Information Meeting for First Nine Months of Fiscal 2008

SBI E*TRADE SECURITIES〜Nine months ended December 31, 2007〜
January 29, 2008
SBI E*TRADE SECURITIES Co., Ltd.
Code 8701
This presentation was prepared for the purpose of explaining the operations and business strategies of SBI E*TRADE SECURITIES. This is not a solicitation topurchase stock or other securities issued by the company. SBI E*TRADE SECURITIES makes no guarantee that this information is com plete or that strategies orother goals will be accomplished. In addition, the contents of this presentation may be revised or deleted without prior notice.

1.Financial Highlights

Consolidated Financial Highlights for First Nine Months of Fiscal 2008
Higher revenues and earnings due to growth in revenues from investment trusts,
financial revenues and other sources（Unit: Million yen, %）First nine months
of FY07（April ‘06〜Dec. ‘06）

First nine months
of FY08（April ‘07〜Dec. ‘07）

YoY change

Operatingrevenues
Net operating
revenues

42,31149,784+17.7

39,43544,924+13.9

Operating income

18,015

18,624+3.4

Ordinary income

18,212

18,460+1.4

Net income

10,164

11,537+13.5*Added about 910 million yen to the doubtful account allowance for OHT stock during the first three quarters of FY08.

<3>

Fiscal 2007 and 2008 Consolidated Quarterly Financial Highlights
Revenues and earnings up YoY and revenues higher than in 2nd quarter（Unit: Million yen, %）Fiscal 2007

Fiscal 2008

3rd quarter

4th quarter

1st quarter2nd quarter（Oct.〜Dec. ‘06）

（Jan.〜Mar. ‘07）

（Apr.〜June ‘07）

（July〜Sept. ‘07）

3rd quarter（Oct.〜Dec. ‘07）

YoYchangevs.
prior
quarter

Operatingrevenues

13,737 15,100 15,440 17,138 17,205 +25.3 +0.4

Net
operatingrevenues

12,642 13,861 14,115 15,133 15,675 +24.0 +3.6

Operatingincome5,803 6,527 6,113 6,544 5,966 +2.8

-8.8

Ordinary
income5,744 6,358 6,112 6,426

5,921 +3.1

-7.9

Net
income3,191 3,646 3,221 4,113

4,202 +31.7 +2.2

*Added about 450 million yen to the doubtful account allowance for OHT stock in the second and the third quarter.

<4>

Highlights of First Nine Months of Fiscal 2008 Consolidated
Performance（1）Brokerage commissions・・・Up 2.1% YoY to 23,993 million yen
l 1,602,797 customer accounts (end of Dec. ’07). 104,040 new accounts during the first nine monthsl Share of retail brokerage trading value rose to an all-time high of 37.1% in the first nine months.
（2）Financial revenues・・・Up 33.7% YoY to 16,976 million yen
l Big increase of about 31.3% in net financial revenues to 12,911 million yen mainly because of growth in use of internalfinancing.
l 164,443 customer accounts (end of Dec. ’07). 6,178 new accounts during the third quarter (avg. of 2,059 accounts permonth)（3）Underwriting, offering and selling commissions・・・Up 45.3% YoY to 2,138 million yen
l Revenues associated with investment trusts increased 200.4% to 2,979 million yen due to an increase in the number offunds offered.
l Ranked first among Japanese securities companies by underwriting 45 issues.
（4）Trading gains and others・・・Up 43.4% YoY to 6,675 million yen
l Reduction in commissions and other actions led to increase in foreign exchange margin accounts and trading
volume. Other revenues increased because of growth in profits from sales at a systems subsidiary and other factors.
（5）Selling, general and administrative expensesl SG&A expenses increased because of the larger scale of operations following the merger with SBI
Securities.
（6）Consolidated subsidiaries
l Benefiting in part from favorable market conditions, E*TRADE Korea Co., Ltd. posted 67.0% growth in operating
revenues and a 121.4% increase in net income.

<5>Nine months highlights（1）Consolidated Brokerage Commissions（Brokeragecommissions:million yen）

Brokeragecommissions
Up 2.1 %30,00025,00023,492

61,176

Brokerage
trading value
Up 12.6%（Brokerage
trading value
billion yen）

68,85623,99370,00060,00020,00050,000Brokeragecommissions

40,00015,000Brokerage
trading value

10,00030,00020,0005,000

10,0000

0First nine months of fiscal 2007
（Apr. ‘06〜Dec. ‘06）

First nine months of fiscal 2008
（Apr. ‘07〜Dec. ‘07）

*Brokerage commissions and brokered transactions are the sum of activity for online and conventional accounts.

<6>

（1）Brokerage Commissions

Customer accounts at major online securities companies
Customer accounts at big five online securities
companies（Accounts）

1,600,000（December 31, 2007）

1,602,797

Growth in customer accounts at big five online
securities companies（Accounts）(April 2004 through December 2007) SBI E*TRADE
1700000
1,602,797
Continued to surpass competitors
1600000

Conventional accounts

58,668by adding 196,900 accounts (April
2004 through December 2007)

1500000
1400000

1,400,000
Online accounts

1300000

1,544,129

1200000

1,200,000

Monex
812,766

1100000
1000000

1,000,000

Rakuten

900000812,766
751,015800,000

751,015800000700000712,484

Matsui
712,484

600000608,625 500000
600,000

Kabu.com
608,625

400000300000400,000

200000100000Apr04

200,000
SBI E*Trade

Monex

RakutenMatsui

Kabucom

2004

Jul04

Oct- Jan- Apr04
05
05

2005

Jul05

Oct- Jan- Apr05
06
06

2006

Jul06

Oct06

Jan- Apr07
07

2007

Jul07

Oct07

<7>

Source: Compiled by SBI E*TRADE SECURITIES based on Web sites and other public information for each company*1. Monex is the sum of Nikko Beans and Monex. 2. Kabu.com merged with MeNet in January 2006. ３．SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

（1）Brokerage Commissions

New accounts at major online securities companies
New accounts during year ended December 2007

（new accounts）

200,000

192,553
3Q

3Q (Oct.-Dec. ’07)
2Q (Jul.-Sep. ’07)
1Q (Apr.-Jun. ’07)
4Ｑ （Jan.-Mar. ’07)※

45,372150,000
2Q

47,993100,000

1Q

44,86750,0004Q

105,601
22,832
23,67528,96092,981
16,10022,63867,637
13,32365,635
10,727

23,664

14,918

17,117

16,17018,17523,226

19,616

MatsuiKabu.com

54,3210

SBI E*Trade30,13430,579

Rakuten

Monex*Only online accounts; does not include conventional
accounts.

Source: Compiled by SBI E*TRADE SECURITIES based on
Web sites and other public information for each company
SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

<8>

（1）Brokerage Commissions

Change in SBI E*TRADE basis
Basis since 2Q of Fiscal 2006

（Basis）

6.0

July 1, 2005 Loweredcommissions

June 1〜August 31, 2006
Conducted reduced commission
campaign

5.2

5.0
4.3

4.4
September 1, 2006 End of
campaign Introduced newcommission structure

4.0

4.0
October 3, 2005
Lowered commissions

3.1

3.2

3.0

3.0

2.8

2.7

2.9

2.0
2Q

3Q

Fiscal 2006

4Q

1Q

2Q

Fiscal 2007

3Q

4Q

1Q

2Q

3Q

Fiscal 2008

Note: Quarterly index calculated by dividing non-consolidated brokerage commissions by brokered trades, using brokerage commissions as shown in the kessan tanshin.

Based on solely figures for the online securities business (the former SBI E*TRADE SECURITIES) in FY08 3Q.

<9>（1）Brokerage Commissions

Basis at major online securities companies
Basis at big five online securities companies(Basis)12.0（Brokerage commissions / Brokerage trading value）

11.4

3Q of Fiscal 2007
3Q of Fiscal 2008

10.0
8.1

8.6

11.3
10.3

8.0
7.8
6.0
4.7
4.0
2.0
0.0

3.4

4.4

2.8

SBI E*Trade

Kabu.com

Matsui

MBH

RakutenSource: Compiled by SBI E*TRADE SECURITIES based on Web sites and other public information for each company
Cumulative figures for April through September. Brokerage commissions as shown in the non-consolidated kessan tanshin.
Based on solely figures for the online securities business (the former SBI E*TRADE SECURITIES) in FY08 3Q.

