UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

OR

For the fiscal year ended March 31, 20142016

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, 2014, 3,717,630,4622016, 3,608,391,999 shares of Common Stock were outstanding, including 44,659,12743,528,251 shares represented by 44,659,12743,528,251 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. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

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 Rule 12b-2 of the Exchange Act).     ¨  Yes    x  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, and “dollar” or “$” means the lawful currency of the United States of America (the “U.S.(“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.Identity1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2.Offer2. Offer Statistics and Expected Timetable

Not applicable.

Item 3.Key3. Key Information

A. Selected Financial Data

The following table showspresents selected financial information as of and for the years ended March 31, 2010, 2011, 2012, 2013, 2014, 2015 and 20142016 which is derived from our consolidated financial statements. The consolidated balance sheets for the years ended March 31, 2015 and 2016, the consolidated statements includedof income, comprehensive income, changes in equity and cash flows for each of the years ended March 31, 2014, 2015 and 2016, 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 yenYen and U.S. dollarDollar will affect the U.S. dollarDollar equivalent of the yenJapanese Yen price of our sharescommon stocks and ADSs and the U.S. dollarDollar amounts received on conversion of cash dividends. The following table provides the noon buying rates for Japanese yenYen in New York City for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York, expressed in Japanese yenYen per $1.00.

The noon buying rate for Japanese yenYen on June 20, 201417, 2016 was $1.00 = ¥102.14¥104.20

B. Capitalization and Indebtedness.

Not applicable.

C. Reasons for the Offer and Use of Proceeds.

Not applicable.

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

TheOur 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, affected not only the global securities market but also financial services firms as participants, and also affected economic activity as a whole, especially in developed countries, including Japan. Also in 2011, financial problems in the U.S. and the worsening of financial issues in the peripheral countries of the Eurozone in 2011, including Greece, have adversely influenced major global financial markets. Since 2013, the prospects of global economy have remained uncertain due to various actions including monetary tightening in China and tapering in the United States.

Our business and revenues may be affected by any adverse changes in the Japanese and global economic environments and 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, forecastforecasts 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 extendlast for a long period of time, which could adversely affect our business and can result in us incurring substantial losses. Even in the absence of a prolonged market or economic downturn, changes relating toin market volatility or governmental fiscal and monetary policy changes in Japan, andor in any other country or region where we conduct business including the actions taken by the Bank of Japan or any other international central banking authorities 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.

Monetary policy changes by central banks may affect our business, financial condition and results of operations

In recent years, central banks in many major economies have been pursuing an expansionary 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 negative 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 trading and investment activities, which in turn could have an adverse impact on our financial condition and results of operations.

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.

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 yearyears ended March 31, 2012 and March 31, 2013 decreased by 15.9% and 15.0% from the previous yearyears, 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 and on-line content and tools to our clients via exchanges or other automated trading facilities. Revenue from our electronic trading, which includes trading commissions and bid-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 and bid-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, 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 sold assets that we do not own, or have short positions, an upturn in the prices of the assets could expose us to potentially significant losses. Although we seek to mitigate these position risks with a variety of hedging techniques, these market movements could result in us incurring losses. We canmay also incur losses 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.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 by Value-at-Risk (“VaR”) and may expose us to higher risks in connection with our market-making and proprietary businesses orbusinesses. 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. Also, weWe 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 on our profitability by changing the business.due to decrease in client transactions. Assuming a one-notch and two-notch downgrade of our credit ratings on

March 31, 2014,2016, absent other changes, we estimate that the aggregate fair value of assets that we wouldwill be required to post as additional collateral in connection with our derivative contracts would have been approximately ¥33.2¥24.9 billion and ¥122.8¥46.2 billion, respectively.

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 bondsdebt securities through third-party allotment or through providing business solutions to meet client’sclients’ 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.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 the marketthose markets in which we operate, whichoperate. Market liquidity may makealso 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 casethe 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 to Over-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 of own position is not formed, itfinancial 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 which 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 recordedrecognized 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 in conformity with U.S. GAAP as a business combination under U.S. GAAP by allocating our acquisition costs to the assets acquired and liabilities assumed and recordingrecognizing the remaining amount as goodwill. We also possess tangible and intangible assets besidesother than those stated above.

We may have to recognize impairment charges, as well as profits andother losses along associated with subsequent transactions, with regard to the amount of goodwill, tangible and intangible assets and if recorded, theyrecognized, such changes may adversely affect our financial condition and results of operationsoperations. For example, during the years ended March 31, 2014 and financial condition.March 31, 2015 we recognized goodwill impairment charges of ¥2,840 million and ¥3,188 million, respectively.

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 businesses.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, access tolong-term borrowings and the issuance of long-term debt issuance of mid/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 the debt capital marketsunsecured or secured funding

We depend on continuouscontinuously access tounsecured funding from issuance of securities in the short-term credit markets and the debt capital markets as well as bank borrowings to finance our day-to-day operations. An inability to raise money in the long-term or short-term debt markets, or to engage inoperations, 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 impairedadversely impacted by factors that are not specific to us, such as increasesreductions in banks’ nonperforming loans which reduce their lending capacity, a severe disruption of the financial and credit markets, which, among others, can lead to widening credit spreads and thereby increase our borrowing costs, or negative views about the general prospects for the investment banking, brokerage or financial services industries, generally.

We may be unable to access the short-term debt markets

We issue commercial paper and short-term debt instruments as a sourceor negative market perceptions of unsecured short-term funding of our operations. Our liquidity depends largely on our ability to refinance these borrowings on a continuous basis. Investors who hold our outstanding commercial paper and other short-term debt instruments have no obligation to provide refinancing when the outstanding instruments mature. We may be unable to obtain short-term financing from banks to make up any shortfall.Japan’s financial soundness.

We may be unable to sell assets

If we are unable to borrow in the debt capital marketsraise funds or if our cash balances declineliquidity declines significantly, we will need to liquidate our 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, which may adversely affect our liquidity, 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 impairedadversely impacted by other market participants seeking to sell similar assets into the market at the same time.

Lowering of our credit ratings could increaseimpact our borrowing costsfunding

Our borrowing costs and our access to the debt capital markets dependfunding depends significantly on our credit ratings. Rating agencies may reduce or withdraw their ratings or place us on “credit watch” with negative implications.For example, on March 15, 2012, Moody’s Investors Service downgraded our senior debt rating from Baa2 to Baa3. Although the impact of this downgrade was limited, futureimplications. Future downgrades could increase our borrowingfunding costs and limit our access to the capital markets.funding. This, in turn, could reduce our earnings and adversely affect our liquidity. Further,result of operations and our financial condition. In addition, other factors which are not specific to us may increaseimpact our funding, costs, such as negative market perceptionperceptions of Japan’s fiscalfinancial 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 in value we may suffer through unpredictable events that cause large unexpected market price movements.movements such as natural or man-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 problems in the U.S. and European countries which became apparent starting the same year, and the political crisis in Ukraine which began in late 2013, the terrorist attacks in Paris in November 2015 and the terrorist attacks in Brussels in March 2016, 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 derivativesderivative 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 and non-Japanese firms in the Japanese market is increasing

Since the late 1990s, the financial services sector in Japan has been undergoingundergone 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, as 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 to a greater degree than they could before deregulation in the areas of financing and investment trusts. Among others, securities subsidiaries of commercial banks and non-Japanese firms have been affecting our market shares in the sales and trading, investment banking and retail businesses.

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 firmsgroups have established or acquired broker-dealers or have consolidated with other financial institutions. Recently, these other securities companies and commercial banks develop theirlarge financial services groups have been further developing business linkage and have the abilitywithin 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, alliances regardlessthe financial services industry has seen collaboration beyond the borders of the existing groups are seen. These financial groups will further enhance their synergiesbusinesses and industries, such as alliances between commercial banks and securities companies outside of framework of existing corporate groups and eventuallyrecent alliances with non-financial companies including emerging companies. Our competitiveness may be adversely affected if our competitors are able to expand their businesses and improve their profitability. Our market shares may decrease if these large consolidated firms expand their businesses.profitability through such business alliances.

Our global business strategies may not result in the anticipated outcome due to competition with other financial services firms in international markets and the failure to realize the full benefit of management resource reallocation

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 important non-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 rebuildmaintain and expanddevelop our operations in these regions and the U.S. After the acquisition, however, market structures have changed drastically due to the global economy started to slow down,scaling back of market-related businesses by European financial institutions and both regulation and supervision have tightened around the world.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 changes to our Wholesale 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 affect our global businesses, financial condition and results of operations.

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 our marketthe markets in which we operate could adversely affect our business.

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

Changes inNew 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. For example, in March 2012,Such new regulations or revisions to existing regulations include the FSA published the revised Capital Adequacy Notice on Final Designated Parent Company in order to respond to theso-called Basel III measures announcedpackage formulated by the Basel Committee on Banking Supervision (“Basel Committee”), and beginning on March 31, 2013, the amended Notice has been gradually phased in. The full implementationsome rules of such new measures may decrease our capital adequacy ratio calculated pursuantwhich are still to such new measures below the levels at the end of March 2013. In addition to the Basel III measures, implementation of new regulations be finalized and/or strengthening of existing regulations have been determined or are under consideration by international organizations such as theG-20, Financial Stability Board (“FSB”), International Organization of Securities Commissions (“IOSCO”) and Basel Committee, or governmental and self-regulatory organizations in Japan and in virtually all other jurisdictions in which we operate.implemented. These changes in regulations if they are applied to us, may 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 FSBFinancial Stability Board (“FSB”) and the Basel Committee have announced that they will 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, G20G-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

addition, December 2015, the FSBFSA identified us as a D-SIB and IOSCO have published assessment methodologies for identifying Non-bank Non-insurer Global Systemically Important Financial Institutions (“NBNI G-SIFIs”), for public consultation. Theimposed 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 may further increase if we are identified as a G-SIB, a D-SIB or a NBNIG-SIFI in the future.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.condition

We recognize deferred tax assets onin our consolidated balance sheets as a possible benefit of tax relief in the future. If we experience or foresee a deteriorating business condition, aforecast future operating losses, if tax reform (such as a reduction of corporatelaws or enacted tax rate)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 then recognized in our consolidated balance sheets. As a result, it could adversely affect our operatingfinancial condition and results andof operations. See Note 15“Income taxes” in our consolidated financial condition.statements included in this annual report for further information regarding the deferred tax assets that we currently recognize.

