UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORMFORM 20-F

OR

For the fiscal year ended March 31, 20162019

OR

For the transition period from            to            

OR

Date of event requiring this shell company report

Commission file number:1-15270

Nomura Horudingusu Kabushiki Kaisha

(Exact name of registrant as specified in its charter)

Nomura Holdings, Inc.

(Translation of registrant’s name into English)

Takumi Kitamura,81-3-5255-1000,81-3-6746-7850

(Name, Telephone,E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of March 31, 2016, 3,608,391,9992019, 3,310,800,799 shares of Common Stock were outstanding, including 43,528,25129,311,158 shares represented by 43,528,25129,311,158 American Depositary Shares.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     x☒  Yes    ¨☐  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.     ¨☐  Yes    x☒  No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x☒    No  ¨☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of RegulationS-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     Yes  x☒    No  ¨☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer.filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and large accelerated filer”“emerging growth company” in Rule12b-2 of the Exchange Act. (Check one):

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.     ¨☐  Item 17    ¨☐  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act).    ¨☐  Yes    x☒  No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     ☐  Yes    ☐  No

TABLE OF CONTENTS

As used in this annual report, references to the “Company”, “Nomura”, the “Nomura Group”, “we”, “us” and “our” are to Nomura Holdings, Inc. and, except as the context otherwise requires, its consolidated subsidiaries. As part of certain line items in Nomura’s financial statements and information included in this annual report, references to “NHI” are to Nomura Holdings, Inc.

As used in this annual report, “yen” or “¥” means the lawful currency of Japan, “dollar” or “$” means the lawful currency of the United States of America (“U.S.”), and “EUR” means the lawful currency of the member states of the European Monetary Union.

As used in this annual report, “ADS” means an American Depositary Share, currently representing one share of the Company’s common stock, and “ADR” means an American Depositary Receipt evidencing one or more ADSs. See “Rights of ADR Holders” under Item 10.B of this annual report.

As used in this annual report, except as the context otherwise requires, the “Companies Act” means the Companies Act of Japan and the “FSA” means the Financial Services Agency of Japan.

Amounts shown in this annual report have been rounded to the nearest indicated digit unless otherwise specified. In tables and graphs with rounded figures, sums may not add up due to rounding.

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

A. Selected Financial Data

The following table presents selected financial information as of and for the years ended March 31, 2012, 2013, 2014, 2015, 2016, 2017, 2018 and 20162019 which is derived from our consolidated financial statements. The consolidated balance sheets for the years ended March 31, 20152018 and 2016,2019, the consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the years ended March 31, 2014, 20152017, 2018 and 2016,2019, and notes thereto appear elsewhere in this annual report. These financial statements are prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). Certain reclassifications of previously reported amounts have been made to conform to the current period presentation.

The selected consolidated financial information set forth below should be read in conjunction with Item 5. “Operating and Financial Review and Prospects” in this annual report and our consolidated financial statements and notes thereto included in this annual report.

Notes:

Foreign Exchange

Fluctuations in exchange rates between the Japanese Yen and U.S. Dollar will affect the U.S. Dollar equivalent of the Japanese Yen price of our common stocks and ADSs and the U.S. Dollar amounts received on conversion of cash dividends. The following table provides the noon buying rates for Japanese Yen in New York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York, expressed in Japanese Yen per $1.00.

D. Risk Factors.

Risk Factors

You should carefully consider the risks described below before making an investment decision. If any of the risks described below actually occurs, our business, financial condition, results of operations or cash flows could be adversely affected. In that event, the trading prices of our shares could decline, and you may lose all or part of your investment. In addition to the risks listed below, risks not currently known to us or that we now deem immaterial may also harm us and affect your investment.

Our business may be materially affected by financial markets, economic conditions and market fluctuations in Japan and elsewhere around the world

Our business and revenues may be affected by any adverse changes in the Japanese and global economic environments and financial markets.

For example, the global financial crisis that originated with the collapse of Lehman Brothers Holding Inc. (“Lehman Brothers”) in 2008, and the worsening of financial issues in the peripheral countries of the Eurozone in 2011, including Greece, have adversely influenced major global financial markets.

In addition, and as described later, not only purely economic factors but also future wars, acts of terrorism, economic or political sanctions, pandemics, forecasts of geopolitical risks and geopolitical events which have actually occurred, natural disasters or other similar events could have an effect on the financial markets and economies of each country. For example, in case the United Kingdom leaves the European Union, financial markets may be negatively impacted.

If any adverse events including those discussed above were to occur, a market or economic downturn may last for a long period of time, which could adversely affect our business and can result in us incurring substantial losses. Furthermore, unfavorable demographic trends, such as the long-term trends of population aging and population decline faced by Japan, are expected to continue to put downward pressure on demand in the businesses in which we operate, including, in particular, our retail business. Even in the absence of a prolonged market or economic downturn, changes in market volatility or governmental fiscal and monetary policy changes in Japan, or in any other country or region where we conduct business and other changes in the environment may adversely affect our business, financial condition and results of operations. The following are certain risks related to the financial markets and economic conditions for our specific businesses.

MonetaryGovernmental fiscal and monetary policy changes by central banksin Japan, or in any other country or region where we conduct business may affect our business, financial condition and results of operations

We engage in our business globally through domestic and international offices. Governmental fiscal, monetary and other policy changes in Japan, or in any other country or region where we conduct business may affect our business, financial condition and results of operations. In recent years, central banks in many major economies have been pursuing an expansionaryaddition, any changes to the monetary policy including in some cases the introduction of negative interest rates. For example, the European Central Bank started to impose negative interest rate in June 2014 in order to counter low inflation. The Bank of Japan also announced the introduction of “Quantitative and Qualitative Monetary Easing with a Negative Interest Rate” in January 2016 in order to achieve price stability. As part of this policy, the Bank of Japan has implemented additional monetary easing measures and started to apply a negativeor central banks in major economies worldwide, which could potentially be followed by volatility of interest rate to the outstanding balance of current accounts at the Bank of Japan which exceeds a certain balance. The prolonged implementation of a negative interest rate policy or the further lowering of negative interest rates in one or more countries as well as further decreases in yields of financial assets in the financial markets may negatively affect our ability to provide asset management products to our clients as well as our and our clients’ trading and investment activities, whichas exemplified by decreased returns for fixed income products in turn could have an adversethe prolonged low interest rate environment in Japan.

Brexit may adversely affect our business on various fronts

As a result of the national referendum took place on June 23, 2016, the United Kingdom (“U.K.”) is due to leave the European Union (“EU”) (“Brexit”) sometime in the near future. Although, under the current agreement between the U.K. and the EU in accordance with the Article 50(3) of the Treaty on the European Union, Brexit is required to occur by the end of October 2019 at the latest, the final timing of Brexit is still uncertain, and Brexit may not occur at all. Moreover, if Brexit does occur, the final form and substance of Brexit remain undecided, and many other uncertainties still remain.

Because we conduct a substantial level of business throughout Europe where London is our regional hub, Brexit may adversely affect our business on various fronts. Currently, our regulated activities in European region are carried out mainly through Nomura International plc (“NIP”), our broker-dealer arm established in London. NIP has access to the entire European Economic Area (“EEA”) through providing cross-border services under the relevant EU single market legislation known as “passporting rights”. If Brexit happens without any agreement between the U.K. and the EU in respect of continuation of access for financial services, including passporting rights, NIP may lose access to the EEA and, as a result, our revenue and profitability from business

in the European region may be adversely affected. This situation would also similarly apply to other group entities operating in the European region.

In order to address such potential impact on our business, we have established a new broker-dealer entity, Nomura Financial Products Europe GmbH (“NFPE”) as a licensed broker-dealer in the Federal Republic of Germany. As a German entity, NFPE is eligible for passporting rights after Brexit, if it occurs. However, as discussed below, a number of uncertainties affecting our business in the European region will remain regardless of establishment of NFPE.

For example, the form and substance of the final agreement over Brexit between the U.K. and the EU may adversely affect our business in the European region. Moreover, if no agreement is reached, Brexit may occur in a disorderly manner, which may adversely affect financial conditionstability both in the U.K. and resultsthe wider European region. Any market turmoil and increased volatility due to a disorderly Brexit may adversely affect our business, with potentially severe liquidity and operational pressures on our financial position, particularly in the short term. If the U.K. and EU agree on a longer transition period for maintaining the status quo until final agreement for a future relationship becomes effective, this may affect the behavior of operations.market participants and their potential response to Brexit. For example, market participants may postpone or cancel transactions or other activities that they would otherwise engage in, which may adversely affect our revenues and profitability.

Depending on the content of any future agreement between the U.K. and the EU, the wider financial system and regulatory and supervisory regime in European region may also be substantially changed, which could adversely affect our business as well. Euro-denominated financial transactions in the market, which are currently centralized in London, in particular may be affected by any regulatory regime emerging after Brexit in terms of the physical location for financial market infrastructure, liquidity provision and pricing. Operating conditions for financial institutions and financial market infrastructures may also become more stringent for all market participants depending on the content of any such new regulatory or supervisory regime.

These potential changes in the relevant regulatory or supervisory regimes in the wider financial system may accelerate fragmentation of the financial markets and, as a result, we may be adversely affected due to increasing operating costs, which could impact on our profitability. Such increased operating costs may result from a number of factors, including the introduction or modification of regulatory requirements such as regulatory capital, liquidity, governance, risk management control and overall entity structure planning.

Overall, Brexit poses a high level of potentially prolonged uncertainties both politically and economically, mainly in the U.K. and the EU. There may also be certain extraterritorial effects in markets outside of the region. These uncertainties, together with other potential developments such as rising trade tensions, may add further downward pressure to the world economic growth and global financial stability and, as a result, we may see lower liquidity in financial markets, an unexpected increase in volatility across various asset classes, higher funding costs, a trend towards increasing risk averseness in investment activities and negative business sentiment, all of which may adversely affect our business.

Our brokerage and asset management revenues may decline

A market downturn could result in a decline in the revenues generated by our brokerage business because of a decline in the volume and value of securities that we broker for our clients. Also, within our asset management business, in most cases, we charge fees and commissions for managing our clients’ portfolios that are based on

the market value of their portfolios. A market downturn that reduces the market value of our clients’ portfolios may increase the amount of withdrawals or reduce the amount of new investments in these portfolios, and would reduce the revenue we receive from our asset management business. Also, any changes in our clients’ investment preference on their asset portfolios, including shifting investment assets to stable assets such as deposits and/or passive funds, which bring relatively low commission rates, may reduce our revenue as well.

Our investment banking revenues may decline

Changes in financial or economic conditions would likely affect the number and size of transactions for which we provide securities underwriting, financial advisory and other investment banking services. Our investment banking revenues, which include fees from these services, are directly related to the number and size of the transactions in which we participate and would therefore decrease if there are financial and market changes unfavorable to our investment banking business and our clients. For example, due in part to the continued slowdown in financing activities resulting primarily from the worsened and prolonged impact of the European sovereign debt crisis in 2011, our Investment Banking net revenue for the years ended March 31, 2012 and March 31, 2013 decreased by 15.9% and 15.0% from the previous years, respectively.

Our electronic trading business revenues may decline

Electronic trading is essential for our business in order to execute trades faster with fewer resources. Utilizing these systems allows us to provide an efficient execution platform andon-line content and tools to our clients via exchanges or other automated trading facilities. Revenue from our electronic trading, which includes trading commissions andbid-offer spreads from these services, are directly correlated with the number and size of the transactions in which we participate and would therefore decrease if there are financial market or economic changes that would cause our clients to trade less frequently or in a smaller amounts. In addition, the use of electronic trading has increased across capital markets products and has put pressure on trading commissions andbid-offer spreads in our industry due to the increased competition of our electronic trading business. Although trade volumes may increase due to the availability of electronic trading, this may not be sufficient to offset margin erosion in our execution business, leading to a potential decline in revenue generated from this business. We continue to invest in developing technologies to provide an efficient trading platform; however, we may fail to maximize returns on these investments due to this increased pressure on lowering margins.

We may incur significant losses from our trading and investment activities

We maintain large trading and investment positions in fixed income, equity and other markets, both for proprietary purposes and for the purpose of facilitating our clients’ trades. Our positions consist of various types of assets, including securities, derivatives transactions with equity, interest rate, currency, credit and other underlyings,underliers, as well as loans, reverse repurchase agreements and real estate. Fluctuations in the markets where these assets are traded can adversely affect the value of these assets. To the extent that we own assets, or have long positions, a market downturn could result in losses if the value of these long positions decreases. Furthermore, to the extent that we have not kept assets and sold assets that we do not own,them, or have short positions, an upturn in prices of the assets could expose us to potentially significant losses. Although we seekcontinue to mitigate these position risks with a variety of hedging techniques, these market movements could result in us incurring losses. Wewe may also incur losses if the value of these assets are fluctuated or if the financial system is overly stressed and the markets move in a way we have not anticipated.

Our businesses have been, and may continue to be, affected by changes in market volatility levels. Certain of our trading businesses such as those engaged in trading and arbitrage opportunities depend on market volatility to generate revenues. Lower volatility may lead to a decrease in business opportunities which may affect the results of operations of these businesses. On the other hand, higher volatility, while it can increase trading volumes and spreads, also increases risk as measured byValue-at-Risk (“VaR”) and may expose us to higher risks in connection with our market-making and proprietary businesses. Higher volatility can also cause us to reduce the outstanding positions or size of these businesses in order to avoid increasing our VaR.

Furthermore, we commit capital to take relatively large positions for underwriting or warehousing assets to facilitate certain capital market transactions. We also structure and take positions in pilot funds for developing financial investment products and invest seed money to set up and support financial investment products. We may incur significant losses from these positions in the event of significant market fluctuations.

In addition, if we are the party providing collateral in a transaction, significant declines in the value of the collateral or a requirement to provide additional collateral due to a decline in our creditworthiness (by way of a

lowered credit rating or otherwise) can increase our costs and reduce our profitability. On the other hand, if we are the party receiving collateral from our clients and counterparties, such declines may also affect our profitability due to decrease in client transactions. Assuming aone-notch andtwo-notch downgrade of our credit ratings on March 31, 2016,2019, absent other changes, we estimate that the aggregate fair value of assets that will be required to postbe posted as additional collateral in connection with our derivative contracts would have been approximately ¥24.9¥6.2 billion and ¥46.2¥51.4 billion, respectively.

Transition from IBORs to alternative rate indices may adversely affect our business

We trade interest rate swaps and other derivatives and underwrite bonds and loans which refer to Interbank Offered Rates (“IBORs”) such as the London Interbank Offered Rate (“LIBOR”). Following the LIBOR manipulation scandal in 2012, the Chief Executive of the U.K. Financial Conduct Authority (“FCA”), which regulates LIBOR, announced on July 27, 2017 that FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021, and indicated that the continuation of LIBOR on the current basis cannot and will not be guaranteed after 2021. Since then, the Financial Stability Board (“FSB”) has observed structural declines in liquidity of the interbank short term funding including IBORs. The regulators and the finance industry have responded and are discussing the development of alternatives to IBORs and how to transfer existing contracts and products to such alternative rates. Some IBORs are expected to be replaced by the end of 2021. Such transfers will involve the development of new calculation methods for alternative rates, revisions to relevant contracts and modifications to the application of accounting principles to the relevant transactions. These changes could require us to incur additional costs and subject us to risks associated with systematic reform, operational application and client disclosure, or adversely impact the pricing, volatility and liquidity of financial products including derivatives, bonds and loans which refer IBORs as floating rate. Therefore, our business, financial condition and results of operations could be impacted materially adversely and/or we could be subject to disputes, litigation or other actions with counterparties or relative participants.

We have established a firmwide IBOR transition program to manage the transition away from these IBORs. However, the regulatory and industry responses to these developments are the subject of significant uncertainty, and we may not be successful in managing this transition without potentially serious disruption to our business.

Holding large and concentrated positions of securities and other assets may expose us to large losses

Holding large and concentrated positions of certain securities can expose us to large losses in our businesses such as market-making, block trading, underwriting, asset securitization, acquiring newly-issued convertible debt securities through third-party allotment or providing business solutions to meet clients’ needs. We have committed substantial amounts of capital to these businesses. This often requires us to take large positions in the securities of a particular issuer or issuers in a particular industry, country or region. We generally have higher exposure to those issuers engaged in financial services businesses, including commercial banks, broker-dealers, clearing houses, exchanges and investment companies. There may also be cases where we hold relatively large amounts of securities by issuers in particular countries or regions due to the business we conduct with our clients or our counterparties. In addition, we may incur substantial losses due to market fluctuations on asset-backed securities such as residential mortgage-backed securities (“RMBS”) and commercial mortgage-backed securities (“CMBS”).

Extended market declines and decreases in market participants can reduce liquidity and lead to material losses

Extended market declines can reduce the level of market activity and the liquidity of the assets traded in those markets in which we operate. Market liquidity may also be affected by decreases in market participants that could occur, for example, if financial institutions scale back market-related businesses due to increasing regulation or other reasons. As a result, it may be difficult for us to sell, hedge or value such assets which we hold. Also, in the event that a market fails in pricing such assets, it will be difficult to estimate their value. If we cannot properly close out or hedge our associated positions in a timely manner or in full, particularly with respect

toOver-The-Counter (“OTC”) derivatives, we may incur substantial losses. Further, if the liquidity of a market significantly decreases and the market may become unable to price financial instruments held by us, this could lead to unanticipated losses.

Our hedging strategies may not prevent losses

We use a variety of financial instruments and strategies to hedge our exposure to various types of risk. If our hedging strategies are not effective, we may incur losses. We base many of our hedging strategies on historical trading patterns and correlations. For example, if we hold an asset, we may hedge this position by taking a position in another asset which has, historically, moved in a direction that would offset a change in value of the former asset. However, historical trading patterns and correlations may not continue, as seen in the case of past financial crises, and these hedging strategies may not be fully effective in mitigating our risk exposure because we are exposed to all types of risk in a variety of market environments.

Our risk management policies and procedures may not be fully effective in managing market risk

Our policies and procedures to identify, monitor and manage risks may not be fully effective. Although some of our methods of managing risk are based upon observed historical behavior of market data, the movement of each data in future financial market may not be the same as was observed in the past. As a result, we may

suffer large losses through unexpected future risk exposures. Other risk management methods that we use also rely on our evaluation of information regarding markets, clients or other matters, which is publicly available or otherwise accessible by us. This information may not be accurate, complete,up-to-date or properly evaluated, and we may be unable to properly assess our risks, and thereby suffer large losses. Furthermore, certain factors, such as market volatility, may render our risk evaluation model unsuitable for a new market environment. In such event, we may become unable to evaluate or otherwise manage our risks adequately.

Market risk may increase other risks that we face

In addition to the potentially adverse effects on our businesses described above, market risk could exacerbate other risks that we face. For example, the risks inherent in financial instruments developed through financial engineering and innovation may be increased by market risk.

Also, if we incur substantial trading losses caused by our exposure to market risk, our need for liquidity could rise sharply while our access to cash may be impaired as a result of market perception of our credit risk.

Furthermore, in a market downturn, our clients and counterparties could incur substantial losses of their own, thereby weakening their financial condition and, as a result, increasing our credit risk exposure to them.

We may have to recognize impairment charges with regard to the amount of goodwill, tangible and intangible assets recognized on our consolidated balance sheets

We have purchased all or a part of the equity interests in, or operations from, certain other companies in order to pursue our business expansion, and expect to continue to do so when and as we deem appropriate. We account for certain of those and similar purchases and acquisitions as a business combination under U.S. GAAP by allocating our acquisition costs to the assets acquired and liabilities assumed and recognizing the remaining amount as goodwill. We also possess tangible and intangible assets other than those stated above.

We may have to recognize impairment charges, as well as other losses associated with subsequent transactions, with regard to the amount of goodwill, tangible and intangible assets and, if recognized, such changes may adversely affect our financial condition and results of operations. For example, during the yearsyear ended March 31, 2014 and March 31, 20152019, we recognized an impairment loss on goodwill impairment chargesin our Wholesale segment attributable to previous overseas acquisitions of ¥2,840 million and ¥3,188 million, respectively.¥81,372 million.

Liquidity risk could impair our ability to fund operations and jeopardize our financial condition

Liquidity, or having ready access to cash, is essential to our business. We define liquidity risk as the risk of loss arising from difficulty in securing the necessary funding or from a significantly higher cost of funding than normal levels due to deterioration of our creditworthiness or deterioration in market conditions. In addition to maintaining a readily available cash position, we seek to secure ample liquidity through repurchase agreements and securities lending transactions, long-term borrowings and the issuance of long-term debt securities, diversification of our short-term funding sources such as commercial paper, and by holding a portfolio of highly liquid assets. We bear the risk that we may lose liquidity under certain circumstances, including the following:

We may be unable to access unsecured or secured funding

We continuously access unsecured funding from issuance of securities in the short-term credit markets and debt capital markets as well as bank borrowings to finance ourday-to-day operations, including refinancing. We also enter into repurchase agreements and securities lending transactions to raise secured funding for our trading businesses. An inability to access unsecured or secured funding or funding at significantly higher cost than normal levels could have a substantial negative effect on our liquidity. For example, lenders could refuse to extend the credit necessary for us to conduct our business based on their assessment of our long-term or short-term financial prospects if:

In addition to the above, our ability to borrow in the debt capital markets could also be adversely impacted by factors that are not specific to us, such as reductions in banks’ lending capacity, a severe disruption of the financial and credit markets, negative views about the general prospects for the investment banking, brokerage or financial services industries, or negative market perceptions of Japan’s financial soundness.

We may be unable to sell assets

If we are unable to raise funds or if our liquidity declines significantly, we will need to liquidate assets or take other actions in order to meet our maturing liabilities. In volatile or uncertain market environments, overall market liquidity may decline. In a time of reduced market liquidity, we may be unable to sell some of our assets, or we may have to sell at depressed prices, which could adversely affect our results of operations and financial condition. Our ability to sell assets may also be adversely impacted by other market participants seeking to sell similar assets into the market at the same time.

Lowering of our credit ratings could impact our funding

Our funding depends significantly on our credit ratings. Rating agencies may reduce or withdraw their ratings or place us on “credit watch” with negative implications. Future downgrades could increase our funding costs and limit our funding. This, in turn, could adversely affect our result of operations and our financial condition. In addition, other factors which are not specific to us may impact our funding, such as negative market perceptions of Japan’s financial soundness.

