEMar. 2014
IFRS

FYEMar. 2015
IFRS

FYEMar. 2016
IFRS

FYEMar. 2017
IFRS

FYEMar. 2018
IFRS

FYEMar. 2019
IFRS

FYEMar. 2020
IFRS

FYEMar. 2021
IFRS

FYE
Mar. 2022
IFRS

Monex, Inc.

Capital adequacy ratio *5

%

396.5

459.3

394.9

422.7

335.3

297.8

310.4

340.6

384.8

304.1

327.8

TradeStation
Securities, Inc.

Excess net capital *6

Thousands of
U.S. Dollars

45,72944,721

52,16349,07462,441

71,782

84,379115,554

129,057

136,500

132,700

Consolidated

Number of employees

Persons

845

917

992

951

971

830

853

1,093

1,108

1,129

1,480

Monex Group, Inc. *7

Japan *8

US

Crypto Asset

Asia-Pacific *9

Nikkei 225

Number of board members

Persons

9

10

11

11

11

11

9

9

9

11

11

Independent director

Persons

5

5

6

6

7

6

6

6

6

7

7

Percentage of women

%

45

50

49

47

45

44

40

39

37

37

39

Percentage of women in
management positions

%

23

23

23

22

19

19

20

21

20

28

31

Percentage of women

%

—

30

29

31

25

24

22

22

22

25

25

Percentage of women in
management positions

%

—

16

19

24

21

18

27

21

20

27

25

Percentage of women

%

—

—

—

—

—

—

—

19

19

22

19

Percentage of women in
management positions

%

—

—

—

—

—

—

—

0

0

0

13

Percentage of women

%

42

44

41

50

50

45

45

45

44

41

42

Percentage of women in
management positions

%

40

45

36

36

45

42

42

42

38

31

31

10,083.56

12,397.91

14,827.83

19,206.99

16,758.67

17,518.52

20,960.70

21,995.69

21,890.25

24,459.20

28,389.64

Nikkei stock average*5 This index measures the stability of securities companies in Japan, and it is based on the Financial Instruments and Exchange
Act and the Cabinet Office Ordinance on Financial Instruments businesses.
*6 Based on the laws and regulations established by the U.S. Securities and Exchange Commission (SEC) and self-regulatingorganizations, U.S. financial companies are required to maintain a minimum net capital (equity capital calculated based on SEC
regulations).

*7 Total number of persons after the General Meeting of Shareholders, based on the year-end reference*8 Applies to Monex Group, Inc. & Monex, Inc.
*9 Applies to Monex Boom Securities Group

Monex Group, Inc. | Integrated Report 2022

53

Financial Section

Stock Information
As of March 31, 2022

Investor Information

Major Shareholders
Prime Market of
the Tokyo Stock Exchange

Name

Security code

8698

Name of company

Monex Group, Inc.

Stock listing

No. of outstanding shares 267,447,100 Shares
Trading unit

100

No. of shareholders

61,679Administrator
for shareholders’ register

Mizuho Trust & Banking, Co., Ltd.

Fiscal year

From April 1 of each year to March 31of the following year

Record datefor year-end dividends

March 31

Record datefor interim dividends

September 30

Ordinaryshareholders’ meeting

Every June

No. of shares held
(unit 1,000shares)

Percentage ofshares held (%)

Shizuoka Financial Group, Inc.

53,491

20.08

The Master Trust Bank of Japan, Ltd. (trust account)

21,494

8.07

MOMO & Co.

15,588

5.85

GALAXY DIGITAL LP

8,448

3.17

J.P. MORGAN BANK LUXEMBOURG S.A. 385598

7,700

2.89

Oki Matsumoto

7,566

2.84

Recruit Holdings Co., Ltd.

5,720

2.14

MLI FOR CLIENT GENERAL OMNI NON COLLATERAL NON TREATY-PB

4,314

1.62

Custody Bank of Japan, Ltd. (trust account)

3,903

1.46

STATE STREET BANK AND TRUST COMPANY 505103

3,782

1.42

*1 Figures for the number of shares held are rounded down to the nearest one thousand and the figures for the percentage of shares held are rounded down to the nearest
second decimal place.
*2 Treasury stock of 1,179,565 shares is excluded for calculating the percentage of the above list of major shareholders.
*3 The Report of Large Volume Holding that was made available for public inspection on February 28 2022 reports that Oasis Management Company Ltd. owned 13,594
thousand shares of Monex Group Inc. as of February 18 2022. However, their holdings are not reflected in the status of major shareholders above since the Company
was not able to confirm beneficial ownership or the number of shares held as of March 31, 2022.