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 misconduct by an employee, director or officer, or any third party, could occur which 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’ confidentialnon-public information, such as insider trading the disclosure of materialnon-public information and the recommendation of trades based on material non-publicsuch 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’s subsidiary,Company, received a business improvement order from the FSA with respect to flaws recognized in connection with the management of entity-related information for public stock offerings. In response to the order, NSC as of December 2013, has implemented and completed a series of improvement measures and is working to enhance and strengthen its information management structure to prevent similar incidents from occurring in the future.as of December 2012.

Although we have precautions in place to detect and prevent any 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 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 our day-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 address conflicts of interest appropriately could adversely affect our businesses

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

OperationalWe classify and define operational risk isas 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 the secure processing, storage, transmission and reception of personal, confidential and proprietary information inon our systems. We may become the target of attempted unauthorized access, computer systems.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 foreign non-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 system,measures to protect our systems, there can be no assurance that any controls and procedures we recognize the increasing riskhave in place will be sufficient to protect us from the continuously evolving nature of cyber threats.future security breaches. As cyber security threats are continually evolving, our controls and procedures may become more sophisticated,inadequate and we may be required to expend significantdevote additional resources to modify or enhance our systems and if any of our protective measures are not adequate, it is possible that such attacks may lead to significant breaches in the future.

Unauthorized disclosure of personal information held by us may adversely affect our business

We keep and manage personal information obtained from clients in connection with our business. In recent years, there have been many reported cases of personal information and records in the possession of corporations and institutions being improperly accessed or disclosed.

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.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, or in connection with public relations campaigns designed to prevent or mitigate damage to our corporate or brand image or reputation.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 in dealing with any such problems.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’sbroker-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, Nomura Securities Co., Ltd.,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 private equity investments

We engage in private equity businesses in and outside of Japan through certain consolidated subsidiaries. A decline in the fair values of our investment positions, which could arise from deteriorating business performance of investee companies or any deterioration in the market conditions of these sectors, may cause material losses to us. Further, our inability to dispose of our private equity investments at the level and time we may wish could have a material impact on our operating results and financial condition.

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

We hold substantial investments in equity securities and non-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 wouldcould have a substantialan adverse impact on our consolidated statementsfinancial condition and results of income.operations. Depending on the market conditions, of the markets, 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 values.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 an impairment losslosses

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 recordrecognize an impairment loss for the applicable fiscal period.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 bondsdebt securities we offeredoffer

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

Cash reserve funds, such as money managementmarket funds and money reserve funds are categorized as low-risklow risk financial products. SuchAs a result of a sudden rise in interest rates, such cash reserve funds may fall below par value as a resultdue to losses resulting from price decreases of losses caused by the rise of interest rates or the withdrawals or defaults on bonds containeddebt securities in the portfolio. 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 redemption of money market funds in June 2016.

In addition, bondsdebt securities that we offer may default or experience delays in their obligation to paythe payment of interest and/or principal.

Such losses, inearly 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.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 a non-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 effect service of processsecure personal jurisdiction within the U.S. uponover 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 effect service of process within the U.S. uponobtain 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.Information4. 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 the over-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 dealerbroker-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 (the “NYSE”(“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,System), a system in which management oversight and business execution functions are clearly separated.

What started out as a U.S. subprime loan crisis in the summer of 2007 became a global financial crisis with effects spreading to the broader economy. This created an extraordinarily challenging business environment for the Company.

In dealing with these troubled assets, the Company reassessed the parts of its business that are not fully focused on clients. The Company was quick2008, to review, reduce, and exit non-client businesses and illiquid positions such as commercial mortgages. As a result, the Company emerged from the financial crisis with one of the cleanest balance sheets among global players. 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.

At the end of March 2013 Japan became one of the first countries to implement Basel III. Ahead of the introduction of the new regulations, the Company reallocated resources to concentrate management resources on businesses where the Company can manifest its strengths.

The address of the Company’s registered office is 9-1, Nihonbashi 1-chome, Chuo-ku, Tokyo 103-8645, Japan, telephone number: +81-3-5255-1000.

B. Business Overview.

Overview

We are one of the leading financial services groups in Japan and have global operations. Wewe 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 and Wholesale divisions which are described in further detail below. See also Note 2421 “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 Company and increasing satisfaction of stakeholders, including that of our shareholders and clients.

As “Asia’s global investment bank”, Nomura will provide high value-added 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 the managementmanagement’s target.

Our Business Divisions

Retail

In Retail, we deliverconduct 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 itslocal branches, including our head office, and local branches was 159 as of the end of March 2014.2016. We offer investment consultation services to meet the medium- tolong-term needs of our clients. The aggregate market value of our retail client assets increased ¥7.9 trillion to ¥91.7 trillion as of the end of March 2014 from ¥83.8 trillion a year ago. We discuss retail client assets in “Retail“Retail Client Assets”Assets” under Item 5.A of this annual report.

In orderWe continue to executefocus on delivering top-quality solutions including our business strategy, we employ various methods to deliver ourbroad range of products and services to clients. These includethrough face-to-face meetings, withonline and call center channels, so that Nomura Group can sustainably be a trusted partner to our Financial Advisors, either in our branch offices or through client visits, communications through internet-based trading services, or through our call centers.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 NAM.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, 2014.2016. 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. Investment trusts are also offeredheld in defined contribution pension plans. We also provide investment advisory services to public pensions,pension funds, private pensions,pension funds, governments and their agencies, central banks and institutional investors.investors globally.

Wholesale

Our Wholesale Division consistedconsists of Global Markets and Investment Banking, and certain other non-Retail operations, providing our corporate and institutional clients with timely, high value-added services tailored to their needs.

Global Markets

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

Our global fixed income offerings include, among other products, government securities, interest-rateinterest rate derivatives, investment-grade and high-yield corporate bonds,debt securities, credit derivatives, G-10 and emerging markets foreign exchange, asset-backed securities and mortgage-related products, in over-the-counter (“OTC”) and listed markets. We are also undertake primary dealership businessdealers 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 common stock,equity securities, Exchange Traded Funds (“ETFs”), convertible securities, listed futures and options and OTC equity-linkedequity derivatives. In addition, we offer execution services based on cutting-edge technologies such as electronic trading. Nomura istrading 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 the London and Tokyo stock exchanges and various other global exchanges.

These product offerings are underpinned by our global structuring function which provides 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, investment fundsfinancial sponsors and others. We aim to develop and fortify solid relationships with these 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 include various types of stocks, convertible and exchangeable securities, investment grade debt, sovereign and emerging market debt, high yield debt, structured securities and other securities in Asia, Europe, U.S. and other major financial markets. We also arrange private placements and engage in other capital raising activities. We are one of the leading equity and fixed income securities underwriters in Japan.

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, (“IPOs”), reorganizations and other corporate restructurings related to industry consolidation enhances our opportunities to offer clients other advisory and investment banking services. We are one of the leading financial advisors in Asia and EMEA.

Private Equity.We engage in the private equity business, mainly in Japan and Europe. For a further description of our private equity business, see Item 5.A “Private Equity Business” of this annual report.

We capitalize on the linkages between theour Retail, the Asset Management and the Wholesale Divisions to offer various financial instruments such as stocks,equity securities, debt securities, investment trusts and variable annuity insurance products, for the short, medium, and long-term, with different risk levels. We seek to provide proprietary Nomura expertise to clients through various media such as our investment reports and internet-based trading services.

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 researchersanalysts collaborate closely across regions and disciplines to track changes and spot future trends in politics, economics, foreign exchange, interest rates, equities, credit, andas well as provide quantitative analysis. Our Japan Equity Research team continued to top the Institutional Investor research polls in 2013. Our Fixed Income Research teams topped the Nikkei Veritas rankings for the fourth straight year.

Our Information Technology

We believe that information technology is one of the key success factors for our overall business and intend to develop and maintain a solid technology platform to ensure that the CompanyNomura Group is able to fulfill the various needs of our clients. Accordingly, we will continue to invest, enhance and adapt a technology platform to ensure it remains suitable for each business segment.division.

For example, forIn our retail clients, we provide internet-based trading services and current status reports on asset portfolios, investments and transactions and investment market information, including our research reports through the internet or mobile phones. In the fiscal year ended March 31, 2013,Retail Division, we implemented thea new platformcore system and werelated systems have improved cost efficiencyalso been enhanced. We are also continuously working on improving our internet-based and increased the system stability.smartphone platforms.

In our Wholesale Division, we have enhancedcontinually enhance our technology platformsplatform to provide better risk management and also to increase trading capabilities through platforms allowing direct market access and algorithmic trading. We alsoIn order to ensure the support level of Wholesale operations, we will continue to look for opportunities to further leveragemaintain utilization of our offshore service entities in India to supportIndia.