Event risk may cause losses in our trading and investment assets as well as market and liquidity risk

Event risk refers to potential losses we may suffer through unpredictable events that cause large unexpected market price movements such as natural orman-made disasters, epidemics, acts of terrorism, armed conflicts or

political instability, as well as adverse events specifically affecting our business activities or counterparties. These events include not only significant events such as the terrorist attacks in the U.S. on September 11, 2001, U.S. subprime issues since 2007, the global financial and credit crisis in the autumn of 2008, the Great East Japan Earthquake in March 2011, fiscal problemsthe increasing tensions on Korean Peninsula following North Korean nuclear tests in 2017, and sudden and unexpected developments in global trade or security policies such as tensions between the U.S.United States and European countries which became apparent starting the same year, the political crisisChina in Ukraine which began in late 2013, the terrorist attacks in Paris in November 20152018 and the terrorist attacks in Brussels in March 2016,2019 but also more specifically the following types of events that could cause losses in our trading and investment assets:

We may be exposed to losses when third parties that are indebted to us do not perform their obligations

Our counterparties are from time to time indebted to us as a result of transactions or contracts, including loans, commitments to lend, other contingent liabilities and derivative transactions. We may incur material losses

when our counterparties default or fail to perform on their obligations to us due to their filing for bankruptcy, a deterioration in their creditworthiness, lack of liquidity, operational failure, an economic or political event, repudiation of the transaction or for other reasons.

Credit risk may also arise from:

Issues related to third party credit risk may include the following:

Defaults by a large financial institution could adversely affect the financial markets generally and us specifically

The commercial soundness of many financial institutions is closely interrelated as a result of credit, trading, clearing or other relationships among the institutions. As a result, concern about the creditworthiness of or a default by, a certain financial institution could lead to significant liquidity problems or losses in, or defaults by, other financial institutions. This may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which we interact on a daily basis. Actual defaults, increases in perceived default risk and other similar events could arise in the future and could have an adverse effect on the financial markets and on us. Our funding operations may be adversely affected if major financial institutions, Japanese or otherwise, fail or experience severe liquidity or solvency problems.

There can be no assurance as to the accuracy of the information about, or the sufficiency of the collateral we use in managing, our credit risk

We regularly review our credit exposure to specific clients or counterparties and to specific countries and regions that we believe may present credit concerns. Default risk, however, may arise from events or circumstances that are difficult to detect, such as account-rigging and fraud. We may also fail to receive full

information with respect to the risks of a counterparty. In addition, in cases where we have extended credit against collateral, we may fall into a deficiency in value in the collateral if sudden declines in market values reduce the value of our collateral.

Our clients and counterparties may be unable to perform their obligations to us as a result of political or economic conditions

Country, regional and political risks are components of credit risk, as well as market risk. Political or economic pressures in a country or region, including those arising from local market disruptions or currency crises, may adversely affect the ability of clients or counterparties located in that country or region to obtain credit or foreign exchange, and therefore to perform their obligations owed to us.

The financial services industry faces intense competition

Our businesses are intensely competitive, and are expected to remain so. We compete on the basis of a number of factors, including transaction execution capability, our products and services, innovation, reputation and price. We have experienced intense price competition, particularly in brokerage, investment banking and other businesses.

Competition with commercial banks, commercial bank-owned securities subsidiaries,non-Japanese firms and non-Japaneseonline securities firms in the Japanese market is increasing

Since the late 1990s, the financial services sector in Japan has undergone deregulation. In accordance with the amendments to the Securities and Exchange Law of Japan (which has been renamed as the Financial Instruments and Exchange Act of Japan (“FIEA”) since September 30, 2007), effective from December 1, 2004, banks and certain other financial institutions became able to enter into the securities brokerage business. In addition, in accordance with the amendments to the FIEA effective from June 1, 2009, firewalls between commercial banks and securities firms were deregulated. Therefore, asderegulated, and our competitors will be able to cooperate more closely with their affiliated commercial banks, banks and other types of financial services firms can compete with us tobanks. As a greater degree than they could before deregulation in the areas of financing and investment trusts. Among others,result, securities subsidiaries of commercial banks andnon-Japanese firms with increased competitiveness have been affecting our market shares in the sales and trading, investment banking and retail businesses. In recent years, the rise of online securities firms has further intensified the competition. In order to address such changes in the competitive landscape, we have taken certain measures, including the establishment of a business alliance with a social networking and messaging service provider. However, these measures may not be successful in growing or maintaining our market share in this increasingly fierce competitive environment, and we may lose business or transactions to our competitors, harming our business and results of operations.

Increased consolidation, business alliance and cooperation in the financial services groups industry mean increased competition for us

There has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of large commercial banks and other broad-based large financial services groups have established or acquired broker-dealers or have consolidated with other financial institutions. Recently, these large financial services groups have been further developing business linkage within their respective groups in order to provide comprehensive financial services to clients. These financial services groups continue to offer a wide range of products, including loans, deposit-taking, insurance, brokerage, asset management and investment banking services within their group, which may enhance their competitive position compared with us. They also have the ability to supplement their investment banking and brokerage businesses with commercial banking and other financial services revenues in an effort to gain market share. In addition, the financial services industry has seen collaboration beyond the borders of businesses and industries, such as alliances between commercial banks and securities companies outside of framework of existing corporate groups and recent alliances withnon-financial companies including emerging companies. Our competitiveness may be adversely affected if our competitors are able to expand their businesses and improve their profitability through such business alliances.

Our global business strategies mayhave not resultresulted in the anticipated outcome due to competition with other financial services firms in international marketsdate, and the failurewe may not be able to realize the full benefit of management resource reallocationsuccessfully rebuild them

We continue to believe there are significant opportunities in the international markets, but there is also significant competition associated with such opportunities. In order to take advantage of these opportunities, we will have to compete successfully with financial services firms based in importantnon-Japanese markets, including the U.S., Europe and Asia. Under such competitive environment, as a means to bolster our international operations, we acquired certain Lehman Brothers operations in Europe, the Middle East and Asia in 2008 and we have invested significant management resources to maintain and develop our operations in these regions and the U.S. After the acquisition, however, market structures have changed drastically due to the scaling back of market-related businesses by European financial institutions and the monetary easing policies by central banks of each country, resulting in decline in whole market liquidity. In light of this challenging business environment, we have endeavored to reallocate our management resources to optimize our global operations and thereby improve our profitability. For example, we announced strategic changesHowever, due in part to the challenging environment facing these businesses, the bulk of which are within our Wholesale segment, performance has been weaker than expected, and we recognized an impairment loss of ¥81,372 million in the fiscal year ended March 31, 2019 attributable to the Wholesale segment. If we are not able to successfully restructure and revitalize these businesses, in EMEA and the Americas in April 2016, in order to reallocate resources towards our areas of expertise and most profitable business lines. However, failure to realize the full benefits of these efforts may adversely affectincluded as described below, our global businesses, financial condition and results of operations.

Operational risk is inherent in all our products, activities, processes and systems which therefore can potentially have a direct financial impact on us or an indirect financial impact through a disruption to our business, regulatory sanctions, loss of clients, reputational damage or damage to the health and safety of our management and employees. While we have established a robust framework to manage and mitigate the impact of operational risks within us, prevention of the following key specific types of key operational risks occurring remains challenging:

Misconduct or fraud by an employee, director or officer, or any third party, could occur, and our reputation in the market and our relationships with clients could be harmed

We face the risk that our employees, directors or officers, or any third party, could engage in misconduct that may adversely affect our business. Misconduct by an employee, director or officer includes conduct such as entering into transactions in excess of authorized limits, acceptance of risks that exceed our limits, or concealment of unauthorized or unsuccessful activities. The misconduct could also involve the improper use or disclosure ofnon-public information relating to us or our clients, such as insider trading and the recommendation of trades based on such information, as well as other crimes, which could result in regulatory sanctions, legal liability and serious reputational or financial damage to us.

For example, on March 5, 2019, a researcher at Nomura Research Institute, Ltd. (“NRI”), our equity-method affiliate, revealed information that there was a high possibility that the standard for designating the top market of the Tokyo Stock Exchange (the “TSE”) would fall to ¥25 billion, which had been under review at the TSE, to a chief strategist (the “NSC Strategist”) in the research division of Nomura Securities Co., Ltd. (“NSC”). The researcher at NRI was a member of the Advisory Group to Review the TSE Equity Market Structure and received this information in such capacity. On the same day and the next day, the NSC Strategist communicated the information to certain people including members of Japanese stock sales team of NSC and Nomura International (Hong Kong) Limited, some of whom provided the information to their institutional investor clients. Although these our providing the information did not represent a violation of law, they were inappropriate conducts and impaired the implicit trust placed in us and our employees by other market participants. Following a special internal investigation conducted by external experts, on May 24, 2019, we announced a remediation plan and the reduction of compensation of certain of our executives and those of NSC. On May 28, 2019, the FSA issued a business improvement order to us and to NSC, requiring us to clarify responsibility for this incident, develop and submit a detailed improvement plan, and report periodically on the implementation and effectiveness of measures for improvement. However, our remediation plan may not be successful in preventing similar future incidents due to misconduct by third parties and other factors. Furthermore, the extent of the damage by such business improvement order to our reputation and our business is not certain at this point.

Although we have precautions in place to detect and prevent such misconduct in the future, the measures we have implemented or may implement may not be effective in all cases, and we may not always be able to detect or deter misconduct by an employee, director or officer. If any administrative or judicial sanction is issued against us as a result of such misconduct, we may lose business opportunities for a period of time, even after the sanction is lifted, if and to the extent that our clients, especially public institutions, decide not to engage us for their financial transactions.

Third parties may also engage in fraudulent activities, including devising a fraudulent scheme to induce our investment, loans, guarantee or any other form of financial commitment, both direct and indirect. Because of the broad range of businesses that we engage in and the large number of third parties with whom we deal in ourday-to-day business operations, such fraud or any other misconduct may be difficult to prevent or detect.

We may not be able to recover the financial losses caused by such activities and our reputation may also be damaged by such activities.

A failure to identify and appropriately address conflicts of interest could adversely affect our business

We are a global financial institution that provides a wide range of products and services to a diverse group of clients, including individuals, corporations, other financial institutions and governmental institutions. As such, we face potential conflicts of interest in the ordinary course of our business. Conflicts of interests can arise when our services to a particular client conflict or compete, or are perceived to conflict or compete, with our own interests. In addition, wherenon-public information is not appropriately restricted or shared within the firm, conflicts of interest can also arise where a transaction within the Nomura Group and/or a transaction with another client conflict or compete, or is perceived to conflict or compete, with a transaction with a particular client. While we have extensive internal procedures and controls designed to identify and address conflicts of interest, a failure, or a perceived failure, to identify, disclose and appropriately address such conflicts could adversely affect our reputation and the willingness of current or potential clients to do business with us. In addition, conflicts of interest could give rise to regulatory actions or litigation.

Our business is subject to substantial legal, regulatory and reputational risks

Substantial legal liability or a significant regulatory action against us could have a material financial effect on us or cause reputational harm to us, which in turn could adversely affect our business prospects, financial

condition and results of operations. Also, material changes in regulations applicable to us or to the markets in which we operate could adversely affect our business. See Note 21“Commitments, contingencies and guarantees” in our consolidated financial statements included in this annual report for further information regarding the significant investigations, lawsuits and other legal proceedings that we are currently facing.

Our exposure to legal liability is significant

We face significant legal risks in our businesses. These risks include liability under securities or other laws in connection with securities underwriting and offering transactions, liability arising from the purchase or sale of any securities or other financial products, disputes over the terms and conditions of complex trading arrangements or the validity of contracts for our transactions, disputes with our business alliance partners and legal claims concerning our other businesses.

During a prolonged market downturn or upon the occurrence of an event that adversely affects the market, we would expect claims against us to increase. We may also face significant litigation. The cost of defending such litigation may be substantial and our involvement in litigation may damage our reputation. In addition, even legal transactions might be subject to adverse public reaction according to the particular details of such transactions. These risks may be difficult to assess or quantify and their existence and magnitude may remain unknown for substantial periods of time. See Note 20“Commitments, contingencies and guarantees” in our consolidated financial statements included in this annual report for further information regarding the significant investigations, lawsuits and other legal proceedings that we are currently facing.

Extensive regulation of our businesses limits our activities and may subject us to significant penalties and losses

The financial services industry is subject to extensive regulation. We are subject to increasing regulation by governmental and self-regulatory organizations in Japan and in virtually all other jurisdictions in which we operate, and such governmental and regulatory scrutiny may increase as our operations expand or as laws change. In addition, while regulatory complexities increase, possibilities of extra-territorial application of a regulation in one jurisdiction to business activities outside of such jurisdiction may also increase. These regulations are broadly designed to ensure the stability of financial systems and the integrity of the financial markets and financial institutions, and to protect clients and other third parties who deal with us, and often limit our activities and/or affect our profitability, through net capital, client protection and market conduct requirements. In addition, on top of traditional finance-related legislation, the scope of laws and regulations applying to, and/or impacting on, our operations may become wider depending on the situation of the wider international political and economic environment or policy approaches taken by governmental authorities in respect of regulatory application or law enforcement. In particular, the number of investigations and proceedings against the financial services industry by governmental and self-regulatory organizations has increased substantially and the consequences of such investigations and proceedings have become more severe in recent years, and we are subject to face the risk of such investigations and proceedings. For example, the U.S. Department of Justice (the “DOJ”) conducted an investigation regarding residential mortgage-backed securities securitized by some of our U.S. subsidiaries prior to 2009. On October 15, 2018, the U.S. subsidiaries settled the investigation with the DOJ and agreed to pay USD 480 million. Although we have policies in place to prevent violations of such laws and regulations, we may not always be able to prevent violations, and we could be fined, prohibited from engaging in some of our business activities, ordered to improve our internal governance procedures or be subject to revocation of our license to conduct business. Our reputation could also suffer from the adverse publicity that any administrative or judicial sanction against us may create, which may negatively affect our business opportunities and ability to secure human resources. As a result of any such sanction, we may lose business opportunities for a period of time, even after the sanction is lifted, if and to the extent that our clients, especially public institutions, decide not to engage us for their financial transactions. In addition, certain market participants may refrain from investing in or entering into transactions with us if we engage in business activities in regions subject to international sanctions, even if our activities do not constitute violations of sanctions laws and regulations.

Tightening of regulations applicable to the financial system and financial industry could adversely affect our business, financial condition and results of operations

If regulations that apply to our businesses are introduced, modified or removed, we could be adversely affected directly or through resulting changes in market conditions. The impact of such developments could make it economically unreasonable for us to continue to conduct all or certain of our businesses, or could cause us to incur significant costs to adjust to such changes.

In particular, various reforms to financial regulatory frameworks, includingFurthermore, the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in the U.S. and various proposals to strengthen financial regulation in the European Union and the United Kingdom (“U.K.”), have been put in place. The exact details of the implementation of these proposals for regulatory change and its impact on us will depend on the final regulations as they become ultimately adopted by various governmental agencies and oversight boards. See Item 4.B “Business Overview—Regulation” in this annual report for more information about such regulations.

New regulations or revisions to existing regulations relating to accounting standards, regulatory capital adequacy ratios, liquidity ratios and leverage ratios applicable to us could also have a material adverse effect on our business, financial condition and results of operations. Such new regulations or revisions to existing regulations include theso-called Basel III package formulated by the Basel Committee on Banking Supervision (“Basel Committee”), some rules and the finalized Basel III reforms published in December 2017. Furthermore, in October 2012, the Basel Committee developed and published a set of whichprinciples on the assessment methodology and higher loss absorbency requirements for domestic systemically important banks(“D-SIBs”), and, in December 2015, the FSA identified us as aD-SIB and imposed a surcharge of 0.5% on our required capital ratio after March 2016 with3-year transitional arrangement. In addition, FSB published the final standard requiring global systemically important banks(“G-SIBs”) to maintain a certain level of total loss-absorbing capacity (“TLAC”) upon their failure in November 2015. Under the FSA’s policy implementing the TLAC framework in Japan as updated in April 2018, the TLAC requirements in Japan apply not only to JapaneseG-SIBs but also to JapaneseD-SIBs that are stilldeemed (i) of particular need for a cross-border resolution arrangement and (ii) of particular systemic significance to Japanese financial system if they fail. Based on the revised policy, in March 2019, the FSA published the notices and guidelines of TLAC regulations in Japan. According to these notices and guidelines, Nomura will be finalized and/or implemented.subject to the TLAC requirements in Japan from March 31, 2021 although Nomura is not identified as aG-SIB as of the date of this annual report. These changes in regulations may increase our funding costs or require us to liquidate financial instruments and other assets, raise additional capital or otherwise restrict our business activities in a manner that could increase our funding costs or could otherwise adversely affect our operating or financing activities or the interests of our shareholders. Furthermore, the Financial Stability Board (“FSB”) and the Basel Committee annually update the list of global systemically important banks (“G-SIBs”) identified by financial regulators and additional regulatory capital requirements imposed on those G-SIBs. Additionally, G-20 Finance Ministers and Central Bank Governors requested the FSB and the Basel Committee to expand the G-SIB framework to domestic systemically important banks (“D-SIBs”), and in October 2012, the Basel Committee developed and published a set of principles on the assessment methodology and higher loss absorbency requirements for D-SIBs. In December 2015, the FSA identified us as a D-SIB and imposed a surcharge of 0.5% on our required capital ratio after March 2016 over a 3-year transitional period. This may result in additional costs and impact on us as described above.

Deferred tax assets may be impacted due to a change in business condition or in laws and regulations, resulting in an adverse effect on our operating results and financial condition

We recognize deferred tax assets in our consolidated balance sheets as a possible benefit of tax relief in the future. If we experience or forecast future operating losses, if tax laws or enacted tax rates in the relevant tax jurisdictions in which we operate change, or if there is a change in accounting standards in the future, we may reduce the deferred tax assets recognized in our consolidated balance sheets. As a result, it could adversely affect our financial condition and results of operations. See Note 1516“Income taxes” in our consolidated financial statements included in this annual report for further information regarding the deferred tax assets that we currently recognize.

Misconduct or fraudUnauthorized disclosure of personal information held by an employee, director or officer, or any third party, could occur, and our reputation in the market and our relationships with clients could be harmed

We face the risk that misconduct by an employee, director or officer, or any third party, could occur whichus may adversely affect our business. Misconduct by an employee, director or officer can include, for example, entering into transactions in excess of authorized limits, acceptance of risks that exceed our limits, or concealment of unauthorized or unsuccessful activities. The misconduct could also involve the improper use or disclosure of our or our clients’ non-publicbusiness

We keep and manage personal information such as insider trading and the recommendation of trades based on such information, and other financial crimes, which could result in regulatory sanctions, legal liability and serious reputational or financial damage to us.

In August 2012, Nomura Securities Co., Ltd. (“NSC”), a subsidiary of the Company, received a business improvement orderobtained from the FSA with respect to flaws recognizedclients in connection with our business. In recent years, there have been many reported cases of personal information and records in the managementpossession of entity-related information for public stock offerings. In response to the order, NSC has implementedcorporations and completed a series of improvement measures as of December 2012.institutions being improperly accessed or disclosed.

Although we have precautionsexercise care to protect the confidentiality of personal information and take steps to safeguard such information in placecompliance with applicable laws, rules and regulations, were any material unauthorized

disclosure of personal information to detectoccur, our business could be adversely affected. For example, we could be subject to administrative fines in case there is any violation of applicable personal data protection laws, rules and preventregulations or be subject to complaints and lawsuits for damages from clients if they are adversely affected due to the unauthorized disclosure of their personal information (including leakage of such misconduct in the future, the measures we implement may not be effective in all cases, and we may not always be able to detect or deter misconductinformation by an employee, directorexternal service provider). In addition, we could incur additional expenses associated with changing our security systems, either voluntarily or officer. If anyin response to administrative guidance or judicial sanction is issued against usother regulatory initiatives. Any damage to our reputation caused by such unauthorized disclosure could lead to a decline in new clients and/or a loss of existing clients, as a result of such misconduct, we may lose business opportunitieswell as to increased costs and expenses incurred for a period of time, even after the sanction is lifted, if and to the extent that our clients, especially public institutions, decide not to engage us for their financial transactions.

Third parties may also engage in fraudulent activities, including devising a fraudulent scheme to induce our investment, loans, guarantee or any other form of financial commitment, both direct and indirect. Because of the broad range of businesses that we engage in and the large number of third parties with whom we deal in our day-to-day business operations, such fraud or any other misconduct may be difficultrelations campaigns designed to prevent or detect.mitigate damage to our corporate or brand image or reputation.

We may not be able to recoverSystem failure, the financial losses caused by such activitiesinformation leakage and our reputation may also be damaged by such activities.

A failure to identify and address conflictsthe cost of interest appropriatelymaintaining sufficient cybersecurity could adversely affect our businessesbusiness

We are a global financial institution providing a wide range of products and services to a diverse group of clients, including individuals, corporations, other financial institutions and governmental institutions. As such, we face potential conflicts of interest in the ordinary course of our business. Conflicts of interests can occur when our services to a particular client conflict or compete, or are perceived to conflict or compete, with our own interests. In addition, where non-public information is not appropriately restricted or shared within the firm, with regard to the many transactions within the Nomura Group, conflicts of interest can also occur where a group company transaction and/or a transaction with another client conflicts or competes with, or is perceived to conflict or compete with, a transaction with a particular client. While we have extensive internal procedures and controls designed to identify and address conflicts of interest, a failure, or a perceived failure, to identify, disclose and appropriately address conflicts could adversely affect our reputation and the willingness of current or potential clients to do business with us. In addition, conflicts of interest could give rise to regulatory actions or litigation.

Our business is subject to various operational risks

We classify and define operational risk as the risk of loss resulting from inadequate or failed internal processes, people, and systems or from external events. It excludes strategic risk (the risk of loss as a result of poor strategic business decisions), but includes the risk of breach of legal and regulatory requirements, and the risk of damage to Nomura’s reputation if caused by an operational risk. Types of operational risk may include the following, each of which could result in financial losses, disruption in our business, litigation from third parties, regulatory/supervisory actions, restrictions or penalties, and/or damage to our reputation:

Our businesses rely on secure processing, storage, transmission and reception of personal, confidential and proprietary information on our systems. We may become the target of attempted unauthorized access, computer viruses or malware, and other cyber-attacks designed to access and obtain information on our systems or to disrupt and cause other damage to our services. Although these threats may originate from human error or technological failure, they may also originate from the malice or fraud of internal parties, such as employees, or third parties, including foreignnon-state actors and extremist parties. Additionally, we could also be adversely impacted if any of the third-party vendors, exchanges, clearing houses or other financial institutions to whom we are interconnected are subject to cyber-attacks or other informational security breaches. Such events could cause interruptions to our systems, reputational damage, client dissatisfaction, legal liability, enforcement actions or additional costs, any and all of which could adversely affect our financial condition and operations.

While we continue to devote significant resources to monitor and update our systems and implement information security measures to protect our systems, there can be no assurance that any controls and procedures we have in place will be sufficient to protect us from future security breaches. As cyber threats are continually evolving, our controls and procedures may become inadequate and we may be required to devote additional resources to modify or enhance our systems in the future. For example, in June 2018, one of our foreign subsidiaries experienced a spear phishing incident that resulted in the unauthorized access to the firm’s desktop network, requiring us to immediately launch an internal investigation to assess and remediate the incident, notify the appropriate authorities of its occurrence and communicate with clients and other individuals whose data may have been impacted. The investigation is still ongoing and the extent and potential magnitude of this incident, including whether any client information has been impacted, have yet to be determined. As a result of this incident, we may suffer financial loss through reputational damage, legal liability and enforcement actions and through the cost of additional resources not only to remediate this incident but also to enhance and strengthen the cyber security of other Nomura group companies, all of which could negatively affect our financial conditions and results of operations.

