Tokyo Stock Exchange Imposes A Penalty On Maruhachi Securities Co., Ltd.

TSE also requested Maruhachi Securities to submit a business improvement report regarding clarification of its management policy toward compliance of regulations and locus of responsibility, improvement of its internal control, measures to prevent the recurrence of the violation below, implementation of compliance training for directors and staff, and the establishment of effective schemes for strengthening of internal inspections.

An Executive Officer/Director of the Corporate department and 14 employees, in the course of business, concluded contracts with 32 clients to manage discretionary accounts for equities and bonds, which enabled them to decide issues, volume, price, and/or whether to purchase or sell without obtaining the individual consent of the clients. They accepted orders and executed them based on the contracts.

The above act is acknowledged to be an 'act of entering into a contract to manage a discretionary account' outlined in Item 5, Paragraph 1 of Article 42 under the Securities and Exchange Law.