Financial Instruments and Exchange Act

Link to law: http://www.japaneselawtranslation.go.jp/law/detail_download/?ff=08&id=2355
Published: 2010

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Financial Instruments and Exchange Act

Chapter I General Provisions (Article 1 and Article 2)

Chapter II Disclosure of Corporate Affairs (Article 2-2 - Article 27)

Chapter II-2 Disclosure in a Tender Offer

Section 1 Tender Offers for Share Certificates, etc. by Persons Other Than the Issuer (Article 27-2 - Article 27-22)

Section 2 Tender Offers for Listed Share Certificates, etc. by the Issuer (Article 27-22-2 - Article 27-22-4)

Chapter II-3 Disclosure of the Status of Large-Volume Holdings in Share Certificates, etc. (Article 27-23 - Article 27-30)

Chapter II-4 Special Provisions, etc. on Carrying Out Procedures Via an Electronic Data Processing System for Disclosure (Article 27-30-2 - Article 27-30-11)

Chapter II-5 Provision or Disclosure of Specified Information on Securities, etc. (Article 27-31 - Article 27-35)

Chapter III Financial Services Provider, etc.

Section 1 General Provisions

Subsection 1 General Rules (Article 28)

Subsection 2 Financial Services Providers (Article 29 - Article 31-5)

Subsection 3 Major Shareholders (Article 32 - Article 32-4)

Subsection 4 Registered Financial Institutions (Article 33 - Article 33-8)

Subsection 5 Professional Investors (Article 34 - Article 34-5)

Section 2 Services

Subsection 1 General Rules (Article 35 - Article 40-5)

Subsection 2 Special Provisions on Investment Advisory Services (Article 41 - Article 41-5)

Subsection 3 Special Provisions on Investment Management Business (Article 42 - Article 42-8)

Subsection 4 Special Provisions on Securities, etc. Management (Article 43 - Article 43-4)

Subsection 5 Preventive Measures against Adverse Effects (Article 44 - Article 44-4)

Subsection 6 Miscellaneous Provisions (Article 45)

Section 3 Accounting

Subsection 1 Financial Instruments Services Providers Engaged in Type I Financial Instruments Business (Article 46 - Article 46-6)

Subsection 2 Financial Services Provider Not Engaged in Type I Financial Instruments Business (Article 47 - Article 47-3)

Subsection 3 Registered Financial Institutions (Article 48 - Article 48-3)

Subsection 4 Special Provisions on Foreign Corporations, etc. (Article 49 - Article 49-5)

Section 4 Supervision (Article 50 - Article 57)

Section 4-2 Special Provisions on Special Financial Services Providers, etc.

Subsection 1 Special Financial Services Providers (Article 57-2 - Article 57-11)

Subsection 2 Designated Parent Companies (Article 57-12 - Article 57-25)

Subsection 3 Miscellaneous Provisions (Article 57-26 - Article 57-27)

Section 5 Special Provisions for Foreign Companies Related to Financial Instrument Business

Subsection 1 Foreign Securities Services Providers (Article 58 and Article 58-2)

Subsection 2 Permission for Some Underwriting Activities (Article 59 - Article 59-6)

Subsection 3 Permission for On-Exchange Transaction Services (Article 60 - Article 60-13)

Subsection 4 Persons Engaging in Investment Advisory Services or Investment Management in a Foreign State (Article 61)

Subsection 5 Establishment of Facilities for Collecting Information (Article 62)

Section 6 Special Provisions on Specially Permitted Services for Qualified Institutional Investors, etc. (Article 63 - Article 63-4)

Section 7 Sales Representatives (Article 64 - Article 64-9)

Section 8 Miscellaneous Provisions (Article 65 - Article 65-6)

Chapter III-2 Financial Instruments Intermediaries

Section 1 General Provisions (Article 66 - Article 66-6)

Section 2 Services (Article 66-7 - Article 66-15)

Section 3 Accounting (Article 66-16 - Article 66-18)

Section 4 Supervision (Article 66-19 - Article 66-23)

Section 5 Miscellaneous Provisions (Article 66-24 - Article 66-26)

Chapter III-3 Credit Rating Agencies

Section 1 General Provisions (Article 66-27 - Article 66-31)

Section 2 Services (Article 66-32 - Article 66-36)

Section 3 Accounting (Article 66-37 - Article 66-39)

Section 4 Supervision (Article 66-40 - Article 66-45)

Section 5 Miscellaneous Provisions (Article 66-46 - Article 66-49)

Chapter IV Financial Instruments Firms Associations

Section 1 Authorized Financial Instruments Business Associations

Subsection 1 Incorporation and Services (Article 67 - Article 67-20)

Subsection 2 Association Members (Article 68 and Article 68-2)

Subsection 3 Management (Article 69 - Article 72)

Subsection 4 Supervision (Article 73 - Article 76)

Subsection 5 Miscellaneous Provisions (Article 77 - Article 77-7)

Section 2 Certified Financial Instruments Business Associations

Subsection 1 Certification and Services (Article 78 - Article 79)

Subsection 2 Supervision (Article 79-2 - Article 79-6)

Section 3 Certified Investor Protection Organization (Article 79-7 - Article 79-19)

Chapter IV-2 Investor Protection Fund

Section 1 General Provisions (Article 79-20 - Article 79-25)

Section 2 Members (Article 79-26 - Article 79-28)

Section 3 Incorporation (Article 79-29 - Article 79-33)

Section 4 Management (Article 79-34 - Article 79-48)

Section 5 Services (Article 79-49 - Article 79-62)

Section 6 Dues (Article 79-63 - Article 79-67)

Section 7 Finance and Accounting (Article 79-68 - Article 79-74)

Section 8 Supervision (Article 79-75 - Article 79-77)

Section 9 Dissolution (Article 79-78 - Article 79-80)

Chapter V Financial Instruments Exchanges

Section 1 General Provisions (Article 80 - Article 87-9)

Section 2 Financial Instruments Incorporated Associations, Self-Regulatory Organizations, and Stock Companies That Operate Financial Instruments Exchange Markets

Subsection 1 Financial Instruments Incorporated Associations

Division 1 Incorporation (Article 88 - Article 88-22)

Division 2 Registration (Article 89 - Article 90)

Division 3 Members (Article 91 - Article 96)

Division 4 Administration (Article 97 - Article 99)

Division 5 Dissolution (Article 100 - Article 100-25)

Division 6 Organizational Conversion (Article 101 - Article 102)

Subsection 1-2 Self-Regulatory Organizations

Division 1 Incorporation (Article 102-2 - Article 102-7)

Division 2 Registration (Article 102-8 - Article 102-11)

Division 3 Members (Article 102-12 and Article 102-13)

Division 4 Self-Regulatory Services (Article 102-14 - Article 102-20)

Division 5 Administration (Article 102-21 - Article 102-34)