<10>（1）Brokerage Commissions

Brokerage trading value at major online securities companies（Index）

130

Brokerage trading value index for big five online securities companies
SBI E*Trade
MatsuiMonex
RakutenKabu.com
Total retail(Index using 100 for 3Q of FY06)

SBI E*TRADE
137.9

115

Rakuten 109.5
Kabu.com 102.4

100

Total retail 87.6
8570

Matsui 66.9
Monex 64.6

55

1Q – 3Q

1Q – 3Q

1Q – 3Q

Fiscal 2006

Fiscal 2007

Fiscal 2008

Source: Compiled by SBI E*TRADE SECURITIES based on Tokyo Stock Exchange and JASDAQ materials and Web sites and other public information for each company*Retail brokerage transactions are sum for Tokyo, Nagoya and Osaka exchanges and JASDAQ.

SBI E*TRADE SECURITIES figures for FY08 are based solely online transactions.

<11>

（1）Brokerage Commissions
Brokerage trading value at major online securities companies（million yen）

Average daily trading value at big five online securities companies
Daily trading value in
December 2007
（million yen）

(January 2004 to December 2007)

500,000

SBI E*TRADE
327,351

400,000

300,000

Rakuten200,000

100,000

0
Jan

2004

Apr

Jul

Oct

Jan

Apr

Jul

Oct

2005

Jan

2006

Apr

Jul

Oct

Jan

Apr

Jul

Oct

119,838
Matsui
68,822
Kabu.com
51,609Monex
43,8062007

Source: Compiled by SBI E*TRADE SECURITIES based on Tokyo Stock Exchange and JASDAQ materials and Web sites and other public information for each company.
* Monex is the sum of Nikko Beans and Monex. Kabu.com merged with MeNet in January 2006.
SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

<12>

（1）Brokerage Commissions

Brokerage trading value at big three securities companies
Changes in brokered stock transactions（billion yen）

30,000Share of brokerage trading
value as of 3Q of FY08

25,000SBI E*TRADE
22,887 （
10.8%）

20,000Surpassed Nomura Securities
in 4Q of FY05
Nomura15,492（
7.3%）

15,00010,000Daiwa SMBC 8,077(3.8%)
Nikko Citigroup 7,043(3.3%)
Matsui 4,907（
2.3%）
Daiwa 3,170(1.5%)

5,000

Nikko Cordial 1,303（
0.6%)

01Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
FY02
FY07
FY08
FY04
FY06
FY03
FY05
Source: Compiled by SBI E*TRADE SECURITIES based on public information for each securities
company and the TSE (SBI E*TRADE includes orders from overseas investors).

(Unit: billion yen, figures in parentheses are share of
brokered transactions at the three major exchanges)<13>

（1）Brokerage Commissions

Share of retail brokerage trading value at major online securities companies
SBI E*TRADE SECURITIES market share has exceeded the shares of the other four major online
securities companies for three consecutive FY third quarters
Change in share of retail brokerage trading value
3Q of fiscal 2006
（Oct.〜Dec. ‘05）

3Q of fiscal 2007
（Oct.〜Dec. ‘06）

Others45.8％

Others35.3％

Big five
onlinesecurities
54.2％

Big five
onlinesecurities
64.7％

3Q of fiscal 2008
（Oct.〜Dec. ‘07）

Others28.7％

Big five
onlinesecurities

71.3％

SBI E*TRADE

21.3％

SBI E*TRADE

29.9％

SBI E*TRADE

37.1％

Rakuten

10.3

Rakuten

13.4

Rakuten

13.7

Matsui

9.7

Matsui

9.4

Matsui

8.0

Monex

8.2

Monex

6.2

Monex

6.6

Kabu.com

4.8

Kabu.com

5.8

Kabu.com

5.9

Source: Compiled by SBI E*TRADE SECURITIES based on Tokyo Stock Exchange andJASDAQ materials and Web sites and other public information for each company*Retail stock brokerage transactions are sum for Tokyo, Nagoya and Osaka exchanges and
JASDAQ.

Kabu.com merged with MeNet in January 2006
SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

<14>

（1）Brokerage Commissions

Share of retail margin trading value at major online securities companies
Change in share of retail margin trading value
3Q of fiscal 2006

3Q of fiscal 2007

3Q of fiscal 2008

（Oct.〜Dec. ‘05）

（Oct.〜Dec. ‘06）

（Oct.〜Dec. ‘07）

Others
34.6％

Big five
onlinesecurities

Others24.8％

Others
20.4％
Big five
onlinesecurities

Big five
onlinesecurities

75.2％

79.6％

65.4％

SBI E*TRADE

24.9％

SBI E*TRADE

35.5％

SBI E*TRADE

41.5％

Matsui

13.8

Rakuten

14.9

Rakuten

15.7

Rakuten

11.9

Matsui

12.0

Matsui

9.2

Monex

8.7

Kabu.com

7.0

Monex

6.8

Kabu.com

6.1

Monex

5.9

Kabu.com

6.5

Source: Compiled by SBI E*TRADE SECURITIES based on Tokyo Stock Exchange and JASDAQ
materials and Web sites and other public information for each company*Retail stock brokerage transactions are sum for Tokyo, Nagoya and Osaka exchanges and JASDAQ.

Kabu.com merged with MeNet in January 2006
SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

<15>

（1）Brokerage Commissions(Reference) Assets in customer accounts
YoY change+10.4％（100 million yen） +396.3 billion

Online accounts: 3,855.8 billion (up 0.8% YoY)
Conventional： accounts: 365.9 billion

42,21840,00038,255
Dec. 31, 2006
Dec. 31, 2007

30,00020,000YoY change-1.9％-38.2 billion

YoY change-8.3％

20,344 19,962-137.2 billion
16,56815,196

YoY change+0.8％+10.7 billion
12,910 13,017

YoY change-2.5％-29.6 billion
11,782 11,486

10,0000

SBI E*Trade

Monex

MatsuiRakutenKabu.com

Source: Compiled by SBI E*TRADE SECURITIES based on Web sites and other public information for each company

SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

<16>

（1）Brokerage Commissions

Growth in futures and options transactions
FY08 3Q mini-Nikkei 225 futures trading volume was 80% higher than in FY08 2Q(Accounts)

Futures and options
accounts

450,000

38,65240,000Futures and optionscommissions
418,559（thousand yen）

400,000

385,916
367,998

35,000350,000

279,472

30,000315,322
322,010311,604

315,186
302,436

300,000

25,000250,000

20,000200,000

15,000150,000

10,000100,000

5,000

50,0000

0
4 5 6 7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 91011121 2 3 4 5 6 7 8 9 101112

3Q

2004

Fiscal 2006

2005

2006

2007

4Q

1Q

2Q

3Q

4Q

Fiscal 2007

1Q

2Q

3Q

Fiscal 2008<17>

Third quarter highlights(2) Consolidated financial revenues（million yen）

16,000Financial revenues
Net Financial revenue

12,692
12,00016,976

9,833

8,000

Financial
revenues
Up 33.7%

12,911

Net financial
revenues

Up 31.3%

4,000

0Third quarter of fiscal 2007
（April〜Dec. ‘06 )Third quarter of fiscal 2008
（April〜Dec. ‘07））<18>

（2）Financial revenues

Margin accounts at major online securities companies（Margin accounts）

180,000

Margin accounts at big five online
Margin account comparison with
Matsui Securities
securities companies（Margin accounts）（March 2004 to December 2007）（December 31, 2007）

175,000

164,443
Conventional accounts

160,000
140,000

SBI E*TRADE
164,443

1,198
150,000

Online accounts
163,245

125,000

120,000

Matsui
98,72098,720100,000

85,938100,000

80,00057,40860,00075,00035,18340,00050,00020,000025,000SBI E*Trade

MatsuiRakutenKabu.comMonex

Mar-04

Sep-04 Mar-05

2004

2005

Sep-05Mar-06

Sep-06 Mar-07

2006

2007

Source: Compiled by SBI E*TRADE SECURITIES based on Web sites and other public information for each company
SBI E*TRADE SECURITIES merged with SBI Securities in October 2007.