In our wholesale operations.

For the corporate areafunctions in Japan, which relates tosupport both theour Retail and Wholesale businesses,Divisions, we are implementingimplemented new settlement and financeaccounting 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 efficiency by decommissioning our legacy system.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 and non-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 (“M&A”) 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

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 its subsidiaries includingsuch 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 conduct day-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 (TTokubetsu Kinyu Shouhin Torihiki Gyosha,okubetsuKinyuShouhinTorihikiGyosha,“Special “Special Financial Instruments Firm”) and on certain parent companies designated by the Prime Minister (SShitei Oyagaisha,hiteiOyagaisha, “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 Shitei Oyagaisha,“a “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.A bill to amend the FIEA was submitted to the Diet of Japan on March 9, 2012 and was passed on September 6, 2012. A part of the amendment, based on the declaration reached at the G-20 Pittsburg Summit in September 2009 to enhance transparency of the settlement of over-the-counter (“OTC”) derivative transactions, requires Financial Instruments Business Operators (Kinyu Shouhin Torihiki Gyousha in Japanese) to trade certain OTC derivative contracts through an electronic trading platform and to report such OTC derivative contracts to repositories. The amendment is scheduled to become effective within three years from its promulgation.

On April 16, 2013, anothera 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.

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, and the Financial Industry Regulatory Authority (a private organization with quasi-governmental authority and a regulator for all securities companies doing business in the U.S.), the National Futures Association (a self-regulatory organization for the U.S. derivatives industry) in the U.S.; and by the Prudential Regulation Authority (“U.K. PRA”), 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. 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 be subject to certain reporting requirements consistent with a mutual agreement between Japanese governmental authorities and the U.S. Treasury Department. Failure to comply with such laws, rules or regulations could result in fines, suspension or expulsion, which could materially and adversely affect us.

Regulatory ChangesChanges.. 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 theDodd-Frank Wall Street Reform and Consumer Protection Act, (the “Dodd-Frank Act”) which is now the subject of 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) rules related to the orderly liquidation of certain broker dealers; (vi) annual stress tests; (vii) a number of executive compensation mandates, including rules to curtail incentive compensation that promotes excessive risk taking.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 for non-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 some non-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 (the so-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 and non-bank SIFIs; (iv) provide for a broader regulatory oversight of hedge funds; and (v) new regulations regarding the role of credit rating agencies, investment advisors and others. To facilitate the transition to the requirements of the Dodd-Frank Act, the Commodity Futures Trading Commission issued an exemptive order in July 2013 (the “Exemptive(“Exemptive Order”) that granted market participants temporary conditional relief from certain provisions of the Commodity Exchange Act, as amended by the Dodd-Frank Act. As the Exemptive Order expired on December 21, 2013 some U.S. derivatives rules are now being applied extraterritorially and are now therefore impacting some non-U.S. Nomura entities. 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. On May 1, 2013, theThe SEC proposedcontinues 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 two non-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, on February 10, 2016, the SEC issued final rules that require a non-U.S. person that uses personnel or personnel of agents located

in the United States in connection with security-based swap dealing activity to include such security-based swaps in its security-based swap dealer registration de minimis calculation, and on April 14, 2016 the SEC issued final rules that require a non-U.S. security-based swap dealer to comply with external business conduct standards rules when facing a non-U.S. person counterparty if the non-U.S. security-based swap dealer uses personnel or personnel of agents located in the United States to arrange, negotiate or execute the security-based swap. The SEC may issue additional final rules that apply Dodd-Frank Act requirements to security-based swaps of two non-U.S. person counterparties when one or both uses personnel or personnel of agents located in the United States to arrange, negotiate or execute the security-based swap (e.g. final rules governing reporting and public dissemination of security-based swaps). Once final and effective, these cross-border rules will also be applied extraterritorially andmay impact some non-U.S. Nomura entities. The exact details of the Dodd FrankDodd-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 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 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 be 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, the Financial Stability Board published a consultative document 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 SIFIs (“G-SIFIs”) 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 of the EU Bank Recovery and Resolution Directive (“BRRD”), which was published on June 12, 2014. The BRRD also aims to implement Financial Stability Board recommendations on recovery and resolution regimes for financial institutions and for U.K. purposes it will partially supersede the existing U.K. regime. 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 the bail-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”) issued by the Financial Stability Board on November 9, 2015. 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 the 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 of regulatory developments that impact capital requirements for U.K. regulated entities. Most significant of these is the Basel III framework, as adopted into EU law through the fourth Capital Requirements Directive (“CRD IV”) and Capital Requirements Regulation (together, “CRD IV”), which came into forcebecame effective on January 1, 2014. The aim of CRD IV is to strengthen the resilience of the EU banking sector so it is better placed to absorb economic shocks while ensuring that banks continue to finance economic activity and growth. CRD IV sets out requirements for minimum capital requirements for banks and investment firms and also introduced new capital and liquidity buffers.

The new framework also includes themodifies treatment of bankfinancial institution exposures to central counterparties.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 concept of the leverage ratio.ratio and the net stable funding ration (“NSFR”) expected to apply from 2018, although further legislation is required to implement a binding requirement. 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 firmsfinancial institutions to make increased Pillar 3 disclosures

about their corporate governance arrangements. CRD IV also sets out requirements in relation to remuneration policies including limitationsimposing a 1:1 ratio on the basic salary relative to bonus ratio (can be raised to a maximum of 1:2 with the approval of shareholders) for certain staff.

On October 20, 2011, the European Commission published draft legislation for the Directive on markets in financial instruments repealing Directive 2004/39/EC of the European Parliament and of the Council. The legislation has been 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, 2014. The majority of the new rules under MiFID II and MiFIR will come into force intake effect from January 2017. 3, 2018.

The legislation seeks to introduce wide-reaching changes to markets, including the extension of market transparency rules into non-equities and potentially reducing the size of the OTC derivative market by mandating the clearing of suchstandardised OTC transactions through central clearing counterparties and exchanges.their trading through regulated trading venues. The new framework introduces a market structure which closesseeks to close certain loopholes and ensures that trading, wherever appropriate, takes place on regulated platforms. It introduces rules on high frequency trading and aims to improve the transparency and oversight of financial markets. The revised MiFID also aims to strengthen the protection of investors by introducing more robust organisational and conduct requirements orand by strengthening the role of management bodies. The new framework also increases the role and supervisory powers of regulators and establishes powers to prohibit or restrict the marketing and distribution of certain products in well-defined circumstances. A harmonised regime for granting access to EU professional markets for firms from third countries, based on an equivalence assessment of third country jurisdictions by the Commission, is introduced.

In May 2014

Following a range of consultations and technical advice published by the European Securities and Markets Authority (“ESMA”) launched the consultation process for the implementation of the revised MiFID II and MiFIR by publishing a consultation paper and a discussion paper. MiFID II/MiFIR contains over 100 requirements for ESMA to draft regulatory technical standards (RTS) and implementing technical standards (ITS) and to provide technical advice to, in April 2016 the European Commission adopted a MiFID Delegated Directive. The Directive contains provisions on investor protection, notably on safeguarding of clients’ funds and financial instruments, product governance and monetary/non-monetary compensation. The Commission also adopted a delegated Regulation supplementing MiFID II. The Regulation aims at specifying, in particular, the rules relating to allow it to adopt delegated acts. The main issues coveredexemptions, the organisational requirements for investment firms, and conduct of business obligations in the papers are divided into those addressingprovision of investment services. In May 2016, the structure, transparency and regulation of financial markets, and those aimedCommission adopted a further delegated Regulation supplementing MiFIR. This Regulation aims at strengthening investor protection. The consultation paper requests commentsspecifying, in particular, the rules relating to determining liquidity for equity instruments, the rules on the technical advice that ESMA is required to deliver toprovision of market data on a reasonable commercial basis, the European Commission by December 2014rules on publication, order execution and transparency obligations for systematic internalisers, and the discussion paper will providerules on supervisory measures on product intervention by ESMA, EBA and national authorities, as well as on position management powers by ESMA.

In the basisU.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 furtherconsultation on the Transposition of the MiFID II. The U.K. FCA published its first consultation paper on the draft RTSMiFID II implementation in December 2015. The paper focused on markets issues. The U.K. FCA will publish a second consultation in Summer 2016 and ITS which is expected to be issueda third consultation in late 2014/early 2015.Autumn 2016.

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 entered into forcebecame effective on August 16, 2012. EMIR applies to any entity established in the European Union that is a legal counterparty to a derivative contract, even when trading with non-EU firms. It may also have extraterritorial impact in certain circumstances. Many of the EMIR requirements became effective 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 enforced,implemented, EMIR will require entities that 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.

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 adopted the Securities Financing Transactions Regulation, 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 to a trade repository; impose various potentially onerous requirements on entities reusing financial instruments received under a collateral arrangement and apply various related disclosure requirements. On October 20, 2011, 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 Market Abuse Directive (criminal sanctions for market abuse) and the Market Abuse Regulation. In June 2014 the Market Abuse Regulation and Market Abuse Directive were published in the EU Official Journal. The Market Abuse Regulation shall enter into application in July 2016. Member States have two years to transpose the Market Abuse Directive on criminal sanctions for market abuse into their national law.(“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, provided byreplacing the existing Market Abuse Directive which will now be repealed. TheDirective.