Major Shareholders and Shareholder Breakdown
TSR (Over 5 Years)

Monex Group, Inc. 0.4%

(%)
350

Other institutions 2.8%
Securities Companies
9.0%
Financial
institutions
10.8%

Individuals, etc.
26.2%
* The graph made by Monex
based on shareholders’ list
as of Mar. 31, 2022 and theLarge shareholding report

Shizuoka Bank
20.0%
MOMO & Co. andOki Matsumoto
8.7%

Foreigninstitutions, etc.
22.1%

Monex Group (including dividends)
TOPIX (including dividends)

334.2

300

263.9

250
200
150

193.7

180.9
144.7

172.4

100.1

100

104.7

50

159.5

93.7

Mar. 2021

Mar. 2022

105.1
64.5

0

Mar. 2017

Mar. 2018

Mar. 2019

Mar. 2020* Total shareholder return (TSR) for the previous 5 years shown above is calculated using the closing price value for the last day of each respective term.

Monex Group, Inc. | Integrated Report 2022

54

Financial Section

Overview of Group Companies
As of August 31, 2022

Monex Group, Inc.
Established
Representative

August 2004
Oki Matsumoto

Business Description
Location

Japan Segment
Monex, Inc.
Established
Representative
Business
Description
Location

Securities business andaccompanying businesses
ARK Mori Building 25F 1-12-32 Akasaka,
Minato-ku, Tokyo 107-6025, Japan

Monex SP Trust, Inc.
May 1999
Yuko Seimei
Securities business andaccompanying businesses
Minato-ku, Tokyo, Japan

Established
Representative
Business
Description
LocationAug 2017
Yuki Yada
Custodial trust business
Minato-ku, Tokyo, Japan

Monex Asset Management, Inc.

Japan Catalyst, Inc.

Established
Representative
Business
Description
Location

Established
Representative
Business
Description
Location

August 2015
Katsuki Mandai
Asset building andmanagement services
Minato-ku, Tokyo, Japan

Monex Finance Corporation

Genex, Inc.

Established
Representative
Business
Description

Established
Representative
Business
Description

Location

March 2017
Akira Inoue
Finance and supply
the funding needs ofMonex group businesses
Minato-ku, Tokyo, Japan

Location

Monex Crypto Bank, Inc.

Viling, Inc.

Established
Representative
Business
Description

Established
Representative
Business
Description
Location

LocationAsia-Pacific Segment

US Segment

December 2017
Atsushi Mandai
Researching, planning, studying,developing and consulting
regarding crypto asset services
Minato-ku, Tokyo, Japan

September 2019
Taro Hirano
Investment Advisory andAgency Business
Minato-ku, Tokyo, Japan

August 2019
Ken Yagi
Providing services for the securemanagement and utilization of
genomic, medical andhealthcare data
Minato-ku, Tokyo, Japan

October 2012
Kazuaki Nakamura
Education andchildcare businesses
Suginami-ku, Tokyo, Japan

TradeStation Group, Inc.

Monex International Limited

Established
Representative
Business
Description
Location

Established
Representative
Business
Description
LocationJanuary 2000
John Bartleman
Immediate holding company
in the U.S.
Florida, United States of America

TradeStation Securities, Inc.
Established
Representative
Business
Description
Location

September 1995
Peter Korotkiy
Financial instruments
business
Florida, United States of America

TradeStation Crypto, Inc.
Established
Representative
Business
Description
Location

June 2018
John Bartleman
Crypto asset tradingbusiness
Florida, United States of America

Crypto Asset Segment
Coincheck Group B.V.
Established
Representative
Business
Description
Location

February 2022
Akira Inoue
Holding company
Amsterdam, the Netherlands

Coincheck, Inc.
Established
Representative
Business
Description
Location

Monex Group, Inc. | Integrated Report 2022

August 2012
Satoshi Hasuo
Crypto asset exchange and R&D
on new financial services
Shibuya-ku, Tokyo, Japan

55

August 2010
Keiji Okamoto
Immediate holding company
in Hong Kong
Hong Kong Special
Administrative Region of
the People’s Republic of China

Monex Boom Securities (H.K.) Limited
Established
Representative
Business
Description
Location

March 1997
Ivan Law
Financial instruments
businessHong Kong Special
Administrative Region of
the People’s Republic of China

Monex Securities Australia Pty Ltd
Established
Representative
Business
Description
Location

February 2010
Alex Douglas
Financial instruments
business
Sydney, Commonwealth of Australia

Investment Segment
Monex Ventures, Inc.
Established
Representative
Business
Description
Location

November 2005
Seiichiro Wada
Venture capital business
Minato-ku, Tokyo, Japan

This is the Annual Report issued by Monex Group, Inc.
(“the Company”). The descriptions for products, services,
etc., that are handled by the Monex Group companies,
are made only for disclosure purposes and are requiredfor providing specific explanations about the Company.
This presentation material contains forward-looking
statements based on current expectations, assumptions,estimates and projections about our industry and theCompany. Please note that these statements are basedon current information but the actual performance
results are subject to various risks and uncertainties, andtherefore may be different than the material presented.
(published in October, 2022)

ARK Mori Building 25F
1-12-32 Akasaka, Minato-ku, Tokyo 107-6025, Japan

www.monexgroup.jp/en/

Printed in Japan