Unauthorized disclosure of personal information held by us mayNatural disaster, terrorism, military dispute and infectious disease could adversely affect our business

We keephave developed a contingency plan for addressing unexpected situations. However, disaster, terrorism, military dispute or infectious disease afflicting our management and manage personal information obtained from clients in connection withemployees could exceed the assumptions of our business. In recent years, there have been many reported cases of personal informationplan, and records in the possession of corporations and institutions being improperly accessed or disclosed.could adversely affect our business.

Although we exercise care in protecting the confidentiality of personal information and take steps to safeguard such information in compliance with applicable laws, rules and regulations, if any material unauthorized disclosure of personal information does occur, our business could be adversely affected in a number of ways. For example, we could be subject to complaints and lawsuits for damages from clients if they are adversely affected as a result of the release of their personal information (including leakage of information by external service providers). In addition, we could incur additional expenses associated with changing our security systems, either voluntarily or in response to administrative guidance or other regulatory initiatives. Any damage to our reputation caused by such unauthorized disclosure could lead to a decline in new clients and/or a loss of existing clients, as well as to increased costs and expenses incurred for public relations campaigns designed to prevent or mitigate damage to our corporate or brand image or reputation.

The Company is a holding company and depends on payments from subsidiaries

The Company heavily depends on dividends, distributions and other payments from subsidiaries to make payments on the Company’s obligations. Regulatory and other legal restrictions, such as those under the Companies Act, may limit the Company’s ability to transfer funds freely, either to or from the Company’s subsidiaries. In particular, many of the Company’s subsidiaries, including the Company’s broker-dealer subsidiaries, are subject to laws and regulations, including regulatory capital requirements, that authorize

regulatory bodies to block or reduce the flow of funds to the parent holding company, or that prohibit such transfers altogether in certain circumstances. For example, NSC, Nomura Securities International, Inc., Nomura International plc and Nomura International (Hong Kong) Limited, our main broker-dealer subsidiaries, are subject to regulatory capital requirements that could limit the transfer of funds to the Company. These laws and regulations may hinder the Company’s ability to access funds needed to make payments on the Company’s obligations.

We may not be able to realize gains we expect, and may even suffer losses, on our investments in equity securities andnon-trading debt securities

We hold substantial investments in equity securities including private equity investments andnon-trading debt securities. Under U.S. GAAP, depending on market conditions, we may recognize significant unrealized gains or losses on our investments in

equity securities and debt securities, which could have an adverse impact on our financial condition and results of operations. Depending on the market conditions, we may also not be able to dispose of these equity securities and debt securities when we would like to do so, as quickly as we may wish or at the desired price.

Equity investments in affiliates and other investees accounted for under the equity method in our consolidated financial statements may decline significantly over a period of time and result in us incurring impairment losses

We have affiliates and investees accounted for under the equity method in our consolidated financial statements and whose shares are publicly traded. Under U.S. GAAP, if there is a decline in the fair value, i.e., the market price, of the shares we hold in such affiliates over a period of time, and we determine that the decline is other-than-temporary, then we recognize an impairment loss for the applicable fiscal period which may have an adverse effect on our financial condition and results of operations.

We may face an outflow of clients’ assets due to losses of cash reserve funds or debt securities we offer

We offer many types of products to meet various needs of our clients with different risk profiles.

Cash reserve funds, such as money market funds and money reserve funds are categorized as low risk financial products. As a result of a sudden rise in interest rates, such cash reserve funds may fall below par value due to losses resulting from price decreases of debt securities in the portfolio, defaults of debt securities in the portfolio or charges of negative interest. If we determine that a stable return cannot be achieved from the investment performance of cash reserve funds, we may accelerate the redemption of, or impose a deposit limit on, such cash reserve funds. For example, Nomura Asset Management Co., Ltd., the Company’s subsidiary, announced accelerated redemptionended its operation of money market funds in Junelate August 2016 and executed an accelerated redemption of such funds in September 2016.

In addition, debt securities that we offer may default or experience delays in the payment of interest and/or principal.

Such losses, early redemption or deposit limit for the products we offer may result in the loss of client confidence and lead to an outflow of client assets from our custody or preclude us from increasing such client assets.

Because of daily price range limitations under Japanese stock exchange rules, you may not be able to sell your shares of the Company’s common stock at a particular price on any particular trading day, or at all

Stock prices on Japanese stock exchanges are determined on a real-time basis by the equilibrium between bids and offers. These exchanges are order-driven markets without specialists or market makers to guide price

formation. For the purpose of protecting investors from excessive volatility, these exchanges set daily upward and downward price fluctuation limits for each stock, based on the previous day’s closing price. Although transactions may continue at the upward or downward limit price if the limit price is reached on a particular trading day, no transactions may take place outside these limits. Consequently, an investor wishing to sell at a price above or below the relevant daily limit may not be able to sell his or her shares at such price on a particular trading day, or at all.

Under Japan’s unit share system, holders of the Company’s shares constituting less than one unit are subject to transfer, voting and other restrictions

The Company’s Articles of Incorporation, as permitted under the Companies Act, provide that 100 shares of the Company’s stock constitute one “unit.” The Companies Act imposes significant restrictions and limitations on holdings of shares that constitute less than a whole unit. Holders of shares constituting less than one unit do not have the right to vote or any other rights relating to voting. Under the unit share system, any holders of shares

constituting less than a unit may at any time request the Company to purchase their shares. Also, holders of shares constituting less than a unit may request the Company to sell them such number of shares that the Company may have as may be necessary to raise such holder’s share ownership to a whole unit. Shares constituting less than a unit are transferable under the Companies Act, but may not be traded on any Japanese stock exchange.

As a holder of ADSs, you will have fewer rights than a shareholder has and you will have to act through the depositary to exercise these rights

The rights of shareholders under Japanese law to take actions including voting their shares, receiving dividends and distributions, bringing derivative actions, examining the company’s accounting books and records and exercising appraisal rights are available only to holders of record. Because the depositary, through its custodian agent, is the record holder of the shares underlying the ADSs, only the depositary can exercise those rights in connection with the deposited shares. The depositary will make efforts to vote the shares underlying your ADSs as instructed by you and will pay you the dividends and distributions collected from the Company. However, in your capacity as an ADS holder, you will not be able to bring a derivative action, examine the Company’s accounting books or records or exercise appraisal rights except through the depositary.

Rights of shareholders under Japanese law may be more limited than under the laws of other jurisdictions

The Companies Act and the Company’s Articles of Incorporation and Regulations of the Board of Directors govern the Company’s corporate affairs. Legal principles relating to such matters as the validity of corporate procedures, directors’ and executive officers’ fiduciary duties and shareholders’ rights may be different from those that would apply to anon-Japanese company. Shareholders’ rights under Japanese law may not be as extensive as shareholders’ rights under the laws of other jurisdictions, including jurisdictions within the U.S. You may have more difficulty in asserting your rights as a shareholder than you would as a shareholder of a corporation organized in another jurisdiction.

The Company’s shareholders of record on a record date may not receive the dividend they anticipate

The customary dividend payout practice of publicly listed companies in Japan may significantly differ from that widely followed or otherwise deemed necessary or fair in foreign markets. The Company’s dividend payout practice is no exception. The Company ultimately determines whether the Company will make any dividend payment to shareholders of record as of a record date and such determination is made only after such record date. For the foregoing reasons, the Company’s shareholders of record as of a record date may not receive the dividends they anticipate. Furthermore, the Company does not announce any dividend forecasts.

It may not be possible for investors to secure personal jurisdiction within the U.S. over the Company or the Company’s directors or executive officers, or to enforce against the Company or those persons judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the U.S.

The Company is a limited liability, joint-stock corporation incorporated under the laws of Japan. Most of the Company’s directors and executive officers reside in Japan. Many of the Company’s assets and the assets of these persons are located in Japan and elsewhere outside the U.S. It may not be possible, therefore, for U.S. investors to obtain personal jurisdiction over the Company or these persons within the U.S. or to enforce against the Company or these persons judgments obtained in U.S. courts predicated upon the civil liability provisions of the federal securities laws of the U.S. The Company believes that there is doubt as to the enforceability in Japan, in original actions or in actions for enforcement of U.S. court judgments, of liabilities predicated solely upon the federal securities laws of the U.S.

Special Note Regarding Forward-looking Statements

This annual report contains forward-looking statements that are based on our current expectations, assumptions, estimates and projections about our business, our industry and capital markets around the world. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “estimate”, “plan” or similar words. These statements discuss future expectations, identify strategies, contain projections of our results of operations or financial condition, or state other forward-looking information.

Known and unknown risks, uncertainties and other factors may cause our actual results, performance, achievements or financial position to differ materially from any future results, performance, achievements or financial position expressed or implied by any forward-looking statement contained in this annual report. Such risks, uncertainties and other factors are set forth in this Item 3.D and elsewhere in this annual report.

Item 4. Information on the Company

A. History and Development of the Company.

The Company (previously known as The Nomura Securities Co., Ltd.) was incorporated in Japan on December 25, 1925 under the Commercial Code of Japan when the securities division of The Osaka Nomura Bank, Ltd. became a separate entity specializing in the trading and distribution of debt securities in Japan. The Company was the first Japanese securities company to develop its business internationally with the opening in 1927 of a representative office in New York. In Japan, we broadened the scope of our business when we began trading in equity securities in 1938 and when we organized the first investment trust in Japan in 1941.

Since the end of World War II, we have played a leading role in most major developments in the Japanese securities market. These developments include the resumption of the investment trust business in the 1950s, the introduction of public stock offerings by Japanese companies in the 1960s, the development of theover-the-counter bond market in the 1970s, the introduction of new types of investment trusts such as the medium-term Japanese government bond investment trust in the 1980s, and the growth of the corporate bond and initial public offering markets in the 1990s.

Our expansion overseas accelerated in 1967, when the Company acquired a controlling interest in Nomura International (Hong Kong) Limited for the purpose of conducting broker-dealer activities in the Hong Kong capital markets. Subsequently, we established a number of other overseas subsidiaries, including Nomura Securities International, Inc. in the U.S. in 1969 as a broker-dealer and Nomura International Limited, now Nomura International plc, in the U.K. in 1981, which acts as an underwriter and a broker, as well as other overseas affiliates, branches and representative offices.

On October 1, 2001, we adopted a holding company structure. In connection with this reorganization, the Company changed its name from “The Nomura Securities Co., Ltd.” to “Nomura Holdings, Inc.” The Company

continues to be listed on the Tokyo Stock Exchange and other stock exchanges on which it was previously listed. A wholly-owned subsidiary of the Company assumed the Company’s securities businesses and was named “Nomura Securities Co., Ltd.”

The Company has proactively engaged in establishing a governance framework to ensure transparency in the Company’s management. Among other endeavors, when the Company adopted a holding company structure and was listed on the New York Stock Exchange (“NYSE”) in 2001, the Company installed Outside Directors. In addition, in June 2003, the Company further strengthened and increased the transparency of the Company’s oversight functions by adopting the Company with Three Board Committees (previously known as the Committee System), a system in which management oversight and business execution functions are clearly separated.

In 2008, to pave the way for future growth, the Company acquired and integrated the operations of Lehman Brothers in Asia Pacific, Europe and the Middle East.

The address of the Company’s registered office is9-1, Nihonbashi1-chome,Chuo-ku, Tokyo103-8645, Japan, telephone number: +81-3-5255-1000.+81-3-5255-1000.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at https://www.sec.gov. Our corporate website is https://www.nomuraholdings.com.

B. Business Overview.

Overview

We are one of the leading financial services groups in Japan and we operate offices in countries and regions worldwide including Japan, the U.S., the U.K., Singapore and Hong Kong Special Administrative Region (“Hong Kong”) through our subsidiaries.

Our clients include individuals, corporations, financial institutions, governments and governmental agencies.

Our business consists of our Retail, Asset Management, Wholesale and Wholesale divisionsMerchant Banking which are described in further detail below. See also Note 2122 “Segment and geographic information” in our consolidated financial statements included in this annual report.

Corporate Goals and Principles

The Nomura Group’s management vision is to enhance its corporate value by deepening society’s trust in the Companyfirm and increasing satisfaction of stakeholders, including that of our shareholders and clients.

As “Asia’s global investment bank”,bank,” Nomura will provide high value-addedvalue-adding solutions to clients globally, and recognizing its wider social responsibility, Nomura will continue to contribute to the economic growth and development of society.

To enhance its corporate value, Nomura places significance on earnings per share (“EPS”) and will seek to maintain sustained improvement of management’s target.

Our Business Divisions

Retail

In our Retail Division, we conduct business activities by delivering a wide range of financial products and high quality investment services mainly for individuals and corporations in Japan primarily through a network of

nationwide branches of Nomura Securities Co., Ltd. (“NSC”). The total number of local branches, including our head office, was 159156 as of the end of March 2016.2019. However, we are planning consolidation of some branches in metropolitan areas over the next few years. We offer investment consultation services to meet the medium- tomedium and long-term needs of our clients. We discuss retail client assets in “Retail Client Assets” under Item 5.A of this annual report.

We continue to focus on deliveringtop-quality solutions including our broad range of products and services throughface-to-face meetings, online and call center channels, so that Nomura Group can sustainably be a trusted partner to our clients.

Asset Management

We conduct our asset management business, which consists of the development and management of investment trusts and investment advisory services, primarily through Nomura Asset Management Co., Ltd (“NAM”). NAM is the largest asset management company in Japan in terms of assets under management in

investment trusts as of March 31, 2016.2019. In Japan, our challenge is to shift individual financial assets from saving products into investment products to create business opportunities. In order to make these opportunities available, NAM manages various investment trusts, ranging from low risk/low return products to high risk/high return products, and develops new products to respond to various investor needs. Investment trusts are distributed to investors through NSC as well as through financial institutions such as securities companies (including those outside our group), banks and Japan Post Bank Co., Ltd.banks. Investment trusts are also held in defined contribution pension plans. We also provide investment advisory services to public pension funds, private pension funds, governments and their agencies, central banks and institutional investors globally.

Wholesale

OurThe Wholesale Division consists of Global Markets and Investment Banking, providing our corporate and institutional clients with timely, high value-addedvalue-adding products and services tailored to their needs. In April 2018 we brought together key Global Markets and Investment Banking functions under the integrated Client Financing and Solutions (CFS) structure in order to better meet the strong, growing demand from our clients for a broad range of financing, capital and hedging solutions.

Global Markets

Global Markets provides research, sales, trading, agency execution, and market-making of fixed income and equity-related products.

Our global fixed income offerings include, among other products, government securities, interest rate derivatives, investment-grade and high-yield corporate debt securities, credit derivatives,G-10 and emerging markets foreign exchange, asset-backed securities and mortgage-related products, inover-the-counter (“OTC”) and listed markets. We are also primary dealers in the Japanese government securities market as well as in the Asian, European and U.S. markets. These product offerings are underpinned by our global structuring function which tailors ideas and trading strategies for our institutional and corporate client base.

Our global equity-related products include equity securities, Exchange Traded Funds (“ETFs”), convertible securities, listed futures and options and OTC equity derivatives.derivatives, and prime services. In addition, we offer execution services based on cutting-edge electronic trading technology to help clients navigate through the complex market structure and achieve best execution. We are also a member of various exchanges around the world, with leading positions on Tokyo stock exchanges and various other global exchanges.Stock Exchange.

These product offerings are underpinned by our global structuring and quants function which providesprovide tailored ideas and trading strategies for our institutional and corporate clients as well as our retail franchise.

Investment Banking

We offer a broad range of investment banking services to a diverse range of corporations, financial institutions, sovereigns, financial sponsors and others. We aim to developestablish and fortify solidcultivate strong, long-term relationships with theseour clients on a long-term basis by providing them with our extensive resources for each bespoke solution.

Underwriting. We underwrite offerings of a wide range of securities and other financial instruments, which includeincluding various typesclasses of stocks,shares, convertible and exchangeable securities, investment grade and high yield debt, sovereign and emerging market debt, high yield debt, structured securities and other securities in Asia, Europe,the Asian, European, U.S. and other major financial markets. We also arrange private placements and engage in other capital raising activities.

Financial Advisory & Solutions Services. We provide financial advisory services on business transactions including mergers and acquisitions, divestitures, spin-offs, capital structuring, corporate defense activities, leveraged buyouts and risk solutions. Our involvement in initial public offerings, reorganizations and other corporate restructurings related to industry consolidation enhances our opportunities to offer clients other advisory and investment banking services.

We capitalize onleverage the linkagesconnectivity between our Retail, Asset Management, Wholesale and WholesaleMerchant Banking Divisions to offer various financial instruments such as equity securities,and debt securities, investment trusts and variable annuity insurance products, for the short, medium, and long-term, with differentdiffering risk levels. We seekalso endeavor to providedeliver Nomura’s proprietary Nomura expertiseinsights to clients through various media such as our investment reports and internet-based trading services.

Merchant Banking

Our Merchant Banking Division have embarked on principal business to primarily provide equity to transactions such as business reorganization and revitalization, business succession as well as management buyout. We will, under proper management of risk, focus on support for improving the enterprise value of portfolio companies, and will contribute to expansion of the private equity market.

Our Research Activities

We have an extensive network of intellectual capital with key research offices in Tokyo, Hong Kong and other major markets in the Asia-Pacific region, as well as in London and New York. Nomura is recognized as a leading content provider with an integrated global approach to providing capital markets research. Our analysts collaborate closely across regions and disciplines to track changes and spot future trends in politics, economics, foreign exchange, interest rates, equities, and credit, as well asand also provide quantitative analysis.

Our Information Technology

We believe that information technology is one of the key success factors for our overall business and intend to developmaintain and maintain aenhance our solid technology platform to ensure that the Nomura Group is able to fulfill and exceed the various needs of our clients. Accordingly, we will continue to invest, enhance and adapt aour technology platform to ensure it remains suitable for each division.division proactively seek and implement innovative financial technology to improve the operations of our business.

In our Retail Division, we implemented a newcontinually invest and enhance our core system and related systems have also been enhanced.to improve efficiency on business operation. We are also continuously working on improving our internet-based and smartphone platforms.

In our Wholesale Division, we continually invest and enhance our technology platformplatforms to provide better risk management, improved data governance and also to increase trading capabilities through platforms allowing

direct market access and algorithmic trading. In order to ensure the support level of Wholesale operations, we will continue to maintain utilization of our offshore service entities in India.India and enhance our regional support based capabilities.

In our corporate functions in Japan, which support both our Retail and Wholesale Divisions, we implemented new settlement and accounting systems while decommissioning our legacy system in order to improve IT efficiency.

Our recent focus is cyber security. In order to prevent potential damage as well as take immediate actions in case a security threat occurs, we continue to strengthen measures in four areas, which are system implementation, trainings and drills, organizational emergency plans and information sharing with external institutions. In March 2015, we established a global team specializing in cyber security measures called the Computer Security Incident Response Team (“CSIRT”).

Competition

The financial services industry is intensely competitive and we expect it to continue remain so. We compete globally with other brokers and dealers, investment banking firms, commercial banks, investment advisors and other financial services firms. We also face competition on regional, product and niche bases from local and specialist firms. A number of factors determine our competitive position against other firms, including:

Our competitive position is also affected by the overall condition of the global financial markets, which are influenced by factors such as:

In Japan, we compete with other Japanese andnon-Japanese securities companies and other financial institutions. Competition has become more intense due to deregulation in the Japanese financial industry since the late 1990s and the increased presence of global securities companies and other financial institutions. In particular, major global firms have increased their presence in securities underwriting, corporate advisory services (particularly, mergers and acquisitions advisory) and secondary securities sales and trading.

There has also been substantial consolidation and convergence among financial institutions, both within Japan and globally and this trend accelerated further in recent years as the credit crisis caused mergers and acquisitions and asset acquisitions in the industry. The growing presence and scale of financial groups which encompass commercial banking, securities brokerage, investment banking and other financial services has led to increased competition. Through their broadened offerings, these firms are able to create good client relationships and leverage their existing client base in the brokerage and investment banking business as well.

In addition to the breadth of their products and services, these firms have the ability to pursue greater market share in investment banking and securities products by reducing margins and relying on their commercial banking, asset management, insurance and other financial services activities. This has resulted in pricing pressure in our investment banking and trading businesses and could result in pricing pressure in other areas of our businesses. We have also competed, and expect to compete, with other financial institutions which commit capital to businesses or transactions for market share in investment banking activities. In particular, corporate clients may seek loans or commitments in connection with investment banking mandates and other assignments.

Moreover, the trend toward consolidation and convergence has significantly increased the capital base and geographic reach of some of our competitors, hastening the globalization of the securities and financial services markets. To accommodate this trend, we will have to compete successfully with financial institutions that are large and well-capitalized, and that may have a stronger local presence and longer operating history outside Japan.

Regulation

Regulation

Japan

Regulation of the Securities Industry and Securities Companies. Pursuant to the FIEA, the Prime Minister of Japan has the authority to supervise and regulate the securities industry and securities companies, and delegates its authority to the Commissioner of the FSA. The Company, as a holding company of a securities company, as well as subsidiaries such as NSC and Nomura Financial Products & Services, Inc. (“NFPS”), are subject to such supervision and regulation by the FSA. The Commissioner of the FSA delegates certain authority to the Director General of Local Finance Bureaus to inspect local securities companies and branches. Furthermore, the Securities and Exchange Surveillance Commission, an external agency of the FSA which is independent from the Agency’s other bureaus, is vested with authority to conductday-to-day monitoring of the securities markets and to investigate irregular activities that hinder the fair trading of securities, including inspection of securities companies. Securities companies are also subject to the rules and regulations of the Japanese stock exchanges and the Japan Securities Dealers Association, a self-regulatory organization of the securities industry.

To enhance investor protection, each Japanese securities company is required to segregate client assets and to hold membership in an Investor Protection Fund approved by the government under the FIEA. The Investor

Protection Fund is funded through assessments on its securities company members. In the event of failure of a securities company that is a member of the fund, the Investor Protection Fund provides protection of up to ¥10 million per client. The Investor Protection Fund covers claims related to securities deposited by clients with the failed securities company and certain other client claims.

Regulation of Other Financial Services. Securities companies are not permitted to conduct banking or other financial services directly, except for those which are registered as money lenders and engaged in money lending business under the Money Lending Business Act or which hold permission to act as bank agents and conduct banking agency activities under the Banking Law. Among the subsidiaries of the Company in Japan, NSC is a securities company that is also registered as a money lender and holds permission to act as a bank agent. Another subsidiary of the Company, The Nomura Trust & Banking holds a banking license and trust business license.