In June 2014 MAR and CSMAD were published in the EU Official Journal. MAR repeals and replaces the Market Abuse Directive and its implementing legislation with effect from July 3, 2016. A number 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”). MLD4 came into effect on June 25, 2015. It has to be transposed by Member States by June 27, 2017, on which date it 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”) within the EEA. As the concept of an “AIF” is broadly defined, the AIFMD captures the majority of non-UCITs funds, including hedge funds, private equity, debt and real estate funds.

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”). 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 reforms aim to improve the speed and efficiency with which client assets may be distributed following the insolvency of the holding firm and to minimize negative market impact. This has resulted in extensive changes to the rules, designed to strengthen the legal and operational requirements of holding 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 changes is generally to increase 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, establishing a modern and harmonised data protection framework across the EU. On May 4, 2016, the official texts of the Regulation and the Directive were published in the EU Official Journal in all the official languages. While the Regulation became effective on May 24, 2016 it shall apply from May 25, 2018. The Regulation includes a number of important changes to existing data protection legislation including new obligations on data processors, restrictions on the transfer of personal data and introduces new concepts such as 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 outsourcing to the “cloud” and other third-party IT services (GC15/6). The draft guidance is intended to clarify the requirements on firms when outsourcing to a “cloud” and other third party Technology services. The guidance identifies several areas of interest which regulated firms should consider and also provides recommendations and guidance in relation 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 Regulation and the Capital Markets Union initiative (together with the related review of the Prospectus Directive and the EU securitization framework). In the U.K., the Fair and Effective Markets Review and the work of 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 Nomura Financial Products & Services, Inc. (“NFPS”),NFPS, ensure that their capital adequacy ratios do not fall below 120% on a non-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, additional paid-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 include non-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 Basel III-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“Consolidated Regulatory Requirements”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 the G-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 of G-SIBs will be updated annually and published by the FSB each November. We wereSince November 2011, we have not been designated as a G-SIB in November 2012 and November 2013.G-SIB. On the other hand, the FSB and the Basel Committee were asked to work on extending the framework for G-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 for D-SIBs. Furthermore,In December 2015, the FSBFSA identified us as a D-SIB and the IOSCO have published assessment methodologies for identifyingNon-bank Non-insurer Global Systemically Important Financial Institutions (NBNI G-SIFIs), for public consultation, as described in “Consolidated Regulatory Requirements” under Item 5.Brequired additional capital charge of this annual report.0.5% after March 2016, with 3-year transitional arrangement.

Overseas

In the U.S., Nomura Securities International, Inc. (“NSI”) is registered as a registered broker-dealer under the Securities Exchange Act of 1934 and registeredas a futures commission merchant. As such, NSI is subject to minimum net capital requirements set by the U.S. Securities and Exchange Commission andmerchant with the Commodity Futures Trading Commission.Commission (“CFTC”). NSI is also regulated by self-regulatory organizations, such as the Financial Industry Regulatory Authority (“FINRA”) and the Chicago Mercantile Exchange Group exchanges. These requirements specify minimum levelsGroup. NSI is subject to the SEC’s Uniform Net Capital Rule (“Rule 15c3-1”) and other related rules, which require net capital, as defined under the alternative method, of capital that U.S. broker-dealers are required to maintain and limitnot less than the amountgreater of leverage that such broker-dealers may use in their businesses. As a primary dealer$1,000,000 or 2% of U.S. government securities,aggregate debit items arising from client transactions. NSI is also subject to CFTC Regulation 1.17 which requires the maintenance of net capital adequacy requirementsof 8% of the Government Securities Act of 1986.

In addition,total risk margin requirement, as defined, for all positions carried in January 2014,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”) received approval from the U.S. Securities and Exchange Commission to becomeis registered as an OTC Derivatives Dealer (a special categoryunder the Securities Exchange Act ofbroker-dealer engaged in an OTC derivatives business), 1934. NGFP is subject to Rule 15c3-1 and applies Appendix F. NGFP is also provisionally registered with the Commodity Futures Trading Commission as a Swap Dealerrequired to maintain net capital of $20,000,000 in accordance with the Dodd-Frank Act. NGFP maintainsSEC. 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 to Rule 15c3-1 which requires the maintenance of minimum levels ofnet capital, as determineddefined under Appendix F asthe alternative method, equal to the greater of SEC Rule 15c3-1.$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 Rule 15c3-1(a). As of March 31, 2015 and 2016, NSI, NGFP and ILLC were in compliance with relevant regulatory capital related requirements.

In Europe, the Nomura Europe Holdings plc group(“NEHS”) is regulated underon a consolidated supervisionbasis by the Prudential RegulatoryRegulation Authority in the U.K. Various banking, which imposes minimum capital adequacy requirements on NEHS. Nomura International plc (“NIP”), the most significant of NEHS’ subsidiaries, acts as a securities brokerage and broker/dealer subsidiariesdealing business. NIP is regulated and has minimum capital adequacy requirements imposed on it on a standalone basis by the U.K. PRA. Nomura Bank International plc (“NBI”), another subsidiary of NEHS, is also regulated by the groupU.K. PRA on a standalone basis. As of March 31, 2015 and 2016, NEHS, NIP and NBI 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 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 participant 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. Activities of NIHK including its branch 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 stand alonestandalone basis by their appropriate local regulators.the MAS in Singapore. As of March 31, 2015 and 2016, 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 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 placing top priorityprimarily focusing on ensuring that profits are recorded by all divisions and regions. We are committed to continuing business segmentsmodel transformation in all regions. This fiscal year, we further advanced selection and concentration centered on our overseas bases, and completed cost reduction measures. We will continue our effortsJapan as well as aiming to strengthen theimprove profitability of our overseas operations and boost the comprehensive competitiveness of the Group.under Vision C&C, so that we will be able to build a solid foundation to generate profits even in severe market environments.

WeAs “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 comply with international financial regulations. Basel III has beencompound effect, and concern about newly emerging risks are being phased in from the end of March 2013, and Nomura is now subject to these regulations. The Deposit Insurance Act was revised in June 2013 aiming to implement an effective resolution management structure for financial institutions in Japan, and under those revisions, Nomura is now subjectpointed out. We will ensure a flexible response by staying attentive to the new crisis response measures in the same way as banks. Liquidity regulations are also starting to be introduced as part of new rules, with various debates taking place regarding the details. Furthermore, new rules for derivatives and other financial transactions are being put in place in various countries. These new regulations are now in executive stage for global financial institutions.

In Western countries, regulations limiting the scopeimpact of the banking business are scheduled for introduction, and moves toward placing additional regulationsoverall regulatory framework on largethe financial institutions are growing more active. In Europe, financial transaction tax will also be introduced. These regulatory tightening actions may directly affect the Companymarket and the trading markets for equities, bonds and their derivative products as well as the competitive conditions among financial institutions. Therefore, Nomura will take necessary measures in carefully responding to these changes.landscape.

The challenges and strategies in each division are as follows:

In our Retail Division, in Japanunder our basic philosophy of “placing our clients at the heart of everything we do,” we are aiming to increase client satisfaction further by listening to our clients’ as well as understanding and meeting their diversified demands and needs. We also focus on expanding and improving our service line-up offeredproviding a broad range of clients with value-added solutions through our sales channels including branches, the Internetface-to-face consulting services, seminars, online and call centers, aiming to meet and resolve the individual needs and concerns of each client. We seek to enhance our consulting-based sales and deliver top-quality services tailored to the particular life plan or life stage of each client,center channels, so that thewe will win greater trust from account holders as well as new clients, and so that Nomura Group can remainsustainably be a trusted partner to our clients.

InWe intend to increase assets under management and expand our client base in (i) our investment trust business, we will provideby providing clients with a diverse range of investment opportunities to meet theirinvestors’ various needs. Inneeds, and (ii) our investment advisory business, we will provideby providing value-added investment services to our domestic and international institutional clients. We intend to increase

assets under management and expand our client base for these two core businesses.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.performance and to meet clients’ various needs.

Global Markets has been focusing on delivering differentiated products and solutions to our clients by leveraging the Nomura Group’sour global capabilities in trading, research, and global distribution. We are improving comprehensive services transcending the boundaries ofThrough our integrated Fixed Income and Equities products.platform, we aim to provide competitive and comprehensive services and solutions to our clients.

In Investment Banking, we continue to enhance our global structure to further provide cross-border M&A and financing services in both domestic and overseas markets as well as to provide solution business services associated with saidthe our M&A and financing services amid the globalization of our clients’ business activities.

In our Wholesale Division, cooperation across business areas and regions is becoming more importantin order to provide quality services whichto meet the needs of our clients.clients, we redeploy the firm’s resources to areas of competitive advantage, and aim to further enhance the connectivity across Global Markets, Investment Banking, and regions. We will focus onstrive to improve our capabilities of proposing products and services, as well as to make use of our geographic competitive advantage in Asia, as a strategic region where Nomura has a competitive geographical advantage,so that we can meet the changing needs of our clients in accordance with expectations of its medium- to long-term economic growth, aiming to manifestglobal-scale fluctuations in the Group’s comprehensive strengths for future growth.macro economy and the market environment.

Risk Management and Compliance, etc.

Amid the expansion of global business, we must continue to enhance our risk management system and increase its efficiency inIn order to ensure financial soundness and enhancedenhance corporate value.value, the risk management systems require further developments in response to increasing global business. Nomura Group has the Risk Appetite Statement in which risks that we are willing to accept are articulated. We will continue to make efforts to develop a system where seniorthe top management directly engageengages in a proactive risk management approach for precise decision making.

As our business becomes increasingly international and diverse,With regard to compliance, we recognize the growing importance of 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 existing overallinternal compliance system and rules with initiatives that promotefor 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.