Division 6 Dissolution (Article 102-35 - Article 102-39)

Subsection 2 A Stock Company That Operetes Financial Instruments Exchange Markets

Division 1 General Provisions (Article 103 - Article 105-3)

Division 2 Self-Regulatory Committees (Article 105-4 - Article 106-2)

Division 3 Major Shareholders (Article 106-3 - Article 106-9)

Division 4 Financial Instruments Exchange Holding Companies (Article 106-10 - Article 109)

Section 3 The Purchase and Sale of Securities, etc. on a Financial Instruments Exchange Market (Article 110 - Article 133-2)

Section 4 Dissolution of a Financial Instruments Exchange

Subsection 1 Dissolution (Article 134 and Article 135)

Subsection 2 Merger

Division 1 General Rules (Article 136)

Division 2 Merger between an Incorporated Association-Operated Financial Instruments Exchange and an Incorporated Association-Operated Financial Instruments Exchange (Article 137 and Article 138)

Division 3 Merger between an Incorporated Association-Operated Financial Instruments Exchange and a Stock Company-Operated Financial Instruments Exchange (Article 139 and Article 139-2)

Division 4 Merger Procedures for an Incorporated Association-Operated Financial Instruments Exchange (Article 139-3 - Article 139-6)

Division 5 Merger Procedures for Stock-Operated Financial Instruments Exchanges (Article 139-7 - Article 139-21)

Division 6 The Coming Into Effect of a Merger (Article 140 - Article 147)

Section 5 Supervision (Article 148 - Article 153-4)

Section 6 Miscellaneous Provisions (Article 154 and Article 154-2)

Chapter V-2 Foreign Financial Instruments Exchanges

Section 1 General Provisions (Article 155 - Article 155-5)

Section 2 Supervision (Article 155-6 - Article 155-10)

Section 3 Miscellaneous Provision (Article 156)

Chapter V-3 Financial Instruments Clearing Organizations, etc.

Section 1 Financial Instruments Clearing Organizations (Article 156-2 - Article 156-20)

Section 2 Foreign Financial Instruments Clearing Organizations (Article 156-20-2 - Article 156-20-15)

Section 3 Coordination between a Financial Instruments Clearing Organization and Other Financial Instruments Clearing Organizations, etc. (Article 156-20-16 - Article 156-20-22)

Section 4 Miscellaneous Provisions (Article 156-20-23 and Article 156-22)

Chapter V-4 Securities Finance Companies (Article 156-23 - Article 156-37)

Chapter V-5 Designated Dispute Resolution Organization

Section 1 General Provisions (Article 156-38 - Article 156-41)

Section 2 Services (Article 156-42 - Article 156-54)

Section 3 Supervision (Article 156-55 - Article 156-61)

Chapter V-6 Trade Repositories

Section 1 Centralization of Clearing (Article 156-62)

Section 2 Archiving and Reporting Trade Data (Article 156-63 - Article 156-66)

Section 3 Trade Repositories (Article 156-67 - Article 156-84)

Chapter VI Regulations on Transactions, etc. of Securities (Article 157 - Article 171)

Chapter VI-2 Administrative Surcharges

Section 1 Payment Order (Article 172 - Article 177)

Section 2 Administrative Hearing Proceedings (Article 178 - Article 185-17)

Section 3 Litigation (Article 185-18)

Section 4 Miscellaneous Provisions (Article 185-19 - Article 185-21)

Chapter VII Miscellaneous Provisions (Article 186 - Article 196-2)

Chapter VIII Penal Provisions (Article 197 - Article 209)

Chapter IX Investigations in Criminal Cases (Article 210 - Article 227)

Supplementary Provisions

Chapter I General Provisions

(Purpose)

Article 1 The purpose of this Act is to ensure fairness in, inter alia, the issuance of Securities and transactions of Financial Instruments, etc. and to facilitate the smooth distribution of Securities, as well as to achieve fair price formation for Financial Instruments, etc. through the full utilization of the functions of the capital markets, by, inter alia, streamlining systems for the disclosure of corporate affairs, specifying the necessary particulars relevant to persons conducting Financial Instruments Business, and ensuring the appropriate operation of Financial Instruments Exchanges, thereby contributing to the sound development of the national economy and the protection of investors.

(Definitions)

Article 2 (1) The term "Securities" as used in this Act means the following:

(i) national government bonds;

(ii) municipal bonds;

(iii) debentures issued by a corporation pursuant to a special Act (excluding those set forth in the following item and item (xi));

(iv) specified corporate bonds prescribed in the Act on the Securitization of Assets (Act No. 105 of 1998);

(v) corporate bond certificates (including those issued by a mutual company; the same applies hereinafter);

(vi) investment securities issued by a corporation incorporated pursuant to a special Act (excluding those set forth in the following item, item (viii) and item (xi));

(vii) preferred equity investment certificates prescribed in the Act on Preferred Equity Investment by Cooperative Financial Institutions (Act No. 44 of 1993; (hereinafter referred to as the "Act on Preferred Equity Investment");

(viii) preferred equity securities and securities indicating a right to subscribe for preferred equity which are prescribed in the Act on the Securitization of Assets;

(ix) share certificates and share option certificates;

(x) beneficiary certificates of an investment trust or foreign investment trust which are prescribed in the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951);

(xi) investment securities or investment corporation bond certificates or foreign investment securities prescribed in the Act on Investment Trusts and Investment Corporations;

(xii) beneficiary certificates of loan trusts;

(xiii) beneficiary certificates of special purpose trusts prescribed in the Act on the Securitization of Assets;

(xiv) beneficiary certificates of beneficiary certificate-issuing trusts prescribed in the Trust Act (Act No. 108 of 2006);

(xv) promissory notes specified by Cabinet Office Ordinance which have been issued by a corporation in order to raise the funds necessary for business;

(xvi) mortgage securities prescribed in the Mortgage Securities Act (Act No. 15 of 1931);

(xvii) securities or certificates issued by a foreign state or foreign person, and which have the nature of the securities and certificates set forth in items (i) to (ix) inclusive or item (xii) to the preceding item inclusive (excluding those specified in the following item);

(xviii) securities or certificates which are specified by Cabinet Office Ordinance, which are issued by a foreign person, and which indicate a beneficial interest in a trust that holds the loan claims of a person operating in the banking business or a person otherwise providing money loans in the course of trade, or indicate any other similar rights;

(xix) securities or certificates that indicate the right to a transaction specified in paragraph (21), item (iii) which is conducted on a Financial Instruments Market, in accordance with the standards and means prescribed by the person operating the Financial Instruments Market, right to a transaction that is conducted on a foreign Financial Instruments Market (meaning a foreign Financial Instruments Market provided for in paragraph (8), item (iii), sub-item (b); hereinafter the same applies in this item) and which is similar to the transaction specified in paragraph (21), item (iii), or the right to a transaction specified in paragraph (22), item (iii) or (iv) which is conducted in neither a Financial Instruments Market nor a foreign Financial Instruments Market (such rights are hereinafter referred to as "Options");

(xx) securities or certificates which the person with whom securities or certificates set forth in the preceding items has been deposited issues in a state other than the state in which the deposited securities or certificates were issued, and which indicate a right to the deposited securities or certificates; and

(xxi) securities or certificates other than those set forth in the preceding items, which are specified by Cabinet Order as those with regard to which, in consideration of transferability and other factors, it is found to be necessary to ensure the public interest or the protection of investors.

