Japan's Financial Services Agency on May 28 issued a business improvement order against Nomura Holdings Inc. and subsidiary Nomura Securities Co. Ltd. after the Japanese brokerage's found that an employee leaked sensitive market information.

In a statement, the FSA said it found significant inadequacies at Nomura Holdings and Nomura Securities, including inadequate information control systems and insufficient improvement of operations based on the past administrative actions. The regulator also directed both the companies to improve their business practices, clarify where responsibility lies for the incident, including senior executives, and file detailed improvement plans to prevent a recurrence of such incidents in the future, among others.

Nomura Holdings President and group CEO Koji Nagai said the group takes the matter very seriously and that it regrets the trouble that has been caused to its clients and all other concerned parties. "We will further strengthen our compliance and internal controls frameworks," he said. "We are committed to preventing a recurrence and will work towards regaining trust."

Nomura on May 24 announced measures, including temporarily cutting the pay of Nagai and other executives, to prevent a recurrence of such incidents. The announcement came after an internal probe conducted by the brokerage found that a researcher at affiliate Nomura Research Institute shared confidential information relating to the listing and delisting criteria for the Tokyo Stock Exchange upper section to a strategist at Nomura Securities. The strategist then passed on the information to other employees at the securities unit, some of whom provided the information to clients.