(Provisional Translation)
March 16, 2007
Financial Services Agency
Government of Japan

Request to Credit Suisse regarding Its Operation of Unlicensed Banking Business in Japan

I. Description of Request

The Financial Services Agency (FSA) has confirmed certain illegal sales activities that had been conducted in Japan in 2003 by an ex-employee of the private banking division (offices outside Japan) of Credit Suisse headquartered in Zurich, Switzerland as described in Section II below. Therefore, pursuant to the objective of paragraph 1, Article 1 of the Banking Law, the FSA has requested Credit Suisse on March 15 to develop and enhance its compliance system and internal control system with due emphasis on the following points.

(1) The private banking division shall not engage in any sales activities in violation of laws and regulations, such as having its staff go on business trips to Japan from overseas branches and engage in deposit-taking solicitation.

(2) Internal rules and manuals required in complying with Japanese laws and regulations shall be revised based on an accurate understanding of the relevant laws and regulations.

(3) Staff shall be given the necessary guidance and education in order to have them fully understand and properly observe the internal rules and manuals revised in accordance with (2) above.

(4) The system for managing the sales activities of staff shall be improved.

(5) When the private banking division conducts banking business in Japan in the future, group-wide efforts shall be made to develop and enhance its compliance system and internal control system relating to Japan as required of a bank.

II. Confirmed Facts

1. The FSA has confirmed that the private banking division of Credit Suisse established a marketing organization targeting wealthy Japanese individuals (called ''Japan Desk'') in several location outside Japan. The FSA also has confirmed that the activities of Japan Desk included having its employee engage in banking business such as deposit-taking solicitation while going on business trips to Japan. Such sales activities, when conducted in Japan by an overseas branch, are deemed to be in violation of paragraph 1, Article 4 of the Banking Law of Japan (operation of banking business without a license).

2. Specifically, the FSA has confirmed that an ex-employee of the Hong Kong branch of Credit Suisse went on business trips to Japan, visited the office of a potential customer, engaged in deposit-taking solicitation for the Hong Kong branch with respect to the said customer, obtained his signature on the application form to open a deposit account at the aforementioned office in 2003.

In this instance, the ex-employee has been prosecuted of breach of ''The Law for Punishment of Organized Crimes, Control of Crime Proceeds and other matters'' for being involved in a criminal case concerning money-laundering by the said customer. In the first trial in March 2006, the fact of sale activities concerning deposit-taking solicitation by the ex-employee was confirmed, but he was acquitted of involvement in money-laundering and has been appealed by the prosecutors.

3. Such illegal sales activities are deemed to have been primarily attributable to problems in the compliance system and internal control system as described as follows: Specific internal rules and manuals relating to private banking operations in Japan had not been formulated in Credit Suisse, and its staff lacked an accurate understanding of Japanese laws and regulations and were neither given sufficiently guidance nor adequate education based on an accurate understanding of the relevant laws and regulations; Sales activities of staff conducted in Japan were not properly managed either.