(2) The rights that must be indicated on Securities set forth in items (i) to (xv) inclusive of the preceding paragraph, on Securities set forth in item (xvii) of that paragraph (excluding those with the nature of Securities set forth in item (xvi) of that paragraph), and on Securities set forth in item (xviii) of that paragraph; and the rights that must be indicated on the Securities set forth in item (xvi) of that paragraph, Securities set forth in item (xvii) of that paragraph (limited to those with the nature of Securities set forth in item (xvi) of that paragraph), and Securities set forth in items (xix) to (xxi) inclusive of that paragraph which are specified by Cabinet Office Ordinance (hereinafter collectively referred to as "Rights That Must Be Indicated on Securities" in this and the following paragraphs) are deemed to be the Securities indicating these rights even if Securities indicating these rights have not been issued; the Electronically Recorded Monetary Claims (meaning the Electronically Recorded Monetary Claims set forth in Article 2, paragraph (1) of the Electronically Recorded Monetary Claims Act (Act No. 102 of 2007); hereinafter the same applies in this paragraph) specified by Cabinet Order as those which, in consideration of transferabilityy and other circumstances, it is found to be necessary to deem corporate bond certificates or any other Securities specified in the items of the preceding paragraph (referred to as the "Specified Electronically Recorded Monetary Claims" in item (vii) and the following paragraph), are deemed to be such Securities; the rights set forth in the following items are deemed to be the relevant Securities even if they are not rights which must be indicated on securities or certificates; and the provisions of this Act apply:

(i) a beneficial interest in a trust (excluding a beneficial interest that must be indicated on the beneficiary certificates of an investment trust specified in item (x) of the preceding paragraph and a beneficial interest that must be indicated on Securities set forth in any of items (xii) to (xiv) inclusive of that paragraph);

(ii) rights that are claimable against a foreign person and which have the nature of the rights specified in the preceding item (excluding rights that must be indicated on the beneficiary certificates of a foreign investment trust specified in item (x) of the preceding paragraph and rights that must be indicated on Securities set forth in item (xvii) or item (xviii) of that paragraph);

(iii) the membership rights of a general partnership company or limited partnership company (limited to rights specified by Cabinet Order) or membership rights of a limited liability company;

(iv) the membership rights of a foreign corporation which have the nature of rights specified in the preceding item;

(v) among the rights based on a partnership contract provided for in Article 667, paragraph (1) of the Civil Code (Act No. 89 of 1896), an silentpartnership agreement provided for in Article 535 of the Commercial Code (Act No. 48 of 1899), a limited partnership agreement for investment provided for in Article 3, paragraph (1) of the Limited Partnership Act for Investment (Act No. 90 of 1998), or a limited liability partnership agreement provided for in Article 3, paragraph (1) of the Limited Liability Partnership Act (Act No. 40 of 2005), membership rights in an incorporated association or other rights (excluding rights based on foreign laws and regulations) the holder of which (hereinafter referred to as an "Equity Holder" in this item) can receive dividends of profits arising from business that is conducted using the money (including anything specified by Cabinet Order as being similar to money) invested or contributed by the Equity Holder (such business is hereinafter referred to as "Invested Business" in this item) or a distribution of the assets of the Invested Business, which do not fall under one of the following categories (excluding rights that must be indicated on Securities set forth in the items of the preceding paragraph and rights deemed to be Securities pursuant to the provisions of this paragraph (excluding this item)):

(a) rights of an Equity Holder in cases specified by Cabinet Order as those in which all of the Equity Holders participate in the Invested Business;

(b) rights of an Equity Holder, if it is provided that Equity Holders will not receive dividends of profits or a distribution of the assets of the Invested Business in an amount exceeding the amount invested or contributed by them (excluding rights set forth in sub-item (a));

(c) rights based on an insurance contract in which a person that engages in the insurance business prescribed in Article 2, paragraph (1) of the Insurance Business Act (Act No. 105 of 1995) is the insurer, a mutual aid contract concluded with a cooperative prescribed in Article 5 of the Agricultural Cooperatives Act (Act No. 132 of 1947) which engages in the services prescribed in Article 10, paragraph (1), item (x) of that Act, a mutual aid contract concluded with a cooperative prescribed in Article 4 of the Consumer Cooperatives Act (Act No. 200 of 1948) which engages in the mutual aid services prescribed in Article 10, paragraph (2) of that Act, a mutual aid contract concluded with a cooperative prescribed in Article 2 of the Fisheries Cooperatives Act (Act No. 242 of 1948) which engages in the services prescribed in Article 11, paragraph (1), item (xi), Article 93, paragraph (1), item (vi)-2 or Article 100-2, paragraph (1), item (i) of that Act, a mutual aid contract concluded with a cooperative prescribed in Article 3 of the Small and Medium-Sized Enterprise Cooperatives Act (Act No. 181 of 1949) which engages in the mutual aid services prescribed in Article 9-2, paragraph (7) of that Act, or a specified joint real estate venture contract prescribed in Article 2, paragraph (3) of the Specified Joint Real Estate Ventures Act (Act No. 77 of 1994) (excluding rights set forth in sub-items (a) and (b)); or

(d) rights other than those set forth in sub-items (a) to (c) inclusive, which are specified by Cabinet Order as rights in connection with which there is found to be no compromise to the public interest or to the protection of Equity Holders even if the rights are not deemed to be Securities;

(vi) rights based on foreign laws and regulations which are similar to those specified in the preceding item; or

(vii) rights other than Specified Electronically Recorded Monetary Claims and the rights set forth in the preceding items, which are specified by Cabinet Order as rights in connection with which it is found that, in consideration of their economic nature being similar to Securities prescribed in the preceding paragraph and rights set forth in the preceding items and in consideration of other circumstances, it is necessary and appropriate to ensure the public interest or the protection of investors, by deeming these rights to be Securities.