Financial Instruments and Exchange Act. The FIEA widely regulates financial products and services in Japan under the defined terms “financial instruments” and “financial instruments trading business”. It regulates most aspects of securities transactions and the securities industry, including public offerings, private placements and secondary trading of securities,on-going disclosure by securities issuers, tender offers for securities, organization and operation of securities exchanges and self-regulatory associations, and registration of securities companies. In addition, to enhance fairness and transparency in the financial markets and to protect investors, the FIEA provides for, among other things, penalties for misrepresentations in disclosure documents and unfair trading, strict reporting obligations for large shareholders and corporate information disclosure systems, including annual and quarterly report systems, submission of confirmation certificates concerning the descriptions in securities reports, and internal controls over financial reporting.

The FIEA also provides for corporate group regulations on securities companies the size of which exceeds specified parameters (Tokubetsu(Tokubetsu Kinyu Shouhin Torihiki Gyosha, “Special Financial Instruments Firm”) and on certain parent companies designated by the Prime Minister (Shitei(Shitei Oyagaisha, “Designated Parent Companies”) and their subsidiaries (together, the “Designated Parent Company Group”). The FIEA aims to regulate and strengthen business management systems, compliance systems and risk management systems to ensure the protection of investors. The FIEA and its related guidelines also provide reporting requirements to the FSA on the Designated Parent Company Group’s business and capital adequacy ratios, enhanced public disclosures as well as restrictions on compensation all of which are designed to reduce excessive risk-taking by executives and employees of a Designated Parent Company Group. We were designated as the Designated Parent Company of NSC in April 2011 and were designated as the Designated Parent Company of NFPS in December 2013. As the Designated Parent Company and the final parent company within a corporate group (Saishu(Saishu Shitei Oyagaisha, “a Final Designated Parent Company”), we are subject to these requirements. A violation of the FIEA may result in

various administrative sanctions, including the revocation of registration or license, the suspension of business or an order to discharge any director or executive officer who has failed to comply with the FIEA.

Regulatory Changes. On April 16, 2013, a bill was submitted to the Diet of Japan to amend the FIEA and the Deposit Insurance Act and was passed on June 12, 2013. A part of the amendment includes establishing “Orderly Resolution Regime for Financial Institutions” to prevent a financial crisis that may spread across financial markets and may seriously impact the real economy. Under the Orderly Resolution Regime, the Financial Crisis Response Council, chaired by the Prime Minister, will take measures such as providing liquidity to ensure the performance of obligations for critical market transactions where it is considered necessary to prevent severe market disruption. Such measures will be funded by the financial industry, except in special cases where the government will provide financial support. The amendment became effective on March 6, 2014.

Regulatory Changes. In April 2016, the FSA published its policy describing its approach and framework for the introduction of the TLAC requirements in Japan applicable to JapaneseG-SIBs and, in April 2018, released revisions to such policy that extended the coverage of the TLAC requirements in Japan not only to JapaneseG-SIBs but also to JapaneseD-SIBs that are deemed (i) of particular need for a cross-border resolution arrangement and (ii) of particular systemic significance to Japanese financial system if they fail. Based on the revised policy, in March 2019, the FSA finally published the notices and guidelines of TLAC regulations in Japan (including TLAC holding regulations). Although Nomura is not identified as aG-SIB as of the date of this annual report, Nomura is subject to the TLAC regulations in Japan, and will be required to meet a minimum TLAC requirement of holding TLAC in an amount at least 16% of our consolidated risk-weighted assets as from March 31, 2021 and at least 18% as from March 31, 2024 as well as at least 6% of the applicable Basel III leverage ratio denominator from March 31, 2021 and at least 6.75% from March 31, 2024.

Overseas

Our overseas offices and subsidiaries are also subject to various laws, rules and regulations applicable in the countries where they conduct their operations, including, but not limited to those promulgated and enforced by the U.S. Securities and Exchange Commission (“SEC”), the Commodity Futures Trading Commission

(“CFTC”), the U.S. Treasury, the Financial Stability Oversight Council, the New York Stock Exchange, the Financial Industry Regulatory Authority (“FINRA”) (a private organization with quasi-governmental authority and a regulator for all securities companies doing business in the U.S.), the National Futures Association (“NFA”) (a self-regulatory organization for the U.S. derivatives industry) in the U.S.; and by the Prudential Regulation Authority (“U.K. PRA”,), and the Financial Conduct Authority (“U.K. FCA”), and the London Stock Exchange in the U.K. We are also subject to international money laundering and related regulations in various countries. For example, the USA PATRIOT Act of 2001 contains measures to prevent, detect and prosecute terrorism and international money laundering by imposing significant compliance and due diligence obligations and creating crimes and penalties. Failure to comply with such laws, rules or regulations could result in fines, suspension or expulsion, which could materially and adversely affect us.

Regulatory Changes. In response to the financial markets crisis, governments and regulatory authorities in various jurisdictions have made and continue to make numerous proposals to reform the regulatory framework for, or impose a tax or levy upon, the financial services industry to enhance its resilience against future crises, contribute to the relevant economy generally or for other purposes. In July 2010, the U.S. enacted the Dodd-Frank Act which is now the subject ofand a multi-agency rulemaking process. The rulemakings include the following: (i) create a tighter regulatory framework for OTC derivatives to promote transparency and impose conduct rules in that marketplace; (ii) establish a process for designating nonbank financial firms as Systemically Important Financial Institutions (“SIFIs”), subject to increased (and sometimes new) prudential oversight including early remediation, capital standards, resolution authority and new regulatory fees; (iii) prohibit material conflicts of interest between firms that package and sell asset-backed securities (“ABS”) and firms that invest in ABS; (iv) establish risk retention requirements for ABS; and (v) establish rules related to the orderly liquidation of certain broker dealers; (vi) create annual stress tests; and (vii) set forth a number of executive compensation mandates, including rules to

curtail incentive compensation that promotes excessive risk taking and listing standards for recovery of erroneously awarded compensation. The new regulatory framework for OTC derivatives includes mandates for clearing transactions with designated clearing organizations, exchange trading, new capital requirements, bilateral and variation margin fornon-cleared derivatives, reporting and recordkeeping, and internal and external business conduct rules. Some U.S. derivatives and executive compensation rules may be applied extraterritorially and therefore impact somenon-U.S. Nomura entities.

Other aspects of the Dodd-Frank Act and related rulemakings include provisions that (i) prohibit deposit-taking banks and their affiliates from engaging in proprietary trading and limit their ability to make investments in hedge funds and private equity funds (theso-called “Volcker Rule”); (ii) empower regulators to liquidate failing nonbank financial companies that are systemically important; (iii) provide for new systemic risk oversight and increased capital requirements for both bank andnon-bank SIFIs; (iv) provide for a broader regulatory oversight of hedge funds; and (v) establish new regulations regarding the role of credit rating agencies, investment advisors and others. To facilitateThe Economic Growth, Regulatory Relief, and Consumer Protection Act, which was enacted in May 2018, preserves the transitionfundamental elements of the post-Dodd-Frank regulatory framework and, as to bank regulatory requirements, primarily focuses on revising certain aspects of the U.S. financial regulatory regime for small andmedium-sized banking organizations. In connection with the implementation of this Act, the U.S. federal bank agencies have released proposals to tailor the application of prudential requirements, including capital and liquidity requirements, for large U.S. banking organizations and foreign banking organizations with significant U.S. activities. The CFTC has largely finalized its rulemakings that implement the OTC derivatives market reform aspects of the Dodd-Frank Act,Act. Among other items, the Commodity Futures Trading Commission issued an exemptive order in July 2013 (“Exemptive Order”)CFTC Dodd-Frank rules now impose reporting, clearing, margin and trade execution requirements that granted market participants temporary conditional relief from certain provisionswill apply, to varying degrees, to commodity derivative transactions entered into by all U.S. and many non-U.S. Nomura entities. These rules also require swap dealers that exceed a de minimis threshold of swap dealing activity to be registered with the Commodity Exchange Act, as amended by the Dodd-Frank Act. As the Exemptive Order expired on December 21, 2013 someCFTC and subject those registered swap dealers to internal and external conduct requirements. The U.S. derivatives rules are now being applied extraterritorially and are now therefore impacting somenon-U.S. Nomura entities. The full extent of the extraterritorial application of the CFTC’s Dodd-Frank rules continues to evolve as the CFTC updates its own guidance, and these changes may result in more or fewer aspects of the rules impacting Nomura’s entities. Separately, on March 5, 2019, the NFA issued rules that require certain Associated Persons (“APs”) of NFA member firms (e.g. swap dealers and Futures Commission Merchants) to satisfy certain swaps proficiency requirements to ensure that APs engaged in swaps activities meet a minimum proficiency standard that tests both their market knowledge and their knowledge of regulatory requirements relating to swaps activities. Swap dealer APs outside the U.S. that only transact swaps withnon-U.S. persons ornon-U.S. branches of U.S. swap dealers are exempt from the requirements. The compliance date forin-scope APs to complete the proficiency requirements is January 31, 2021. In addition, Title VII of the Dodd-Frank Act gives the SEC regulatory authority over “security-based swaps” which are defined under the act as swaps based on a single security or loan or a narrow-based group or index of securities. Security-based swaps are included within the definition of “security” under the U.S. Securities and Exchange Act of 1934 and the U.S. Securities Act of 1933. The SEC continues to issue final rules and interpretive guidance addressing cross-border security-based swap activities. On June 25, 2014, the SEC initially finalized a portion of its cross-border rules, namely key foundational definitions and registration calculations that will become operative once the SEC sets a timeframe for the security-based swap dealer registration process to begin. Since then, the SEC has issued a series of final rules that will apply certain Dodd-Frank Act requirements to security-based swaps between twonon-U.S. person counterparties when the security-based swaps are arranged, negotiated or executed using personnel or personnel of agents located in the United States. Specifically, onU.S. On February 10, 2016, the SEC issued final rules that require anon-U.S. person that uses personnel or personnel of agents located

in the United StatesU.S. in connection withsecurity-based swap dealing activity to include such security-based swaps in its security-based swap dealer registration de minimis calculation, and oncalculation. On April 14, 2016, the SEC issued final rules that require anon-U.S. security-based swap dealer to comply with external business conduct standards rules when facing anon-U.S. person counterparty if thenon-U.S. security-based swap dealer uses personnel or personnel of agents located in the United StatesU.S. to arrange, negotiate or execute the security-based swap. TheOn July 14, 2016 the SEC may issue additionalissued final rules that apply Dodd-Frank Act requirementssubject asecurity-based swap between anon-U.S. security-based swap dealer and anon-U.S. person

counterparty to security-based swaps of two public dissemination pursuant to SEC rules if thenon-U.S. person counterparties when one or both swap dealer uses personnel or personnel of agents located in the United StatesU.S. to arrange, negotiate or execute the security-based swap. On October 11, 2018, the SEC reopened the comment period on capital, margin and segregation requirements for security-based swap (e.g. finaldealers and major security-based swap participants and capital requirements for broker-dealers. Finally, on May 10, 2019, the SEC issued proposed guidance and rule amendments addressing the cross-border application of certain security-based swap requirements. Specifically, the proposal provides guidance on the circumstances under which providing “market color” will not constitute “arranging” or “negotiating” a security-based swap for purposes of the of the SEC rules, governing reportingguidance relating to the opinion of counsel requirement applicable tonon-U.S. firms seeking to register as a security-based swap dealer, and relief from certain security-based swap dealer AP requirements. In addition, the SEC proposed two alternative proposals for a conditional exception from the de minimis dealer registration calculation for security-based swap transactions entered into between non-U.S. persons that are arranged or negotiated by personnel located in the U.S. While the SEC did not propose to change the application of its external business conduct, public dissemination or regulatory reporting rules to swaps betweennon-U.S. persons that are arranged, negotiated, or executed by personnel or personnel of security-based swaps).agents located in the U.S., the SEC asked questions and invited the public to comment on whether it should propose changes to those requirements. Once final and effective, these cross-border rules may impact somenon-U.S. Nomura entities. The exact details of the Dodd-Frank Act implementation and ultimate impact on Nomura’s operations will depend on the form and substance of the final regulations adopted by various governmental agencies and oversight boards. In addition to the rulemakings required by the Dodd-Frank Act, the SEC is considering other rulemakings that will impact Nomura’s U.S. entities. While these rules have not been formally proposed, they have been publicly reported in the U.S. Office of Management and Budget’s (“OMB”) “Current Regulatory Plan and Unified Agenda of Regulatory and Deregulatory Actions.” The SEC’s Division of Trading and Markets has announced that it is considering recommending that the SEC propose an amendment to its net capital rule that would prohibit a broker-dealer that carries customer accounts from having a ratio of total assets to regulatory capital in excess of a certain level. The SEC and the CFTC are also considering a number of changes to market structure rules. The SEC adopted Rule 613 to create a consolidated audit trail (“CAT”) intended to allow regulators to track all activity throughout the U.S. markets in National Markets Systems (“NMS”) securities. Self-regulatory organizations must jointly submit a NMS plan to create and implement the CAT, which will replace existing reporting systems OATS, TRACE and EBS. On June 15, 2016 the SEC approved amendments to FINRA Rule 4210, which require FINRA member broker-dealers to set risk limits on each counterparty transacting in specified forward-settling agency mortgage-backed securities (“covered agency transactions”) as of December 15, 2016, and to collect variation margin and/or maintenance margin from certain counterparties transacting in covered agency transactions as of June 25, 2018. A failure to collect required margin in a timely manner (T+1) results in an obligation for the FINRA member broker-dealer to take a capital charge, and ultimately (T+5) to liquidate the customer’s position in order to satisfy the margin deficiency. On January 29, 2019, FINRA filed a rule change with the SEC again extending the effective date of the Rule 4210 margin requirements to March 25, 2020, citing the need to consider potential revisions to Rule 4210 in consultation with market participants and other regulators. On November 7, 2016, the CFTC approved a supplemental notice of proposed rulemaking modifying certain rules proposed in the CFTC’s December 17, 2015 notice of proposed rulemaking regarding Regulation AT. Proposed Regulation AT would have, among other things, required firms engaged in electronic algorithmic trading to (i) register with the CFTC and (ii) submit their trading source code to the CFTC. While the proposed Regulation AT has not been finalized, the CFTC continues to consider comments that were received in connection with the proposed rulemaking.

On February 3, 2017, U.S. President Donald J. Trump signed Executive Order 13772 outlining core principles to regulate the U.S. financial system. The order directed the Secretary of the Treasury to consult with heads of member agencies of the Financial Stability Oversight Council and report within 120 days of the date of the order (and periodically thereafter) on the extent to which existing laws, treaties, regulations, guidance, reporting and recordkeeping requirements and other government policies promote the core principles. U.S. regulatory agencies may change financial regulations through administrative procedures and rulemakings, supervisory guidance orno-action relief as the result of recommendations by the Treasury Secretary in

accordance with the core principles of the executive order. These may have a material impact on Nomura’s business.

The core principles are as follows: (i) empower Americans to make independent financial decisions and informed choices in the marketplace, save for retirement, and build individual wealth; (ii) preventtaxpayer-funded bailouts; (iii) foster economic growth and vibrant financial markets through more rigorous regulatory impact analysis that addresses systemic risk and market failures, such as moral hazard and information asymmetry; (iv) enable American companies to be competitive with foreign firms in domestic and foreign markets; (v) advance American interests in international financial regulatory negotiations and meetings; (vi) make regulation efficient, effective, and appropriately tailored; and (vii) restore public accountability within Federal financial regulatory agencies and rationalize the Federal financial regulatory framework. The Treasury Department divided its review of the financial system into a series of reports. The reports, all of which have been issued, cover the following subjects: (1) the depository system, covering banks, savings associations, and credit unions of all sizes, types and regulatory charters: (2) capital markets: covering debt, equity, commodities and derivatives markets, central clearing and other operational functions; (3) the asset management and insurance industries, and retail and institutional investment products and vehicles; and (4)non-bank financial institutions, financial technology and financial innovation. In addition, President Trump issued two Presidential Memoranda to the Secretary of the Treasury. One calls for a review of the Orderly Liquidation Authority (“OLA”) established under Title II of the Dodd-Frank Act, which the Treasury Department released in February 2018, recommending reforms to the OLA and amendments to the U.S. Bankruptcy Code to make a bankruptcy proceeding a more effective solution method for large financial institutions. The other calls for Treasury to review the process by which the Financial Stability Oversight Council (“FSOC”) determines that a nonbank financial company could pose a threat to the financial stability of the U.S., subjecting such an entity to supervision by the Federal Reserve and enhanced prudential standards and capital requirements. In March 2019, the FSOC proposed to revise its interpretive guidance relating to such designations.

On October 26, 2017, the Division of Investment Management and the Division of Trading and Markets of the SEC issued three relatedno-action letters to address certain issues raised by cross-border implementation of the European Union’s (“EU”) Markets in Financial Instruments Directive (“MiFID II”), which took effect on January 3, 2018. MiFID II will require the unbundling of execution and research payments made by investment managers to broker-dealers. Under the relief, a broker-dealer may, without becoming subject to the Advisers Act, provide research services to an investment manager that is required, either directly or by contractual obligation, to pay for such research services with MiFIDII-compliant research payments. The temporary relief will expire on July 3, 2020, 30 months from MiFID II’s implementation date.

The Foreign Account Tax Compliance Act (“FATCA”), which was enacted in 2010, requires foreign financial institutions (“FFIs”) to report to the U.S. Internal Revenue Service information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest. As a result, Nomura will beis subject to certain reporting requirements consistent with a mutual agreement between Japanese governmental authorities and the U.S. Treasury Department. In addition, the US Treasury Department proposed new rules in April 2016 that would give the Internal Revenue Service the authority to reclassify certain related-company debt transactions as equity and as a result could impact the Company’s tax liability.

On July 19, 2011,December 22, 2017, President Donald Trump signed the Financial Stability Board publishedTax Cuts and Jobs Act into law. Among other things, the legislation includes the Base Erosion and Anti-Abuse Tax (“BEAT”), effectively a consultative documentminimum tax on large corporations applied by adding back to taxable income certain deductible payments made to related foreign persons. These tax law changes are complex and raise significant interpretive issues and therefore we anticipate future guidance on these rules to address the areas of uncertainty which could also have an adverse impact on the tax liabilities of our U.S. entities.

As part of global efforts to establish a global framework to improve authorities’ capacity to resolve failing SIFIs without systemic disruption and exposing taxpayers to the risk of loss. The proposed measures require Global SIFIsSystemically Important Financial Institutions (“G-SIFIs”SIFI”) to prepare and maintain recovery and resolution plans (“RRPs”) by December 2012. In light of such a global framework,, the U.K. Financial Services Authority (“U.K. FSA”) (which has now been replaced by the U.K. PRA and FCA) published a consultation paper on August 9, 2011 containing its proposals for RRPs. The consultation paper covered a requirement for banks and large investment firms in the U.K. (including G-SIFIs) to prepare and maintain RRPs. In a separate discussion paper, the U.K. FSA explores matters relevant to resolving financial services firms, including the resolution of trading books, enhancing the resolution toolkit and bail-ins. In May 2012, the U.K. FSA published a feedback statement setting out its approach to ensure firms develop appropriate recovery plans and resolution packs and a further update was issued by the U.K. FSA in February 2013. In December 2013, the U.K. PRA published a policy statement setting out final rules which require banks, building societies and U.K. PRA-regulated investment firms to produce recovery plans (identification of options to recover financial strength in stress situations) and resolution packs (information to support resolution planning by the authorities).

These rules were amended in January 2015 as part of the U.K. implementation ofimplemented the EU Bank Recovery and Resolution Directive (“BRRD”), which was published on June 12, 2014. The BRRD also aims to implement Financial Stability Board (“FSB”) recommendations on recovery and resolution regimes for financial institutions and for U.K. purposes it will partially supersede the existing U.K. regime. institutions.

The BRRD applies to banks and investment firms operating in EU member states, including EU branches and subsidiaries of third country firms. It includes requirements for the preparation of RRPs by institutions and regulators. It also creates various powers for EU regulators to intervene to resolve institutions at risk of failure, including the ability to sell or transfer all or part of an institution (similar to existing U.K. regulatory powers) and the introduction of a debt write down or bail-in tool. Amongst other things, relevant firms are required to include a contractual recognition of bail-in clause in a

wide range of non-EU law governed contracts governing liabilities created or materially amended after January 1, 2016 under which the creditor contractually recognizes and agrees that the liability may be subject to use of the bail-in tool. Specific provision is also made to facilitate cross-border crisis management and the recognition of third country recovery and resolution action in relation to third country banking and investment groups. As part of thebail-in rules, firms will be required to maintain capital resources sufficient to meet the stipulated minimum requirement for eligible liabilities (“MREL”). The MREL requirement overlaps with the global capital standards on total loss absorbing capacity (“TLAC”) for Global Systemically Important Banks (“G-SIBs”)G-SIBs issued by the Financial Stability BoardFSB on November 9, 2015. As Nomura Group has adopted a single point of entry resolution strategy, European subsidiaries are subject to internal MREL. The TLAC standard defines a minimum requirement for the instruments and liabilities that should be readily available for bail-in within resolution at G-SIBs, but does not limit authorities’ powers under theinternal MREL became applicable resolution law to expose other liabilities to loss through bail-in or the application of other resolution tools. G-SIBs will be required to meet the TLAC requirement alongside the minimum regulatory requirements set out in the Basel III framework.

There are a number ofU.K. for all U.K. incorporated institutions from January 1, 2019, although this had negligible impact for Nomura as this was prescribed to be equal to existing regulatory developments that impactcapital requirements. However, from January 1, 2020, Nomura is expected to require internal MREL resources above the regulatory capital requirements for the material subsidiaries in the U.K., identified as NEHS on a sub-consolidated bases and NIP.

On December 18, 2018, Bank of England (BOE) and Prudential Regulation Authority (PRA) jointly published a consultation document on Resolvability Assessment Framework (PRA) MREL became applicable in the U.K. regulated entities. Mostfor all U.K. incorporated institutions from January 1, 2019, although this hath firms whose failure would have a significant impact on the U.K. financial system and for certain overseas firms where the BOE would support a home resolution authority in carrying out a cross-border resolution. The proposals for the RAF bring together existing policies such as MREL and Operational Continuity in Resolution (“OCIR”) and new policies proposed in the consultation in order to follow the resolution principles set out by the FSB. Under the consultation, it is expected firms perform an assessment of these istheir preparations for resolution and the Basel III framework,BOE to provide a public statement concerning resolvability of each firm. The BOE and PRA are expected to provide a response to the consultation during the course of 2019 and further details are expected on how RAF would apply to overseas firms such as adopted into Nomura.

