December 10, 2007
Nikko Cordial Securities Inc.
Nikko Global Wrap Ltd.

Transfer of discretionary management business operations concerning Nikko SMA
Premier-Port and Nikko Fund Wrap (discretionary)This is to announce that at respective board meetings on December 10, 2007, Board of Directors of
Nikko Cordial Securities Inc. and Nikko Global Wrap Ltd. passed resolution on the signing ofabsorption type demerger agreement for the transfer of investment management functions (“thebusiness”) concerning Nikko SMA Premier-Port and Nikko Fund Wrap (discretionary) from Nikko
Global Wrap to Nikko Cordial Securities for the purpose of restructuring the business structure toreinforce consistency and efficiency. The outline of the agreement is as follows.
Please be advised that the absorption type demerger will not require the customers of Nikko SMA
Premier-Port and Nikko Fund Wrap to take specific procedures. Upon the effective date of theabsorption type demerger agreement, the concerned discretionary investment management agreements
between Nikko Global Wrap and its clients will be succeeded by Nikko Cordial Securities.

1.

Purpose of the absorption type demerger
Among the products provided by Investment Management team of Nikko Global Wrap,“external wrap scheme (the scheme where wrap account provider and investment managementcompany are different)” was introduced for Nikko SMA Premier-Port in April 2004, and for
Nikko Fund Wrap in November 2006. After the regulatory changes etc., environment of wrap
services is different now and wrap service providers have more options such as “in-house wrapscheme（The roles of wrap account provider and investment management company are playedby one securities company）”. At Nikko Cordial Securities, preparations for the absorption
type demerger are underway such as application for the registration as investment management
operator.
Through the restructuring the business by the planned absorption type demerger, we arescheduled to implement the migration from “external wrap “to “in-house wrap”. As aconsequence, Nikko Cordial Securities, more familiar name for customers, will be able toprovide not only wrap accounts but also investment management services, which is expected
to enable us to provide more consistent and efficient service for our customers.

This material is an English translation of a Japanese announcement made on Dec. 10, 2007. Although the Company
intended to faithfully translate the Japanese document into English, the accuracy and correctness of this translation are notguaranteed.

2.

Schedule of the absorption type demerger
December 10, 2007
Board approval for the absorption type demerger agreement
December 10, 2007
Signing of the absorption type demerger agreement
April 1, 2008（planned）
Effective date of the absorption type demerger agreement

3.

Method of the absorption type demerger
Partial business transfer from Nikko Global Wrap to Nikko Cordial Securities.

4.

The authorities and liabilities to be succeeded by Nikko Cordial Securities
Upon the effective date of the absorption type demerger agreement, Nikko Cordial Securities
is scheduled to succeed all authorities and liabilities including assets, obligations andagreements concerning Nikko SMA Premier-Port and Nikko Fund Wrap (discretionary) fromthe investment management business of Nikko Global Wrap.

5.

Financial capability to fulfill the obligations
As both Nikko Cordial Securities and Nikko Global Wrap are considered to maintainfinancial capability of fulfilling the obligations that are scheduled to become due on or after
the effective date of the agreement, we have no concern about the fulfillment of theobligations by Nikko Cordial Securities and Nikko Global Wrap.

【Company outline】
The succeedingcompany

Company Name

Nikko Cordial Securities Inc.

Director of Kanto Local Finance Bureau (Financial instruments firms) No.129
Associations in which a Member : Japan Securities Dealers Association, The
Investment Trusts Association, Japan Securities Investment Advisers
Association, The Financial Futures Association of JapanThe divesting
company

Company Name

Nikko Global Wrap Ltd.

Director of Kanto Local Finance Bureau (Financial instruments firms) No.449
Associations in which a Member : Japan Securities Investment Advisers
Association,End

This material is an English translation of a Japanese announcement made on Dec. 10, 2007. Although the Company
intended to faithfully translate the Japanese document into English, the accuracy and correctness of this translation are notguaranteed.