Thorough Risk Management
* The "risk assessment" categories are shared throughout the Nomura Group.
By setting clear investment goals and employing state-of-the-art risk management systems, Nomura Asset Management can identify risks associated with investment activities under a variety of conditions and make more appropriate investments.
The PRC, chaired by the President and CEO, reports and deliberates on the results of periodic examinations (analysis and assessment) based on performance. Analysis data is provided by the Performance Analysis & Risk Management Department, which is independent from investment divisions. If a problem occurs, a report is made to the Investment Policy Committee (IPC) and a response is requested.
The Investment Risk Management Committee performs credit risk management and reviews and adopts internal guidelines to ensure the safety of invested funds and to facilitate sound investment of trust assets. The Committee's administrative office (the Performance Analysis & Risk Management Department) monitors internal management standards concerning pre-defined credit risks on a daily basis.
In the event of harm caused by a natural disaster or accident, organizational emergency response structures have been specified in advance, including the establishment of a disaster response headquarters chaired by an Executive Vice President, and processes for the resumption of normal operations as quickly as possible (business continuity plans) have been adopted in anticipation of occurrences such in a crisis which normal operations cannot be conducted at a particular location.
Trading divisions constantly monitor market liquidity and communicate with investment departments as necessary. In addition, investments are diversified over time and among various firms in accordance with the instructions of portfolio managers based on adequate mutual understanding reached with investment divisions in order to minimize market impact.
Each department has an established division of duties and puts in place mutual restraints and redundant work check procedures. A compliance officer in each department prepares a work manual and conducts training as necessary. If an administrative error occurs, the respective department contacts the Legal & Compliance Department and implements measures to prevent a recurrence.
The Treasury and Controller's Department has an established division of duties and has put in place mutual restraints and redundant work check procedures. In addition, the Internal Audit Department conducts internal audits of disclosure and governance relating to financial reporting in accordance with Article 302 of the U.S. Sarbanes-Oxley Act.
Systems have been established for continued operations in alternative offices if part or all of the current offices become unusable. In addition, internal administrative lines and information system lines for external communications are physically separated to minimize the risks of intrusion into internal information systems from outside the company. Redundant servers and lines are present and backups regularly performed to ensure continued operations in the event of an information system failure.
Companywide compliance structures are in place. The status of compliance with applicable laws and regulations by each department is confirmed, and if an error occurs, measures are implemented to prevent a recurrence and the process is followed up to ensure proper implementation. Registration of investment guidelines on information systems is confirmed, and checks to detect violations are performed each day.
The Compliance Manual contains ethical guidelines providing that officers and employees must comply with all laws that apply to officers and employees, including the laws of the United States. The guidelines also provide that if an officer or employee commits a violation, a report must immediately be made to a compliance officer.