Sep-07<19>

（2）Financial revenues

Margin trading balance
Margin trading balance (long and short) (at end of month)（million yen）

600,000

567,988570,686

530,493
519,033
519,112
Ordinary margin trades (no expiration)
83,237492,093 64,004
93,512
468,715 64,315 429,021
69,925
Restricted margin trades (long and short)
437,876
64,271500,000

65,407

387,891

400,000

53,60656,005

321,52967,089
307,869
300,000

65,19055,881

487,449

213,856
203,499 210,686
200,000

474,475

23,751 29,762 35,946

455,107427,821

320,801
256,339

100,000
112,925

466,178

449,108384,269
373,015

403,308

179,747
184,093251,987
164,545
174,739

108,488
0

Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec

2003

2004

2005

Notes: 1. Based on settlement date. SBI E*TRADE SECURITIES figures are non-consolidated.

2006

2007

2. December 2007 figures include conventional accounts at SBI Securities.<20>

（2）Financial revenues

Growth in self-financing for margin trades
Self-financing ratio increasing due to diversification offund procurement channels(％)

Non-consolidated self-financing ratio

45

42.7
40.2

40
40.0
34.7
33.4

35
30.5

32.6

30

25
1Q
Fiscal 2007

2Q

3Q

4Q

1Q

2Q

3Q

Fiscal 2008

＜More productive use of assets＞

・Making efficient use of internal funds by funding loans for margin trades
・Strong performance by stock lending operations using stock certificates submitted as collateral for margin trading

Will strengthen cash management in order to continue increasing financial revenues<21>

（2）Financial revenues

Growth in revenues from stock lending
Balance is low due to poor market conditions but revenues are strong. Will continue to focus onstock lending along with growth in self-financing.
（million yen）

80,000

Balance of shares lent at end of each month（million yen）

Revenues from stock lending

350

321

74,233306
70,000300
57,51654,554 54,746

60,00053,79651,35150,00052,80248,456

280

275
249

250

256

246

209
200

40,000136

150
30,00022,605100

20,00050
10,000

4,282
2,169

8
0

0
Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec

2005

25

2006

2007

*Based on market value at the end of each month.

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Fiscal 2006

Fiscal 2007

Fiscal 2008 <22>

Third quarter highlights(3) Consolidated underwriting, offering and selling commissions（million yen）

2,138
2,000

1,500

1,471

Up 45.3%

1,000

500

0
Third quarter of fiscal 2007
（April〜Dec. ‘06）

Third quarter of fiscal 2008
（April〜Dec. ‘07）
<23>

(3) Underwriting, offering and selling commissions

Measures to increase investment trust revenues and results（million yen）

3,500

Revenues from investment trusts

2,979

3,000
2,500

Up 200.4%

2,000
1,500
1,000

991

500
0

Third quarter of fiscal 2007
（April〜Dec. ‘06）

Third quarter of fiscal 2008
（April〜Dec. ‘07）

Notes: 1. Sum of selling commissions and trust fees (trust fees include MRF)
2. Trust fees are included in “other commissions received.”<24>

（3） Underwriting, offering and selling commissions

Investment trust sales and major initiatives
SBI India &Vietnam
Stock Fund

Investment trust sales（¥100 million）

India and Vietnam

608

600

492

500

434 419

Arabiancountries

400

Sumishin SBI Asset Design Open(“Sugo 6”)

Sold only by SBI E*TRADE
SECURITIESJapanese and overseas index funds

Access to a variety of investments

300

200

SG-Arab Stock
Fund

230

189
101

Individual investors

100

0
1Q
2Q
Fiscal 2007

3Q

4Q

1Q
2Q
Fiscal 2008

3Q

*Includes MMF and medium-term gov’t bond fundWill continue to help individuals accumulate savings by
establishing more no-load overseas funds, mainly for
emerging economies where there is much interest amongindividuals, and offer many more services, such as aperiodic fund purchase system.
<25>

(3) Underwriting, offering and selling commissions

Sales of no-load investment trusts
Continued to rapidly increase lineup of no-load trusts in the third quarter, just as in
the first half, and plan to add even more.

Sales up about 2.8 times year on year（
funds）

Growth in
number of funds

100
90

92

80

no-load funds

350

322
299

300

70

67

68

267

250

60

227

200

50
41

40

41

45

44

150
100

30
20

（100 million yen） Growth in sales of

114
75
40

50

18

10

0
Mar

2006

Jun

Sep

Dec

Mar

2007

Jun

Sep

Dec

1Q

2Q

Fiscal 2007

3Q

4Q

1Q

2Q

Fiscal 2008

3Q
<26>

(3) Underwriting, offering and selling commissions

Growth in investment trust assets and trust fees
Big increase in investment trust assets due to larger lineup and SBI
Securities merger. Steady growth in trust fees, too.
（100 million yen）

3,500

（million yen）
650

Investment trusts
Growth inquarterly assets

3283*

2,500

500

2,215
2,105

2,000
1,500
1,000

579

595

550

3,000

*Includes 106.8 billion yen
in conventional accounts.

600

Investment trusts
Growth in trust fees

1,625
1,402
1,277
1,200
1,177
1,091
982
717

450

411
372

400
350

293

300
250

190

200
150
100

500

50

28 46

69

92

214

105

0

0
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Fiscal 2006

Fiscal 2007

Fiscal 2008

*Includes MMF, medium-term gov’t bond fund and conventional accounts

１Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Fiscal 2006

Fiscal 2007

Fiscal 2008

*Includes MMF, medium -term gov’t bond fund and conventional accounts*Trust fees are included in “other commissions received.”<27>

(3) Underwriting, offering and selling commissions

IPO Underwriting ①
Big four online securities companies

SBI E*TRADE SECURITIES（Companies）

120

FY08 3Q IPO issues underwritten/amount

IPO issues underwritten
121（Companies）

50
45

100

94

45

29

30

3Q
60

25

38 38

40

45

1,871

2,000

20

1,500

15

12

10

20

8

672

7
67

0

0
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08

1,000
500

5

0

3,500

2,500

3Q

23

4,000

3,000

35

96

42

Offerings
underwritten
Amount40

87
80（million yen）

4,564

SBI E*TRADE

Monex

MatsuiRakuten*Includes over-allotments. Excludes brokerage sales. Based on listing date. Excludes brokerage sales and real estate investment trusts.

IPOs in Japan: FY07 1Q-3Q: 144 FY08 1Q-3Q: 78<28>

(3) Underwriting, offering and selling commissions

IPO Underwriting ②（Companies）
500

496

IPO underwriting ranking

Big four online securities
companies(Apr. ‘07〜Dec. ’07)

Cumulative IPOs underwritten

First among all securities companies

450
400

377

Ran
king

Company

Issuesunder
writtenParticipati
on ratio(%)

1

SBI E*TRADE

45

57.7

1

Nomura Securities

45

57.7

3

Mitsubishi UFJ Sec

44

56.4

4

Daiwa SMBC

43

55.1

5

Shinko Securities

42

53.8

6

Mizuho Investors

29

37.2

6

Monex Securities

29

37.2

350
300
250

231

214

200
150
100
50
0
SBI E*Trade

Monex

MatsuiRakutenSource: Compiled by SBI E*TRADE SECURITIES based on public information. Covers
period from start of each company’s online securities business to Dec. 2007 (based on
isting date). Excludes brokerage sales and real estate investment trusts.

*Compiled by SBI E*TRADE SECURITIES based on public information and otheravailable information. Covers underwriting in Japan (excluding over-allotment) for 78
IPOs from April through Dec. 2007 (based on listing date).