The improvement measures announcedLast year, based on June 29, 2012 regarding the recommendations of administrative penalties imposed on our subsidiary, Nomura Securities Co. Ltd. in 2012 in connection with public stock offerings, have been fully implemented. By thoroughly implementing the improvement measuresNomura Group established the Nomura Founding Principles and making them function effectively, we aimCorporate Ethics Day. 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 recurrencesimilar incidents from recurring in the future and further improve public trust through various measures. We will strive to regain trust; wemaintain a sound corporate culture through these initiatives. We will also further enhance and reinforce our internal control system, starting with preventionframework, which includes measures to prevent insider trading and solicitation of improprieties in the provision of information to clients and the recommendation of trading as a matter of course, and have each and every oneunfair dealing, by ensuring that all of our executive officers and employees upholdcontinually maintain the highest level of business ethics as aexpected from professionals engaged in the capital markets professional.

We continue to reinforce our Internal Audit system aiming to ensure the effectiveness of our highly developed risk management and the efficacy of our governance. We will continue to strengthen the efficiency of our internal governance system by reinforcing and ensuring the independence of our Internal Audit system from the execution side, and promote proper corporate activities.markets.

Through the efforts described above, we are strengthening the Company isearnings power of the entire Nomura Group and working to achieve our management targets and to maximize corporate value by strengthening the earnings power of the entire Group.value. We will advance collaboration across regions and among theour three divisions,Divisions, and devote our efforts to the stability of financial and capital markets and to our further expansion and development as “Asia’s global investment bank”.

Disclosure pursuant to Section 13(r) of the Securities Exchange Act of 1934

Under Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, 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 covered by the report with the Government of Iran, Iranian government-controlled entities or persons sanctioned by the U.S. government under programs relating 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 conducted in accordance with applicable law, and we do not believe that the activities were sanctionable under applicable law. We have not generated any revenues from these activities during the period covered by this report.

In light of recent changes in the international economic sanctions regime relating to Iran, we intend to continue to engage in the activities described above and may engage in similar activities in future periods; however, any such activities will be conducted in accordance with all applicable laws, and we do not intend to engage in any activities that are sanctionable under applicable law.

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, 2014,2016, our principal head office is located in Tokyo, Japan and occupies 984,157974,836 square feet of office space. Our other major offices in Japan are our Osaka branch office, which occupies 125,218125,217 square feet, our Nagoya branch office, which occupies 82,91882,914 square feet, and the head office of NAM in Tokyo, which occupies 157,231176,115 square feet.

As of March 31, 2014,2016, our major offices outside Japan are the head offices of Nomura International plc (“NIP”)NIP located in London, which occupies 458,615459,010 square feet, the New York head office of Nomura Securities International, Inc., which occupies 182,534202,017 square feet, and the offices of Nomura International (Hong Kong) Limited located in Hong Kong which occupies 140,501146,368 square feet. We lease most of our overseas office space.

As of March 31, 2014,2016, the major office of Nomura Services India Private Limited, our specialized service company in India, occupies 476,271 square feet.

As of March 31, 2014,2016, the aggregate book value of the land and buildings we owned including capital leases was ¥204¥179 billion, and the aggregate book value of equipment we owned, including communications and data processing facilities, was ¥48¥27 billion.

Item 4A.Unresolved4A. Unresolved Staff Comments

We are a large accelerated filer as defined in Rule 12b-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, 20142016 and which remain unresolved as of the date of the filing of this annual report with the Commission.

Item 5.Operating5. 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 “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 “Risk Factors”and elsewhere in this annual report.

Business Environment

Japan

The Japanese economy recovered throughout the fiscal year ended March 31, 2014. The economy was driven by policy effects under the so-called “three arrows” of “Abenomics”: bold monetary policies, flexible fiscal policies, and growth strategies aimed at stimulating private-sector investment. In particular, yen depreciation and rising share prices supported by quantitative and qualitative monetary easing introduced in April by the Bank of Japan under its new leadership supported increased consumer spending and a marked improvement in earnings at exporters. In addition, economic stimulus in the FY12 supplementary budget led to a

sharp increase in public investment, underpinning economic growth. Consumer spending also accelerated in January-March 2014 on the back of a spike in demand ahead of the increase in the consumption tax rate implemented in April 2014. As a result,weakened overall. Japan’s real gross domestic product (“GDP”) grew relatively rapidly in January-March 2015, at a quarter-on-quarter annualized rate of 4.6%, but showed no clear direction after that, falling 1.4% in April-June, rising 1.4% in July-September, and then falling 1.1% inOctober-December. Corporate capital expenditure rose for two consecutive quarters, 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 concerns 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 led 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, 2014, expanded by 2.3% year-on-year.2016, supplementary budget approved on January 20, 2016. In addition, on January 29, 2016 the Bank of Japan decided to implement “QQE (quantitative and qualitative easing) with a Negative Interest Rate,” which involves applying a negative interest rate to a portion of the current account deposits that financial institutions hold with it.

In terms of corporateCorporate earnings recurring profits either rose or moved into the black in all industry sectors in the fiscal year ended March 31, 2014, supported by2016, as in previous fiscal year, in sectors where the weakening of the yen depreciationversus the U.S. dollar boosted earnings and sectors where the fall in crude oil prices tended to result into lower costs. However, corporate earnings struggled in sectors that were sensitive to the rapid fall in 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 companies benefited from lower crude oil prices, autos, on the back of Abenomics, economic recovery overseas,strong new auto sales globally, and a spike in demand ahead of the hike in the consumption tax. Profits rose markedly particularly in the automotive, electronicsU.S., and precision, and other sectorschemicals, where earnings are comparatively sensitive to exchange rates, and in the financials sector, which saw substantial benefitscompanies benefited from the reflationary environment. Wefall in raw material prices. Meanwhile, the steel & nonferrous metals, electrical machinery & precision equipment, and machinery sectors all made substantial negative contributions 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 recurring profits at major Japanese companies (those in the Russell/Nomura Large Cap Index) increased by 35%rose 3% year-on-year in the fiscal year ended March 31, 2014,2016, with growth expandingthus slowing from the 13%7% recorded in the prior fiscal year.year ended March 31, 2015.

TheOn the Japanese stock market, made large gainsthe Nikkei Stock Average rose temporarily above its April 2000 high in June 2015, when companies started to apply Japan’s new Corporate Governance Code, which aims to encourage improvements in capital efficiency and constructive dialogue with investors. This rise in equity prices was in response to expectations that the above-noted quantitativeweakening of the yen versus the U.S. dollar would lead to growth in corporate earnings and qualitative monetary easing,also to overseas investors’ expectations of improvements to shareholder returns. However, stock 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 then fell back on such factors as the announcement of growth strategies in June 2013, but maintained an upward trendChinese equity prices, and Japanese equity prices also made substantial losses through to December supportedthe end of September. 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 a sustained correctionthe fall in the strong yen.crude oil prices. From the startbeginning of 2014, however,2016, there were further falls in Chinese equity prices and crude oil prices, while the stock market saw weakness on concerns of economic slowing in Japan owing to the increase in the consumption tax, receding expectations of additional monetary easing by the Bank of Japan, worries over economic slowing inyen strengthened further versus the U.S. triggered bydollar, and in February 2016 the cold snap there, and growing geopolitical risk relating to Ukraine.Nikkei Stock Average temporarily dipped below 15,000 for the first time since October 2014. The key Tokyo Stock Price Index (the “TOPIX”) advanced 16.3%fell 12.7% over the course of the fiscal year, from 1,034.71 points1,543.11 at the end of March 20132015 to 1,202.89 points1,347.20 at the end of March 2014.2016. The Nikkei Stock Average rose 19.6%also fell 12.7% over the fiscal year, from 12,397.9119,206.99 at the end of March 20132015 to 14.827.8316,758.67 at the end of March 2014.2016.

The yield on newly issued 10-year Japanese government bondsdebt securities yields rose at the beginning of fiscal year ended March 31, 2016, but subsequently followed a downward trend. European government debt securities yields rose sharply at the beginning of the fiscal year but then trended downward. The yield beganas excessive expectations regarding the fiscal year ended March 31 2013 atquantitative easing (government bond purchases) launched by the mid-0.5% level, but then declined close to 0.3% asEuropean Central Bank (ECB) faded. This had an effect on the Bank of Japan came out with much more extensive quantitative and qualitative monetary easing policies on 4 April 2013 than the market had been expecting. Subsequently, however, volatility increased amid supply-demand instability, with sustained selling of Japanese government bonds by investors in expectation of an exit to Bank of Japan easing. In tandem with the U.S. Federal Reserve Board (the “FRB”) tapering its third round of quantitative easing (“QE3”),debt securities market and the yield on newly issued 10-year Japanese government bonds at one point reached 1.0%debt securities rose temporarily to nearly 0.5%. The yieldYields on Japanese government debt securities subsequently started to turn down graduallyfall, 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 middleend of 2015, ahead of the fiscal year asrate hike implemented by the effects ofU.S. Federal Reserve Board (FRB) on 16 December 2015, its first since 2006, but the above-notedrise in yields on Japanese

government debt securities was limited. Japanese interest rates then fell sharply after the Bank of Japan’s easing measures showed through, fallingJapan decided to around 0.60% after the U.S. in September put off QE3 tapering.introduce a negative interest rate policy on January 29, 2016. The yield rose temporarily on the announcement of the start of QE3 tapering in December, but only to the 0.7% level. From January 2014 onward, risk aversion increased globally prompted by weaker-than-expected U.S. economic indicators as the result of the cold snap and growing uncertainties over the situation in Ukraine, with the yield on newly issued 10-year Japanese government bonds ending March once again at the lower 0.6% level.