EU law throughbanks and investment firms including those located in the fourthU.K. have been subject to the current prudential regulatory capital regime since the introduction of the Capital Requirements Regulation and Capital Requirements Directive and Capital Requirements Regulation (together, “CRD IV”), which became effective on in January 1, 2014. The aim of CRD IV iswas to strengthen the resilience of the EU banking sector so it iswould be better placed to absorb economic shocks whilewhilst also ensuring that banks continuecontinued to finance economic activity and growth. CRD IV sets out requirementsregulations for minimum capital requirements for banks and investment firms and also introduced new capital and liquidity buffers.

The new framework also modifies treatmentIn November 2016 the European Commission proposed amendments to this regulation in a “CRRII” package of financial institution exposuresreforms. Together with the updates to central counterparties, resulting in increased capital charges, as well as qualifying conditions that must be met by central counterparties before institutions may benefit from preferential treatment. CRD IV introduces the conceptBank Recovery and Resolution Directive (“BRRD II”) and Single Resolution Mechanism Regulation (“SRMR”) this package is an important step towards the completion of the leverage ratioEuropean post-crisis regulatory reforms and implements some of the outstanding global reforms agreed by the Basel Committee on Banking Supervision (“BCBS”) and the FSB. The EU views the amendments as essential to making its financial system more stable and resilient, and the financial institutions more resolvable. These updates will enter into force in June 2019 with the majority of changes being introduced 2 years later in June 2021.

Amongst other things these proposed changes include the introduction of binding minimum leverage and net stable funding ration (“NSFR”)ratios, changes to the calculations for counterparty credit risk of derivatives, a tightening of large exposure limits, introduction of new reporting requirements for market risk and the introduction of a new EU intermediate parent undertaking requirement. These reforms are generally expected to apply from 2018, although further legislation is requiredlead to an increase in local capital and liquidity requirements and increased costs of compliance.

Subsequent to the finalization of work on the CRRII package the EU will introduce a “CRRIII” package of reforms to implement a binding requirement. all outstanding elements of the Basel 3 framework including changes to the calculations for Operational Risk, CVA, Credit Risk and the introduction of an output floor to modelled calculations.

The directive introduces corporate governance requirements with a more rigorous supervision of risks by directors as well as management or supervisory boards. The rules concern the composition of boards, their functioning and their role in risk oversight and strategy in order to improve the effectiveness of risk oversight by boards. The regulation requires financial institutions to make increased Pillar 3 disclosures about their corporate governance arrangements. CRD IV also sets out requirements in relation to remuneration policies imposing a 1:1 ratio on the basic salary relative to bonus for certain staff.

On October 20, 2011, the European Commission published draft legislation for therevised Directive on marketsMarkets in financial instruments repealing Directive 2004/39/EC of the European Parliament and of the Council. The legislation has beenFinancial Instruments, MiFID II, which is split into two parts: the Markets in Financial Instruments Directive (“MiFID”) and the Markets in Financial Instruments Regulation (“MiFIR”). On May 13, 2014, the Council of the European Union announced that it had adopted MiFID II (the revised MiFID) and MiFIR. MiFID II was published in the EU Official Journal on June 12, 2014 and entered into force on July 3,2, 2014. The majority of the new rules under MiFID II and MiFIR will taketook effect from January 3, 2018.

2018, with Member States required to implement MiFID II through national legislation by July 3, 2017. The legislation seekssought to introduce wide-reaching changes to markets, including the extension of market transparency rules intonon-equities and potentially reducing the size of the OTC derivative market by mandating the clearing of standardisedstandardized OTC transactions through central clearing counterparties and their trading through regulated trading venues. The new framework introducesintroduced a market structure which seekswas intended to close certain loopholes and ensuresensure that trading, wherever appropriate, takes place on regulated platforms. It introduceshas introduced rules on high frequency trading and aimswith a view to improveimproving the transparency and oversight of financial markets. The revised MiFID also aimsaimed to strengthen the protection of investors by introducing more robust organisationalorganizational and conduct requirements and by strengthening the role of management bodies. The new framework also increasesincreased the role and supervisory powers of regulators and establishesestablished powers to prohibit or restrict the marketing and distribution of certain products in well-defined circumstances. A harmonisedharmonized regime for granting firms from third countries access to EU professional markets, for firms from third countries, based on an equivalence assessment of third countrythird-country jurisdictions by the Commission, iswas also introduced.

Following a range of consultations and technical advice published by the European Securities and Markets Authority (“ESMA”), in April 2016 the European Commission adopted a MiFID Delegated Directive.Directive (“Directive”). The Directive contains provisions on investor protection, notably on safeguarding of clients’ funds and financial instruments, product governance and monetary/non-monetary compensation.clients. The Commission also adopted a delegated Regulationregulation supplementing MiFID II. The Regulation aimsThis regulation was aimed at specifying, in particular, the rules relating to exemptions, the organisationalorganizational requirements for investment firms, and conduct of business obligations in the provision of investment services. In May 2016, the Commission adopted a further delegated Regulationregulation supplementing MiFIR. This Regulationregulation aims at specifying, in particular, the rules relating to determining liquidity for equity instruments, the rules on the provision of market data on a reasonable commercial basis, the rules on publication, order execution and transparency obligations for systematic internalisers, and the rules on supervisory measures on product intervention by the ESMA, EBAthe European Banking Authority and national authorities, as well as on position management powers by ESMA.

In the U.K., the U.K. FCA has also published various commentary on MiFID II, including a Discussion Paper published in March 2015, which discusses the FCA’s approach to those areas of MiFID II for which the U.K. has discretion in relation to implementation. In March 2015, UK HM Treasury published a consultation on the Transposition of the MiFID II. The U.K. FCA published its first consultation paper on MiFID II implementation in December 2015. The paper focused on markets issues. The U.K. FCA will publish a second consultation in Summer 2016 and a third consultation in Autumn 2016.ESMA.

The European Market Infrastructure Regulation (“EMIR”) introduces new requirements to improve transparency and reduce the risks associated with the derivatives market. EMIR was adopted on July 4, 2012 and became effective on August 16, 2012. EMIR2012, and applies to any entity established in the European UnionEU that is a legal counterparty to a derivative contract, even when trading withnon-EU firms. It may alsoEMIR was created with the intention of stabilizing over-the-counter (“OTC”) markets found within EU member states. Although the majority of EMIR regulations have extraterritorial impactalready been implemented, on May 28, 2019, Regulation (EU) 2019/834 (EMIR REFIT) was published in certain circumstances. Manythe EU’s Official Journal, with the aim of amending EMIR to make some of its requirements simpler and more proportionate, particularly for non-financial counterparties (“NFCs”). With a few exceptions, the majority of the EMIR requirements became effectiveprovisions in 2013 and 2014, although some elements have yet to be implemented. For example, the first wave of clearing obligation for interest rate swaps to be phased in from June 21, 2016. When fully implemented, EMIR will require entities thatRegulation enter into any form of derivative contract to: report every derivative contract that they enter to a trade repository; implement new risk management standards, including operational processes and margining, for all bilateral over-the-counter derivatives trades that are not cleared by a central counterparty; and clear, through a central counterparty, over-the-counter derivatives that are subject to a mandatory clearing obligation. Nomura is in the process of implementing the various EMIR requirements across work streams in accordance with their respective compliance dates.force on June 17, 2019.

In May 2015, the Commission published a consultation paper to enable it to judge market participants’ experience in implementing EMIR. ESMA’s input to the Commission’s consultation on the EMIR review made recommendations to amend EMIR in a number of areas, including the clearing obligation, recognition of third-country CCPs and trade repositories.

In November 2015, the Council of the EU formally adoptedOn January 12, 2016, the Securities Financing Transactions Regulation (“SFTR”), which forms part of the EU’s package of legislation targeted at reforming shadow banking and aims to improve transparency in the securities financing transactions (SFT) market. The SFTR, once implemented, will require counterparties to an SFT to report the SFT(“SFTs”) market, came into force subject to a trade repository; impose various potentially onerous requirementsrange of transitional provisions over a number of years. On April 11, 2019, the final regulatory technical standards entered into force and MiFID firms are due to commence their reporting one year later on entities reusing financial instruments received under a collateral arrangement and apply various related disclosure requirements. On October 20, 2011,April 11, 2020. Other reporting counterparties are phased in over the European Commission published draft legislation for the review of the Market Abuse Directive (“MAD II”). The dossier has been split into two parts: the Directivefollowing months, ending with NFCs on criminal sanctions for market abuse (“CSMAD”) and the Market Abuse Regulation (“MAR”). The new rules on market abuse update and strengthen the existing framework to ensure greater market integrity and investor protection, replacing the existing Market Abuse Directive.January 11, 2021.

In June 2014 MAR2015, the European Parliament and CSMAD were published inCouncil to the EU Official Journal. MAR repeals and replacesmembers issued the Market Abuse Directive and its implementing legislation with effect from July 3, 2016. A numberfinal version of delegated acts, technical standards and guidelines in key areas were required to be produced under MAR.

Member States must also transpose CSMAD into their national law by July 3, 2016. The U.K. has not opted in to CSMAD and is therefore not obliged to transpose its provisions into national law. CSMAD requires all Member States to provide for harmonised criminal offences of insider dealing and market manipulation, and to impose maximum criminal penalties of not less than 4 and 2 years imprisonment, respectively, for the most serious market abuse offences.

In February 2013, the European Commission published draft legislation for the review of the current EU anti-money laundering rules, in the form of proposals for the Fourth Money Laundering Directive (“MLD4”4MLD”). MLD4All EU member states, including the U.K., had until June 26, 2017 to transpose the requirements of the directive into national law. In February 2016, the EU Commission, in an effort to bolster the fight against terrorist financing, proposed amendments to the 4MLD that would enable the tracing of terrorists through financial movements and disrupt the sources of revenue for terrorist organizations by targeting their capacity to raise funds. These proposed amendments were included in a final version of the 4MLD

issued by the EU Parliament in July 2016. In September 2017, additional legislation was implemented in the U.K. designed to combat financial crime including the Criminal Finances Act. The Act functions as an enhancement and extension of the Proceeds of Crime Act 2002 and, in addition to increasing the powers of authorities in investigating tax evasion, is also designed to make failure by a commercial organization to prevent the facilitation of tax evasion a punishable offence.

The Fifth Anti-Money Laundering Directive (“5MLD”), came into effectforce in the EU on June 25, 2015. It has toApril 26, 2018 and must be transposedimplemented by EU Member States by June 27, 2017, on which date itJanuary 10, 2020. The changes will repeal the Third Money Laundering Directive (“MLD3”) and the MLD3 Implementing Directive. However, the European Commission has urged Member States to comply by the end of 2016. MLD4 aims to update and strengthen the current EU anti-money laundering regime, including by implementing the standards published by the Financial Action Task Force in 2012. MLD4 also shifts the focus of regulatory requirements further towards a risk-based approach, which will require increasingly robust policies and procedures within regulated firms in order to assess and monitor risk effectively. The scope of the anti-money laundering regime is also extended in certain respects and the approach to classifying third country firms will in the future be focused on “blacklisting” of non-equivalent jurisdictions (in contrast with the current focus on positive equivalence).

The Alternative Investment Fund Managers Directive (“AIFMD”) became effective on July 21, 2011. The AIFMD was required to be implemented by Member States by July 22, 2013 (subject to a one-year transitional period). The AIFMD and its related implementing legislation establishes a detailed framework for the management and marketing of alternative investment funds (or “AIFs”)impose additional obligations within the EEA. Asfinancial services sector. 5MLD amends 4MLD, and includes provisions that enhance the conceptrequired level of an “AIF” is broadly defined, the AIFMD captures the majoritytransparency around beneficial ownership of non-UCITs funds, including hedge funds, private equity, debtcorporates and real estate funds.trusts, tightens some controls relating to Politically-Exposed Persons and high risk third countries and also addresses risks associated with certain technological innovation, particularly virtual currencies.

Under the AIFMD regime, fund managers operating within the EEA are subject to extensive organizational requirements, including mandatory authorization by an EEA regulator, substantial ongoing compliance, conduct of business and disclosure requirements and the obligation to appoint an independent depositary with responsibility for an AIF’s assets. A separate regulatory regime applies to depositaries, which must also be authorized for this purpose. Additional restrictions and disclosure obligations apply to managers of private equity firms which acquire material holdings in EEA companies. Non-EEA fund managers seeking to target EEA investors are also subject, at a minimum, to a sub-set of the compliance requirements for EEA managers, focusing mainly on disclosure. It is open to each Member State to introduce additional restrictions for third country managers and some jurisdictions remain very restrictive in this respect. The possibility of a passporting regime for third country managers is, however, provided for in the AIFMD and is currently under consideration at the EU level, although further legislation would be required to introduce this. The AIFMD has material impact for Nomura insofar as it manages and markets investment funds within the EEA (which now attracts an enhanced compliance burden). Nomura also acts as depositary of an AIF and is accordingly subject to separate compliance requirements and liability provisions in this capacity. The U.K. FCA is due to release a consultation paper on rules for eventual implementation of European passports for Non-EEA AIFM’s managing EEA AIF’s and for non-EEA AIFs being marketed in the EEA.

On April 1, 2013, the U.K. Financial Services Act 2012 was formally enacted (after having received Royal Assent on December 19, 2012). The implementation of the U.K. Financial Services Act 2012 has resulted in the U.K. FSA being replaced by a “twin peaks” approach through the U.K. PRA and U.K. FCA. The U.K. PRA was formed as a subsidiary of the Bank of England and is responsible for the prudential supervision of a number of banks and deposit takers, plus certain large investment firms and insurers. It has a single objective to “promote the safety and soundness of regulated firms.” The U.K. FCA was formed as a separate entity and is responsible for the prudential supervision of firms not supervised by the U.K. PRA and for market conduct matters for all authorized firms. The U.K. FCA has a single strategic objective of “making markets work well.” Nomura’s main operating subsidiaries in the U.K. (Nomura International plc and Nomura Bank International plc) are regulated by both the U.K. PRA and U.K. FCA.

In July 2014, the U.K. FCA and U.K. PRA consulted on proposals for a new senior managers regime (“SMR”) for senior managers and a related certification regime (“CR”) for a wider population of employees whose performance has the potential to pose harm to a firm or its customers. In March 2015, the U.K. FCA and U.K. PRA consulted on applying the SMR and CR to U.K. branches of foreign banks. On August 13, 2015 the U.K. FCA and the U.K. PRA published their respective rules confirming how they apply the SMR and CR to U.K. branches of non-EEA banks (incoming branches). The new individual accountability standards in this area have been developed by the FCA in response to recommendations made by the Parliamentary Committee on Banking Standards in this area. The Senior Managers and Certification Regime was implemented on March 7, 2016. Senior managers (but not those of U.K. branches of overseas banks) may be prosecuted by the U.K. PRA or U.K. FCA in certain prescribed circumstances for taking a decision that causes a financial institution to fail. The rules also require firms to demarcate responsibilities more precisely, implement new systems and controls for certification and share with the U.K. PRA/U.K. FCA detailed information on their governance structures.

Over the past two to three years the U.K. FCA has worked towards introducing a number of changes to the U.K. regulatory regime for the protection of client assets (“CASS”SM&CR”). These requirements are relevant for Nomura’s U.K. entities where they hold client money and other assets on behalf of their clients (other than in the course of deposit-taking activity). The reforms made to the CASS regime have been driven in large part by concerns of the U.K. FSA/FCA regarding the shortcomings of the previous rules that were highlighted in the U.K. case law surrounding the collapse of Lehman Brothers International (Europe). The U.K. FCA commenced its review of the CASS regime in 2012 and published final rules in 2014, the last of which came into force on June 1, 2015. The reformsMarch 7, 2016 with the aim of reducing the risk of harm to improveconsumers and strengthening market integrity by making firms, and individuals within those firms, more accountable for their conduct and competence. In July 2018, the speedU.K. FCA and efficiency with which client assets may be distributed following the insolvency of the holding firm andPRA published near-final rules extending SM&CR to minimize negative market impact. This has resulted in extensive changes to the rules, designed to strengthen the legal and operational requirements of holdingcover all financial services firms for effective segregation of client money and to enhance controls over institutions with which client money is deposited and third parties to whom client money is transferred. The conditions attached to exclusions from the client money rules have also been clarified and enhanced. In addition, various changes have also been made to the rules to give effect to EMIR requirements regarding client money held in the course of derivatives clearing activity. The net effect of these various changesU.K. to apply from December 9, 2019. On March 8, 2019, the U.K. FCA announced its final rules on its proposed Directory—a new public register that will enable consumers, firms and other stakeholders to find information on key individuals working in financial services who are not otherwise appointed and publicly registered under the SMCR. Firms are to submit data on Directory individuals in December 2019, and the Directory is generallyexpected to increasego live in March 2020.

Since 2012, the operational and compliance burden on firms that hold client money and assets.

The European Commission put forward its EU Data Protection Reform in January 2012. On December 15, 2015 the European Parliament, the Council and the Commission reached agreement on the new data protection rules, establishingsought to establish a modern and harmonisedharmonized data protection framework across the EU.EU to replace the existing Directive. On May 4, 2016, the official texts of the new EU General Data Protection Regulation and the Directive(“GDPR”) were published in the EU Official Journal in all the official languages. While the Regulation became effectivelanguages and it came into force on May 24, 2016 it shall apply from25, 2016. GDPR took effect across the EU member states on May 25, 2018. The Regulation includesGDPR included a number of important changes to existing data protection legislation including new obligations on data processors, restrictions on the transfer of personal data outside the EEA and introducesthe introduction of new concepts such as “accountability” (and related record-keeping), the “right to be forgotten” and a requirement for data breach notifications.

In November 2015, the FCA published Guidance Consultation 15/6: Proposed guidance for firms outsourcingnotifications to the “cloud”relevant Regulators. Enforcement of GDPR will be carried out by both national regulators (for the U.K., the Information Commissioner) and other third-party IT services (GC15/6). the European Commission, and the regulators will also have the new power to impose greater fines for any breaches of the data protection requirements of up to 4% of a firm’s global turnover.

The draft guidance is intended to clarifyEU Benchmark Regulation entered into force on June 30, 2016 and has applied in the requirementsU.K. since January 1, 2018. Global regulators have imposed fines on firms when outsourcingfollowing attempted manipulation of the LIBOR, gold and foreign exchange benchmarks, and have taken action against individuals for misconduct related to a “cloud”benchmarks. The objectives of the EU Benchmark Regulation include, but are not limited to: (i) improving governance and other third party Technology services. The guidance identifies several areascontrols over the benchmarking process to ensure that administrators avoid/manage conflicts of interest, which regulated firms should consider(ii) improving the quality of input data and also provides recommendations and guidance in relationmethodologies used by benchmark administrators, (iii) ensuring that contributors to firms conducting due diligence and ensuring the relevant outsourcing contract complies with the FCA rules, oversight of the cloud provider, access to business premises and change management processes. Feedback is expected in July 2016.

A number of reforms are also either pending or anticipated at the EU and/or U.K. level, which may have a material impact on Nomura and on EU markets generally. In the EU, these include the Bank Structure Regulationbenchmarks and the Capital Markets Union initiative (together with the related reviewdata they provide are subject to adequate controls, and (iv) protecting consumers and investors through greater transparency and adequate rights of the Prospectus Directive and the EU securitization framework). redress.

In the U.K., as a follow up to the Fair and Effective Markets Review (established by the Chancellor of the Exchequer), the Fixed Income, Currencies and Commodities (“FICC”) Markets Standards Board (“FMSB”) was established in 2015 as a private sector response to the conduct problems revealed in global wholesale FICC markets after the financial crisis. The function of the FMSB is to help raise standards of conduct in global wholesale markets by producing voluntary Standards and other guidance in areas of uncertainty that are developed by the membership and designed to illustrate best practices to all market participants. These Standards are intended to reduce the continuing uncertainty about acceptable practices in opaque and unregulated areas, which is a hazard for FMSB members, as well as other market participants. The Standards published to date

cover the new issue process, binary options for the commodities markets and reference price transactions for the fixed income markets. The published Standards do not have legal or regulatory force and do not replace existing legislation; rather, they are intended to supplement the rules already in place. The Standards are implemented by way of FMSB member firms, including Nomura International plc, making an adherence statement on an annual basis.

The U.K. is due to formally leave the EU at the end of October 2019 following the Brexit referendum held in June 2016 and triggering of Article 50 of the Treaty on the Functioning of the European Union to start the formal exit process on March 29, 2017. This is the result of an agreed extension to the previously negotiated March 29, 2019 deadline with the EU, and leaves open the possibility of Brexit occurring before this date, subject to political agreement being achieved. The U.K. remains a full member of the EU until such point, although its influence over rule-making is significantly reduced. The U.K. Government has proposed domestic legislation, the EU (Withdrawal) Bill, to repeal the European Communities Act 1972 that gives primacy to aspects of EU law and transposes currentEU-derived law into U.K. legislation to provide continuity. The U.K. financial services sector currently relies on access to the EU single market to conduct business across borders within the EU. Both sides have emphasized the need for continued good access, but the terms of the future relationship still depend on the outcome of political dialogue. In negotiating the terms of withdrawal, the U.K. and EU have agreed in principle draft plans for withdrawal, with proposed underpinnings of a future relationship and a “transition period” that would see the U.K. continue to be an EU member on current terms, without input into the rule-making process, until December 2020. U.K. parliamentary approval has not been obtained for this agreement, with further political developments and negotiation expected to bring about a final resolution.

Subject to further developments, regulatory authorities will continue to consider the appropriate measures required to mitigate risks to the financial system of a disorderly Brexit.

On May 25, 2018, Nomura Financial Products Europe GmbH, a Nomura subsidiary domiciled in Germany, was granted a securities trading license by the German regulator (“BaFin”). Nomura’s plans are well advanced and the work oflicense represents a major step towards ensuring that current client and counterparty relationships, and access to Nomura products and services, can continue without disruption after the FICC Market Standards Board may also have a material impact on Nomura and on U.K. markets.

Regulatory Capital Rules

Japan

The FIEA requires that all Financial Instruments Firms (Category I) (“Financial Instruments Firms I”), a category that includes NSC and NFPS, ensure that their capital adequacy ratios do not fall below 120% on anon-consolidated basis. The FIEA also requires Financial Instruments Firms I to file monthly reports regarding their capital adequacy ratios with the Commissioner of the FSA or the Director-General of the appropriate Local Finance Bureau, and also to disclose their capital adequacy ratios to the public on a quarterly basis. In addition, if the capital adequacy ratio of a Financial Instruments Firm I falls below 140%, it must file a daily report with the authorities. The FIEA provides for actions which the Prime Minister, through the Commissioner of the FSA or the Director-General of the appropriate Local Finance Bureau, may take if any Financial Instruments Firm I fails to meet the capital adequacy requirement. More specifically, if the capital adequacy ratio of any Financial Instruments Firms I falls below 120%, the Commissioner of the FSA or the Director-General of the appropriate Local Finance Bureau may order the Financial Instruments Firm I to change its business conduct, to deposit its property in trust, or may issue any other supervisory order that such authorities deem necessary and appropriate to protect the interests of the general public or investors. If the capital adequacy ratio of a Financial Instruments Firm I falls below 100%, the authorities may take further action, including the issuance of orders to temporarily suspend its business and the revocation of its registration as a Financial Instruments Firm I under the FIEA.