<29>

Fiscal 2008 third quarter highlights(4) Consolidated trading gain and other revenues（million yen）

Other commissions + Trading gain + Other revenues + 401k sales

6,675
6,000

4,655

Up 43.4%

4,000

2,000

0

Third Quarter of FY07
（April ‘06〜Dec. ‘06)

Third Quarter of FY08
（April ‘07〜Dec. ‘06)<30>

(4) Trading gain and other revenues

Bond sales（million yen）
20,00018,000Effective use of conventional sales channels

19,599Foreignbonds
Yen bonds<FY08 third quarter initiatives>
u Used consulting-linked sales, possible only withconventional (face-to-face) sales channels, toimprove customer satisfaction andunderstanding of bonds

7,094

16,00014,000Growth in sales of foreign gov’t bonds

Government, corporate andforeign bond sales

13,704 13,608◆ Sent direct mail promotional
12,000materials to customers withconventional accounts

10,341
10,000

6,724

9,063

8,687

◆ Prepared leaflets

8,000

12,504

6,000

4,000

6,594

8,018

<Initiatives in FY08 4Q and afterward>◆ Plan to hold a large number of small seminars at
the 27 branch offices in Japan

6,979
4,920

2,000

2,468

2,323

Jul-Sep

Oct-Dec0

Oct-Dec

Fiscal 2007

Jan-MarApr-JunFiscal 2008

*Includes underwriting and selling commissions for retail JGB. Above figures include brokerage sales.

<31>(4) Trading gain and other revenues

Growth in foreign exchange margin transactions
Interest among individuals is high in forex margin transactions; Lowered official
commissions following the June marketing campaign.
Foreign exchange margin accounts （million yen）Revenues from foreign exchange（Accounts）
700
margin transactions
85,559634

80,000600
538

70,000500

60,000454
413

50,000

400
335

449

432
356

375

374

40,000300
30,000200

192

20,000100

10,00000
Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Dec

2004

2005

2006

2007

１Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Fiscal 2006

Fiscal 2007

Fiscal 2008<32>

Fiscal 2008 third quarter highlights(5) Consolidated selling, general and administrative expenses（million yen）

26,300（1,510）

27,000

Trading expenses

24,00021,00018,00015,00012,000
9,000
6,000
3,000
0

21,4197,768 （195）

Exchange membership expenses,
advertising expenses, others

Personnel expenses

6,485
2,248
3,953
11
1,082

Occupancy expenses

3,405 （667）IT system leases, branch officeleases , others

Goodwill amortization

4,861 （286）156（
1,320 36）

5,080
413
2,142

5,221 （183）422 （2）
3,144 （141）Third Quarter of FY07
（April ‘06〜Dec. ‘06)

Third Quarter of FY08
（April ‘07〜Dec. ‘07）

Depreciation
Software depreciation, others

Administrative expenses
IT system back office use, others

Taxes
OthersProvision for allowancefor doubtful accounts
Information provisionfees, others*Figures in parentheses for FY08 are estimated SG&A expenses for conventional securities operations (former SBI Securities) based on Oct. ’07 expenses.

<33>

Fiscal 2008 third quarter highlights(6)-① E*TRADE Korea FY08 first half performance＜converted to yen＞

（million yen、%）

3Q of FY07
3Q of FY08
YoY change（April ‘06〜Dec. ‘06) （April ‘07〜Dec. ‘07）

Operatingrevenues
Net operating
revenues
OperatingincomeOrdinary
income

4,283

7,153

+67.0

4,030

6,504

+61.4

1,107

2,478

+123.8

1,114

2,487

+123.3

Net income

776

1,717

+121.4(Won is converted to yen using average monthly exchange rates.)<34>

Fiscal 2008 third quarter highlights(6)-① E*TRADE Korea FY08 3Q performance＜Korean won＞

（million won、％）

3Q of FY07
3Q of FY08
YoY change（April ‘06〜Dec. ‘06) （April ‘07〜Dec. ‘07）

Operatingrevenues
Net operating
revenues
Operatingincome34,711

56,211+61.9

32,656

51,115

+56.5

8,970

19,437+116.7

Ordinary income

9,026

19,517+116.2

Net income

6,294

13,489+114.3<35>

(6) Consolidated subsidiary

E*TRADE Korea Co., Ltd.
Big increases in revenues and earnings due to success at attracting moreindividual investors as the market remained strong
Accounts and brokerage trading value(Accounts)
180,000

160,000

179,423
Accounts (end of period)
Brokerage trading value

164,698

23,00021,000135,139
123,533

21,012
19,431

120,000

19,00019,31517,00015,000100,000

80,00025,000150,888

140,000

13,95513,00012,8369,000
40,00020,000
3Q

4Q

Capital:Equity ratio:

67,140 million won
72.6%

Online accounts : 179,423（
5th largest in Korea）
Brokerage
trading value:

59,759.8 billion won (Apr.’07-Dec. ’07)
(11th largest in Korea)

Major FY08 initiatives
l Provision of global trading service.
l Started handling Hong Kong and China stock transactions inJanuary 2008l US stock brokerage will be starting

11,000 ◆Fund Mall: Expanded sales of investment trusts

60,000Fiscal 2007

Profile (December 31, 2007)（billion won）

1Q

2Q

Fiscal 2008

3Q

◆Used alliance with Swiss Savings Bank to start ahigh-leverage margin transaction service: allows
investors to use a higher margin multiple
7,000
Goal is to expand this business by establishing a sufficiently
5,000 large customer base and then pursuing further growth while
offering even more services.

Value of SBI E*TRADE equity interest is about ¥14.7 billion (December 31, 2007)※Converted using exchange rate as of December 31, 2007

<36>

Fiscal 2008 third quarter highlights（6）-② IT system subsidiaries
Reduced outsourcing expenses by performing system development and operations internally

Plan to recover development expenses by selling these systems to other companies

Traders Financial Systems Co., Ltd.

TradeWin Co., Ltd.

FY08 3rd quarter（July〜Dec. ‘07）

Operating revenues
Net operating
revenues
Operating income
Ordinary income
Net income

839
353
235
244
136
（million yen）

FY08 3rd quarter（July〜Dec. ‘07）

Operating revenues
Net operating
revenues
Operating income
Ordinary income

Net income

603
136
-36
-39
70
（million yen）
<37>

2. Major FY2008 third quarter initiatives

2. Major FY2008 third quarter initiatives

Major FY2008 third quarter initiatives•Indicates service release, *Indicates alliance, decision, etc.

Month

Description of action

April

・Started HYPER E*TRADE reverse limit order service
・Started instant settlement service through alliance with Seven Bank・Started promoting the SBI Holdings SNS E*TRA Long-life Village (now SBI Money World) to customers with securities
accounts

May・Introduced S! appli compatible HYPER MOBLIE service for cell phone users
・”Biggest Campaign of All Time” ? Cut to industry’ s lowest level the fee structure for eight products・Started MOBILE E*TRADE for W-ZERO3 service for the WILLCOM W-ZERO3 series
・Started Investment Trust Double Smile Campaign

June・Cut official commissions for E*TRADE FX foreign exchange margin trading
・Lowered interest rates on long margin positions with no maturity (ordinary margin trades)
・Conducted Biggest Campaign of All Time ? Customer Appreciation
・Started promoting 401k accounts for individuals at the Everyone’s Money Site of Seven Bank・Started handling overseas exchange-traded funds

July・Through alliance with Winterthur Swiss Life Insurance, started handling investment-type annuity insurance throughInternet applications*Made TradeWin and Traders Financial Systems wholly owned subsidiaries through exchange of stockAug.

・Significantly eased requirements for free use of HYPER E＊TRADE Ver2.0
・Began accepting requests to use E*TRADE points as contributions to victims of the earthquake in Niigata, Japan
・Started nighttime trading service (started link with Japannext PTS)・Started a campaign that cut mini-Nikkei 225 futures commissions to the industry’ s lowest level

Sep.

・Started bank agent service for Sumishin SBI Net Bank・Started offering FLASH version of form to open an account<39>

2. Major FY2008 third quarter initiatives

Major FY2008 third quarter initiatives
Month

Oct.

Nov.

*Indicates service release *Indicates alliance, decision, etc.

Description of action*Merged with SBI Securitiesl Foreign stock trading – “W Campaign” for new accounts
l Foreign stock trading – Christmas campaignl Mini-Nikkei 225 Futures ¥52.5 & Large ¥315 Campaign*Announcement of company name change and end of licensing contract

Dec.

l “Happy Bonus Campaign” to commemorate expansion of investment trust periodic purchase servicel Started Japanese Stock Dial Ordering Servicel Allowed customers to use E*TRADE Points for charitable donations*SBI Group and Softbank Mobile agreed to jointly develop and sell a cell phone exclusively to stock tradingl Reduced official commissions for mini-Nikkei 225 futures

Jan.