(3) The term "Public Offering of Securities" as used in this Act means, among solicitations of offers to acquire newly issued Securities (including acts specified by Cabinet Office Ordinance as being similar to such solicitation (such acts are referred to as "Acts Similar to Solicitation of Offers to Acquire" in the following paragraph); hereinafter referred to as "Solicitation of Offers to Acquire"), the Solicitation of Offers to Acquire in cases provided for in item (i) or item (ii) below, which is issued with regard to Securities set forth in paragraph (1), Rights That Must Be Indicated on Securities, or Specified Electronically Recorded Monetary Claims that are deemed to be Securities under the preceding paragraph (such Securities or rights are referred to as "Article 2(1) Securities" in the following paragraph, paragraph (6) of this Article, paragraphs (4) and (5) of the following Article, and Article 23-13, paragraph (4)); and the Solicitation of Offers to Acquire in cases provided for in item (iii) below, which is issued with regard to rights that are deemed to be Securities under the items of the preceding paragraph (such rights are referred to as "Article 2(2) Securities" in the following paragraph, paragraphs (4) and (5) of the following Article, and Article 23-13, paragraph (4)); the term "Private Placement of Securities" means Solicitation of Offers to Acquire which does not come within the purview of a Public Offering of Securities:

(i) cases specified by Cabinet Order as those in which the Solicitation of Offers to Acquire is issued (unless the solicitation is issued only to Professional Investors) to a large number of persons (other than qualified institutional investors (meaning persons specified by Cabinet Office Ordinance as having expert knowledge of and experience with investment in Securities; the same applies hereinafter), if qualified institutional investors are included in the persons to which the Solicitation of Offers to Acquire is issued, and the Solicitation of Offers to Acquire constitutes a case specified by Cabinet Order as one in which there is little likelihood of the relevant Securities being transferred from the qualified institutional investor that acquires them to any person other than a qualified institutional investor);

(ii) cases in which the Solicitation of Offers to Acquire is other than as specified in the preceding item, and in which it does not fall under any of the following sub-items:

(a) a Solicitation of Offers to Acquire issued only to qualified institutional investors and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant Securities being transferred from the person that acquires them to any person other than a qualified institutional investor; and

(b) a Solicitation of Offers to Acquire issued only to Professional Investors and falling under all of the following requirements (excluding the cases specified in sub-item (a)):

1. the other party to the Solicitation of Offers to Acquire is not the State, the Bank of Japan, or a qualified institutional investor, and the Solicitation of Offers to Acquire is issued by a Financial Services Provider , etc. (meaning a Financial Services Provider, etc. as prescribed in Article 34; the same applies in the following paragraph, Article 4, paragraph (1), item (iv) and paragraph (3), Article 27-32-2, and Article 27-34-2) based on entrustment by customers or on its own behalf;

2. the Solicitation of Offers to Acquire comes under the purview of cases specified by Cabinet Order as those in which there is little likelihood of the relevant Securities being transferred from the person that acquires them to any person other than a Professional Investor, etc. (meaning a Professional Investor or Non-Resident (meaning a non-resident as defined in Article 6, paragraph (1), item (vi) of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949)), and limited to those specified by Cabinet Order; the same applies hereinafter).

(c) a Solicitation of Offers to Acquire falling under neither the case specified in the preceding item, nor sub-items (a) and (b) of this item (except if the Solicitation of Offers to Acquire meets the requirements that are specified by Cabinet Order in consideration of the status, etc. of the issuance and solicitation of Securities of the same class as the relevant Securities), and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant Securities being held by a large number of persons.

(iii) cases specified by Cabinet Order as those in which, in response to the Solicitation of Offers to Acquire, a considerably large number of persons will come to hold the Securities connected with the solicitation.

(4) The term "Secondary Distribution of Securities" as used in this Act means, among offers to sell and solicitation of offers to purchase already-issued Securities (excluding offers and solicitation coming under the purview of Acts Similar to the Solicitation of Offers to Acquire and any other offer or solicitation specified by Cabinet Office Ordinance; hereinafter referred to as an "Offer to Sell, etc."), Offers to Sell, etc. in cases provided for in item (i) or item (ii), which are made with regard to Article 2(1) Securities; and Offers to Sell, etc. in cases provided for in item (iii), which are made with regard to Article 2(2) Securities (excluding an Offer to Sell, etc. that involves the purchase and sale of Securities on a Financial Instruments Exchange Market, a transaction equivalent thereto, and any other Securities transactions specified by Cabinet Order):

(i) cases specified by Cabinet Order as those in which the Offer to Sell, etc. is made (unless the offer is made only to Professional Investors) to a large number of persons (other than qualified institutional investors, if qualified institutional investors are included in the persons to which the Offer to Sell, etc. is made, and if the Offer to Sell, etc. constitutes a case specified by Cabinet Order as one in which there is little likelihood of the relevant Securities being transferred from the qualified institutional investor that acquires them to any person other than a qualified institutional investor);

(ii) cases in which the Offer to Sell, etc. is other than as specified in the preceding item, and in which it does not fall under any of the following sub-items:

(a) an Offer to Sell, etc. made only to qualified institutional investors and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant Securities being transferred from the person that acquires them to any person other than a qualified institutional investor;

(b) an Offer to Sell, etc. made only to Professional Investors and falling under all of the following requirements (excluding the cases specified in sub-item (a)):

1. the other party to the Offer to Sell, etc. is not the State, the Bank of Japan, or a qualified institutional investor, and the Offer to Sell, etc. is made by a Financial Services Provider, etc. based on entrustment by a customer or on its own behalf;

2. the Offer to Sell, etc. comes under the purview of cases specified by Cabinet Order as those in which there is little likelihood of the relevant Securities being transferred from the person that acquires them to any person other than a Professional Investor, etc.

(c) an Offer to Sell, etc. falling under neither the case specified in the preceding item, nor sub-items (a) and (b) of this item (except if the Offer to Sell, etc. meets the requirements that are specified by Cabinet Order in consideration of the status, etc. of the issuance and solicitation of Securities of the same class as the relevant Securities), and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant Securities being held by a large number of persons.

(iii) cases specified by Cabinet Order as those in which, in response to the Offer to Sell, etc., a considerably large number of persons will come to hold the Securities connected with the offer.

(5) The term "Issuer" as used in this Act means the person that issues, or seeks to issue, Securities (or the person specified by Cabinet Office Ordinance with regard to the Securities specified by Cabinet Office Ordinance); and rights other than those which must be indicated on securities or certificates, but which are deemed to be Securities pursuant to paragraph (2), are deemed to have been issued as Securities by the person specified by Cabinet Office Ordinance for each kind of right, at the time specified by Cabinet Office Ordinance.

(6) The term "Underwriter" as used in this Act (excluding Chapter V) means a person that, at the time of a Public Offering, Secondary Distribution, or Private Placement of Securities, or the time of an exclusive Offer to Sell, etc. to Professional Investors (meaning an Offer to Sell, etc. Article 2(1) Securities which falls under paragraph (4), item (ii), sub-item (b) (excluding an Offer to Sell, etc. involving the purchase and sale of Securities on a Financial Instruments Exchange Market, a transaction equivalent thereto, and any other transaction of Securities specified by Cabinet Order; the same applies hereinafter) involving Securities, does either of the things set forth in the following items:

(i) acquires all or part of the relevant Securities with the aim of having other persons acquire them; or

(ii) concludes a contract stipulating that if no other person acquires all or part of the relevant Securities, the Underwriter will acquire those that remain.

