May 18, 2012
SMBC Nikko Securities Inc.

Submission of Business Improvement Plan by SMBC Nikko Securities Inc.

SMBC Nikko Securities Inc. (Hereafter, SMBC Nikko) submitted today its Business Improvement Plan
to the Financial Services Agency, complying with the Business Improvement Order dated April 20,
2012 (FSA Supervisory Bureau Memorandum, No. 1055).
We sincerely apologize to our customers and related parties for the concerns and inconvenience wehave caused in conjunction with the inadequate controls over undisclosed corporate information(hereafter, “Corporate Information”) and inappropriate solicitation.
We very seriously accept the gravity of the situation and drafted the Business Improvement Plan forfurther improvement and enhancement, in addition to the improvement measures that we have already
implemented. We will establish even stronger internal control systems through the steady
implementation of the Improvement Plan, and SMBC Nikko will do our best to recover the confidenceof customers and other interested parties.
Outline of the Business Improvement Plan and our self-disciplinary actions for Persons Responsible
are as described below.

1. Outline of the improvement and enhancement measures as specified in Business
Improvement Plan
(1)

Improvement and enhancement measures on establishment and application of rules andregulationsA) Increase the punishment for violations of laws and regulations and internal rules
concerning Corporate Information.
B) Enhance the transmission procedure on the Corporate Information.
C) Distribution of portable reference manuals regarding the handling of CorporateInformation to all the management and employees.

(2)

To make the management and employees thoroughly aware of importance of complianceincluding handling of Corporate InformationA) Provide intensive trainings to all the management and employees.
B) Continue providing effective trainings regarding Corporate Information control to all themanagement and employees.

(3)

Improvement and enhancement measures on early detection of irregular activities
A) Make the management and employees thoroughly aware of significance of reporting
irregular activities and whistle-blowing.

This material is an English translation of Japanese announcement made on May 18, 2012. Although the company
intended to faithfully translate the Japanese document into English, the accuracy and correctness of this translation are
not guaranteed and thus you are encouraged to refer to the original Japanese document.

(4)Improvement and enhancement measures on monitoring system
A) Enhance monitoring over internal emails and meetings.

(5)Internal audit over implementation status of the improvement and enhancement measures

Reference:
Outline of our improvement measures which have been already announced and implemented(1) Establishment of a Task Force to Enhance Management of Corporate Information(2) Enhancement of Securities Trading Supervisory Operation Division(3) Provide more sophisticated training(4) On-going monitoring

2. Description of the self-disciplinary actions
Eiji Watanabe
Four other executives

President & CEO

15% cut of compensation for three months
5% to 50% cut of compensation for three months###This material is an English translation of Japanese announcement made on May 18, 2012. Although the company
intended to faithfully translate the Japanese document into English, the accuracy and correctness of this translation are
not guaranteed and thus you are encouraged to refer to the original Japanese document.

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