Following official approval given at the ordinary general shareholders' meeting held on June 23, 2004, the Daiwa Securities Group Inc. has executed a transition to a "committee system" of corporate governance.

The objectives for the transition to a committee system are followings:

1. An increase in the number of outside board members and the establishment of three committees; the Nominating, Audit and Compensation Committees. These committees will enhance the supervisory function of the Board and increase transparency of management.
2. Doubling as an executive officer of Daiwa Securities Group Inc. as well as a main officer of other Group companies will enhance the effectiveness and efficiency of segment strategies derived from Group strategies.
3. The transfer of authority from the Board to the Group Executive Officers will increase the flexibility of the decision-making process.