(7) The term "Registration Statement" as used in this Act means the statement referred to in Article 5, paragraph (1) (including as applied mutatis mutandis pursuant to Article 5, paragraph (5); the same applies hereinafter), documents accompanying it pursuant to Article 5, paragraph (6), and any amended statement as under Article 7, Article 9, paragraph (1) or Article 10, paragraph (1).

(8) The term "Financial Instruments Business" as used in this Act means performance of any of the following acts (excluding those that are specified by Cabinet Order as acts which, in consideration of their content and other factors, are found not to compromise the protection of investors, and the acts set forth in item (xii), (xiv), and (xv) of this paragraph and in the items of Article 28, paragraph (8), when performed by a bank, a Cooperative Financial Institution defined in Article 2, paragraph (1) of the Act on Preferred Equity Investment (hereinafter referred to as a "Cooperative Financial Institution") or other financial institution specified by Cabinet Order) in the course of trade:

(i) the purchase and sale of Securities (excluding those falling under the category of Derivatives Transactions; the same applies hereinafter), Market Transactions of Derivatives, or Foreign Market Transaction of Derivatives (excluding the purchase and sale of Securities falling under item (x));

(ii) intermediation, brokerage (excluding Brokerage for the Clearing of Securities, etc.), or agency for the purchase and sale of Securities, Market Transaction of Derivatives, or Foreign Market Transactions of Derivatives (excluding intermediation, brokerage, or agency for the purchase and sale of Securities which falls under item (x));

(iii) intermediation, brokerage, or agency for entrustment of the following transactions:

(a) the purchase and sale of Securities or Market Transactions of Derivatives on a Financial Instruments Exchange Market;

(b) the purchase and sale of Securities or Foreign Market Transaction of Derivatives on a foreign Financial Instruments Market (meaning a market in a foreign state which is similar to a Financial Instruments Exchange Market; the same applies hereinafter).

(iv) Over-the-Counter Derivatives Transactions or intermediation, brokerage (excluding Brokerage for the Clearing of Securities, etc.), or agency for it (hereinafter referred to as "Over-the-Counter Derivatives Transactions, etc.");

(v) Brokerage for the Clearing of Securities, etc.;

(vi) the underwriting of Securities (meaning doing any of the things set forth in an item of paragraph (6) at the time of a Public Offering, Secondary Distribution, Private Placement of Securities, or exclusive Offer to Sell, etc. to Professional Investors);

(vii) the Public Offering or Private Placement of Securities (limited to those set forth in the following items):

(a) beneficiary certificates of investment trusts specified in paragraph (1), item (x) which are connected to the beneficial interest in an Investment Trust Managed Under Instructions from the Settlor provided for in Article 2, paragraph (1) of the Act on Investment Trusts and Investment Corporations;

(b) beneficiary certificates of foreign investment trusts specified in paragraph (1), item (x);

(c) Securities specified in paragraph (1), item (xvi);

(d) Securities specified in paragraph (1), item (xvii) which have the nature of Securities specified in item (xvi) of that paragraph;

(e) rights that must be indicated on the Securities specified in sub-item (a) or sub-item (b) above, or rights that must be indicated on the Securities under sub-item (c) or sub-item (d) above which are specified by Cabinet Office Ordinance, which are deemed to be Securities pursuant to paragraph (2);

(f) rights specified in paragraph (2), item (v) or item (vi) which are deemed to be Securities pursuant to that paragraph; and

(g) the Securities other than those set forth in sub-items (a) to (f) inclusive which are specified by Cabinet Order.

(viii) Secondary Distribution of Securities or exclusive Offer to Sell, etc. to Professional Investors;

(ix) the handling of a Public Offering or Secondary Distribution of Securities, or the handling of a Private Placement of Securities or exclusive Offer to Sell, etc. to Professional Investors;

(x) the purchase and sale of Securities or intermediation, brokerage, or agency for it, using an electronic data processing system, conducted through any of the following price formation methods or other similar methods, with a large number of persons participating simultaneously as parties on one side of the transaction or as parties on both sides of the transaction (excluding those specified by Cabinet Order as transactions that are found to be inappropriate in terms of investor protection if conducted outside a Financial Instruments Exchange Market or an Over-the-Counter Securities Market (meaning an Over-the-Counter Securities Market provided for in Article 67, paragraph (2)));

(a) by auction (but only if the trading volume of Securities does not exceed the criteria specified by Cabinet Order);

(b) for Securities listed on a Financial Instruments Exchange, by using the trading price of the Securities on the Financial Instruments Exchange Market that is operated by the relevant Financial Instruments Exchange;

(c) for Securities registered under Article 67-11, paragraph (1) (hereinafter referred to as "Over-the-Counter Traded Securities"), by using the trading price of the Securities which is published by the Authorized Financial Instruments Business Association to which the Securities are registered;

(d) by using the price decided by negotiation between the customers; and

(e) methods other than those set forth in sub-item (a) to (d) inclusive, which are specified by Cabinet Office Ordinance.

(xi) conclusion of a contract in which one of the parties promises to provide the other party with oral, written (excluding newspapers, magazines, books, or any other written work that is issued for sale to many and unspecified persons and which many and unspecified persons can buy as needed), or any other form of advice about the following things, and the other party promises to pay remuneration for this (such a contract is hereinafter referred to as an "Investment Advisory Contract"), and provision of advice under such Investment Advisory Contract;

(a) the value, etc. of Securities (meaning the value of Securities, the amount receivable for Options on Securities (meaning the right to conduct a transaction provided for in Article 28, paragraph (8), item (iii), sub-item (c) on a Financial Instruments Market in accordance with the standards and means prescribed by the person operating the Financial Instruments Market, the right to conduct a transaction similar to the transaction provided for in Article 28, paragraph (8), item (iii), sub-item (c) on a foreign Financial Instruments Market, or the right to conduct a transaction set forth in item (iv), sub-item (c) or sub-item (d) of that paragraph without using a Financial Instruments Market or foreign Financial Instruments Market), and the movement of Securities indicators (meaning the price or interest rate of Securities and anything else specified by Cabinet Office Ordinance as being equivalent thereto, or figures calculated based thereon)); or

(b) investment decisions (meaning decisions on the classes, issues, volumes, or prices of Securities targeted for investment, as well as whether the Securities are purchased or sold and by what method and at what timing, and decisions on what should be the contents and timing of any Derivatives Transactions that are conducted; the same applies hereinafter) based on an analysis of the values, etc. of Financial Instruments (meaning the value of Financial Instruments, amount receivable for Options, and movement of Financial Indicators; the same applies hereinafter).

