Best execution policy

Attention
This is an unofficial translation. The official document is in Japanese.

January 1,2010
Daiwa Securities Capital Markets Co. Ltd. (the “Company”)

This best execution policy provides for policies and procedures of the Company for ensuring the best trade execution of securities transactions for clients pursuant to Article 40-2(1) of the Financial Instruments and Exchange Law.

In the case where there is no specific client instruction regarding the execution as acceptance of a client order for securities listed on financial instruments exchanges in Japan, the Company will endeavor to execute such order in accordance with the following policy:

• The Company hopes that the client will confirm this policy enough. In addition, Professional Investors are exempted from the application of the delivery of this policy.

1. Type of Securities Covered

• 　"Listed securities" that are prescribed in Article 16-6 of the Cabinet Order for Enforcement of the Financial Instruments and Exchange Law, including but not limited to shares, corporate bonds with share purchase warrants (CBs), ETFs (beneficiary rights of exchange traded funds), and REITs (investment securities of real estate investment trusts) listed on financial instruments exchanges in Japan;
• "Traded Securities" that are prescribed in Article 67-18(ⅳ) of the Financial Instruments and Exchange Law, including but not limited to shares and corporate bonds with share purchase warrants (CBs) that are Green Sheet issues and Phoenix issues.

2. Best Execution Method

The Company will not act as direct trading counterparty with respect to client orders but will treat all orders as agency orders.

• Listed securities
  Basically, the Company place orders for listed securities from clients with financial instruments exchanges, and it does not treat any off-exchange transactions including by means of PTS (proprietary trading system).
  • Upon receipt of an order from a client, the Company will promptly place the order with the financial instruments exchange in Japan where the issue is listed. The Company will, however, place the orders that were received during off-the market hours from clients with the financial instruments exchange after the market is reopened.
  • When i. above is applicable, the transaction for agency order on the financial instruments exchange shall be carried out as follows.
    • In the case where the security is only listed on one financial instruments exchange (single listing), the Company will place the order with that particular financial instruments exchange.
    • 　In the case where the security is listed on more than two exchanges (multiple listing), the order will be placed with the first financial instruments exchange that appears on the screen when a search using the securities code is made on one of QUICK terminals at execution of such order (the financial instruments exchange is chosen based on the calculation that indicate the highest trading volume in accordance with that company's prescribed method of calculation, this search will select the financial instruments exchange with the highest trading generated during a certain period, hereinafter termed the "main exchange".)
    • In the case where the Company is not a participant nor has any membership of the financial instruments exchange selected through a) or b) above (i.e. Fukuoka and Sapporo stock exchanges), the Company will place the order with that exchange through an exchange participant or a member with whom the Company has entered into an agreement for placing orders with that particular financial instruments exchange.
  • The Company will treat the orders as follows, in the case where the main exchange is changed after the orders placed by the clients are placed with the main exchange:
    • The order will be placed with the same exchange as the one at acceptance of the order, in the case where the main exchange to the particular issue is changed while the orders received as the orders with expiration period and there is no specific instruction of change in the main exchange from clients. The change in the main exchange can be verified through QUICK terminals.
    • For new purchases of a security based on standardized or negotiable margin transactions, in the case where the main exchange should change before the reversing transaction is covered by the client, in principle the reversing transaction will be placed with the new main exchange. However, if the Company receives the approval of the client, it will place the reversing transaction with the same market as the original margin transaction.
• Traded Securities
  In principle, the Company does not accept orders for Traded Securities(Green Sheet issues and phoenix issues). However, if the client wishes to place the order and there is an agreement on the order between the Company and the client, the Company may place an order based on the agreed conditions. In the case where the Company is soliciting the investment to and presenting the price quotations for a Green Sheet issue and a Phoenix issue, the Company shall act as the direct trading counterparty for the transaction only if the client shall confirm the price quotations for the issue (cross-checking the price quotations from another securities company also soliciting the issue) at the time of order placement, and agree with the Company on the price. For information on the issues the Company is soliciting or other securities companies that is soliciting that particular issues, please visit the website of Japan Securities Dealers Association (http://www.jsda.or.jp/).

3. Reasons for selecting the execution methods employed by the Company

• Listed Securities
  Financial instruments exchanges are the focal point of supply and demand from investors, and provide with the best liquidity conditions as well as being highly public markets. Therefore, in overall consideration of price, probability for order execution, and speed of transaction, the Company has decided that placing orders in these markets are the most practical and efficient method for the client.
  In addition, in the case where particular security is listed on two or more financial instruments exchanges, the Company has decided that executing the transaction in the main market, which has the highest liquidity, is the most practical and efficient method for the client.
  In the case where the main market is changed before the expiration date for a time limit order, the Company places the order with the financial instruments exchange where the one at a acceptance of the order, when there is no instruction from the client, because the Company has decided that doing such way will avoid the additional costs in trade confirmation with the client and replacing the order as well as an extension of the time required to complete the order, therefore, this action has the greatest potential for retaining the best execution condition, and is the most practical and efficient method for the client.
  In the case where the main market is changed before the reversing transaction is completed for standardized or negotiable margin transactions, the Company places the order for the reversing transaction with the same financial instruments exchange as the original margin transaction with the approval of the client, because the Company has decided that, if the client has not decided to change the financial instruments exchange in which the short or long position is held for some reason, doing such way is the most practical and efficient method for the client.
• Traded Securities
  The extent that the Company is trading those Traded Securities (Green Sheet issues and Phoenix issues) is limited to those issues that the Company is soliciting the investment to and presenting the price quotations. The Company only executes transactions for the issue in which the client has cross-checked the price quotation with another securities companies that also solicit the issue at the time when the order is placed, because the Company has decided that achieving an overall agreement between the Company and the client on the price, potential for order execution, and execution costs, etc. is the most practical and efficient method for the client.