Under the FIEA and regulations thereunder, the “capital adequacy ratio” means the ratio of adjusted capital to a quantified total of business risks. Adjusted capital is defined as net worth less illiquid assets. Net worth

mainly consists of stated capital, additionalpaid-in capital, retained earnings, reserves for securities transactions, certain allowances for doubtful current accounts, net unrealized gains/losses in the market value of investment securities, and subordinated debt. Illiquid assets generally includenon-current assets, certain deposits and advances and prepaid expenses. Business risks are divided into three categories: (i) market risks (i.e., risks of asset value changes due to decline in market values and other reasons), (ii) counterparty risks (i.e., risks of delinquency of counterparties and other reasons) and (iii) basic risks (i.e., risks in carrying out daily business activities, such as administrative problems with securities transactions and clerical mistakes), each quantified in the manner specified in a rule promulgated under the FIEA.

The FSA reviewed the FIEA and regulations thereunder in line with Basel 2.5 framework and the revised regulations for Basel 2.5 were implemented at the end of December 2011. Market risks increased significantly as a result of the Basel 2.5 rule implementation.

We closely monitor the capital adequacy ratio of NSC and NFPS on a continuous basis. Since the introduction of the capital adequacy requirement in Japan in 1989, we have at all times been in compliance with all appropriate requirements. We believe that we will continue to be in compliance with all applicable capital adequacy requirements for the foreseeable future.

As discussed above, the FSA amended the FIEA and introduced new rules on consolidated regulation and supervision of securities companies on a consolidated basis on April 1, 2011 to improve the stability and transparency of Japan’s financial system and ensure the protection of investors. Following introduction of these rules, NSC was designated as a Special Financial Instruments Firm, following which we have been designated as a Final Designated Parent Company. As such, we are required to calculate consolidated regulatory capital adequacy ratio according to the FSA’s “Establishment of standards on sufficiency of capital stock of a final designated parent company and its subsidiary entities, etc. compared to the assets held thereby” (2010 FSA Regulatory Notice No. 130; “Capital Adequacy Notice on Final Designated Parent Company”). Accordingly, since our designation as a Final Designated Parent Company in April 2011, we now calculate our Baselrule-based consolidated regulatory capital adequacy ratio according to the Capital Adequacy Notice on Final Designated Parent Company.

The FSA also amended the FIEA to include reporting on consolidated regulatory capital for the Final Designated Parent Companies, effective April 1, 2011. We are subject to this reporting requirements as well as the capital adequacy requirements described above.

The Capital Adequacy Notice on Final Designated Parent Company has been revised to be in line with Basel 2.5 and Basel III, and we have calculated a BaselIII-based consolidated capital adequacy ratio since the end of March 2013. Basel 2.5 includes significant changes in the method of calculating market risk and Basel III includes redefinition of capital items for the purpose of requiring higher levels of capital and expansion of the scope of credit risk-weighted assets calculation.

If our capital ratios fall to the minimum level required by the FSA, our business activities may be impacted. However, these ratios are currently at well capitalized levels. We have met all capital adequacy requirements to which we are subject and have consistently operated in excess of the FSA’s capital adequacy requirements. Subject to future developments in regulatory capital regulations and standards, there has been no significant change in our capital ratios which management believes would have material impact on our operations.

The Basel Committee has issued a series of announcements regarding a broader program to strengthen the regulatory capital framework in light of weaknesses revealed by the financial crises, as described in “Consolidated Regulatory Capital Requirements” under Item 5.B of this annual report. The Capital Adequacy Notice on Final Designated Parent Company is expected to incorporate the series of rules and standards in line with the schedule proposed by the Basel Committee.

At theG-20 summit in November 2011, the Financial Stability Board (“FSB”) and the Basel Committee announced the list of global systemically important banks(“G-SIBs”) and the additional requirements to theG-SIBs including the recovery and resolution plan. The FSB also announced the group ofG-SIBs will be updated annually and published by the FSB each November. Since November 2011, we have not been designated as aG-SIB. On the other hand, the FSB and the Basel Committee were asked to work on extending the framework forG-SIBs to domestic systemically important banks(“D-SIBs”) and the Basel Committee developed and published a set of principles on the assessment methodology and the higher loss absorbency requirement forD-SIBs. In December 2015, the FSA identified us as aD-SIB and required additional capital charge of 0.5% after March 2016, with3-year transitional arrangement.

Overseas

In the U.S., Nomura Securities International, Inc. (“NSI”) is registered as a broker-dealer under the Securities Exchange Act of 1934 and asis a futures commission merchant with the Commodity Futures Trading Commission (“CFTC”). NSI is also regulated by self-regulatory organizations, such as the Financial Industry Regulatory Authority (“FINRA”) and the Chicago Mercantile Exchange Group. NSI is subject to the SEC’s Uniform Net Capital Rule (“Rule15c3-1”) and other related rules, which require net capital, as defined under the alternative method, of not less than the greater of $1,000,000 or 2% of aggregate debit items arising from client transactions. NSI is also subject to CFTC Regulation 1.17 which requires the maintenance of net capital of 8% of the total risk margin requirement, as defined, for all positions carried in client accounts and nonclient accounts or $1,000,000, whichever is greater. NSI is required to maintain net capital in accordance with the SEC, CFTC, or other various exchange requirements, whichever is greater. Another U.S. subsidiary, Nomura Global Financial Products Inc. (“NGFP”) is registered as an OTC Derivatives Dealer under the Securities Exchange Act of 1934. NGFP is subject to Rule15c3-1 and applies Appendix F. NGFP is required to maintain net capital of $20,000,000 in accordance with the SEC. Another U.S. subsidiary, Instinet, LLC (“ILLC”) is a broker-dealer registered with the SEC and is a member of FINRA. Further, ILLC is an introducing broker registered with the CFTC and a member of the National Futures Association and various other exchanges. ILLC is subject toRule 15c3-1 which requires the maintenance of minimum net capital, as defined under the alternative method, equal to the greater of $1,000,000, 2% of aggregate debit items arising from client transactions, or the CFTC minimum requirement. Under CFTC rules, ILLC is subject to the greater of the following when determining its minimum

net capital requirement: $45,000 minimum net capital required as a CFTC introducing broker; the amount of adjusted net capital required by a futures association of which it is a member; and the amount of net capital required by Rule15c3-1(a). As of March 31, 20152018 and 2016,2019, NSI, NGFP and ILLC were in compliance with relevant regulatory capital related requirements.

In Europe, Nomura Europe Holdings plc (“NEHS”) is regulated on asubject to consolidated basisregulatory supervision by the Prudential Regulation Authority (“U.K. PRA”). The regulatory consolidation is produced in accordance with the U.K.,requirements established under the Capital Requirements Directive and the Capital Requirements Regulation which imposes minimum capital adequacy requirementscame into effect on NEHS.January 1, 2014. Nomura International plc (“NIP”), the most significant of NEHS’ subsidiaries, acts as a securities brokerage and dealing business. NIP is regulated by the U.K. PRA and has minimum capital adequacy requirements imposed on it on a standalone basis by the U.K. PRA.basis. In addition, Nomura Bank International plc (“NBI”), another subsidiary of NEHS, is also regulated by the U.K. PRA on a standalone basis.basis and Nomura Financial Products Europe GmbH (“NFPE”), a Nomura subsidiary domiciled in Germany, is regulated by the German regulator (“BaFin”). As of March 31, 20152018 and 2016,2019, NEHS, NIP, NBI and NBINFPE were in compliance with relevant regulatory capital related requirements.

In Asia, Nomura International (Hong Kong) Limited (“NIHK”) and Nomura Singapore Ltd (“NSL”) are regulated by their local respective regulatory authorities. NIHK is licensed by the Securities and Futures Commission in Hong Kong to carry out regulated activities including dealing and clearing in securities and futures contracts, and advising on securities, futures contracts and corporate finance. With effect from April 22, 2013, NIHK assumed from its fellow subsidiary, Nomura Securities (Hong Kong) Ltd, the roles of exchange participantfinance and options trading exchange participant on the Stock Exchange of Hong Kong Ltd., futures commission merchant at the Hong Kong Futures Exchange Ltd. and clearing participant on the Hong Kong Securities Clearing Co. Ltd., the SEHK Options Clearing House Ltd. and HKFE Clearing Corporation Ltd. NIHK has a branch located in Taiwan which is also regulated by its local regulators.wealth management. Activities of NIHK, including its branch in Taiwan, are subject to the Securities and Futures (Financial Resources) Rules which require it, at all times, to maintain liquid capital at a level not less than its required liquid

capital. Liquid capital is the amount by which liquid assets exceed ranking liabilities. Required liquid capital is calculated in accordance with provisions laid down in the Securities and Futures (Financial Resources) Rules. NSL is a merchant bank with an Asian Currency Unit (“ACU”) license governed by the Monetary Authority of Singapore (“MAS”). NSL carries out its ACU regulated activities including, among others, securities brokerage and dealing business. The regulations require NSL to maintain a minimum paid-up capital of SGD15 million. NSL is regulated and has minimum capital adequacy requirements imposed on it on a standalone basis by the MAS in Singapore. As of March 31, 20152018 and 2016,2019, NIHK and NSL were in compliance with relevant regulatory capital related requirements.

In addition, certain of our other subsidiaries are subject to various securities and banking regulations, and the capital adequacy requirements established by the regulatory and exchange authorities of the countries in which those subsidiaries operate. We believe that each such subsidiary is, and will in the foreseeable future be, in compliance with these requirements in all material respects.

Management Challenges and Strategies

The Nomura Group’s management vision is to enhance its corporate value by deepening society’s trust in the firm and increasing the satisfaction of stakeholders, including shareholders and clients. In order to enhance its corporate value, Nomura responds flexibly to various changes in the business environment, and emphasizes earnings per shareEarnings Per Share (“EPS”) as a management index to achieve stable profit growth, and will seek to maintain sustained improvement in this index.

In order to achieve our management objectives, we are primarily focusinghave focused on ensuring that profits are recorded by all divisions and regions. But by revising the delegation of powers to regions and business divisions, we shifted to a new business execution structure as from May 2019. We are committed to continuing business model transformation in Japan as well as aiming to improve profitability of our overseas operations under Vision C&C slogan, so that we will be able to build a solid foundation to generate profits even in severe market environments.

As “Asia’s global investment bank”, we will continue to take appropriate measures toward phased implementation of Basel regulations (global standards on capital requirements and liquidity) as well as

forthcoming changes in the operating environment. While financial regulatory reforms in the wake of the financial crisis are in their final phase, unintended consequences of the regulatory reforms, adverse impact due to compound effect, and concern about newly emerging risks are being pointed out. We will ensure a flexible and robust response by staying attentive to changes in the impactglobal operating environment, such as various international financial regulations, demographic changes, digital evolution, and so forth, while closely monitoring rapidly-changing geopolitical situations, for the purpose of the overall regulatory framework on themaintaining an appropriate financial marketstanding and the competitive landscape.achieving an effective use of management resources through improved capital efficiency, etc.

The challenges and strategies in each division are as follows:

In Retail Division, under ourthe basic philosophy of “placing our clients at the heart of everything we do,” we provided consulting services to become “financial institution a lot of people need” by responding to diversifying needs and wishes. We continue to support elderly clients with their family as we are aimingexperiencing aging society and expand client base including next-generation clients for their asset management. Furthermore, we need to increase client satisfaction further by listening to our clients’ as well as understanding and meeting their diversified demands and needs.concentrate on mass affluent clients for the future. We also focus on providing a broad range of clients with value-added solutions to clients not only throughface-to-face consulting services, seminars,but alsonon-face-to-face service such as online andinvestment seminars, call center channels, so that we will win greater trust from account holders as well as new clients, and so that Nomura Group can sustainably be a trusted partneraiming to our clients.earn clients’ trust.

We intendaim to increase assets under management and expand our client base in (i) our investment trust business, by providing clients with a diverse range of investment opportunities to meet investors’ various needs, and (ii) our investment advisory business, by providing value-added investment services to our clients on a global basis. As a distinctive investment manager based in Asia with the ability to provide a broad range of products and services, we aim to gain the strong trust of investors worldwide by making continuous efforts to improve investment performance and to meet clients’ various needs.

In addition to the needs of our clients becoming increasingly more sophisticated, the Wholesale division also faces challenges presented by the technological revolution; which may result in market changes which fundamentally affect the form of our traditional business. In order to keep step with such changes as well as to ensure our ability to provide our clients with added value, we will continue to seek the enhancement of our connectivity across Global Markets, Investment Banking and other Divisions around the globe as part of our sustained efforts to provide highly sought-after products and services to the markets.

Global Markets has been focusing on delivering differentiated and competitive products and solutions to our clients by leveraging our global capabilities in trading, research, and global distribution. Through our integrated Fixed Income and Equities platform, weWe aim to provide competitive and comprehensive services and solutionsuninterrupted liquidity to our clients.clients across asset classes and markets, and strive to offerbest-in-class market access and execution services. Additionally, Global Markets will gear up for the digital transformation of our business.

In Investment Banking, we will continue to enhancesupport our structure to further provideclients’ cross-border M&A ambitions, facilitate their fundraising activities both in Japan and financing services in both domestic and overseas marketsother geographies, as well as provide the full product suite of our Solutions Business as our clients continue to provide solution business services associated with the our M&A and financing services amidpursue the globalization of our clients’their business activities.

In our Wholesale

The Merchant Banking Division will primarily provide equity as a new solution for business reorganizations and revitalizations, business succession as well as management buyouts to provide quality servicescater to meet the increasingly diversified and sophisticated needs of our clients, we redeployclients. The Merchant Banking Division will, under proper management of risk, focus on support for improving the firm’s resourcesenterprise value of portfolio companies, and will contribute to areasexpansion of competitive advantage, and aim to further enhance the connectivity across Global Markets, Investment Banking, and regions. We will strive to improve our capabilities of proposing products and services, as well as to make use of our geographic competitive advantage in Asia, so that we can meet the changing needs of our clients in accordance with global-scale fluctuations in the macro economy and the market environment.private equity market.

Risk Management and Compliance, etc.

In order to ensure financial soundness and enhance corporate value,At the risk management systems require further developments in response to increasing global business. Nomura Group, hasthe type of risk and maximum amount of permissible risk for the purpose of achieving strategic objectives and business plans based on management philosophy is set forth as the Risk Appetite Statement in which risks that we are willing to accept are articulated.Appetite. We will continue to make efforts to develop a system where the top management directly engages in proactive risk management for preciseframework which ensures financial soundness, enhances corporate value, and is strategically aligned to the business plan and incorporated in decision making.making by senior management.

With regard to compliance, we will continue to focus on improving the management structure to comply with local laws and regulations in the countries where we operate. In addition to complying with laws and regulations, we will continuously review and improve our internal compliance system and rules for the purpose

of promoting an environment of high ethical standards among all of our executive management and employees. In this way, we will meet the expectations of society and clients toward the Nomura Group and contribute to the further development of financial and capital markets.

Last year, based on the administrative penalties imposed on our subsidiary, Nomura Securities Co. Ltd. in 2012 in connection with public stock offerings, the Nomura Group established the Nomura Founding Principles and Corporate Ethics Day.Day in 2015. Commemorated annually, this day aims to remind all of our executive officers and employees of the lessons learned from the incident and to renew our determination to prevent similar incidents from recurring in the future and further improve public trust through various measures. We will strive to maintain a sound corporate culture through these initiatives. We willhave also further enhanceenhanced and reinforcereinforced our internal control framework, which includes measures to prevent insider trading and solicitation of unfair dealing, by ensuring that all of our executive officers and employees continually maintain the highest level of business ethics expected from professionals engaged in the capital markets.

ThroughHowever, in March 2019, amidst discussions regarding the efforts described above, we are strengtheningcriteria for designation to and exit from the earnings powerupper section of the entireexchange at the Advisory Group to Review the TSE Cash Equity Market Structure, there

were inappropriate information transfers regarding such criteria at Nomura GroupSecurities Co., Ltd. (“NSC”) (“this matter”).

As for this matter, on May 28th, Japan Financial Services Agency (“JFSA”) issued a business improvement order against Nomura Holdings Inc. (“NHI”) and working to achieve ourNSC in terms of management targetsframework and to maximize corporate value. We will advance collaboration across regions and among our three Divisions, and devote our effortscontrol on information.

Prior to the stabilityissuance of financial and capital markets and to our further expansion and development as “Asia’s global investment bank”.

Disclosure pursuant to Section 13(r)business improvement order, on May 24th, we publicized an outline of the Securities Exchange Act of 1934

Under Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012,remediation action plan which added Section 13(r) to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), an issuer of securities registered under the Exchange Act is required to disclose in its periodic reports filed under the Exchange Act if it or its affiliates have knowingly engaged in transactions or dealings during the period coveredwas approved by the report withBoard of Directors and contains structural reorganization as well as establishing a framework to tightly control the Government of Iran, Iranian government-controlled entities or persons sanctioned by the U.S. government under programs relatinginformation that could materially affect investment decisions.

On June 3rd, NHI and NSC submitted reports on their business improvement measures to terrorism and proliferation of weapons of mass destruction. Disclosure is generally required regardless of whether the transactions or dealings were conducted in compliance with applicable law.

During the fiscal year ended March 31, 2016, certain non-U.S. affiliates of ours engaged in the following transactions or dealings with entities that are or may be owned or controlled by the Government of Iran.

These activities were conductedJFSA in accordance with applicable law,the business improvement order.

By fully implementing the remediation action plan, we will further strengthen our internal control framework and we do not believe thatwork together as one firm to regain the activities were sanctionable under applicable law. We have not generated any revenues from these activities during the period covered by this report.trust of our clients, shareholders and all other concerned parties.

C. Organizational Structure.

The following table lists the Company and its significant subsidiaries and their respective countries of incorporation. Indentation indicates the principal parent of each subsidiary. Proportions of ownership interest include indirect ownership.

D. Property, Plants and Equipment.

Our Properties

As of March 31, 2016,2019, our principal head office is located in Tokyo, Japan and occupies 974,836968,050 square feet of office space. Our other major offices in Japan are our Osaka branch office, which occupies 125,217125,184 square feet, our Nagoya branch office, which occupies 82,914 square feet, and the head office of NAM in Tokyo, which occupies 176,115178,218 square feet.

As of March 31, 2016,2019, our major offices outside Japan are the head offices of NIP located in London, which occupies 459,010456,296 square feet, the New York head office of Nomura Securities International, Inc., which occupies 202,017159,811 square feet, and the offices of Nomura International (Hong Kong) Limited located in Hong Kong which occupies 146,368146,389 square feet. We lease most of our overseas office space.

As of March 31, 2016,2019, the major office of Nomura Services India Private Limited, our specialized service company in Mumbai, India, occupies 476,271413,517 square feet.

As of March 31, 2016,2019, the aggregate book value of the land and buildings we owned was ¥179¥153 billion, and the aggregate book value of equipment we owned, including communications and data processing facilities, was ¥27¥75 billion.

Item 4A. Unresolved Staff Comments

We are a large accelerated filer as defined in Rule12b-2 under the Securities Exchange Act of 1934. There are no written comments which have been provided by the staff of the Securities and Exchange Commission regarding our periodic reports under that Act not less than 180 days before the end of the fiscal year ended March 31, 20162019 and which remain unresolved as of the date of the filing of this annual report with the Commission.

Item 5. Operating and Financial Review and Prospects

A. Operating Results.

You should read the following discussion of our operating and financial review and prospects together with Item 3.A “Selected3.A“Selected Financial Data” of this annual report and our consolidated financial statements included elsewhere in this annual report.

This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of factors, including, but not limited to, those under Item 3.D “Risk3.D“Risk Factors”and elsewhere in this annual report.

Business Environment

Japan

The Japanese economy weakened overall.had its ups and downs. Japan’s real gross domestic product (“GDP”) grew relatively rapidlyrose a solid 2.2%quarter-on-quarter, annualized, in April-June 2018, and fell 2.5% in July-September. After returning to growth of 1.6% in October-December, it rose 2.1% in January-March 2015,2019, but we think actual economic activity was on the weak side in January-March as other economic indicators were weak. Until April-June 2018, the economy was led by an increase in exports backed by growth in the global economy, and domestic demand was solid overall. However, thereafter, the ability of exports to drive the economy weakened as the global economy entered a cyclical softening phase and prospects for the economy became increasingly cloudy as

U.S.-China trade tensions intensified. In July-September, demand in Japan weakened overall as many natural disasters occurred, and in particular, exports fell as the Kansai International Airport stopped functioning for a while from the effects of a typhoon. In October-December, GDP likely rose in large part in reaction to the natural disaster-driven decline in July-September, but the reaction was not that strong. In January-March 2019, exports were weak, particularly to Asia, and the slowdown in the global economy continued to weigh on economic activity in Japan. Employment conditions were relatively favorable over this period, with the unemployment rate at a quarter-on-quarter annualized ratelow level, but wage growth remained low and consumer confidence worsened. Consumer durable sales held up through the end of 4.6%,2018, possibly in consideration of the consumption tax increase scheduled for October 2019, but showed no clear direction after that, falling 1.4%consumer spending in April-June, rising 1.4%the New Year was weak, in July-September, and then falling 1.1%tandem with the decline inOctober-December. share prices. Corporate capital expenditure roseplans were comparatively strong owing to demand for two consecutive quarters,labor-saving technology in both July-September and October-December, partly reflecting an improvement in profit margins. At the same time, however, there was a marked weakening in consumer spending, reflecting concernsresponse to personnel shortages, but they became more cautious amid uncertainty about price hikes for food and other items, even though the environment for employment and incomes was favorable. Exports from Japan also weakened as a result of a slowdown in economic growth in China and other Asian countries. From the beginning of 2016, a further heightening of concerns about a global economic slowdown ledconditions and leading indicators of capital spending have weakened since autumn of 2018.

With respect to corporate earnings, recurring profits appear to have risen slightly compared with the yen to strengthen rapidly and as a

result of this some economic indicators for January and February were also notably weak. Amid these economic conditions, in September 2015 the Japanese government set targets of a GDP of ¥600 trillion, a birth rate of 1.8, and reducing to zero the number of people who leave employment to provide nursing care as part of its initiative to ensure that each and every one of Japan’s 100 million-plus citizens was dynamically engaged in society, and a number of concrete measures to this end were included in the fiscal year ended March 31, 2016, supplementary budget approved on January 20, 2016. In addition, on January 29, 2016 the Bank of2018, as a slowdown in business activity became clear in Japan decided to implement “QQE (quantitative and qualitative easing) with a Negative Interest Rate,”overseas. It appears that profit growth for industrial machinery, particularly factory automation (“FA”) systems, which involves applying a negative interest rate to a portion of the current account deposits that financial institutions hold with it.