(xii) conclusion of the following contracts, and the management of money or any other property (including instructions for that management; the same applies hereinafter), based on such contract, as an investment in Securities or in rights connected with Derivative Transactions, based on investment decisions that are grounded in an analysis of the values, etc. of Financial Instruments;

(a) an entrustment contract for the asset management provided for in Article 188, paragraph (1), item (iv) of the Act on Investment Trusts and Investment Corporations, concluded with a registered investment corporation as defined in Article 2, paragraph (13) of that Act; or

(b) a contract other than what is set forth in sub-item (a), in which one of the parties is fully or partly entrusted by the other party with the discretion to make investment decisions based on an analysis of the values, etc. of Financial Instruments, and is also entrusted with the authority necessary to make investments on behalf of the other party based on such investment decisions (such a contract is hereinafter referred to as a "Discretionary Investment Contract").

(xiii) agency or intermediation for the conclusion of an Investment Advisory Contract or a Discretionary Investment Contract;

(xiv) the management (excluding management that falls under the category of act set forth in (xii)) of money or other property contributed by a person that holds rights indicated on the Securities specified in paragraph (1), item (x) or other rights specified by Cabinet Order, as an investment in Securities or in rights connected with Derivatives Transactions, based on investment decisions that are grounded in an analysis of the values, etc. of Financial Instruments;

(xv) the management (excluding management that falls under the category of act set forth in (xii)) of money or other property invested or contributed by a person that holds the following rights or other rights specified by Cabinet Order, as an investment mainly in Securities or in rights connected with Derivatives Transactions, based on investment decisions that are grounded in an analysis of the values, etc. of Financial Instruments;

(a) rights indicated on the Securities specified in paragraph (1), item (xiv) or Securities specified in item (xvii) of that paragraph (limited to those that have the nature of the Securities specified in item (xiv) of that paragraph);

(b) rights set forth in paragraph (2), item (i) or (ii); or

(c) rights set forth in paragraph (2), item (v) or (vi).

(xvi) the acceptance of deposits of money or securities or the certificates set forth in the items of paragraph (1) from customers, in connection with an act set forth in items (i) to (x) inclusive of this paragraph;

(xvii) the transfer of bonds, etc. in response to the opening of an account in order to carry out a transfer of the bonds, etc. defined in Article 2, paragraph (1) of the Act on Transfer of Corporate Bonds, etc. (Act No. 75 of 2001); or

(xviii) acts specified by Cabinet Order as being similar to the acts set forth in the preceding items.

(9) The term "Financial Services Provider " as used in this Act means a person registered by the Prime Minister pursuant to Article 29.

(10) The term "Prospectus" as used in this Act means a document describing the business and other particulars of an Issuer of Securities, which is prepared for a Public Offering or Secondary Distribution of Securities, a General Solicitation for Involving Securities Acquired by a Qualified Institutional Investor as defined in Article 4, paragraph (2) (excluding those falling under the category of Secondary Distribution of Securities), or a General Solicitation Involving Securities Acquired by a Professional Investor as set forth in Article 4, paragraph (3) (excluding those falling under the category of a Secondary Distribution of Securities), and which is delivered, or is to be delivered upon request, to the other party to the Public Offering or Secondary Distribution.

(11) The term "Financial Instruments Intermediation " as used in this Act means services that fall under the category of any of the following acts (excluding the act provided for in item (iv) below if performed by a person engaged in Investment Management as defined in Article 28, paragraph (4)), which are provided for and under entrustment from a Financial Services Provider (limited to a person that engages in the Type I Financial Instruments Business provided for in Article 28, paragraph (1) or Investment Management provided for in Article 28, paragraph (4)) or a registered financial institution (meaning a bank, Cooperative Financial Institution, or other financial institution specified by Cabinet Order, which is registered as under Article 33-2; the same applies hereinafter):

(i) intermediation for the purchase and sale of Securities (excluding intermediation set forth in paragraph (8), item (x));

(ii) the intermediation set forth in paragraph (8), item (iii);

(iii) the act set forth in paragraph (8), item (ix); or

(iv) the intermediation set forth in paragraph (8), item (xiii).

(12) The term "Financial Instruments Intermediary" as used in this Act means a person registered by the Prime Minister pursuant to Article 66.

(13) The term "Authorized Financial Instruments Business Association" as used in this Act means a person incorporated based on the provisions of Chapter IV, Section 1, Subsection 1.

(14) The term "Financial Instruments Market" as used in this Act means a market on which the purchase and sale of Securities or Market Transactions of Derivatives are conducted.

(15) The term "Financial Instruments Incorporated Association" as used in this Act means a membership association incorporated based on the provisions of Chapter V, Section 2, Subsection 1 for the purpose of operating a Financial Instruments Market.

(16) The term "Financial Instruments Exchange" as used in this Act means a Financial Instruments Incorporated Association or stock company which operates a Financial Instruments Market after being licensed by the Prime Minister pursuant to Article 80, paragraph (1).

(17) The term "Financial Instruments Exchange Market" as used in this Act means a Financial Instruments Market operated by a Financial Instruments Exchange.

(18) The term "Financial Instruments Exchange Holding Company" as used in this Act means a stock company whose Subsidiary Companies (meaning a Subsidiary Company as set forth in Article 87-3, paragraph (3)) include a stock company that operates a Financial Instruments Exchange Market (hereinafter referred to as a "Stock Company-Operated Financial Instruments Exchange"), which is incorporated after obtaining the authorization of the Prime Minister pursuant Article 106-10, paragraph (1) or which has obtained the authorization of the Prime Minister pursuant to that paragraph or the proviso to paragraph (3) of that Article.

(19) The term "Trading Participant" as used in this Act means a person that is allowed to participate in the purchase and sale of Securities or Market Transactions of Derivatives on a Financial Instruments Exchange Market, based on a trading license under Article 112, paragraph (1) or Article 113, paragraph (1).

(20) The term "Derivatives Transactions" as used in this Act means Market Transaction of Derivatives, Over-the-Counter Derivatives Transactions or Foreign Market Transaction of Derivatives.