*Reached agreement in principle to make SBI E*TRADE JAPAN a wholly owned subsidiary of SBI Holdings<40>

3. New Initiatives

3. New Initiatives(1) Aim to become an Internet full-line securities company
・Establish a consistently profitable operating structure
・Strength in both elements of Internet full-line securities services:
Retail and wholesale(2) Use conventional (face-to-face) sales channels to establish a new business model
Retail business: Become the securities company most trusted by individual investors
Corporate business: Use sales personnel and the branch network to
conduct sales activities targeting companies(3) Growth strategy as part of the SBI Group① Become a wholly owned subsidiary of SBI Holdings through an exchangeof stock②Change name to SBI Securities<42>(1) Aim to become an Internet full-line securities company

(1) Aim to become an Internet full-line securities company

Establish a consistently profitable operating structure
Build a profit structure that is not vulnerable to market fluctuations
Composition of consolidated operating revenues in FY08 third quarter
Brokerage Commissions（％）

SBI E*Trade

Underwriting/selling commissions

Financial revenues

48.2

Trading gain/losses
OthersOffering/selling commissions

34.1

4.3 4.6 8.8
0.0
0.0 5.8

Matsui54.7

Kabu.com

54.5

34.2

0.0 9.6
1.6

Rakuten

54.2

37.3

1.3
2.0 5.3

Monex

52.3

（Non-consolidated）

Nomura Securities

15.5

20.4

39.4

29.0

21.2

4.0

0.6 14.1

26.4

Source: Company Web sites and earnings releases (Nomura Securities figures based on Japanese standards)

16.5
<44>

(1) Aim to become an Internet full-line securities company
The two elements of comprehensive services: Retail business and wholesale business
Leverage the retail business operating base to expand the wholesale business with aimof establishing a consistently profitable operating structure

Overwhelming lead in online customers served
27 offices nationwide, sales force of about 270 (Dec. 31, 2007)
Growing share of retail brokerage trading value
RetailWholesale
Offering
Offering
IPO
IPOstockstock

StocksStocksInvestment
Investment
truststrusts Bonds
Bonds
Foreign
Foreignexchange,exchange,
futures/options
futures/options
CoveredCoveredwarrants
warrants

Off-market
Off-market

Provision
Provision
of
ofIR
IRand
and
investor
investor
information
information

IPO
IPO
underwriting
underwriting

financefinance

sales
sales

Aim to increase market
share and serve even morecustomers by launching
new services andcompetitive fee structures

Securitized
Securitized
products
products

Secondary
Secondary

Expand wholesale
business by using retailsales capabilities and SBIGroup resources

PrivatePrivatebankingbanking

M&A
M&A

Off-market
Off-market
Sales
main
Sales（（mainintermediary）
intermediary）

Investor
Investor
relationsrelations
supportsupport<<45>>

(2) Use conventional (face-to-face) sales channels toestablish a new business model

(2) Use conventional sales channels to establish a new business model
Retail business: Become Japan’s first ideal securities company for individual investors
Make online services the base, and combine conventional services with this base＜Online services ＞＜Conventional services ＞

Standard Internet
environment that allows
individuals to buy andsell stocks on their own

Meet investors’ needs withdetailed services thatcannot be offered using
the Internet

Convergence

An entirely new framework for online securities services
A securities company that does not demand that investors make trades, but instead allows
individuals to obtain all the information they want.

Investment information

Transactionsl A nationwide network of 27 branchesl Internetl A sales team of about 270

l Call centerl A call center that provides
consultation services
Provides an investor-driven service
where investors can receive theinformation they want

Investors can make trades on theirown based on information received
Transactions do not originate fromthe securities company<47>

(2) Use conventional sales channels to establish a new business model
Retail business: Become Japan’s first ideal securities company for individual investors

Offer services that truly reflect the needs of individual investors
lPreparing to start call center services that include consulting
Makes it possible to use the telephone to offer individual investment consultations, a capability that was notpossible in the past
Provides information that matches customer needs that cannot be targeted using investment plans based
only on information distributed using the Internet

lHold mini-seminars at the 27 branch offices
Plan to hold about 500 seminars by the end of March for groups of about 10 people; main topics are investment
trusts, foreign bonds and foreign exchange

lName a marketing manager for each branch office
SBI E*TRADE SECURITIES branches (Hokkaido 1, Tohoku 2, Kanto 14, Chubu 5, Kinki 3, Kyushu 2)
Each branch marketing manager executes a sales strategy that matches the characteristics of the area servedby that branch

Evolve into a “new type of securities company” by reviewing face-to-face services and introducing new services
Goal is to increase earnings by providing premium services that achieve a high level of satisfaction amongindividual investors

Internet brokerage commission rate: 2.8 basis points
If introduction of premium services raises brokerage commissions by one basis point, there would be
an increase of about 35.3% in brokerage commission revenues.
(estimate based on FY08 3Q performance)<48>

(2) Use conventional sales channels to establish a new business model
Corporate business: Build a powerful organization by greatly expanding the workforce
Use growth in the sales force to build an aggressive sales organization
Increase number of units and personnel associatedwith corporate business
Before merger: 16 people → As of Jan. 25: 32 people

Companies
planning an IPO

Financial
institutions

Corporate Division

Financial institutions

IPO underwriting services

Sales targeting primarily financial institutions

12 people

5 people

Investment Banking Division (new)Total support for companies growthstrategies
6 people

Listed and unlistedcompanies

Corporate Sales Division
Private Banking Division (new)Assistance for asset management needsof companies and their executives
9 people

A framework that allows conducting a broad range of sales
activities and, through collaboration among all divisions,capturing more opportunities for earnings profits

IPO investors
Introductions to SBIGroup companies <<49>(2) Use conventional sales channels to establish a new business model
Corporate business: Use sales force and branches to establish ties
with more corporate clients
Start accurately targeted sales activities by using the SBI Group and the current customer base(1) Deal sourcing within the SBI Group
1. Use SBI Group resources to offer services to meet the M&A, private equity investment and otherneeds of corporate clients.
2. Meet the financing needs of companies introduced by clients of the SBI Group(2) Extensive sales activities targeting the 496 companies that have used SBI
SBI E*TRADE has participated in the IPOs of 496 companies. Target and meet the asset management
needs of these companies and their executives.
(3) Upgrade corporate sales activities in other areas of Japan: Established corporate sales divisions
at the Nagoya, Osaka and Fukuoka branches in November 2007.
Deploy corporate sales personnel to branch offices to increase sales activities targeting companies andfinancial institutions throughout Japan, a client sector that has not been targeted until now.
(4) Increase staffing of Financial Institution Division to reinforce its role as an access point for
financial institutions
Earn FA contract fees by linking the investment and asset management needs of financial institutions
with the demand for more capital at the 496 companies that conducted an IPO with the assistance of
SBI E*TRADE
Expand corporate business by using new approaches to create more opportunities to earn profits<<50>

(3) The SBI Group’s Growth Strategy

(1) Become a wholly owned subsidiary through an exchange of stock

The transformation of the online securities industry and our strategy
SBI E*TRADE has executed the ideal strategy for the ongoing transformation of the online securities industry.

