Prevention of corruption

In line with the principles of the United Nations Global Compact, Daiwa Securities Group works to prevent corruption.

The Code of Ethics and Conduct, which guides the actions of officers and employees, stipulates that if corporate ethics and interests conflict with each other, corporate ethics should be prioritized and acts contrary to corporate ethics should never be performed. In addition, payment of any money or provision of convenience that is against the law is prohibited. Moreover, we prohibit the provision and receipt of economic benefits that may not be valid in the light of common wisdom, such as cash rewards as well as excessive entertainment and provision of gifts. For entertainment, we apply and manage in accordance with management rules on entertainment, and we have set special precautions especially for entertainment with government officials including those from foreign governments. The use status of entertainment expenses is appropriately monitored by voluntary self-inspection of each department and office and inspection by the Compliance Department. For officers, the corporate auditor checks at the annual interview with them the status of undertakings regarding the prevention of corruption.

Moreover, we do not provide financial contributions relating to political activities to those other than political parties or political investment groups. In providing support for activities of a political organization, we do so appropriately in compliance with the Political Funds Control Act, the Public Offices Election Act, and other relating laws and regulations. The total value of political contributions provided by Daiwa Securities Group Inc. was 32 million yen in FY2021, in FY2022 and also in FY2023.

In order to thoroughly prevent corruption, we carry out annual ethics training for all employees based on the Code of Ethics and Conduct. Each department and office emphasizes risk management by periodically implementing annual risk control self-assessment (RCSA) including the viewpoints of bribery and corruption.

We have also built a structure that prevents the fraudulent granting of benefits at overseas offices by establishing internal rules that suit local laws and regulations. Employees who conducted corruptions or violated the Code of Ethics and Conduct are subject to disciplinary action stipulated by Daiwa Securities Group Inc. depending on the scale and maliciousness of such act.
In FY2023, Daiwa Securities Group did not have any serious matters of note such as violations of laws and regulations related to the prevention of corruption.

Daiwa Securities Group Anti-Corruption Policy

The Daiwa Securities Group (the "Group") has established the following Anti-Corruption Policy based on its corporate philosophy. With high ethical standards, we strive to prevent corruption and ensure fair and sound relationships with all stakeholders including our customers with high ethical standards.

1.Prevention of corruption
The Group prohibits receiving and giving of any form of bribery. Also, the Group prohibits the receiving and giving of inappropriate entertainment, gift, facility, and other benefits that exceed acceptable limits under normal social conventions.
2.Management involvement
The management of the Group recognizes the importance of corporate ethics, sets a good model through its daily activities, and is responsible for preventing corruption.
3.Compliance with laws and regulations
The Group complies with anti-corruption laws and regulations and international treaties that apply in the jurisdictions where it does business. Relevant laws and regulations include the Unfair Competition Prevention Law (Japan), the Foreign Corrupt Practices Act (US), the Bribery Prevention Law (UK), the Commercial Bribery Regulations (China), and others.
4.Internal control
The Group appropriately prepares internal rules and other regulations regarding anti-corruption based on relevant laws and regulations. The Group regularly checks the operation and effectiveness of these internal rules to take necessary actions such as reviewing them.
5.Education / training
The Group provides all officers and employees with regular education and training on anti-corruption, such as the prohibition of bribery and raising awareness about the whistleblowing system.
6.Reporting / whistleblowing
The Group establishes a system for receiving reports or whistleblowing from officers and employees regarding activities that breach or might breach anti-corruption laws and regulations and internal rules and other regulations. The Group will thoroughly protect whistleblowers so that any officer or employee who reports will not be disadvantaged.
7.Dealing with breaches
If any officer or employee of the Group breaches relevant anti-corruption laws and regulations or internal rules, the Group will strictly apply the applicable sanction procedures based on internal rules.
8.Understanding and embedding the policy
All management and employees of the Group fully understand this policy and make annual attestation.