On the foreign exchange markets, the value of the yen against the U.S. dollar was influenced by trends in the U.S. economy and against the euro by debt issues in the Eurozone. The yen was trading at the ¥94 level versus the U.S. dollar and the ¥120 level versus the eurosecurities fell to minus 0.08% at the end of March 2013. Initially2016.

On foreign exchange markets, the U.S. dollar remained essentially flat versus the yen, trading 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 trading 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 May 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 indicated in June that he did not expect the yen to weaken further and 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 recovered after the FRB decided in September to postpone the beginning 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 beginning 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 participants 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, in the fiscal year ended March 31, 2014,2016, but the yen depreciated against bothsituation varied from region to region. While the U.S. dollar and euro on expectations for Abenomics and quantitative and qualitative monetary easing by the Bank of Japan. From May onward, however, market sentiment deteriorated amid expectations of a tapering in the FRB’s quantitative easing and the resulting volatility in emerging markets. Expectations for Abenomics also waned. The yen remained stronger than ¥100 against the U.S. dollar from June through to mid-November owing to the emergence of U.S. debt problems, which included a partial government shutdown in September. Against the euro, the yen reached the ¥135 level at the end of October as the euro appreciated on the back of a gradual rise in short-term interest rates as the European economy emerged from its worst period and there was an easing in excess liquidity. Through to the end of the year, the yen depreciated against the U.S. dollar amid confirmationstrength of the U.S. economy picking up steamled it to embark on a new rate hike cycle for the first time since 2004, Europe and againstJapan 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 euro amid abundant fund inflows particularly intoChinese currency in both August 2015 and January 2016, in what became known as the stock markettwo 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 a high level of supply in order to counter the U.S. shale business. This resulted in a rapid fall in resource prices, led by crude oil prices, and as the European Central

Bank adoptedwell as dealing a softer stance on easing. From January 2014 onward, the yen trended flat against both the U.S. dollar and the euro amid a rapid slowing in the U.S. economy owingsharp blow to the cold snap and heightening geopolitical risks relating toeconomies of many resource-exporting countries it also symbolized the situation in Ukraine. At the end of March 2014 the yen was trading at the ¥103 level versus the U.S. dollar and the ¥142 level versus the euro.

Overseas

The global economy saw a slowing trend. In particular, weakness in the U.S. economy owing to the country’s debt problems fed through to economic slowing in industrialized nations as a whole. Meanwhile, expectations grew in the financial markets that the QE3 asset purchasing program in the U.S. might be scaled back, and there were temporary outflows of funds from some emerging economies. This had a negative impact on economic growth in those economies, as it prompted them to opt for monetary tightening. Financial markets in emerging economies gradually settled down in the second half of the fiscal year ended March 31, 2014, and economies also stabilized.global economy.

In the U.S., house prices and stock prices rose as the FRB stayed with QE3, bringing also benefits for consumer spending through the wealth effect. However, growth in 2013 was heldpushed back by increasing fiscal austerity by the federal government and by uncertainties over the fiscal debate against a backdrop of a temporary partial shutdownexpectations of the federal governmenttiming of the first rate hike through 2015, before finally implementing a 0.25ppt hike in October 2013. As a result,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. real GDP growth slowed to 1.9% year-on-yearfiscal policy in 2013, from 2.8%2015, as in 2012.2014. Real GDP growth in the U.S. weakened in January-March 2014 slowed2015, partly owing to 0.1%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 an annualized basis under the adverse impact of inventory adjustmentsforex markets and the cold snap.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 sawtrended 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 correctionrate hike by the FRB and an economic slowdown in China. In both cases, the summer of 2013 on concerns over QE3 tapering, but then followed an uptrend throughmarket returned to the end oflevel seen before its sharp decline within three months as the year. From the start of 2014 the U.S. stock market fluctuated with the start of QE3 tapering.FRB retreated from its positive stance on raising interest rates. The Dow Jones Industrial Average rosefell from 14,578.5417,776.12 at the end of March 20132015 to 16,457.6617,685.09 at the end of March 2014,2016, a gainloss of 12.9%0.5%. The yield on 10-year U.S. Treasuries was around 1.9%1.92% at the end of March 2013, held on an uptrend from May on the emergence of expectations of QE3 tapering to reach over 3% at one point in December,2015 but with an easing in rises in interest rates from the start of 2014 the yield fell to around 2.7%1.77% at the end of March 2014.2016.

In Europe, Eurozone real GDP shrankexpanded 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 furtherdownward 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 2013 after contracting 0.6% year-on-yearMarch 2016. Partly because of expectations of further monetary easing by the ECB, in 2012. The economiesFebruary 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 some countries, including Italy and France, continued to be held back by structural problems. With financial market uncertainties over liquidity abating thanksMarch 2016 owing partly to the ECB’s asset purchasingstrong 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, there was a clear cyclical bottomingit embarked on the restructuring of regional government debt in May 2015. Then in 2016 the economiesgovernment decided to start work in earnest on the disposal of many Eurozone countries from around summer 2013. The benchmark German stock index (“DAX”) had followed a similar pattern to stock prices in Japannonperforming assets at state-owned corporations and the U.S., but ended up advancing by about 23%reduction of surplus production capacity. On the Chinese stock market, the Shanghai Stock Exchange Composite Index fell 19.9% over the year endedto the end of March 31, 2014 supported by the tail wind of economic bottoming.

Asian economies as a whole entered a period of gradual slowing. Among them, China’s economy saw real GDP growth in 2013 of 7.7%, a similar level to 2012. The country continued with its effort to shift from a pattern of economic growth led by investment to one led by consumer spending under the leadership of China’s president Xi Jinping, who was appointed in March 2013, a stance that was also emphasized at the Third Plenum held in November. In the absence of any large-scale fiscal stimulus measures, the country’s real GDP growth slowed slightly in January-March 2014 to 7.4% year-on-year owing to slowing real estate and infrastructure-related investment. Southeast Asia and India saw increasingly marked economic slowing in the second half of 20132016, 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 slowingreform 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 U.S. In countries including Indonesia and India, where the adverse impact from QE3 tapering in the U.S. emerged, a slowing indomestic investment owing to the adoption of monetary tightening policies also had a negative economic impact.environment.

Executive Summary

Looking back at the global economy duringDuring the fiscal year ended March 31, 2014,2016, 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 United States household balance sheet adjustmentsmidst 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 largely completedaffected by the economic slowdown in China and there were signs of economic recovery centered on private consumption. In Europe as well, while some countries require structural adjustments, the worst periodexperienced a decline in demand.

was over. Overall,In Japan, the economieseconomy weakened overall. Despite the rise in corporate capital expenditures as a result of the industrialized nations were firm. On the other hand, in China the growth rate slowed due partly to stronger regulations over shadow banking, a tight labor market, and reduced public investment by regional governments. In addition, there are factors which make the future unclear especially for emerging economies with the Ukraine problem that emerged from late 2013 and other issues.

Under these conditions, in Japan with “Abenomics”, the foreign exchange rate trend shifted toward a depreciation of the yen, and share prices rose sharply on the consequentan improvement in corporate earnings. Furthermore, the September 2013 decision to hold the 2020 Olympicsprofit margins, consumer spending and Paralympics in Tokyo, combined with other developments, had a positive effect on the real economy through improved business and consumer sentiment. As a result, the Japanese economy is on a recovery trend with improvements in private consumption and other areas. Reflecting these developments, theexports weakened markedly. The Tokyo Stock Price Index (“TOPIX”)(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 from 1,000 points at the beginning of the fiscal year ended March 2016, but subsequently followed a downward trend due to 1,276 pointsturmoil in May. The index temporarily weakened duringemerging economies including China and the summer, but recovered to 1,306 points aroundBank of Japan’s announcement of a negative interest rate policy in January 2016. As a result by the end of 2013 and beginning of 2014, and endedMarch 2016, the fiscal year at 1,202 points. In the U.S. dollar-yen exchange rate, the depreciation of the yen continued with the rate rising from the 93 yen range at the beginning of the fiscal yearyields on newly issued 10-year Japanese government debt securities fell to minus 0.08%.

From a regulatory perspective, in addition to the 105 yen range at the end of 2013, with the rate in the 103 yen range at the end of the fiscal year.

With respect to financial regulations, the introductionimplementations of Basel III (Capitalrequirements relating to capital ratios, liquidity ratios, and leverage ratios, Nomura was 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, for financial institutions) has begun in Japan and other widespread regulatorywide-ranging reforms aimed at tightening supervision of domestic and foreign financial institutions are being implemented in a phased manner. Financial regulationswill be further introduced. Nomura will continue to require a careful response.monitor these issues closely and take necessary measures in responding to any such changes.

Amid thisWhile our environment andis changing drastically, under the basic philosophy of “placing our clients at the heart of everything we do,” we strovemade efforts to provide clients with high value-added products and services, worked to strengthen ties among regionsservices. We also took necessary initiatives such as cost reduction and businesses,risk mitigation under a severe market. Our Retail Division achieved a continued increase in recurring revenue, sourced mainly from sales of investment trusts and made efforts to expand revenues. 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 funds for regional financial institutions. Wholesale struggled in Fixed Income despite a solid performance in Equities and Investment Banking.