(21) The term "Market Transactions of Derivatives" as used in this Act means the following transactions as conducted on a Financial Instruments Market in compliance with the standards and means prescribed by the person that operates the Financial Instruments Market:

(i) a transaction comprising a purchase and sale in which the parties promise to deliver and take delivery of a Financial Instrument and its value at a fixed time in the future, which the parties may settle by delivering and taking delivery of the difference in values if they sell or buy back the underlying Financial Instrument;

(ii) a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the numerical value of a Financial Indicator upon which the parties agree in advance (hereinafter referred to as the "Agreed Figure") and the actual numerical value of the Financial Indicator at a fixed time in the future (hereinafter referred to as the "Actual Figure");

(iii) a transaction comprising the first party's promise to grant the second party the option of effecting one of the following transactions between them by a unilateral manifestation of the second party's intention alone, and the second party's promise to pay the value of that option:

(a) the purchase and sale of Financial Instruments (excluding a transaction provided for in item (i)); or

(b) a transaction provided for in one of the preceding two items or in the following item to item (vi) inclusive (including any transaction designated by the Financial Instruments Exchange that is equivalent to a transaction specified in the preceding item).

(iv) a transaction comprising the parties' mutual promise that, for the amount of money they have set as the principal, the first party will pay money to the second based on the rate of change in the interest rate, etc. (meaning the interest rate or any other rate specified by Cabinet Office Ordinance as being equivalent thereto; the same applies hereinafter) of an agreed-upon Financial Instrument (excluding those set forth in Article 2, paragraph (24), item (iii)) or based on the rate of change in an agreed-upon Financial Indicator (excluding interest rates, etc. of Financial Instruments (excluding those set forth in Article 2, paragraph (24), item (iii)) and figures calculated based on them; hereinafter the same applies in this item and item (v) of the following paragraph) during the period they have agreed to, and the second party will pay money to the first based on the rate of change in the interest rate, etc. of an agreed-upon Financial Instrument (excluding those set forth in Article 2, paragraph (24), item (iii)) or based on the rate of change in an agreed-upon Financial Indicator during the period they have agreed to (including transactions in which the parties promise that, in addition to paying such amounts, they will also pay or deliver and receive money or Financial Instruments equivalent to the amount they have set as the principal);

(v) a transaction comprising the first party's promise to pay money to the second, and the second party's promise to pay money to the first if one of the following causes that the parties have stipulated in advance occurs (including transactions comprising the first party's promise to transfer a Financial Instrument, the rights connected to a Financial Instrument, or a monetary claim (other than a claim that constitutes a Financial Instrument or the rights connected to a Financial Instrument), but excluding transactions set forth in the preceding three items):

(a) a cause involving the credit status of a corporation or other similar cause as specified by Cabinet Order; or

(b) a cause on whose occurrence it is impossible or extremely difficult for either party to exert an influence, and which is specified by Cabinet Order as something that may have material impact on the business activities of the parties or other business persons or firms (excluding causes specified in sub-item (a)).

(vi) transactions similar to a transaction set forth in the preceding items and specified by Cabinet Order.

(22) The term "Over-the-Counter Derivatives Transactions" as used in this Act means the following transactions as conducted neither on a Financial Instruments Market nor on a foreign Financial Instruments Market (except those that are specified by Cabinet Order as transactions which, in consideration of their content and other related factors, are found not to compromise the public interest or the protection of investors).

(i) a transaction comprising a purchase and sale in which the parties to the purchase and sale promise to deliver and take delivery of a Financial Instrument (other than one set forth in paragraph (24), item (v); hereinafter the same applies in this paragraph) and its value at a fixed time in the future, and which the parties may settle by delivering and taking delivery of the difference in values if they sell back or buy back the underlying Financial Instrument or if they take some other action that is specified by Cabinet Order;

(ii) a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the Agreed Figure and the Actual Figure, or any transaction similar thereto; and

(iii) a transaction comprising the first party's promise to grant the second party the option of effecting one of the following transactions between them by a unilateral manifestation of the second party's intention alone, and the second party's promise to pay the value of that option, or any transaction similar thereto:

(a) the purchase and sale of Financial Instruments (excluding the transactions specified in item (i)); or

(b) a transaction provided for in the preceding two items or items (v) to (vii) inclusive;

(iv) a transaction comprising, on one side, the first party's promise to grant the second party the option of effecting a transaction by a unilateral manifestation of the second party's intention alone, in which the parties pay and receive the amount of money calculated based on the difference between the numerical value that they have agreed in advance to use as the Agreed Figure for the relevant Financial Indicator if the second party manifests the intention to effect the transaction, and the Actual Figure of the Financial Indicator at the time the second party manifests that intention, and, on the other side, the second party's promise to pay the value of that option, or any transaction similar thereto;

(v) a transaction comprising the parties' mutual promise that, for the amount they have set as the principal, the first party will pay money to the second based on the interest rate, etc. of an agreed-upon Financial Instrument (excluding one as set forth in Article 2, paragraph (24), item (iii)) or based on the rate of change in an agreed-upon Financial Indicator during the period they have agreed to, and the second party will pay money to the first based on the interest rate, etc. of an agreed-upon Financial Instrument (excluding those set forth in Article 2, paragraph (24), item (iii)) or based on the rate of change in an agreed-upon Financial Indicator during the period they have agreed to (including transactions in which the parties promise that, in addition paying such amounts, they will also pay or deliver and receive money or Financial Instruments equivalent to the amount they have set as the principal), or any transaction similar thereto;

(vi) a transaction comprising the first party's promise to pay money to the second, and the second party's promise to pay money to the first if one of the following causes that the parties have stipulated in advance occurs (including transactions comprising the first party's promise to transfer a Financial Instrument, the rights connected to a Financial Instrument, or a monetary claim (other than a claim that constitutes a Financial Instrument or the rights connected to a Financial Instrument), but excluding the transactions set forth in item (ii) to the preceding item inclusive), or any transaction similar thereto:

(a) a cause involving the credit status of a corporation or other similar cause as specified by Cabinet Order; or

(b) a cause on whose occurrence it is impossible or extremely difficult for either party to exert an influence, and which is specified by Cabinet Order as something that may have a material impact on the business activities of the parties or other persons or firms (excluding causes specified in sub-item (a)).

(vii) a transaction other than what is set forth in the preceding items, but which has an economic nature similar thereto and is specified by Cabinet Order as a transaction regarding which it is found to be necessary to ensure the public interest or the protection of investors.

(23) The term "Foreign Market Transaction of Derivatives " as used in this Act means a transaction that is conducted on a foreign Financial Instruments Market and is similar to a Market Transaction of Derivatives.

(24) The term "Financial Instruments" as used in this Act means the following:

(i) Securities;

(ii) rights such as claims based on a deposit contract, or securities or certificates indicating such rights, which are specified by Cabinet Order (excluding those specified in the preceding item);

(iii) currencies;

(iv) assets other than what is set forth in the preceding three items, of which there are many of the same kind, which have substantial price volatility, and which are specified by Cabinet Order as assets in connection with which it is found necessary to secure the protection of investors with regard to Derivatives Transactions (or other similar transactions) thereof (excluding commodities defined in Article 2, paragraph (1) of the Commodity Futures Act (Act No. 239 of 1950)); and

(v) standardized instruments used by a Financial Instruments Exchange for the purpose of facilitating Market Transactions of Derivatives by standardizing interest rates, the maturity period, or other conditions of Financial Instruments set forth in item (i) or item (ii) or the preceding item and specified by Cabinet Office Ordinance.