Corporate earnings rosewas strong in the fiscal year ended March 31, 2016,2018, softened or turned to a profit decline as appetite for capital expenditure fell, mainly in previous fiscal year,China, in sectorsresponse to trade friction between the US and China. Profits were also dragged down by the recognition of unrealized losses on equity securities resulting from changes in the market value of stock holdings and by special factors including dealing with improper inspections and quality issues. Sectors that did well appear to have been trading companies, where the weakening of the yen versus the U.S. dollar boosted earnings and sectors where the fall inresource operations were strong owing to buoyant crude oil prices tended to result into lower costs. However, corporate earnings struggled in sectors that were sensitive to the rapid fall inand other resource prices, and the slowdown in growth in China and emerging economies. Overall, it appears that corporate earnings in Japan rose for the fourth year in a row. Major contributions to this profit growth came from sectors such as utilities, as electric power companiesnon-resource operations also held up, including lifestyle/consumer-related businesses; chemicals, which benefited from lower crude oilhigher market prices autos, on the back of strong new auto sales globally,semiconductor silicon, graphite electrodes, and particularly in the U.S.,other products; electronic parts, as automotive and chemicals, where companies benefited from the fall in raw material prices. Meanwhile, the steel & nonferrous metals, electrical machinery & precisionother products did well; and semiconductor production equipment, and machinery sectors all made substantial negative contributionsowing to overall profit growth. The steel & nonferrous metals sector was hit hard by the decline in steel prices in Asia, triggered by oversupply in China; the electrical machinery & precision equipment sector saw an increase in restructuring costs at some companies; and the machinery sector was affected by weak demand from emerging economies. As of April 8, 2016, we estimate that recurringa large order backlog. Recurring profits at major Japanese companies (those in the Russell/Nomura Large Cap Index) rose 3% an estimated 1.1%year-on-year in the fiscal year ended March 31, 2016, with2019. Profit grew for the third straight year, but profit growth thus slowingslowed sharply from the 7% recorded15.3%year-on-year in the fiscal year ended March 31, 2015.2018. Return on equity (“ROE”) was 9.3% for the year ended March 31, 2019, falling short of 10.3% for the year ended March 31, 2018, which was the highest level in 37 years.

OnIn the equity market, investors became more risk averse on the back of U.S.-China trade friction and other uncertainties in the market environment and a widening in credit spreads, among other factors. Japanese stockequities started off the year ended March 31, 2019, by rallying from a selloff at the end of March 2018, butzig-zagged the rest of the first half of the fiscal year against a backdrop of an uncertain market environment reflecting the U.S.-China trade friction, European political concerns, and prospects for the global economy. In September, the U.S. proposed fresh trade negotiations with China, raising expectations for improved U.S.-China relations. The Nikkei Stock Average closed at 24,245.76 on October 1, 2018, the highest it had been at since November 1991. However, thereafter, Japanese stocks were weighed down by an increase in U.S. long-term interest rates in response to tightening financial conditions as the U.S. Federal Reserve Board (FRB) normalized U.S. monetary policy. Through end of 2018, major equity markets around the world corrected, including the Nikkei Stock Average, rose temporarily above its April 2000 high in June 2015, when companies startedwhich fell below 20,000 at one point. That said, the FRB indicated it would put a halt to apply Japan’s new Corporate Governance Code, which aims to encourage improvements in capital efficiencymonetary tightening, and constructive dialogue with investors. This rise in equity prices was in response to expectations thattoward the weakeningend of the yen versus the U.S. dollar would lead to growth in corporate earnings and also to overseas investors’year ended March 31, 2019, expectations of improvements to shareholder returns. However, stockfor progress with U.S.-China trade talks increased. Buttressed by these factors, major equity markets around the world started to turn bearish from the beginning of August after a period of firmness up to that point, in response to sharp falls in the Chinese renminbi and Chinese equity prices, and Japanese equity prices also made substantial losses through torallied toward the end of September.the fiscal year. The Japanese stock market then started to recover in October, partly on expectations regarding Chinese monetary policy, and investor sentiment received a further boost in November when the IPOs of the three Japan Post Group companies got off to a smooth start. After this, however, the Japanese stock market gradually corrected on concerns about the outlook for the global economy, as symbolized by the fall in crude oil prices. From the beginning of 2016, there were further falls in Chinese equity prices and crude oil prices, while the yen strengthened further versus the U.S. dollar, and in February 2016 the Nikkei Stock Average temporarily dipped below 15,000 for the first time since October 2014. The key Tokyo Stock Price Index (the “TOPIX”) fell 12.7% over the course, a representative equity index, was 1,591.64 at end of the fiscal year,March 2019, down 7.3% from 1,543.111,716.30 at end of March 2018. The Nikkei Stock Average was 21,205.81 at the end of March 2015 to 1,347.202019, down 1.2% from 21,454.30 at the end of March 2016. The Nikkei Stock Average also2018.

On the bond market, with the Bank of Japan (BOJ) maintaining its framework for quantitative and qualitative monetary easing with yield curve control, the yield on newly issued10-year Japanese government debt securities was largely in the range of-0.10% to 0.15%. More specifically, from April tomid-July 2018, the yield on newly issued10-year Japanese government debt securities was largely in the tight range of 0.2% to 0.6%. When the yield on newly issued10-year Japanese government debt securities rose above 0.1% in February

2018, the BOJ conducted market operations to cap rising interest rates, indicating it did not want interest rates to sharply exceed 0.1%. Then inmid-July, the yield on newly issued10-year Japanese government debt securities rose to around 0.1% in response to news reports that the BOJ was considering a more flexible monetary policy, and the BOJ decided at its July30-31 Monetary Policy Meeting to expand the range of allowable movement for the yield on10-year Japanese government debt securities to-0.2% to 0.2%, from-0.1% to 0.1%. Soon after, interest rate increases picked up, yields at one point on August 2, rose to 0.145%, but with the BOJ conducting an emergency long-term Japanese government debt securities purchase operation, returned to around 0.1%. Inmid-September and beyond, the upward trend strengthened for the yield on newly issued10-year Japanese government debt securities along with rising overseas interest rates, and in early October, the yield briefly marked 0.155%, but equity prices fell 12.7% overin the U.S. on concerns the FRB’s interest rate hike stance was too strong relative to underlying economic activity, and frommid-November, U.S. long-term interest rates turned to a downtrend and accordingly the yield on newly issued10-year Japanese government debt securities fell. At the U.S. FOMC meeting on December18-19, the FRB maintained its interest rate hike policy, and Japan’s interest rates fell further, to around 0%, along with overseas interest rates, on concerns of a slowdown in the economy. At the start of 2019, the FRB indicated that it would focus on the economy, after which equity prices turned upward and long-term interest rates were spurred downward, with the yield on newly issued10-year Japanese government debt securities at end of March falling briefly to-0.1%.

In foreign exchange markets, USD/JPY, which started the fiscal year at $1 = ¥106-¥107, moderately moved in the direction of a strong dollar/weak yen in response to continued policy interest rate hikes by the FRB, and in October was around ¥114-¥115. That said, rises in the USD/JPY rate were weighed down by intensification of U.S.-China trade frictions. Furthermore, in October and beyond crude oil prices fell sharply, in December U.S. equities corrected, and, with investors generally becoming more risk averse, the yen strengthened rapidly at the end of 2018 and start of 2019. In particular, when Japanese markets were closed on January 3, and partly owing to thin trading, the USD/JPY rate was briefly at ¥104-¥105, among other erratic movements. Thereafter, USD/JPY rose moderately, but upside became limited in January 2019 and beyond, after the FRB made it clear it would hold off on interest rate hikes for the time being, and USD/JPY ended March 2019 at ¥110.86.

Meanwhile, EUR/JPY started the fiscal year of 2018 at €1 = ¥130-¥131, but fell to ¥125-¥126 in May, with the economy slowing and the emergence of populist political parties in the eurozone. Thereafter, economic data for the eurozone showed signs of recovery, but political concerns in Turkey and other factors led to the EUR/JPY trading in a tight range with limited upside for a while. Furthermore, increased uncertainty toward the end of the fiscal year surrounding the U.K.’s exit from 19,206.99the EU and the European Central Bank (ECB)’s postponement of rate hike plans resulted in EUR/JPY continuing to be capped on the upside and ending March 2019 at €1 = ¥124.35.

Overseas

The global economy grew in both industrialized and emerging-market nations, but the pace of growth slowed. Financial markets were destabilized by concerns over protectionist policies, including the U.K.’s negotiations to leave the EU and U.S.-China trade friction. Major central banks largely put on hold moves to tighten monetary policy. The U.S. FRB more or less raised interest rates at a pace of once every three months, but decided at the March 2019 meeting to leave policy interest rates unchanged. The BOJ maintained its large-scale quantitative easing policy, and the ECB suspended its asset purchase program at the end of December 2018 but via forward guidance indicated that it would keep policy rates unchanged at least through the end of 2019. At the same time in emerging-market nations, the Chinese economy increasingly slowed owing to policies to reduce debt, trade tensions with the U.S., and deterioration of business conditions in the IT sector. High growth continued in India, but signs of slowing in consumer spending emerged. Uncertainties also grew in resource-rich andoil-producing nations.

In the U.S., interest rates fell sharply as the FRB effectively stopped raising rates. In September 2018, FOMC projections for the federal funds rate in 2021 were 3.375%, higher than the projections for the longer run of 3.000%, but thereafter the FRB lowered its rate hike outlook and, in March 2019, FOMC projections for the

federal funds rate in 2021 were 2.625%, below the projection for the longer run of 2.750%. At the same time, the FRB decided not to raise rates in March 2019, and rate hikes that had continued at a pace of once a quarter in 2018 stopped in December 2018 at a target range of2.25%-2.50%. The FRB also decided in March 2019 to end bymid-2019 the balance sheet compression that had continued throughout 2018 as part of a monetary policy normalization effort. The trigger for the sharp change in FRB policy was the sharp drop in equity prices in the second half of 2018. In 2018, the U.S. and China exchanged the imposition of additional tariffs and retaliatory tariffs, raising concerns over trade frictions in the market. U.S. equity prices fell sharply toward the end of 2018. In 2019, the equity market recovered with the FRB turning to a dovish stance, as mentioned above, and the U.S. briefly putting off tariff hikes. Real GDP grew 2.9% in 2018, up from 2.2% growth in 2017. Inflation rose 1.9% year on year in March 2019, down from an increase of 2.4% in March 2019. The Dow Jones Industrial Average rose 7.6% to 25,929 at the end of March 2015 to 16,758.672019, from 24,103 at the end of March 2016.

Japanese government debt securities yields rose2018. The yield on10-year U.S. Treasuries fell 33bp to 2.41% at the beginningend of March 2019, from 2.74% at the end of March 2018.

The euro area economy slowed down from July-September 2018. The largest economy in the eurozone, Germany, was adversely affected by the slowdown in the Chinese economy and reduced demand for autos in key eurozone countries. Brexit was initially scheduled for March 29, 2019, and inventory investment demand accompanying Brexit concerns briefly rose in the eurozone in January-March 2019, but companies in the area became more cautious about economic prospects. The ECB announced in December 2018 that it would scale back monetary easing by taking monthly net asset purchases under the quantitative easing policy to zero at end of 2018, but in March 2019, it said it would make no change to policy interest rates at least through the end of 2019 in view of a slowdown in the German economy. With the ECB taking a cautious stance on rate hikes for the time being, the yield on10-year German government bonds fell below zero in late March 2019 for the first time since autumn of 2016. In the U.K., the withdrawal agreement Prime Minister Theresa May reached with the EU in November 2018 to realize a smooth departure from the EU for the U.K. was rejected by the lower house of the U.K. Parliament three times, and the Brexit date was postponed to the end of October 2019, from the initial schedule of March 29, 2019.

In Asia, real GDP grew 6.6% in China in 2018, down from 6.8% in 2017. This is mainly attributable to capital expenditures and domestic consumption slowing in the second half of the year owing to monetary tightening. Monetary policy switched to an easing stance in the second half of 2018, and large-scale tax cuts were carried out targeting businesses and households. However, the outlook is for weak growth in exports and capital expenditures. If economic slowdown concerns increase, the market would be likely to increasingly anticipate additional measures to be taken to stimulate consumer spending and additional infrastructure spending. In other Asian countries, U.S.-China trade frictions and uncertainty about external conditions have weighed on economic activity, but solid economic growth has continued, centered on domestic demand.

Executive Summary

Although the global economy continued to recover during the fiscal year ended March 31, 2016, but subsequently followed2019, the pace of expansion slowed in some countries and regions. In the U.S., acceleration in real Gross Domestic Product (“GDP”) growth continued from 2017. Personal consumption and government spending grew against a downward trend. European government debt securities yields rose sharply atbackdrop of tax reforms and fiscal expansion, and capital expenditures were also solid. At the beginning ofsame time, the fiscal year as excessive expectations regarding the quantitative easing (government bond purchases) launched by the European Central Bank (ECB) faded. This had an effect on the Japanese government debt securities market and the yield on newly issued 10-year Japanese government debt securities rose temporarily to nearly 0.5%. Yields on Japanese government debt securities subsequently started to fall, however, in response to turmoil in emerging economies, including China, and their markets and deterioration in economic sentiment. Yields on U.S. Treasuries rose through to the end of 2015, ahead of the rate hike implemented by the U.S. Federal Reserve Board (FRB) on 16 December 2015, its first since 2006, butshifted course and now plans to refrain from tightening monetary policy further in 2019 in response to disruption in financial markets. In China, credit creation slowed as a result of the rise in yields on Japanese

governmentgovernment’s efforts to reduce debt, securities was limited. Japanese interest rates then fell sharply after the Bank of Japan decided to introduce a negative interest rate policy on January 29, 2016. The yield on newly issued 10-year Japanese government debt securities fell to minus 0.08% at the end of March 2016.

On foreign exchange markets,and trade frictions between the U.S. dollar remained essentially flat versus the yen, tradingand China made corporations less eager to engage in a narrow range of ¥120-125 through to the end of December 2015, but from the beginning of 2016 the yen strengthened rapidly, to around ¥110 versus the U.S. dollar. At the end of March 2015 the U.S. dollar was tradingcapital expenditures. Consumer spending also slowed, for example in the¥120-121 range versus the yen. The dollar/yen exchange rate was affected at the beginning of the fiscal year by expectations of the start of a rate hike cycle in the U.S., with the dollar strengthening to the ¥125-126 range in Mayautomobile sales, which faltered after FRB Chair Janet Yellen hinted strongly at the possibility of a rate hike before the end of the year. However, dollar appreciation was then limited after Bank of Japan Governor Haruhiko Kuroda indicatedgovernment’s policies promoting automobile purchases. In Europe as well, exports to China weakened owing to the slowdown in June that he did not expect the yen to weaken further andChinese economic growth. A slump in August concerns about China triggered by the “renminbi shock” caused equity prices to fall around the world and the yen strengthened to trade around ¥120 versus the U.S. dollar. Market sentiment subsequently recoveredautomobile sales after the FRB decidedintroduction of stricter exhaust emission regulations also weighed on the European economy. In the U.K., the opaque outlook for Brexit continued to suppress corporate appetites for investment.

Similarly, Japan’s economy continued to expand, but at a slower pace. Exports were sluggish as a result of the slowdown in September to postpone the beginningglobal economies, particularly in China. Personal consumption was also low, in part because of a new rate hike cycle. The FRB then implemented its first rate hike in December as the dollar strengthened versus the yen once again to trade close to ¥123. The yen strengthened from the beginningstring of 2016 as another renminbi shock hit the financial markets. The Bank of Japan announced a negative interest rate policy in January 2016, but the view started to gain ground among financial market participantsnatural disasters including heavy rains, typhoons, and earthquakes, which also disrupted supply chains and otherwise affected corporate production activity. Corporate capital expenditures were nevertheless solid, bolstered by labor-saving investments by companies facing personnel shortages. We estimate that monetary policy had reached the limits of its effectiveness and the yen strengthened further. In March the dollar weakened to trade at ¥110-111 versus the yen. Meanwhile, the euro strengthened versus the yen to ¥140-141 in June 2015 but then followed a downward trend and by March 2016 the euro had weakened versus the yen to trade in the¥122-123 range. At the end of March 2015 the euro was trading at ¥130-131. From the beginning of fiscal year ended March 31, 2016, 10 year government bond issued by Germany and other European countries rose sharply and the euro strengthened against the yen, reaching the ¥140 level in June. However, the euro started to weaken after Greece’s sovereign debt problems flared up once again in July and partly also in reflection of the possibility of further monetary easing by the ECB. In August, the fall in inflation rates in the Eurozone became a problem as concerns about China led to a global decline in equity prices. The euro weakened rapidly versus the yen when in October the ECB announced plans for further monetary easing. However, the euro then rebounded sharply after expectations of additional monetary easing in December proved to be unfounded and the view that monetary policy had reached the limits of its effectiveness gained ground in the new year. Nevertheless, the yen also strengthened sharply over the same period, causing the euro to weaken versus the yen to trade in the ¥122-123 range in March.

Overseas

The global economy expanded as a whole, albeit at a moderate pace,profit growth in the fiscal year ended March 31, 2016, but2019, at major corporations slowed sharply versus the situation varied from regionprevious fiscal year, mainly owing to region. While the strength of the U.S. economy led it to embark on a new rate hike cycle for the first time since 2004, Europe and Japan were being forced by weak inflation to expand quantitative easing (Europe) and introduce negative interest rates (Japan). In China, share prices fell sharply and concerns about an economic slowdown grew from June through August. The devaluation of the Chinese currency in both August 2015 and January 2016, in what became known as the two renminbi shocks, destabilized global markets and this remains a risk factor for economies and financial markets around the world. Despite the fall in demand resulting from the economic slowdown in China, crude oil producing countries maintained athe economy. Market volatility was high level of supply in order to counterat times during the U.S. shale business. This resulted in a rapid fall in resource prices, led by crude oil prices, and as well as dealing a sharp blow to the economies of many resource-exporting countries it also symbolized the weakness of the global economy.

In the U.S., the FRB pushed back expectations of the timing of the first rate hike through 2015, before finally implementing a 0.25ppt hike in December of the same year. It then left the policy interest rate unchanged in January-March 2016 in response to the sharp increase in financial market volatility at the beginning of 2016. There were no particular developments in U.S. fiscal policy in 2015, as in 2014. Real GDP growth in the U.S. weakened in January-March 2015, partly owing to adverse weather conditions, but then improved in April-June

and July-September and in 2015 as a whole real GDP growth was 2.4% year-on-year, the same as in 2014. Nevertheless, the continued strengthening of the U.S. dollar on forex markets and the rise in labor costs led to a slump in corporate earnings. Declines in profits at energy companies as a result of the further fall in crude oil prices also weighed on corporate earnings. The U.S. stock market trended roughly flat at close to its historical high through July 2015, but fell sharply in both August 2015 and January 2016 in response to concerns about a rate hike by the FRB and an economic slowdown in China. In both cases, the market returned to the level seen before its sharp decline within three months as the FRB retreated from its positive stance on raising interest rates. The Dow Jones Industrial Average fell from 17,776.12 at the end of March 2015 to 17,685.09 at the end of March 2016, a loss of 0.5%. The yield on 10-year U.S. Treasuries was around 1.92% at the end of March 2015 but fell to around 1.77% at the end of March 2016.

In Europe, Eurozone real GDP expanded 1.5% year-on-year in 2015, the highest rate of growth since the 1.6% recorded in 2011. The fall in crude oil prices boosted private-sector consumption via an increase in disposable income as the negative economic impact of fiscal deficit reduction measures in various countries in the region eased. Meanwhile, the ECB started to purchase government bonds under its quantitative easing program in March 2015 in an attempt to put an end to fears of deflation, but Eurozone inflation nevertheless fluctuated around 0% and the expected inflation rate followed a downward trend. The weakening of the renminbi, the rise in the value of the euro on forex markets in the wake of the easing of expectations of a U.S. rate hike, and the fall in crude oil prices depressed inflation and caused expected inflation rates to fall. The ECB was forced to lower the interest rate on its deposit facility, which represents its deposit rate, to minus 0.4% in March 2016. Partly because of expectations of further monetary easing by the ECB, in February 2016 the yield on German 10-year government bonds fell to the 0.1-0.2% range for the first time since April 2015 and the key German stock index (the “DAX”) fell 16.7% over the year through to the end of March 2016 owing partly to the strong euro.

In Asia, China’s real GDP grew 6.9% year-on-year in 2015 and 6.7% year-on-year in January-March 2016, in a slowdown from the 7.3% growth recorded in 2014. In order to put the brakes on the rapid correction in domestic demand, the Chinese government eased the restrictions on home loans several times from September 2014 onward and in August 2015 it implemented policies aimed at boosting lending for infrastructure projects. At the beginning of 2016 Chinese construction starts picked up sharply, raising the prospect of a stabilization of construction demand. As part of the central government’s restructuring program, it embarked on the restructuring of regional government debt in May 2015. Then in 2016 the government decided to start work in earnest on the disposal of nonperforming assets at state-owned corporations and the reduction of surplus production capacity. On the Chinese stock market, the Shanghai Stock Exchange Composite Index fell 19.9% over the year to the end of March 2016, partly in response to the tightening of restrictions on margin trading and deterioration in corporate earnings. The slowdown in demand in China also had an effect on other Asian countries. Moreover, there is now a greater need for Asian countries to take aggressive steps toward economic reform because they face structural problems such as aging populations and excessive expansion of debt. In India, the government aims to encourage the creation of domestic infrastructure via direct inward investment and lending based on bipartite (two-country) and multipartite (multinational) talks, while at the same time continuing to pursue fiscal consolidation, and Malaysia too intends to continue with its economic reform program and has plans for government expenditure on major development projects. Indonesia succeeded in dissolving its parliament following a Cabinet reshuffle in August 2015 and this led to an improvement in the domestic investment environment.

Executive Summary

During the fiscal year ended March 31, 2016, the global economy expanded as a whole, albeit at a moderate pace, but the situation varied from region to region. In the U.S., the real Gross Domestic Product (“GDP”) growth rate remained the same as previous year, despite the first interest rate hike since 2004, supported by the strong domestic economy. In Europe, in the midst of low inflation levels, the real GDP growth rate was the highest since 2011, as a result of expanded quantitative easing by the ECB. In Asia, emerging economies were affected by the economic slowdown in China and experienced a decline in demand.