As a result of these efforts, we postedgenerated net revenue of ¥1,557.1¥1,395.7 billion for the fiscal year ended March 31, 2014,2016, a 14.1%13.0% decrease from the previous fiscal year when Nomura Real Estate Holdings, Inc. was a consolidated subsidiary. Noninterestyear. Non-interest expenses decreased 24.1%by 2.1% to ¥1,195.5¥1,230.5 billion, income before income taxes was ¥361.6¥165.2 billion, and net income attributable to the shareholders of Nomura Holdings, Inc. was ¥213.6 billion, the second highest level (after the record high posted for the fiscal year ended March 31, 2006) since we introduced U.S. GAAP in the fiscal year ended March 31, 2002.¥131.6 billion. Return on equity (“ROE”) rose 4 percentage points fromwas 4.9% in the prior fiscal year to 8.9%. Diluted EPS⁽¹⁾ for this fiscalthe year ended March 31, 2016 was 55.8 yen.¥35.52, a decrease from ¥60.03 for the year ended March 31, 2015.

(Note):

1. Diluted net income attributable to Nomura Holdings’ shareholders per share.

We have decided to pay a dividend of 9 yen¥3 per share to shareholders of record as of March 31, 2014.2016. As a result, the total annual dividend will be 17 yenwas ¥13 per share.

In our Retail Division, net revenue for the year ended March 31, 2014 increased2016 decreased by 28.6%8.6% from the previous fiscal year to ¥511.9 billion, primarily¥435.6 billion. Non-interest expenses decreased by 2.1% to ¥308.0 billion. As a result, income before income taxes decreased by 21.1% to ¥127.6 billion. Under the basic philosophy of “placing our clients at the heart of everything we do,” we made progress on services and 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 brokerage commissions.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 increased by 3.3% from the previous fiscal year to ¥95.4 billion. Non-interest expenses increaseddecreased by 7.6%2.5% to ¥319.9¥58.7 billion. As a result, income before income taxes increased by 90.8%14.2% to ¥192.0¥36.7 billion. We continued consulting-oriented sales activitiesIn the investment trust business, funds specialized for fund wrap service and privately placed investment trusts developed in response to accurately respondregional

financial institutions’ demands contributed to the increase in assets under management. We also provided characteristic ETFs, which track the performance of leveraged index, in addition to traditional ETFs. In our investment needs of individual customers toward becoming a securities company that is trusted by clients. For the Nippon Individual Savings Accounts (“NISA”) system introducedadvisory business, we saw continued cash inflow from 2014 which provides tax exemptions for gains on small investments, we held about 2,200 seminars prior to the system’s introduction and made other efforts so that a greater number of clients will make use of NISA.large domestic public pensions despite outflow in overseas. As a result, total retail client assets under management increased to ¥91.7 trillion from ¥83.8 trillion at the end of the previous fiscal year to post a new record. The number of client accounts also increased by 119,000 from the end of the previous fiscal year to 5.14 million, so the business base is steadily expanding.as of March 31, 2016.

In Asset Management,our Wholesale Division, net revenue for the year ended March 31, 2014 increased2016 decreased by 16.7%8.8% from the previous fiscal year to ¥80.5 billion, in part due to increased assets under management. Non-interest expenses increased by 11.7% to ¥53.4¥720.3 billion. As a result, income before income taxes increased by 28.1% to ¥27.1 billion. In the

investment trust business, assets under management increasedGlobal Markets recognized lower net revenue compared with an influx of funds mostly for stock investment trusts and the improved market environment. In particular, funds focused on infrastructure-related companies and Japanese stock funds contributed to increasing assets under management. We also focused on products, seminars and web contents that promote the spread of the NISA system. In the investment advisory business, there was an increase in mandates from overseas clients, mostly for Japanese stocks and foreign bonds. As a result, assets under management as of March 31, 2014 increased by ¥2.9 trillion from the end of the previous fiscal year due to ¥30.8 trillion.

In Wholesale,challenging market conditions and low client activity. On the other hand, Investment banking recognized higher net revenue for the year ended March 31, 2014 increased by 18.6% fromcompared with the previous fiscal year, primarily due to ¥765.1 billion. The first quarter net revenue was mainly drivenenhanced cross-regional and cross-divisional collaboration, which resulted in a number of notable M&A transactions and multi-product deals across all regions. Non-interest expenses decreased by Japan, where a market rally continued from0.4% to ¥704.9 billion, primarily due to decreases in compensation and benefits and commission and floor brokerage expenses partially offset by an increase of employee termination costs recognized in connection with the previous year. From the second quarter net revenue declined in Japan, but net revenue fromrestructuring of our overseas businesses started to pick up, enabling the Wholesale Division to post an increase in net revenue foroperations within EMEA and the full fiscal year. Non-interest expenses also increased by 14.0% to ¥653.3 billion, largely because of the depreciation of the yen, but this increase in expenses was limited by the successful cost reduction efforts to date. As a result, incomeAmericas. Income before income taxes rosedecreased by 56.0%81.3% to ¥111.8¥15.4 billion.

Results of Operations

Overview

The following table provides selected consolidated statements of income information for the years indicated.ended March 31, 2014, 2015 and 2016.

Net revenue decreased by 14%13% from ¥1,813,631¥1,604,176 million for the year ended March 31, 20132015 to ¥1,557,070¥1,395,681 million for the year ended March 31, 20142016. The decrease is primarily due to slower performance in our Fixed Income business as a result of the deconsolidation of Nomura Real Estate Holdings Inc. (“NREH”), a subsidiary of Nomura Landchallenging trading environment and Buildings Co., Ltd (“NLB”) in March 2013 which was partially offset by the impact of exchange rate fluctuations, especially depreciationsettlement of the yen, on revenues generated by our overseas businesses.legal proceedings with Banca Monte dei Paschi di Siena SpA (“MPS”).Commissions increaseddecreased by 32%5% from ¥359,069¥453,401 million for the year ended March 31, 20132015 to ¥474,557¥431,959 million for the year ended March 31, 2014 2016

primarily due to an increasea decrease in brokerage commissions received from equity and equity related products, particularlythe distribution of investment trusts in Japan.Fees from investmentbanking increased by 46%24% from ¥62,353¥95,083 million for the year ended March 31, 20132015 to ¥91,301¥118,333 million for the

year ended March 31, 20142016 primarily due to an increase in commissions receivedrevenue from equityM&A, ECM and equity related products as a result of increased client financing demands in a background of active stock market conditions.our solution businesses associated with fund raising.Asset management and portfolio service fees increased by 19%13% from ¥141,029¥203,387 million for the year ended March 31, 20132015 to ¥167,247¥229,006 million for the year ended March 31, 20142016 primarily due to an increase in assets under management driven by continuingpositive net inflows into ETFs and investment trusts for discretionary investments.Net gain on trading decreased by 33% from ¥531,337 million for the year ended March 31, 2015 to ¥354,031 million for the year ended March 31, 2016, primarily driven by slower performance in our Fixed Income business and the impact of settlement of legal proceedings with MPS.Net gain on trading also included total gains of ¥28.3 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 gain was primarily due to the widening of Nomura’s credit spreads during the period.Gain on private equity investments increased by 150% from ¥5,502 million for the year ended March 31, 2015 to ¥13,761 million for the year ended March 31, 2016.Other decreased by 11% from ¥175,702 million for the year ended March 31, 2015 to ¥156,460 million for the year ended March 31, 2016, primarily due to unrealized losses from our investment in Ashikaga Holdings Co., Ltd. (“Ashikaga Holdings”) and a decrease in net income from other affiliated companies.

Net revenue increased by 3% from ¥1,557,070 million for the year ended March 31, 2014 to ¥1,604,176 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 ¥473,121 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 inflows.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 30%12% from ¥367,979 million for the year ended March 31, 2013 to ¥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 increasefavourable trading environment, particularly in revenue from our Equities business within Global Markets.Japan and Asia.Net gain on trading also included total losses of ¥15.6¥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 primarily to the tightening of Nomura’s credit spreads during the period.Gain on private equity investments increaseddecreased by 42%52% from ¥8,053 million for the year ended March 31, 2013 to ¥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 75%2% from ¥708,767 million for the year ended March 31, 2013 to ¥179,485 million for the year ended March 31, 2014 primarily due to the deconsolidation of NREH.Other for the year ended March 31, 2013 included ¥663,466 million of revenue from NLB and its related subsidiaries.

Net revenue increased by 18% from ¥1,535,859¥175,702 million for the year ended March 31, 20122015, primarily due to ¥1,813,631 million forthe gain recognized in connection with the disposal of our investment in Fortress during the year ended March 31, 2013.Commissions increased2014, which was partially offset by 3%, due primarily to an increase in commissionsnet income from the distribution of investment trust certificates.Fees from investment banking increased by 5%, due primarily to an increase in commissions received from equity and equity related products.Asset management and portfolio service fees decreased by 2%.Net gain on trading increased by 35% to ¥367,979 million for the year ended March 31, 2013, primarily driven by revenue from our Fixed Income business within Global Markets.Net gain on trading also included total losses of ¥57.8 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 due primarily to the tightening of Nomura’s credit spreads during the period.Gain on private equity investment decreased by 68% due primarily to the realized gains on equity securities of certain investee companies for the year ended March 31, 2012.Other was ¥708,767 million for the year ended March 31, 2013, including ¥663,466 million of revenue from NLB and its related subsidiaries. This included ¥336,858 million of revenues from real estate sales generated by NREH which was a subsidiary of NLB. These revenues were recognized when sales have closed, the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay for the real estate and Nomura doesn’t have a substantial continuing involvement in the real estate. Also, ¥50,139 million of revenues were recognized as a result of Nomura’s sale of a portion of its investment in NREH in March 2013. This included ¥38,468 million of unrealized gains arising from remeasurement of Nomura’s remaining investment in NREH. Following this sale, Nomura no longer maintained a controlling financial interest in NREH which was deconsolidated and prospectively accounted for as an affiliate under the equity method.other affiliated companies.

