SMBC Nikko Securities
SMBC Nikko Securities (SMBC日興証券株式会社) is a securities firm in Japan which engages in the operation of large-scale comprehensive securities broking and trading services. The company was founded in 2009 and is headquartered in Tokyo, Japan.[1] It is a wholly owned subsidiary of the Sumitomo Mitsui Financial Group. In Japan, its the third largest securities brokerage firm.[2]
 | |
 Headquarters at the Shin-Marunouchi Building | |
Native name | SMBC日興証券株式会社 |
|---|---|
| Type | Subsidiary |
| Industry | Financial services |
| Founded | June 15, 2009 |
| Founder | Genichi Toyama |
| Headquarters | , |
Key people | Yasuyuki Kawasaki (Chairman) Yuichiro Kondo (President & CEO) |
| Services | Securities brokerage Investment banking |
| Owner | Sumitomo Mitsui Financial Group (100%) |
Number of employees | 9,355 (December 31, 2021) |
| Parent | Sumitomo Mitsui Financial Group |
| Website | www |
History
The origins of SMBC Nikko Securities can be traced back to a company named Kawashimaya Shoten (川島屋商店) which was formed in July 1918 by Genichi Toyama.[3] It was formed to buy and sell stocks and bonds.[3]
In 1920, the firm was incorporated into a stock company.[3]
During the same year, Nikko Securities was created out of the securities department of the Industrial Bank of Japan.[3]
In 1939, Kawashimaya Shoten spun off its securities division forming Kawashimaya Securities.[3] In 1943, Kawashimaya Securities absorbed Kawashimaya Shoten.[3]
In 1944, Kawashimaya Securities and Nikko Securities merged with the resulting company continuing to use the Nikko Securities trade name.[3]
In 2001, the firm changed its name from Nikko Securities to Nikko Cordial Securities.[4]
In 2007, the firm became a subsidiary of Citigroup after Citigroup purchased Nikko Cordial Corporation forming Nikko Citi Holdings Inc.[5][6]
On June 15, 2009, Nikko Cordial Securities De-merger Preparatory Company Ltd was formed.[1] This is considered the legal entity of the firm up to the present.In October 2009, Nikko Cordial Securities De-merger Preparatory Company Ltd took over all of the operations of the original Nikko Cordial Securities business and certain businesses of Nikko Citigroup. It was then renamed Nikko Cordial Securities.[4] Then Citigroup sold the firm to the Sumitomo Mitsui Banking Corporation.[7]
In 2011, the firm changed its name from Nikko Cordial Securities to SMBC Nikko Securities.[4]
In 2016, the firm became a wholly owned direct subsidiary of Sumitomo Mitsui Financial Group.[4]
In 2018, the firm merged with SMBC Friend Securities while continuing to use the SMBC Nikko Securities trade name.[4]
Controversies
2012 Insider Trading Fine
In April 2012, the Financial Services Agency fined the firm for leaking information about a stock offering which was considered insider trading.[2][8] Directors of the firm passed on word of the offering to at least 21 sales branches without carrying out the proper internal procedures to control the information flow.[8] At eight of those branches a total of 23 sales staff tipped off 34 clients to purchase the shares once the deal was launched. The deal was said to be a roughly 1 trillion yen ($12.4 billion) offering by Sumitomo Mitsui Financial Group, Nikko’s parent, in early 2010.[8]
2021-2022 Investigation into Market Manipulation
In November 2021, the Securities and Exchange Surveillance Commission (SESC) launched an investigation into the firm over suspicious stock transactions.[9] The firm was suspected of using its proprietary trading desk to illegitimately maintain the price of stocks in block trades.[9][10] The firm launched a complaint with financial regulators after a senior trader died following intensive questioning.[10]
On March 4, 2022, four employees of the firm were arrested on allegations of market manipulation.[2][11] The employees were Trevor Hill (Head of equity), Alexandre Avakiants (Deputy head of equity), Makoto Yamada (General manager of equity trading) and Shinichiro Okazaki (General manager of structured products).[2][11] The firm's President & CEO, Yuichiro Kondo issued a public apology afterwards.[2][11]
On March 23, 2022, SESC called on prosecutors to extend allegations against the firm. If prosecutors accept the additional charges, three more staff from the firm could be indicted.[12]
References
- "Corporate Overview | SMBC Nikko Securities Inc". www.smbcnikko.co.jp. Retrieved 2022-03-18.
- "UPDATE 2-SMFG's brokerage launches probe after executives arrested". Reuters. 2022-03-05. Retrieved 2022-03-18.
- "History of The Nikko Securities Company Limited – FundingUniverse". www.fundinguniverse.com. Retrieved 2022-03-18.
- "History | SMBC Nikko Securities Inc". www.smbcnikko.co.jp. Retrieved 2022-03-18.
- "Citigroup wins control of Japan's Nikko Cordial". Reuters. 2007-04-27. Retrieved 2022-03-18.
- "Citigroup to buy rest of Nikko in $4.6 bln deal". Reuters. 2007-10-02. Retrieved 2022-03-18.
- "Citi closes sale of Nikko Cordial to SMFG". Reuters. 2009-10-01. Retrieved 2022-03-18.
- "UPDATE 1-Japan regulator reprimands SMBC Nikko in insider crackdown". Reuters. 2012-04-20. Retrieved 2022-03-18.
- "SMBC Nikko and staff probed over suspicious stock transactions". The Japan Times. 2021-11-03. Retrieved 2022-03-18.
- Lewis, Leo; Slodkowski, Antoni; Sugiura, Eri (2022-03-09). "SMBC Nikko complained to regulators over trader's death after questioning". Financial Times. Retrieved 2022-03-18.
- Auto, Hermes (2022-03-16). "Scandal rocks Japanese finance as SMBC Nikko employees are arrested | The Straits Times". www.straitstimes.com. Retrieved 2022-03-18.
- Lewis, Leo; Sugiura, Eri; Slodkowski, Antoni (2022-03-23). "Japan's regulator extends allegations against brokerage SMBC Nikko". Financial Times. Retrieved 2022-03-23.