I. The period of low brokerage commissions (2001-2003)
lOnline securities companies slashed commissions to the industry’s lowest level to capture
market share and build a base for future earnings
SBI E*TRADE became a subsidiary of a holding company to gain greater
autonomy in conducting business activities

II. The period of rapid growth in scale of operations (2003-2006)
lRapid growth in brokerage activities and in balance of margin transactions
lOnline securities companies play an increasing role in IPO and other underwriting activities
To meet demand for funds, SBI E*TRADE conducted an IPO to reinforced its
financial position

III. The period of seeking new growth strategies (2007-)
・Stock market weakness is forcing companies to abandon business models relying solely on
online brokerage services.
SBI E*TRADE aims to go beyond the online securities domain to become acomprehensive securities company<52>>

(1) Become a wholly owned subsidiary through an exchange of stock
I. Commission-based competition = II. Rapid growth

I. The period of low brokerage commissions
Sept. 8, ’00 IPO

NASDAQ JAPANLow commissions
to capture market
share

As a group company owned by a holding company, SBI
E*TRADE was able to execute strategies withconsiderable autonomy

Succeeded in capturing a large share of the retail brokerage market and enlarging the scope of operations

II. The period of rapid growth inscale of operations (2003-2006)

Nov. 30, ’04 IPO
Separate listing

TSE 1st section

JASDAQ

Dec. ’05 public offering of stock

Urgent need to reinforce the balance sheetl Rapid growth in balance of margin transactions (About
570 million yen in March ’06)
l Growing presence in the IPO and other underwriting
markets
March ’06 bond issue

Established the sound financial base needed for further growth and diversification of the profit structure<53>>

(1) Become a wholly owned subsidiary through an exchange of stock

III. The period of seeking new growth strategies
SBI E*TRADE aims to go beyond the online securities domain to become a comprehensive securities company
Online securities: Reliance on brokerage commissions makes this business model highly vulnerable to stock market
ups and downs
Brokerage trading value of big five online securities companies FY08 third quarter consolidated operating revenues(April to December)(trillion yen)
Underwriting, sales
Trading
Financial revenues and distribution

150

126

135

133

SBI
E*TRADE

100

65
50

Brokerage commissions
（％）

36

48.2

2005
3Q

2006
3Q

2007
3Q

2008
3Q

4.34.6 8.8

0.0
0.05.8

54.7

39.4

Kabu.com

54.5

1.6
34.2 0.0
9.6

54.2

37.3

Rakuten

2004
3Q

34.1

Matsui(non-cons)0

Others

2.0 5.3
1.3*The five companies are SBI E*TRADE, Kabu.com, Matsui, Monex and Rakuten.
Compiled by SBI E*TRADE SECURITIES based on Web sites and other public information for each company. SBI E*TRADE SECURITIES brokerage trading value is for only online accounts. <54>

(1) Become a wholly owned subsidiary through an exchange of stock

Plan to make SBI E*TRADE a wholly owned subsidiary of SBI Holdings
Use the capabilities of all SBI Group companies to become a comprehensive securities company◆Become more than merely an online broker
lBecome a comprehensive securities company by using the investmentbanking capabilities of the SBI Group◆The superiority of the financial conglomerate business modellMutual use of strengths of individual group companies makes it possible toprovide new services that companies cannot offer on their own
l Each SBI Group company will use its respective activities to help SBI E*TRADE become acomprehensive securities company, enabling all group companies to pursue earnings
growth.
l By making SBI E*TRADE a wholly owned subsidiary, SBI Holdings will enable its
shareholders to benefit from all of the earnings generated by this subsidiary.
l As a privately owned company, SBI E*TRADE’s management will have greater freedom totake actions aimed at maximizing earnings by pursuing more synergies and introducing
new products and services.
<55>

(1) Become a wholly owned subsidiary through an exchange of stock

Plan to make SBI E*TRADE a wholly owned subsidiary of SBI Holdings
Use the resources of all SBI Group companies to become a comprehensive securities company

capabilities

Individual investors

Investment banking and private banking

Companies

Earnings growthFund operations

Corporate buyout/revitalization funds

Venture capital

Investments and advisory services

Mergers and acquisitions

Anti-aging services

SBI E*TRADE can use other SBI Group companies to gain access to the resources it lacks in order tobecome a comprehensive securities company. The objective is to maximize the group’s earnings,<56>
which SBI E*TRADE could not accomplish on its own.

(1) Become a wholly owned subsidiary through an exchange of stock

The superiority of the financial conglomerate business model
Expand the SBI Group as a financial conglomerate
Online life/non-life
Online bankinsurers

Use the group’s 1.6 million
customer relationships to accelerate
the growth of all group companies◆Sumishin SBI Net Bank (started operations Sept. ’07)
→ Raised deposits to 200 billion yen faster than any
other online bank in Japan; more than 100,000 accountapplications (as of Jan. 23)
Expanding services linked to SBI E*TRADE, likedeposits exclusively for SBI E*TRADE transactions◆SBI Insurance (started operations Jan. ’08)
→ Assisting this company achieve a strong start byintroducing its services to the customers of SBI E*TRADE

Comparisons/ Searches

Venture capital/
Real estate◆SBI Life Insurance→ To start operations in second half of FY08

Capturing mutual synergies among all SBI Group companies will enable the group to offera broad lineup of competitive services<57>

(1) Become a wholly owned subsidiary through an exchange of stock

Plan to make SBI E*TRADE a wholly owned subsidiary of SBI Holdings
Purpose of exchange of stock
To succeed, SBI E*TRADE must capture a dominant market share in the online securities industry andfurther extend the scope of activities as a comprehensive securities company. The company must also
respond to the rapid changes in the financial services market and the diversification of customers’ needs.
By becoming a wholly owned subsidiary of SBI Holdings, SBI E*TRADE will be able to operatewith greater speed and agility, allocating resources in the best manner while pursuing moresynergies with other SBI Group companies. This will enable the group to establish a frameworkthat can serve a broad spectrum of financial needs.
Stock exchange ratio

Exchangeratio

SBI Holdings(parent company)

SBI E*TRADE(wholly owned subsidiary)

1

3.55

*SBI E*TRADE shareholders will receive 3.55 shares of SBI Holdings common stock for each share of SBI E*TRADE common stock.

Timetable for exchange of stock (tentative)

June 25, 2008

Shareholders meeting (for approval of exchange of stock)

July 25, 2008

Final trading date for SBI E*TRADE stock

July 28, 2008

Termination of SBI E*TRADE exchange listing

August 1, 2008

Exchange of stock< <58> >(2) Name change to SBI Securities

Background for change in company name
SBI E*TRADE to be renamed SBI Securities on July 1, 2008
Company will leverage its brand value and reinforce ties
with other SBI Group companies to continue growing

SBI E*TRADE to be renamed SBI Securities on July 1, 2008

◆ Utilize brand value as an innovative and forward-looking financial conglomerate
Evolving: from a specialized online securities firm into a general securities firm with astrong online retail business◆ Merged with SBI Securities on October 1, 2007
Merger provides a base for going beyond the bounds of online securities services, using a sales force ofabout 270 and a nationwide branch network with 27 locations to offer new services and serve thecorporate market. Targeted markets include the PB, IB, corporate and other businesses.

Greater management flexibility, including for actions aimed at growth on a global scale◆ Termination of licensing agreement with E*TRADE Financial Corporation for use of the E*TRADE brandwill allow SBI Securities to begin overseas operations, which were not allowed under the licensing
agreement.
<59>http://www.etrade.ne.jp

Risks and commissions associated with products handled by SBI E*TRADE
Name: SBI E*TRADE SECURITIES, Financial Products Trader
Registration number:
Memberships:

Kanto Regional Finance Bureau (Kinsho) No. 44

Japan Securities Dealers Association, The Financial Futures
Association of Japan
Risk information concerning products

uJapanese stocks Ordinary trading• Stock transactions may result in losses due to changes in stock prices and other factors.

uJapanese stocks Margin trading• Margin trades require a deposit of at least 33% of the transaction value, but not less than ¥300,000.
• Since margin trading permits using small deposits to conduct large transactions, there is a risk of incurring a substantial loss.
• Margin trading may produce losses due to changes in applicable stock prices and other factors. In addition, losses may exceed
the margin deposit.

uOdd-lot shares• Stock transactions may result in losses due to changes in stock prices and other factors.

