DSA has implemented a Business Continuity Plan (BCP) to lessen the effects of a business disruption. The BCP includes steps to protect information, processes and customer data, and to allow the continued operation of critical functions. Our BCP also includes technical, organizational, facilities, regulatory and operational plans to assist DSA to continue operating under different disruption scenarios.

If a business disruption prevents us from operating out of our primary office location, whether due to a disruption affecting only DSA’s office, or the building our office is located in, or a disruption affecting all of Manhattan, DSA would execute its BCP. Critical employees would re-locate to our Disaster Recovery Office located in a different city and state. From this office we expect to be able to operate our critical systems and processes. Depending on the type of event and its severity, operations should be resumed within half a business day, assuming all mission critical vendors and partners are able to recover in a similar time frame.

If a large-scale disruption affects the entire northeast region, DSA plans to work with our international affiliates in Japan and London to fulfill our existing customer obligations and regulatory requirements.

DSA performs a quarterly test of its BCP to assess the degree to which our critical systems and processes are recoverable from our Disaster Recovery Office.

Our BCP is subject to periodic modification. An updated summary of our BCP will be posted on our website at www.daiwausa.com as promptly as possible after any significant modification; a copy of this summary of our BCP is also available upon request by writing to Daiwa Securities America Inc., Financial Square, 32 Old Slip, New York, New York 10005-353