1. Reason for the change

Okasan Asset Management, a subsidiary of the Company, has been engaged in the asset management business for about 60 years since it was established in 1964 under the name Japan Investment Trust Management Co., Ltd. Okasan Asset Management draws on its accumulated know-how to provide attractive products that anticipate customer needs, and it has received numerous awards for its ingenious products and services. Okasan Asset Management has one of the largest distribution networks in Japan, with approximately ¥1.4 trillion in investment trusts under management and 193 distributors (all as of March 31, 2022). It delivers investment products to investors through its main distributors—Okasan Securities Co., Ltd. and other Group securities companies—as well as through various financial institutions.

Looking beyond its 100th anniversary in April 2023, the Group believes that it is effective to strengthen sales expansion through online channels, in addition to developing products suitable for provision through face-to-face consulting. To achieve further growth, the Group intends to promote a highly agile and scalable growth strategy that involves shifting away from a policy of self-sufficiency toward open collaboration with leading partners to develop businesses in different areas. Based on this perspective, the Group has positioned partnerships in the asset management business with financial institutions who operate strong sales channels as a measure to be pursued, based on recognition of the importance of collaboration with stronger business partners, while actively continuing to expand sales outside the Group.

Under such circumstances, the Company signed a basic agreement in May of this year and entered into discussions with the SBI Group, a comprehensive online financial group, to convert Okasan Asset Management to a joint venture company. Today, the parties reached an agreement. Going forward, the Company will capitalize to the fullest on the synergies generated by combining Okasan Asset Management's offering of high-quality products and SBI Group's approach to a broad range of customers, centering on its online channel. It will seek to significantly expand assets under management by pursuing a growth strategy unconstrained by Group boundaries. We believe this will result in revenue for the Group that significantly exceeds levels achieved before these collaborations.

2. Details of the Change and other matters

SBI FINANCIAL SERVICES Co., Ltd., a wholly owned subsidiary of SBI Holdings, Inc., is scheduled to acquire 51% of the shares of Okasan Asset Management effective November 30, 2022 through subscription to a capital increase by third-party allotment of new shares by Okasan Asset Management.

Okasan Asset Management is scheduled to make dividend distributions to the Company in cash and in kind before the change.

3. Outline of the consolidated subsidiary to be transferred

4. Outline of the third-party allotment of new shares by the subsidiary

5. Number of shares held by the subsidiary before and after the capital increase through third-party allotment and percentage of voting rights of all shareholders

• The percentage of voting rights after the Company's conversion of the subsidiary into a wholly-owned subsidiary.

6. Outline of the partner of the third-party allotment

7. Timetable

8. Outlook

In conjunction with this transaction, the status of Okasan Asset Management will change from a consolidated subsidiary to an equity method affiliate from the end of the third quarter of the fiscal year ending March 2023. The Company is currently examining the impact of this change on its business results and will issue notices promptly should any matters arise that warrant announcement.

The main business of the Group is the financial instruments business; thus, its business results are affected by changes in the market environment. In light of this characteristic of the business, the Group does not disclose projections of its business results due to the difficulty of making accurate projections.