◆ Off-market sales･ Stock transactions may result in losses due to changes in stock prices and other factors.
<61>

Risks and commissions associated with products handled by SBI E*TRADE
Risk information concerning products
uIPO/Public offerings・Secondary offerings• Stock transactions may result in losses due to changes in stock prices and other factors.

uInvestment trusts• Investment trusts purchase mainly stocks, corporate and government bonds and other securities with price volatility. Since
the principal is not guaranteed, the price of each investment unit will fluctuate along with changes in market prices, exchange
rates and other items on markets associated with trust assets. Consequently, the value of an investment trust investment
may fall below a customer’s initial investment.
• Investment trusts differ depending on the type of assets held, investment limits, markets and countries used for investments,and other factors. Since each trust has a different risk profile , investors are urged to read the prospectus and contract before
signing.

uBonds• Bond prices move together with changes in market interest rates. Consequently, investors may incur losses when sellinga bond prior to its maturity.
• Foreign government bonds may produce losses due to changes in foreign exchange rates and other items.

uFutures・Options•The required deposit is (SBI E*TRADE SPAN deposit − Net option value) x 1.4 (140%).
•The SBI E*TRADE SPAN deposit and total net option value is recalculated each time an order is placed or completed.
Furthermore, the deposit may change due to exchange regulations or a decision by SBI E*TRADE at its discretion.
<62>

Risks and commissions associated with products handled by SBI E*TRADE
Risk information concerning products
uFutures・Options (continued)• Please confirm the current SPAN deposit by visiting the Osaka Securities Exchange Web site.
• Prices of stock index futures (Nikkei 225 and mini Nikkei 225) fluctuate along with changes in stock indexes and other items. This
volatility may result in losses for investors. If market prices move in the opposite direction than was expected, investors may losea large part or all of the deposit in a short time. Furthermore, this loss may exceed the deposit. Moreover, since stock price index
futures trading permits using small deposits to conduct large transactions, there is a risk of incurring a substantial loss.
• Prices of stock index options (Nikkei 225 options) fluctuate alo ng with changes in stock indexes and other items. This volatility
may result in losses for investors. Caution is needed because options can be exercised only during a certain period. Investors
who buy options will lose their entire investments if the option is not exercised or resold before the expiration date. Investors who
sell options may be exposed to an unlimited loss if market prices move in the opposite direction than expected. Furthermore,since stock index option market prices are linked to movements i n the actual stock index, volatility of option prices may be higher
than the rate of change in the actual stock index. In some cases, there is a risk of incurring a substantial loss.

uForeign stocks• Foreign stock transactions may result in losses due to changes in stock prices and other factors.
• Foreign stock transactions may result in losses due to changes in foreign exchange rates and other items.

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Risks and commissions associated with products handled by SBI E*TRADE
Risk information concerning products
uForeign exchange margin transactions (E*TRADE FX)• Foreign exchange margin transactions are conducted in units of ¥10,000 to ¥10 million and require a minimum deposit offrom ¥50,000 to ¥200,000.
• Principal and interest for these transactions is not guaranteed.
• These transactions are conducted using a small deposit in relation to the amount of the trade. Consequently, while investors
may earn large profits in relation to the deposit, there is also a risk of incurring a large loss within a short time.
• These transactions may result in losses due to changes in currency prices, financial indicators and other items. Furthermore,
losses may exceed the deposit.
• The swap point varies depending on changes in interest rates and other items. Consequently, there is no guarantee that theswap point will remain the same.
• Transaction rates use the 2-way method, resulting in a difference between the purchase and sale value.

uIndividual annuities• Investments used by individual annuity plans include investment trusts. Since the value of investment trust investmentschanges depending on changes in prices of trust stocks and bonds, exchange rates and other items, the value of aninvestment may fall below the principal.

uInsurance• Insurance policy assets are managed in a separate account while premiums are received and while annuity payments are
made. Death benefits, annuity payments and refunds upon policy termination may increase or decrease depending on theperformance of assets in the special account. Assets in the special account are vulnerable to investment risks associated withchanges in prices of stocks and corporate and government bonds, exchange rates, and other items. Depending on theperformance of assets, the sum of annuity payments and the refund upon termination may fall below the one-time insurance
premium payment. The policyholder is responsible for all of the risk.
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Risks and commissions associated with products handled by SBI E*TRADE
Risk information concerning products
ue-warrants• Prices of e-warrants (covered warrants) are vulnerable to many factors that include but are not restricted to changes in pricesof underlying stocks and stock indexes, REITs, depositary receipts, JGB futures, currencies (link bonds), commodities (linkbonds), to the passage of time (in general, the price declines with time, except for certain types of issues), and to foreignexchange rates (for underlying assets are outside Japan). Consequently, principal is not guaranteed and there is a high risk oflosing the entire original investment. Furthermore, e-warrants generally have greater price volatility than a direct investment in
the underlying assets. (However, when the price of an e-warrant is extremely low, price movements are virtually unaffected bychanges in prices of underlying assets.)• Prices of near-pin e-warrants (covered warrants) are vulnerable to many factors that include but are not restricted to changes instock indexes and foreign exchange rates, which are the underlying assets, and the passage of time (including during a singleday). Consequently, principal is not guaranteed and there is a high risk of losing the entire original investment. Furthermore,
nearpin e -warrants generally have greater price volatility than a direct investment in the underlying assets. The maximum
amount that can be received per warrant is ¥100. If the price of the applicable assets upon maturity differs from the pin price bymore than the prescribed amount, the price will be zero upon maturity. Even if an investor purchases all types of nearpin ewarrants that have the same maturity date, there is a possibility of losing the entire investment.
Tracker e-warrants (covered warrants) are securities where prices are vulnerable to many factors, including changes in theprices of the underlying assets such as stock indexes, currencies (linked bonds) and commodities (linked bonds), foreignexchange markets (if the underlying assets are in another country), and other items. Consequently, principal is not guaranteed
and investors may incur losses. Prices of tracker e-warrants generally move more closely with the prices of the underlying
assets than the prices of e-warrants do. However, these prices are not linked with prices of the underlying assets during any
particular period. Furthermore, there may be a change in the assumption for the investment return for the underlying assets
because of changes in interest rates, projected dividends until maturity, stock lending associated with the underlying assets,
and other items. In this case, there may be an effect on the price of the tracker e-warrants. Please refer to the latest foreign
securities manual for more information.
• Furthermore, a transaction may be terminated even during exchange trading hours.
• There is a difference (spread) between customers’ purchase and sales prices.

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Risks and commissions associated with products handled by SBI E*TRADE
Fees and commissions (*Includes Internet・mobile device transaction fees and taxes)◆Japanese stocks, ETF, REIT, Securities investment companies•For ordinary trades, the commission per order is ¥200 for trades up to ¥100,000, ¥250 up to ¥200,000, ¥450 up to¥500,000, ¥800 up to ¥1 million, ¥950 up to ¥1.5 million, ¥1500 up to ¥30 million and ¥1575 for more than ¥30 million.
(standard plan) The commission for trades in a single day is nothing for up to ¥100,000, ¥250 up to ¥200,000, ¥315 up to¥300,000, ¥500 up to ¥500,000, ¥900 up to ¥1 million, and an additional ¥420 for each additional ¥1 million. (active plan
*1) For system/ordinary margin trades, the commission per order is ¥150 for trades up to ¥200,000, ¥200 up to ¥500,000
and ¥400 for more than ¥500,000. (standard plan) The commission for trades in a single day is nothing for up to ¥100,000,¥300 up to ¥500,000, ¥600 up to ¥1 million, ¥1000 up to ¥10 million, ¥2000 up to ¥50 million, and an additional ¥2000 foreach additional ¥50 million. (active plan *1)・For PTS nighttime trades(*2), the commission per order is ¥450 for trades up to ¥500,000, ¥800 up to ¥1 million, ¥950
up to ¥1.5 million, ¥1500 up to ¥30 million, and ¥1575 for more than ¥30 million (but commission is ¥367 for all trades
executed on February 29, 2008).
・The commission for odd-lot shares (S stock) (*2)transactions is 0.63% of the transaction value. There is no minimum
commission.
・There is no commission for IPOs, public offerings and secondary offerings.※3・There is no commission for off-market sales.
*1 The total transaction value and commission are calculated separately for ordinary Japanese stock transactions,Japanese stock system margin transactions, and Japanese stock ordinary margin transactions.

In addition, the standard plan commissions will be applied for transactions by call center customers using the IVR system.
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Risks and commissions associated with products handled by SBI E*TRADE
Fees and commissions (*Includes Internet・mobile device transaction fees and taxes)◆Japanese stocks, ETF, REIT, Securities investment companies (continued)*2. These transactions cannot be performed with Hyper Mobile or Hyper Mobile Lite.
*3. With Mobile E*TRADE, only bookbuilding applications and the confirmation of drawing results
are possible. With Mobile E*TRADE for W-Zero3, Hyper Mobile and Hyper Mobile Lite, and the IVR
system, these transactions are not possible.
*4. Not possible with Mobile E*TRADE for W-Zero3, Hyper Mobile and Hyper Mobile Lite, and the
IVR system.

