April 20, 2012
SMBC Nikko Securities Inc.

Business Improvement Order by Financial Services Agency

SMBC Nikko Securities Inc.(“SMBC Nikko”) today received a Business Improvement Order (“Order”) fromthe Financial Services Agency (“FSA”) under the Article 51 of the Financial Instruments and Exchange Act,in connection with the Recommendation issued on April 13, 2012, by the Securities and Exchange
Surveillance Commission (“SESC”) to the FSA to take administrative action against SMBC Nikko in relation
to inadequate controls over undisclosed corporate information (hereafter, “Corporate Information”) andinappropriate solicitation.
In connection with the receipt of the Order, we express our deep regret and hereby apologize to ourcustomers and all related parties for the concerns and inconveniences we have caused.
The Order issued by the FSA is summarized below. We accept the Order very seriously and will devote ourbest efforts to prevent recurrence of such incidents.

1. Description of the Order(1) To establish an effective system of internal controls by re-examining the controls overCorporate Information including supervision of sales employees and implement any othernecessary improvement measures.
(2) To make the management and employees thoroughly aware of importance of compliance, byconducting comprehensive and extensive trainings to ensure sufficient understanding of laws
and regulations on the matter, including handling of Corporate Information.
(3) To clarify the responsible management and employees involved in this issue.
(4) To submit reports to the FSA on the implementation of the above-mentioned measures by May
18, 2012.

2. Our Action

We have implemented training and awareness programs to management and employees in aneffort to improve the situation. In addition, we will conduct the improvement measures as follows.
Moreover, in light of the gravity of the administrative order, we will also review the controls over
Corporate Information again and further consider the necessary improvement measures andsteadily put them into practice.

This material is an English translation of Japanese announcement made on April 20, 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.

(1) Establishment of a Task Force to Enhance Management of Corporate Information
In April 2012, we established a “Task Force to Enhance Management of CorporateInformation”, a subordinate body to the Compliance Committee which serves an advisory
function to the Board of Directors. We will monitor and enhance further reliable Corporate
Information controls.
(2) Enhancement of Securities Trading Supervisory Operation Division
We established a new Corporate Information Control Department within the Securities Trading
Supervisory Operation Division in March, 2012 to research relevant laws and regulations
concerning Corporate Information, to fully establish management and supervisory systems
regarding Corporate Information, and to enhance the monitoring capabilities with additional
staff.
(3) Provide More Sophisticated Training
We have provided all management and employees with annual training to reinforce andimprove training on Corporate Information management. And awareness program wasinitiated through training sessions starting January 2012. We will continue to provide highly
effective training programs to enhance the understanding of Corporate Information by all
managers and employees and increase their awareness of the importance of appropriate
control of Corporate Information.
(4) On-going Monitoring
After the incident subject to the Recommendation by the SESC, we have monitored alltransactions where SMBC Nikko assumed a role as lead manager in public offeringtransactions and found no problematic cases. We will continue to perform such on-going
monitoring of all the public offering transactions whenever we act as a lead manager.
(5) Clarifying Responsibilities
We will take appropriate actions with respect to the relevant persons involved pursuant to ourinternal rules.

###This material is an English translation of Japanese announcement made on April 20, 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.