Net interest revenue was ¥119,989 million for the year ended March 31, 2012, ¥127,695 million for the year ended March 31, 2013 and ¥141,576 million for the year ended March 31, 2014.2014, ¥110,354 million for the year ended March 31, 2015 and ¥112,635 million for the year ended March 31, 2016.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 viewnet interest revenue andnon-interest revenues in aggregate. For the year ended March 31, 2014,2016, interest revenue increased by 6%1%, primarily due to an increase of dividendsin dividend income and interest income on reverse repurchase agreements and interest expense was largely unchanged with the year ended March 31, 2015. As a result,Net interest revenue for the year ended March 31, 2016 increased by

¥2,281 million from the year ended March 31, 2015. For the year ended March 31, 2015, interest revenue increased by 5%, primarily due to an increase in dividend income and interest income on reverse repurchase agreements and interest expense increased by 3%19%, primarily due to an increase in interest expense on repurchase agreements.securities borrowed. As a result,Net interest revenue for the year ended March 31, 2014 increased2015 decreased by ¥13,881¥31,222 million from the year ended March 31, 2013. For the year ended March 31, 2013, interest revenue decreased by 10% primarily due to a decrease of dividends income and interest income on reverse repurchase agreements in our Europe region and interest expense decreased by 16% primarily due to a decrease in interest expense on repurchase agreements and loans. As a result,Net interest revenuefor the year ended March 31, 2013 increased by ¥7,706 million from the year ended March 31, 2012.2014.

Gain (loss) on investments in equity securities was ¥4,005 million for the year ended March 31, 2012, ¥38,686 million for the year ended March 31, 2013 and ¥15,156 million for the year ended March 31, 2014.2014, ¥29,410 million for the year ended March 31, 2015 and ¥(20,504) million for the year ended March 31, 2016. This line item 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, 20142016 decreased by 24%2% from ¥1,575,901¥1,257,417 million for the year ended March 31, 20132015 to ¥1,195,456¥1,230,523 million primarily due to the deconsolidation of NREHa decrease in March 2013compensation and benefits and commissions and floor brokerage expenses which waswere partially offset by employee termination costs recognized in connection with the impactrestructuring of exchange rate fluctuations, especially depreciation ofour Wholesale Division operations within EMEA and the yen, on expenses incurred by our overseas businesses. Other expenses decreased by 67% from ¥616,463 million to ¥202,754 million primarily due to the deconsolidation of NREH. For the year endedAmericas in March 31, 2013, other expenses included ¥481,641 million related to NLB and its subsidiaries.2016.

Non-interest expenses for the year ended March 31, 20132015 increased by 9%5% from ¥1,450,902¥1,195,456 million for the year ended March 31, 20122014 to ¥1,575,901¥1,257,417 million primarily due to an increase inotherin fees paid by our Asset Management Division as a result of an increase in assets under management, increases in other various expenses by 24% from ¥496,227 million to ¥616,463 million due primarily toas a result of the impact of consolidating NLB for a full fiscal year. Fornew Asian subsidiary acquired during the year ended March 31, 2013, other2015, and the impact of exchange rate fluctuations, especially depreciation of the Japanese Yen, on expenses included ¥481,641 million related to NLB and its subsidiaries, of which ¥306,570 million represented cost of real estate sales incurred in generating real estate revenues by NREH.our overseas businesses.

Income before income taxes was ¥84,957 million for the year ended March 31, 2012, ¥237,730 million for the year ended March 31, 2013 and ¥361,614 million for the year ended March 31, 2014.2014, ¥346,759 million for the year ended March 31, 2015 and ¥165,158 million for the year ended March 31, 2016.

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. Since April 1, 2004, ourNomura’s domestic effective statutory tax rate has beenwas approximately 41%. Due to certain revisions38% for the fiscal year ended March 31, 2014, approximately 36% for the fiscal year ended March 31, 2015 and approximately 33% for the fiscal year ended March 31, 2016. Furthermore, as a result of revision to domestic tax laws during the third quarter ended December 31, 2011 and during the fourth quarter endedon March 31, 2014, the Company’s2016, Nomura’s effective statutory tax rates were revisedrate will decrease from approximately 32% to 38%31% for the fiscal years ended March 31, 2013 and March 31, 2014 and will be 36% in future fiscal years.beginning on or after April 1, 2016. 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, 2016 was ¥22,596 million, representing an effective tax rate of 13.7%. The significant factors causing the difference between the effective tax rate of 13.7% and the effective statutory tax rate of 33% were changes in deferred tax valuation allowance 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%.

Income tax expense for the year ended March 31, 2015 was ¥120,780 million, representing an effective tax rate of 34.8%. The significant factors causing the difference between the effective tax rate of 34.8% and the effective statutory tax rate of 36% were non-deductible expenses which increased the effective tax rate by 5.9%, changes in deferred tax valuation allowance which increased the effective tax rate by 5.1% but partially offset by non-taxable revenue which decreased the effective tax rate by 4.7%.

Income tax expense for the year ended March 31, 2014 was ¥145,165 million, representing an effective tax rate of 40.1%. The significant factors causing the difference between the effective tax rate of 40.1% and the effective statutory tax rate of 38% 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 the changechanges in deferred tax valuation allowance which decreased the effective tax rate by 9.8%.

Income tax expense for the year ended March 31, 2013 was ¥132,039 million, representing an effective tax rate of 55.5%. The significant factors causing the difference between the effective tax rate of 55.5% and the effective statutory tax rate of 38% were non-deductible expenses which increased the effective tax rate by 12.9%, the effect of the tax positions of foreign subsidiaries which increased the effective tax rate by 10.0% as partially offset by non-taxable revenue which decreased the effective tax rate by 9.3%.

Income tax expense for the year ended March 31, 2012 was ¥58,903 million, representing an effective tax rate of 69.3%. The significant factors causing the difference between the effective tax rate of 69.3% and the statutory tax rate of 41% were changes in domestic tax laws which increased the effective tax rate by 45.7%, non-deductible expenses which increased the effective tax rate by 23.3%, the effect of the tax positions of foreign subsidiaries which increased the effective tax rate by 14.1% as partially offset by non-taxable revenue which decreased the effective tax rate by 29.7% and the change in valuation allowance which decreased the effective tax rate by 22.5%.

Net income attributable to NHI shareholders for the year ended March 31, 2012 was ¥11,583 million, ¥107,234 million for the year ended March 31, 2013 and ¥213,591 million for the year ended March 31, 2014, ¥224,785 million for the year ended March 31, 2015 and ¥131,550 million for the year ended March 31, 2016, respectively. Our return on equity for the year ended March 31, 2012, 20132014, 2015 and 20142016 was 0.6%8.9%, 4.9%8.6% and 8.9%4.9%, 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. Gain on investments in equity securities, our share of equity in the earnings (losses) of affiliates, corporate items and other financial adjustments 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 items outside of our segment information. The following segment information should be read in conjunction with Item 4.B “Business Overview” of this annual report and Note 2421 “Segment and geographic 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 2421 “Segment and geographic information” in our consolidated financial statements included in this annual report.

Retail

In our Retail we continue withDivision, our sales activities focusedfocus on providing consultation services and investment proposals to clients andfor which we receive commissions and fees from our sales activities.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 increaseddecreased by 29%9% from ¥397,925¥476,505 million for the year ended March 31, 20132015 to ¥435,634 million for the year ended March 31, 2016, primarily due to the market turmoil from August 2015 which led to a slowdown in sales of stocks and investment trusts.

Net revenue decreased by 7% from ¥511,916 million for the year ended March 31, 2014 primarily due to increasing brokerage commissions from equity and equity-related products and the distribution of investment trusts.

Net revenue increased by 14% from ¥350,258¥476,505 million for the year ended March 31, 2012 to ¥397,925 million for the year ended March 31, 2013,2015, primarily due to increasingdecreasing commissions from the distribution of investment trusts and brokerage commissions.services.

Non-interest expenses increaseddecreased by 8%2% from ¥297,297¥314,675 million for the year ended March 31, 20132015 to ¥308,003 million for the year ended March 31, 2016, primarily due to decreases in compensation and benefits and information technology-related expenses.

Non-interest expenses decreased by 2% from ¥319,915 million for the year ended March 31, 2014 primarily due to increases in compensation and benefits and the expenditures incurred in implementing NISA.

Non-interest expenses increased by 4% from ¥287,128¥314,675 million for the year ended March 31, 2012 to ¥297,297 million for the year ended March 31, 2013,2015, primarily due to an increasedecreases in compensation and benefits, expenditures incurred in implementing the Nippon (Japan) Individual Savings Account (“NISA”) and also a decrease in information technology expenses.technology-related expenses

Income before income taxes was ¥63,130 million for the year ended March 31, 2012, ¥100,628 million for the year ended March 31, 2013, and ¥192,001 million for the year ended March 31, 2014.2014, ¥161,830 million for the year ended March 31, 2015, and ¥127,631 million for the year ended March 31, 2016.

The graph belowfollowing table shows the revenue generated by instrument in termsbreakdown of Retail non-interest revenues for the yearsyear ended March 31, 2012, 2013,2015 and 2014.2016.