◆Foreign stocks
・For U.S. stocks, the commission per order is US$26.25 up to 1,000 shares and an additional 2.1
cents for each additional share.
•For Chinese stocks, the commission is 0.4095% of the transaction value. The minimum
commission is HK$31.50 and the maximum commission is HK$315.
•For Korean stocks, the commission is 0.945% of the transaction value. The minimum commissionis 9,450 won.
*There is a management fee of up to 0.99% on overseas ETF.

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Risks and commissions associated with products handled by SBI E*TRADE
Fees and commissions (*Includes Internet・mobile device transaction fees and taxes)◆ Investment trusts
・For stock and other investment trusts, the application fee is a maximum of 3.15% of the unit price, the trust fee is a
maximum of 2.7125% of the net assets, and the trust asset retention amount is a maximum of 1% (not taxed) of the unit
price upon redemption. Please check for other fees in the prospectus of each fund. Investment trust fees are different foreach fund.
•When investing in a foreign currency-denominated MMF (U.S. dollars), investors pay only the amount of the investment.
There is also a one-way foreign exchange fee of ¥0.25 for the foreign exchange transaction associated with the purchaseof the foreign currency-denominated MMF.

◆Bonds・Japanese bonds (except convertible bonds): Investors pay only the value of the bonds when buying Japanese bonds.
•Foreign bonds: Investors pay only the value of the bonds when buying foreign bonds. Please note that there is also an
SBI E*TRADE foreign exchange fee associated with the purchase of the foreign bond (payable for each purchase). Thisfee is ±¥0.50 for the U.S. dollar, ±¥0.80 for the euro, ±¥0.80 for the Canadian dollar, ±¥1 for the Australian and New
Zealand dollars, ±¥0.50 for the South African rand, and ±¥0.30 for the Mexican peso. ※Please note that these foreignexchange fees may be revised at any time without prior notice.

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Risks and commissions associated with products handled by SBI E*TRADE
Fees and commissions (*Includes Internet・mobile device transaction fees and taxes)◆Financial products•For foreign exchange margin transactions(*5, 6), the commission is ¥300 for each trading unit and ¥4500 for 15 or more
trading units. When there are two or more positions, this commission is applied to each one.
•For futures transactions(*6), the commission is ¥525 per Nikkei 225 contract and ¥52.5(with tax, rounded down to thenearest whole yen) per mini Nikkei 225 contract.
•For options transactions(*6), the commission is 0.21%、and the minimum commission is ¥210 (with tax). .
•e-warrant commissions are ¥262 for trades up to ¥200,000 and ¥525 for trades of ¥200,000 or more.
•There is no commission for individual annuity transactions.
•For insurance policies, there is no commission for investment-type annuity policies, healthcare insurance, cancer
insurance, automobile insurance, overseas travel insurance and golf insurance. However, for investment-type annuity
policies, there is a fee of 5.0% of the lump-sum premium payment to cover initial policy expenses, a monthly fee of ¥500
for policy management expenses and other insurance administrative expenses. Please visit the SBI E*TRADE Web site
to obtain more information.

*5. When there are investments in two or more items, commissions will be calculated for each investment. In addition,
the commission-free service for reverse trades for day trades was terminated on June 16, 2007 (Saturday) in conjunction
with this large reduction in commissions.

*6 Not possible with Mobile E*TRADE for W-Zero3, Hyper Mobile and Hyper Mobile Lite.
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Risks and commissions associated with products handled by SBIE*TRADE
Fees and commissions (*Transaction fees including taxes at conventional offices)◆Commissions for Japanese stocks, ETF, REIT, beneficiary certificates of securities
investment companies, etc., and preferred stock, etc.
l For ordinary trades, the commission per order is 1.2075%(*1) of the transaction value for trades up to ¥1 million, 0.945%+ ¥2,625 for trades of ¥1 million+ to ¥5 million, 0.735% + ¥13,125 for trades of ¥5 million+ to ¥10 million, 0.60375% +¥26,250 for trades of ¥10 million+ to ¥30 million, 0.39375% + ¥89,250 for trades of ¥30 million+ to ¥50 million,¥286,125 for trades of ¥50 million+ to ¥100 million, 0.0735% + ¥212,625 for trades of ¥100 million+ to ¥200 million,
0.0525% + ¥254,625 for trades of ¥200 million+ to ¥300 million, 0.042% + ¥286,125 for trades of ¥300 million+ to ¥500
million and 0.0315% +¥338,625 for trades of more than ¥ 500 million.
*1 However, the commission is ¥2,650 if the above commission of 1.2075% of the transaction value is less than ¥2,625.
*More information concerning commissions is available at any SBI E*TRADE office.

◆Odd-lot stock brokerage commissionsl The brokerage commission for trades of shares of less than one tangen (trading unit) is the proportion of thecommission for one tangen based on the number of odd-lot shares.

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Risks and commissions associated with products handled by SBIE*TRADE
Fees and commissions (*Transaction fees including taxes at conventional offices)◆Foreign stock (U.S. and China) brokerage commissions (continued)
l For foreign stock trades, the commission per order is 10.5% (with tax) of the transaction value for trades up to¥75,000, ¥7,875 (with tax) for trades of ¥75,000+ to ¥750,000, 1.05% (with tax) of the transaction value for tradesof ¥750,000+ to ¥5 million, 0.84% + ¥10,500 (with tax) for trades of ¥5 million+ to ¥10 million, 0.63% + ¥31,500(with tax) for trades of ¥10 million+ to ¥50 million, 0.42% + ¥147,000 (with tax) for trades of ¥50 million+ to ¥100
million, and 0.21% + ¥346,500 (with tax) for trades of more than ¥100 million.
*For purchases, foreign securities exchange brokerage commissions, securities transaction taxes and other fees will
be added to the overseas amount due to calculate the transaction value. For sales, these commissions, taxes andfees will be deducted from the amount due.
*The foreign exchange rate used by SBI E*TRADE for foreign stock transactions will be the TTS rate for purchases
and the TTB rate for sales.

◆Stock index futures brokerage commissions
l For stock index futures trades, the commission per order is 0.084% (with tax) of the transaction value for trades up to¥100 million, 0.063% + ¥21,000 (with tax) for trades of ¥100 million+ to ¥300 million, 0.042% + ¥84,000 (with tax) of
the transaction value for trades of ¥300 million+ to ¥500 million, 0.021% + ¥189,000 (with tax) for trades of ¥500
million+ to ¥1 billion, and 0.0105% + ¥294,000 (with tax) for trades of more than ¥1 billion.

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Risks and commissions associated with products handled by SBIE*TRADE
Fees and commissions (*Transaction fees including taxes at conventional offices)◆Stock index options brokerage commissions
l For stock index options trades, the commission per order is 4.2% (with tax)*1 of the transaction value for trades up to¥1 million, 3.15% + ¥10,500 (with tax) for trades of ¥1 million+ to ¥3 million, 2.1% + ¥42,000 (with tax) of thetransaction value for trades of ¥3 million+ to ¥5 million, 1.575% + ¥68,250 (with tax) for trades of ¥5 million+ to ¥10
million, 1.26% + ¥99,750 (with tax) for trades of ¥10 million+ to ¥30 million, 0.945% + ¥194,250 (with tax) for tradesof ¥30 million+ to ¥50 million, and 0.63% + ¥351,750 (with tax) for trades of more than ¥50 million.
*1. The commission is ¥2,625 (with tax) in cases where 4.20% (with tax) of the transaction value is less than ¥2,625.

*Commissions for ordinary transactions, margin transactions and odd-lot transactions for Japanese stocks
and for ordinary transactions, futures and options for foreign stocks (U.S. and China) are different than thecommissions for online accounts.
*Commissions for investment trusts are different than the commissions for online accounts.
*PTS nighttime transactions, foreign stock (Korea) transactions, foreign exchange margin transactions
and e-warrant transactions are not possible.
*Minors are not allowed to conduct margin transactions or futures and options transactions for Japanesestocks.
*Please contact an SBI E*TRADE branch office for more information.

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