Press Release
July 27, 2015
Daiwa Securities Group Inc.
This is an unofficial translation of a press release announced on July 27, 2015 by Daiwa
Securities Group Inc.. The original press release is in Japanese.

Notice Regarding Making Daiwa Securities Co. Ltd. to a Wholly-owned Subsidiary of Daiwa

Securities Group Inc. by Simplified Share Exchange

Daiwa Securities Group Inc. ("DSGI") and Daiwa Securities Co. Ltd. ("DS") entered into a share exchange agreement on July 27, 2015, in which DS will become a wholly-owned subsidiary of DSGI, and DSGI will become the parent company holding 100% of DS shares on October 1, 2015 (the "Share Exchange").
The Share Exchange will be executed through a simplified share exchange procedure under
the Companies Act, which does not require approval of the general shareholders' meeting of
DSGI. Therefore, some items and contents are omitted in this press release.
1. Purpose of the Share Exchange
DSGI has decided to carry out the Share Exchange for the purpose of constructing a flexible and efficient group management structure.
2. Overview of the Share Exchange
(1) Schedule of the Share Exchange
Resolution by the board of directors of DS for signing the share exchange agreement
Resolution by the Executive Management Committee of
DSGI for signing the share exchange agreement

：July 21, 2015

：July 27, 2015

Execution of the share exchange agreement ：July 27, 2015
Effective date of the Share Exchange ：October 1, 2015
(*1) The board of directors of DSGI has authorized the Executive Management Committee to execute a simplified share exchange agreement under the provisions of Article 416, paragraph 4 of the Companies Act.
(*2) DSGI will carry out the Share Exchange through a simplified share exchange procedure (kan'i kabushiki-koukan) under the provisions of Article 796, paragraph 2 of the Companies Act without obtaining approval of the general shareholders' meeting of DSGI.
(*3) DS will carry out the Share Exchange through a short-form share exchange procedure (ryakushiki kabushiki-koukan) under the provisions of Article 784, paragraph 1 of the Companies Act without obtaining approval of the general shareholders' meeting of DS.
(2) Method of the Share Exchange
Through the Share Exchange, DSGI will become the parent company owning 100% of DS
shares, and DS will become the wholly-owned subsidiary of DSGI.
(3) Allotment of Shares and Other Properties of the Share Exchange
DSGI will deliver 1,112 shares of DSGI common stock to the shareholders of DS (excluding
DSGI) for each DS share.

Company name

DSGI

(100% Parent Company)

DS

(Wholly-owned Subsidiary)

Share exchange ratio

1

1,112 (*1)

Number of shares of DSGI to be delivered in the Share Exchange

Common stock: 143,448 (*2)(*3)

（*1） DSGI will deliver 1,112 shares of DSGI common stock to the shareholders of DS for

each DS share However, the 810,071 DS shares held by DSGI will not be exchanged for shares of DSGI common stock in connection with the Share Exchange. This share exchange ratio may be reviewed by discussion between DSGI and DS.

（*2） Upon the Share Exchange, DSGI will deliver 1,112 shares of DSGI common stock for

each DS share to the shareholders of DS (excluding DSGI) who are stated or recorded in DS's shareholder registry at the time immediately before the Share Exchange takes effect. The total number of DSGI shares to be delivered in the Share Exchange is
143,448.

（*3） DSGI will use its treasury stocks as the shares delivered in the Share Exchange and will not issue new shares in connection with the Share Exchange.

(4) Treatment of stock acquisition rights and bonds with stock acquisition rights of wholly-owned subsidiary
There are no relevant matters.
3. Grounds for the details of Share Exchange Ratio
Based on the calculation results by Duff & Phelps K.K., a third-party calculation institution that is independent from DSGI and DS, DSGI and DS have agreed to use the share exchange ratio set forth above in 2(3), which is the median of the range of the share exchange ratio calculated by Duff & Phelps K.K..
4. Overview of parties to the Share Exchange

DSGI

(100% Parent Company)

DS

(Wholly-owned Subsidiary)

(1) Company Name

Daiwa Securities Group Inc.

Daiwa Securities Co. Ltd.

(2) Businesses

Holds, manages and controls shares of companies engaged in businesses including the financial instruments and exchange business

Securities related businesses, investment advisory and agency businesses

(3) Date Established

December 27, 1943

August 21, 1992

(4) Head Office

9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6751, Japan

9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6752, Japan

(5) Representative

Takashi Hibino, President and

CEO

Takashi Hibino, President

(6) Capital

247,397 million yen (as of March

31, 2015)

100,000 million yen (as of March

31, 2015)

(7) Number of Shares Issued and Outstanding

1,749,378,772 shares (as of March

31, 2015)

810,200 shares (as of March 31,

2015)

(8) Fiscal Year End

March 31

March 31

(9) Number of

Employees

13,466 (consolidated base, as of

March 31, 2015)

8,257 (as of March 31, 2015)

(10) Major Shareholders and Shareholding Ratio

STATE STREET BANK AND TRUST COMPANY 505223 (9.66%),

Japan Trustee Services Bank, Ltd. Trust Account (3.57%),

The Master Trust Bank of Japan, Ltd. Trust Account (3.26%), Sumitomo Mitsui Banking Corporation (1.76%),

THE BANK OF NEW YORK MELLON SA/NV 10 (1.68%),

Japan Trustee Services Bank, Ltd. Sumitomo Mitsui Trust Pension Account (1.45%),

STATE STREET BANK WEST CLIENT - TREATY 505234 (1.25%),

Taiyo Life Insurance Company

(1.23%),

Nippon Life Insurance Company

(1.21%),

Japan Trustee Services Bank, Ltd. Trust Account1 (1.12%)

(* we calculate shareholding ratio by excluding treasury stocks)

Daiwa Securities Group Inc. (99.98%)

Hinode Securuties Co., Ltd. (0.02%)

(11) Financials

FY 2014

As of March 31,2015 (consolidated)

FY 2014

As of March 31,2015

Net Assets

1,434,680 million yen

700,728 million yen

Total Assets

23,001,585 million yen

12,068,012 million yen

Net Assets per shares

725.27 yen

864,883.09 yen

Revenues

659,396 million yen

386,659 million yen

Net Revenues

532,220 million yen

366,592 million yen

Operating

Income

170,839 million yen

136,590 million yen

Ordinary Income

184,578 million yen

138,687 million yen

Net Income

148,490 million yen

127,032 million yen

Net Income per shares

87.07 yen

156,791.37 yen


5. Status after the Share Exchange
There are no changes to company name, location of head office, representative, business, capital and fiscal year end of DSGI after the Share Exchange.
6. Forecast
Since DS is already a consolidated subsidiary of DSGI, the impact of the Share Exchange on
DSGI's consolidated performance is expected to be small.
(End of the document)

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