In Japan, the economy weakened overall. Despite the rise in corporate capital expenditures as a result of an improvement in profit margins, consumer spending and exports weakened markedly. The Tokyo Stock Price Index (TOPIX) fell from 1,543.11 points at the end of March 2015 to 1,347.20 points at the end of March 2016. The Nikkei Stock Average fell from 19,206.99 at the end of March 2015 to 16,758.67 at the end of March 2016. The U.S. Dollar-Japanese Yen exchange rate started the fiscal year at approximately a ¥120 level and continued to be relative flat until the middle of the fiscal year. However, the Japanese Yen strengthened rapidly after the start of the year, to around a ¥110 level in March 2016. Yields on Japanese government debt securities rose at the beginningsecond half of the fiscal year ended March 2016, but subsequently followed a downward trend duein response to turmoil in emerging economies includingtrade friction between the U.S. and China and the Bank of Japan’s announcement of a negative interest rate policychanges in January 2016. As a result by the end of March 2016, the yields on newly issued 10-year Japanese government debt securities fell to minus 0.08%.U.S. monetary policy.

From a regulatory perspective, in addition to the implementationsimplementation of Basel III requirements relating to capital ratios,ratio, liquidity ratios,ratio, and leverage ratios,ratio, Nomura washas been identified as one of the domestic systemically important banks, and the requirement for additional capital is applicable in phases after March 2016. As part of the global tightening of the financial regulations, wide-ranging reforms will be further introduced.Domestic Systemically Important Banks. Nomura will continue to monitor these issues closely and take necessary measures in responding to any such changes.wide-ranging reforms as part of the global tightening of financial regulations. Also, under circumstances characterized by normalization of monetary policies by central banks as well as uncertainty created by Brexit, Nomura is contemplating and implementing appropriate measures by paying necessary attention to the changes in global operating environment.

While our environment is changing drastically, underNomura Group has settled litigations and booked impairment of goodwill related to acquisitions made in the past. Based on our basic philosophy of “placing our clients at the heart of everything we do,” we made effortshave continued to provide clients with high value-added products and services. We also took necessary initiatives such as cost reduction and risk mitigation under a severe market. Ourtransform our domestic business model of Retail Division, achievedand have worked on improving the profitability of our international operations. These initiatives are all intended to establish a continued increasebusiness foundation that will enable the firm to grow in recurring revenue, sourced mainly from sales of investment trustsa sustainable manner in any business environment. Also, in April 2019, the firm established Future Innovation Company, an organization that spans all divisions, in order to leverage innovations including digital tools and discretionary investment contracts, as we transform our Retail business model, while we saw slowdown in sales of stocks and investment trusts in the second half of the year. Asset Management reported an increase of assets under management, driven by solid inflows into Exchange Traded Funds (ETFs) and privately placed fundsbuild a platform for regional financial institutions. Wholesale struggled in Fixed Income despite a solid performance in Equities and Investment Banking.providing new services to clients.

As a result of these efforts, weWe generated net revenue of ¥1,395.7¥1,116.8 billion for the year ended March 31, 2016,2019, a 13.0%25.4% decrease from the previous fiscal year.Non-interest expenses decreased by 2.1%1.2% to ¥1,230.5¥1,154.5 billion, income (loss) before income taxes was ¥165.2¥(37.7) billion, and net income (loss) attributable to the shareholders of Nomura Holdings, Inc. was ¥131.6¥(100.4) billion. Return on equity (“ROE”) was 4.9%negative 3.7%. Diluted EPS⁽¹⁾ for the year ended March 31, 20162019 was ¥35.52,negative ¥29.92, a decrease from ¥60.03¥61.88 for the year ended March 31, 2015.2018.

We have decided to pay a dividend of ¥3 per share to shareholders of record as of March 31, 2016.2019. As a result, the total annual dividend was ¥13¥6 per share.

In our Retail Division, net revenue for the year ended March 31, 20162019 decreased by 8.6%17.8% from the previous fiscal year to ¥435.6¥339.5 billion.Non-interest expenses decreased by 2.1%6.4% to ¥308.0¥290.0 billion. As a result, income before income taxes decreased by 21.1%52.0% to ¥127.6¥49.5 billion. Under the basic philosophy of “placing our clients at the heart of everything we do,” we provided consulting services to become “the most trusted partner” by understanding and meeting their diversified demands and needs. Last fiscal year, uncertain market environment weighed on investor sentiment, Investment trusts and stocks remained sluggish. As we made progress on servicessubstantial organizational changes for elder clients, Net inflows of cash and securities recorded positive through 9 consecutive months. We are continuously working hard to improve the customer satisfaction by improving the products through offering investment advice to best meet the diversified client needs. Although we saw slowdown in sales of stocks and investment trusts in the second half of the year due to market deterioration, we continued to provide consulting services. As a result, the discretionary investment assets under management grew steadily and the recurring revenue increased from the previous fiscal year. Total retail client assets under management remained high.

In our Asset Management Division, net revenue for the year ended March 31, 2016 increased2019 decreased by 3.3%23.2% from the previous fiscal year to ¥95.4¥97.8 billion.Non-interest expenses decreasedincreased by 2.5%4.1% to ¥58.7¥63.7 billion. As a result, income before income taxes increaseddecreased by 14.2%48.3% to ¥36.7¥34.2 billion. In the investment trust business, ETFs, funds specialized for fund wrap service and privately placed investment trusts developed in response to regionalfinancial institutions’ demands, and funds specialized for SMA or fund wrap service contributed to the increase in assets under management. In the investment advisory business, we saw cash

financial institutions’ demands contributed to the increaseinflow into high yield related products in assets under management. We also provided characteristic ETFs, which track the performance of leveraged index, in addition to traditional ETFs. In our investment advisory business, we saw continued cash inflow from large domestic public pensionsoverseas despite outflow in overseas.domestic pensions. As a result, assets under management increased from the end of the previous fiscal year as of March 31, 2016.2019. However, revenues decreased compared to the previous quarter, partially effected by the valuation of American Century Investments, our strategic partner.

In our Wholesale Division, net revenue for the year ended March 31, 20162019 decreased by 8.8%22.4% from the previous fiscal year to ¥720.3¥555.4 billion.Non-interest expenses increased by 8.5% to ¥666.8 billion. As a result, income (loss) before income taxes was ¥(111.4) billion. In Global Markets, recognized lower net revenuethe year ended March 2019 was a particularly tough year across the street, characterized by geopolitical uncertainty and persistent low volatility, leading to low client volumes and directionless markets that prevailed most part of the year. In this environment, Global Markets declined sequentially, particularly in the Fixed Income businesses. Equities business and Structured franchise made some notable contributions but was moderate compared with the previous fiscal year. For Investment Banking, revenues declined year due to challenging market conditions and low client activity. Onon year as the other hand, Investment banking recognized higher net revenue compared with the previous fiscal year, primarily due to enhancedglobal fee pool contracted. However, strong cross-regional and cross-divisionalinterdepartmental collaboration whichhelped deliver firmness in our M&A and ECM (equity-related fundraising business) businesses and supported revenue performance. In Japan, we continued to provide our clients with various products and solutions as well as participated in numerous high profile transactions such as Takeda’s acquisition of Shire and SoftBank’s global IPO. In the International regions, we leveraged our global connectivity to successfully execute major cross-border M&A transactions for our clients as well as provided our clients with various interest rate and foreign exchange solutions as increased market volatility resulted in a number of notable M&A transactions and multi-product deals across all regions. Non-interest expenses decreased by 0.4% to ¥704.9 billion, primarily due to decreasesgreater demand, helping offset softer performances in compensation and benefits and commission and floor brokerage expenses partially offset by an increase of employee termination costs recognized in connection with the restructuring of our Wholesale Division operations within EMEA and the Americas. Income before income taxes decreased by 81.3% to ¥15.4 billion.financing related businesses.

Results of Operations

Overview

The following table provides selected consolidated statements of income information for the years ended March 31, 2014, 20152017, 2018 and 2016.2019.

Net revenue decreased by 13%25% from ¥1,604,176¥1,496,969 million for the year ended March 31, 20152018 to ¥1,395,681¥1,116,770 million for the year ended March 31, 2016. The2019. This decrease is primarily due to slower performance driven byCommissions andNet gain on tradingin our Fixed Income business as a result of the challenging trading environmentRetail and the impact of settlement of legal proceedings with Banca Monte dei Paschi di Siena SpA (“MPS”).Wholesale Division.Commissions decreased by 5%21% from ¥453,401¥373,313 million for the year ended March 31, 20152018 to ¥431,959¥293,069 million for the year ended March 31, 2016

2019 primarily due to a decrease in commissions received from the distribution of investment trusts and brokerage commissions received from equity and equity-related products.Fees from investment bankingprimarily led by M&A and ECM, such as acquisition of Shire Plc by Takeda Pharmaceutical Co. and IPO of Softbank Corp was largely unchanged from ¥101,663 million for the year ended March 31, 2018 to ¥101,521 million for the year ended March 31, 2019.Asset management and portfolio service fees was largely unchanged from ¥245,616 million for the year ended March 31, 2018 to ¥245,519 million for the year ended March 31, 2019, although assets under management increased by positive net inflows into private placement trust for financial institutions and investment trusts for discretionary investments.Net gain on trading decreased by 23% from ¥442,885 million for the year ended March 31, 2018 to ¥342,964 million for the year ended March 31, 2019, driven by decreases in Japan.both Fixed Income and Equity business.Net gain on trading also included total gains of ¥0.2 billion attributable to changes in Nomura’s own creditworthiness with respect to derivative liabilities primarily due to a widening of Nomura’s credit spreads during the fiscal year.Gain (loss) on private equity investments were ¥(869) million for the year ended March 31, 2018 and ¥1,007 million for the year ended March 31, 2019.Other decreased by 63% from ¥221,192 million for the year ended March 31, 2018 to ¥81,057 million for the year ended March 31, 2019, primarily driven by a decrease in American Century Investments related revenue and the absence of gains from the liquidation of an investment in a foreign entity and the sale of our controlling financial interest in Asahi Fire and Marine Insurance Co., Ltd recognized in the previous year.

Net revenue increased by 7% from ¥1,403,197 million for the year ended March 31, 2017 to ¥1,496,969 million for the year ended March 31, 2018. This increase is primarily driven by higher contribution fromCommissions andAsset management and portfolio service fees in Retail and Asset Management.Commissions increased by 14% from ¥327,129 million for the year ended March 31, 2017 to ¥373,313 million for the year ended March 31, 2018 primarily due to an increase in commissions received from the distribution of investment trusts and brokerage commissions received from equity and equity-related products.Fees from investment banking increased by 24%10% from ¥95,083¥92,580 million for the year ended March 31, 20152017 to ¥118,333¥101,663 million for the year ended March 31, 20162018 primarily due to increase in revenue from M&A ECM and our solution businessesbusiness associated with fund raising.Asset management and portfolio service fees increased by 13% from ¥203,387¥216,479 million for the year ended March 31, 20152017 to ¥229,006¥245,616 million for the year ended March 31, 20162018 primarily due to an increase in assets under management driven by positive net inflows into ETFs and investment trusts for discretionary investments.Net gain on trading decreased by 33%7% from ¥531,337¥475,587 million for the year ended March 31, 20152017 to ¥354,031¥442,885 million for the year ended March 31, 2016,2018, primarily driven by slower performance in our Fixed Income business and the impact of settlement of legal proceedingslosses recognized in connection with MPS.a specific margin loan transaction.Net gain on trading also included total gainslosses of ¥28.3¥0.5 billion attributable to changes in Nomura’s own creditworthiness with respect to derivative liabilities and financial liabilities for which the fair value option has been elected. This net gain was primarily due to the wideninga tightening of Nomura’s credit spreads during the period.fiscal year. Gain (loss) on private equity investments increased by 150% from ¥5,502 were ¥1,371 million for the year ended March 31, 2015 to ¥13,7612017 and ¥(869) million for the year ended March 31, 2016.2018.Other decreasedincreased by 11%44% from ¥175,702¥153,626 million for the year ended March 31, 20152017 to ¥156,460¥221,192 million for the year ended March 31, 2016,2018, primarily due to unrealized lossesdriven by gains from ourthe liquidation of an investment in Ashikaga Holdingsa foreign entity and gains from the sale of our controlling financial interest in Asahi Fire and Marine Insurance Co., Ltd. (“Ashikaga Holdings”) and a decrease in net income from other affiliated companies.

Net interest revenue increased by 3% from ¥1,557,070was ¥128,717 million for the year ended March 31, 2014 to ¥1,604,1762017, ¥110,486 million for the year ended March 31, 2015. The increase includes the impact of exchange rate fluctuations, especially depreciation of the Japanese Yen, on revenues generated by our overseas businesses.Commissions decreased by 4 % from ¥473,1212018 and ¥58,616 million for the year ended March 31, 2014 to ¥453,401 million for the year ended March 31, 2015 primarily due to a decrease in commissions received from the distribution of investment trusts and brokerage commissions received from equity and equity-related products, particularly in Japan.Fees from investment banking increased by 4% from ¥91,301 million for the year ended March 31, 2014 to ¥95,083 million for the year ended March 31, 2015 primarily due to revenue from our solution businesses associated with M&As and fund raising.Asset management and portfolio service fees increased by 21% from ¥168,683 million for the year ended March 31, 2014 to ¥203,387 million for the year ended March 31, 2015 primarily due to an increase in assets under management driven by market appreciation and the contribution of the new subsidiary acquired during the year ended March 31, 2015.Net gain on trading increased by 12% from ¥476,356 million for the year ended March 31, 2014 to ¥531,337 million for the year ended March 31, 2015, primarily driven by the favourable trading environment, particularly in Japan and Asia.Net gain on trading also included total losses of ¥4.3 billion attributable to changes in Nomura’s own creditworthiness with respect to derivative liabilities and financial liabilities for which the fair value option has been elected. This net loss was primarily due to the tightening of Nomura’s credit spreads during the period.Gain on private equity investments decreased by 52% from ¥11,392 million for the year ended March 31, 2014 to ¥5,502 million for the year ended March 31, 2015 primarily due to the recognition of unrealized gains from our investment in Ashikaga Holdings Co., Ltd. (“Ashikaga Holdings”) following its listing on the Tokyo Stock Exchange during the year ended March 31, 2014.Other decreased by 2% from ¥179,485 million for the year ended March 31, 2014 to ¥175,702 million for the year ended March 31, 2015, primarily due to the gain recognized in connection with the disposal of our investment in Fortress during the year ended March 31, 2014, which was partially offset by an increase in net income from other affiliated companies.

Net interest revenue was ¥141,576 million for the year ended March 31, 2014, ¥110,354 million for the year ended March 31, 2015 and ¥112,635 million for the year ended March 31, 2016.2019.Net interest revenue is a function of the level and mix of total assets and liabilities, which includes trading assets and financing and lending transactions, and the level, term structure and volatility of interest rates.Net interest revenue is an integral component of trading activity. In assessing the profitability of our overall business and of our Global Markets business in particular, we viewnetNet interest revenue andnon-interestNon-interest revenues in aggregate. For the year ended March 31, 2016,2019, interest revenue, including a dividend from our investment in American Century Investments increased by 1%33%, primarily due to an increase in dividend income and interest income on reverse repurchase agreements and interest expense was largely unchanged withincreased by 51% from the year ended March 31, 2015.2018. As a result,Net

interest revenue for the year ended March 31, 2016 increased2019 decreased by

¥2,281 ¥51,870 million from the year ended March 31, 2015.2018. For the year ended March 31, 2015,2018, interest revenue, including a dividend from American Century Investments, increased by 5%33%, primarily due to an increase in dividend income and interest income on reverse repurchase agreements and interest expense increased by 19%, primarily due to an increase in interest expense on securities borrowed.52% from the year ended March 31, 2017. As a result,Net interest revenue for the year ended March 31, 2015 decreased2018 increased by ¥31,222¥18,231 million from the year ended March 31, 2014.2017.

Gain (loss) on investments in equity securities was ¥15,156¥7,708 million for the year ended March 31, 2014, ¥29,4102017, ¥2,683 million for the year ended March 31, 20152018 and ¥(20,504)¥(6,983) million for the year ended March 31, 2016.2019. This includes both realized and unrealized gains and losses on investments in equity securities held for operating purposes which are our investments in unaffiliated companies, which we hold on a long-term basis in order to promote existing and potential business relationships.

Non-interest expenses for the year ended March 31, 20162019 decreased by 2%1% from ¥1,257,417¥1,168,811 million for the year ended March 31, 20152018 to ¥1,230,523¥1,154,471 million, primarily due to a decrease in compensation and benefits and commissions and floor brokerage expenses which were partially offset by employee termination costs recognizedthe absence of provisions in connection with the restructuring of our Wholesale Division operations within EMEA andlegacy transactions in the Americas recorded slightly over ¥30.0 billion in March 2016.the previous year and lower bonus due to pay for performance offset by goodwill impairment charge of ¥81,372 million attributable to Wholesale.

Non-interest expenses for the year ended March 31, 2015 increased2018 decreased by 5%8% from ¥1,195,456¥1,080,402 million for the year ended March 31, 20142017 to ¥1,257,417¥1,168,811 million primarily due to an increase in fees paid by our Asset Management Division as a resultcompensation and benefits in connection with deferred compensation and provisions of an increaseslightly over ¥30.0 billion in assets under management, increasesconnection with legacy transactions in other various expenses as a result of the new Asian subsidiary acquired during the year ended March 31, 2015, and the impact of exchange rate fluctuations, especially depreciation of the Japanese Yen, on expenses incurred by our overseas businesses.Americas.

Income (loss) before income taxes was ¥361,614¥322,795 million for the year ended March 31, 2014, ¥346,7592017, ¥328,158 million for the year ended March 31, 20152018 and ¥165,158¥(37,701) million for the year ended March 31, 2016.2019.

We are subject to a number of different taxes in Japan and have adopted the consolidated tax filing system permitted under Japanese tax law. The consolidated tax filing system only imposes a national tax. Nomura’s domestic effective statutory tax rate was approximately 38%31% for the fiscal year ended March 31, 2014, approximately 36% for the fiscal year ended March 31, 20152017, 2018 and approximately 33% for the fiscal year ended March 31, 2016. Furthermore, as a result of revision to domestic tax laws on March 31, 2016, Nomura’s effective statutory tax rate will decrease from approximately 32% to 31% for fiscal years beginning on or after April 1, 2016.2019, respectively. Our foreign subsidiaries are subject to the income taxes of the countries in which they operate, which are generally lower than those in Japan. The Company’s effective statutory tax rate in any one year is therefore dependent on our geographic mix of profits and losses and also on the specific tax treatment applicable in each location.

Income tax expense for the year ended March 31, 20162019 was ¥22,596¥57,010 million, representing an effective tax rate of 13.7%a negative 151.2%. The significant factors causing the difference between the effective tax rate of 13.7%a negative 151.2% and the effective statutory tax rate of 33% were changes in deferred31% was the effect ofNon-deductible expenses which decreased the effective tax valuation allowancerate by 110.3%, partially offset byNon-taxable revenue which increased the effective tax rate by 36.1% but partially offset by Tax benefit recognized on the devaluation of investment in subsidiaries and affiliates which decreased the effective tax rate by 54.8%16.8%.

Income tax expense for the year ended March 31, 20152018 was ¥120,780¥103,866 million, representing an effective tax rate of 34.8%31.7%. The significant factors causing the difference between the effective tax rate of 34.8%31.7% and the effective statutory tax rate of 36% were non-deductible expenses31% was the effect of changes in foreign tax laws which increased the effective tax rate by 5.9%23.5%, partially offset by changes in deferred tax valuation allowance which increased the effective tax rate by 5.1% but partially offset by non-taxable revenueallowances, which decreased the effective tax rate by 4.7%22.8%.

Income tax expense for the year ended March 31, 20142017 was ¥145,165¥80,229 million, representing an effective tax rate of 40.1%24.9%. The significant factors causing the difference between the effective tax rate of 40.1%24.9% and the effective statutory tax rate of 38%31% were non-deductible expenses which increased the effective tax rate by 7.7%, the effect of the tax positions of foreign subsidiaries which increased the effective tax rate by 6.3% as partially offset by changes in deferred tax valuation allowance which decreased the effective tax rate by 9.8%10.8% but partially offset bynon-deductible expenses which increased the effective tax rate by 2.9%.

Net income (loss) attributable to NHI shareholders was ¥213,591¥239,617 million for the year ended March 31, 2014, ¥224,7852017, ¥219,343 million for the year ended March 31, 20152018 and ¥131,550¥(100,442) million for the year ended March 31, 2016, respectively.

2019. Our return on equity for the year ended March 31, 2014, 20152017, 2018 and 20162019 was 8.9%8.7%, 8.6%7.9% and 4.9%a negative 3.7%, respectively.

Results by Business Segment

Our operating management and management reporting are prepared based on our Retail, Asset Management and Wholesale Divisions and we disclose business segment information in accordance with this structure. GainRealized gain on investments in equity securities held for operating purposes, our share of equity in the earnings (losses) of affiliates, corporate items and other financial adjustments (including operating result of Merchant Banking Division) are included as “Other” operating results outside of business segments in our segment information. Unrealized gain (loss) on investments in equity securities held for operating purposes is classified as a reconciling itemsitem outside of our segment information. The following segment information should be read in conjunction with Item 4.B “Business Overview”“Business Overview” of this annual report and Note 21 “Segment22 “Segment and geographic information”information” in our consolidated financial statements included in this annual report. The reconciliation of our segment results of operations and consolidated financial statements is provided in Note 2122 “Segment and geographic information” in our consolidated financial statements included in this annual report.

Retail

In our Retail Division, our sales activities focus on providing consultation services and investment proposals to clients for which we receive commissions and fees. Additionally, we receive fees from asset management companies in connection with administration services we provide in connection with investment trust certificates that we distribute. We also receive agent commissions from insurance companies for the insurance products we sell as an agent.

Operating Results of Retail

Net revenue decreased by 9%18% from ¥476,505¥412,908 million for the year ended March 31, 20152018 to ¥435,634¥339,480 million for the year ended March 31, 2016, primarily due to the market turmoil from August 2015 which led to2019 as a slowdownresult of a decrease in salesretail investors’ transactions of stocks and investment trusts.trusts under the uncertain market condition weighed on investor sentiment.

Net revenue decreasedincreased by 7%10% from ¥511,916¥374,434 million for the year ended March 31, 20142017 to ¥476,505¥412,908 million for the year ended March 31, 2015,2018 as a result of an increase in retail investors’ transactions of stocks and investment trusts under the strong market condition.

Non-interest expenses decreased by 6% from ¥309,771 million for the year ended March 31, 2018 to ¥289,990 million for the year ended March 31, 2019, primarily due to decreasinga decrease in compensation and benefit and system-related expenses with the termination of system depreciation.

Non-interest expenses increased by 3% from ¥299,642 million for the year ended March 31, 2017 to ¥309,771 million for the year ended March 31, 2018, primarily due to an increase in system-related expenses.

Income before income taxes were ¥74,792 million for the year ended March 31, 2017, ¥103,137 million for the year ended March 31, 2018, and ¥49,490 million for the year ended March 31, 2019.

The following table shows the breakdown of Retailnon-interest revenues for the year ended March 31, 2018 and 2019.