(25) The term "Financial Indicator" as used in this Act means the following:

(i) the price of a Financial Instrument or the interest rate, etc. of a Financial Instrument (excluding those specified in item (iii) of the preceding paragraph);

(ii) the numerical values associated with the results of meteorological observations published by the Meteorological Agency and others;

(iii) among indicators on whose fluctuation it is impossible or extremely difficult for a person to exert an influence and which may have material impact on the business activities of business firms (excluding indicators provided for in the preceding item) and statistical values associated with social or economic conditions, the indicators and values specified by Cabinet Order as those in connection with which it is found to be necessary to ensure protection for investors with regard to Derivatives Transactions (or other similar transactions) related thereto (excluding commodity indices provided for in Article 2, paragraph (2) of the Commodity Futures Act); and

(iv) numerical values calculated based on anything provided for in the preceding three items.

(26) The term "Foreign Financial Instruments Exchange" as used in this Act means a person that has obtained the authorization of the Prime Minister pursuant to Article 155, paragraph (1).

(27) The term "Brokerage for the Clearing of Securities, etc." as used in this Act means a subject transaction (meaning a "subject transaction" as defined in the following paragraph; hereinafter the same applies in this paragraph) that is effected by a Financial Services Provider or registered financial institution under entrustment from a customer and on the account of the customer in accordance with the business rules of the Financial Instruments Clearing Organization or Foreign Financial Instruments Clearing Organization, which is effected on the condition that the obligation that arises from the subject transaction will be borne by the Financial Instruments Clearing Organization (if such Financial Instruments Clearing Organization performs collaborative Financial Instruments Debt Assumption Services prescribed in Article 156-20-16, paragraph (1), this includes the collaborating Clearing Organization, etc. set forth in said paragraph) or the Foreign Financial Instruments Clearing Organization, and which satisfies either of the following requirements:

(i) the subject transaction is effected by the customer on behalf of the Financial Services Provider or registered financial institution; or

(ii) the customer specifies the other party to the subject transaction and other particulars specified by Cabinet Office Ordinance in advance, at the time of the entrustment.

(28) The term "Financial Instruments Debt Assumption Services" as used in this Act means taking over, novating, or in any other way bearing, in the course of trade, the obligations of a Financial Services Provider, registered financial institution, or Securities Finance Company (hereinafter referred to as a "Business Counterparty to Financial Instruments Debt Assumption Services" in this paragraph) which arise from subject transactions (meaning the purchase and sale of Securities, Derivatives Transactions (except those that are specified by Cabinet Order as transactions which, in consideration of the status of the transactions, the impact exerted on Japan's capital market, and other circumstances, are found not to compromise the public interest or the protection of investors), or transactions specified by Cabinet Order as incidental or related thereto) effected by, a Business Counterparty to Financial Instruments Debt Assumption Services.

(29) The term "Financial Instruments Clearing Organization" as used in this Act means a person that engages in Financial Instruments Debt Assumption Services after being licensed by the Prime Minister or obtaining the approval of the Prime Minister pursuant to Article 156-2 or Article 156-19, paragraph (1), and the term "Foreign Financial Instruments Clearing Organization" as used in this Act means a person that engages in Financial Instruments Debt Assumption Service after being licensed by the Prime Minister pursuant to Article 156-20-2.

(30) The term "Securities Finance Company" as used in this Act means a person that has been licensed by the Prime Minister pursuant to Article 156-24.

(31) The term "Professional Investor" as used in this Act means the following:

(i) qualified institutional investors;

(ii) the State;

(iii) the Bank of Japan; and

(iv) Investor Protection Funds prescribed in Article 79-21 and other corporations specified by Cabinet Office Ordinance beyond those set forth in the preceding three items.

(32) The term "Specified Financial Instruments Exchange Market" as used in this Act means a Financial Instruments Exchange Market on which, pursuant to the provisions of Article 117-2, paragraph (1), it is prohibited to make a Purchase for a General Investor as defined in that paragraph.

(33) The term "Specified Listed Securities" as used in this Act means Securities listed only on a Specified Financial Instruments Exchange Market.

(34) The term "Credit Rating" as used in this Act means a grade which indicates, through symbols or figures (including anything specified by Cabinet Office Ordinance as being similar thereto), the results of an assessment of the credit status of a Financial Instrument or a corporation (including anything specified by Cabinet Office Ordinance as being similar thereto) (such assessment is hereinafter referred to as "Creditworthiness" in this paragraph) (such grade excludes grades specified by Cabinet Office Ordinance as being determined mainly in consideration of any particular other than Creditworthiness).

(35) The term "Credit Rating Services" as used in this Act means engagement in the act of determining Credit Ratings and providing them or making them available for inspection (excluding acts specified by Cabinet Office Ordinance as those that are found to have little likelihood of resulting in insufficient investor protection, in light of the scope of the other party to the act and any other circumstances) in the course of trade.

(36) The term "Credit Rating Agency" as used in this Act means a person registered by the Prime Minister pursuant to Article 66-27.

(37) The term "Financial Instruments Exchange Engaged in the Operation of a Commodity Market" as used in this Act means a Stock Company-Operated Financial Instruments Exchange that operates the necessary market for effecting Commodity Futures Transactions (meaning Futures Transactions prescribed in Article 2, paragraph (3) of the Commodity Futures Act; the same applies hereinafter), with the authorization referred to in the proviso to Article 87-2, paragraph (1).

(38) The term "Commodity Exchange" as used in this Act means an Incorporated Association-Operated Commodity Exchange Operated as an (meaning an Incorporated Association–Operated Commodity Exchange as prescribed in Article 2, paragraph (5) of the Commodity Futures Act) or a Stock Company-Operated Commodity Exchange (meaning a Stock Company-Operated Commodity Exchange as prescribed in paragraph (6) of that Article and limited to those specified by Cabinet Order as being subject to restrictions that are found to be of the same level as restrictions on a Stock Company-Operated Financial Instruments Exchange).

(39) The term "Commodity Exchange Holding Company" as used in this Act means a Commodity Exchange Holding Company as defined in Article 2, paragraph (11) of the Commodity Futures Act (limited to those specified by Cabinet Order as being subject to restrictions that are found to be of the same level as restrictions on a Financial Instruments Exchange Holding Company).

Chapter II Disclosure of Corporate Affairs

(Reorganization and Other Terms Used in This Chapter)

Article 2-2 (1) The term "Reorganization" as used in this Chapter means merger, company split, share exchange, or other act involving the organization of a company which is specified by Cabinet Order.

(2) The term "Procedures Related to the Issuance of Securities During a Reorganization" as used in this Chapter means the Keeping of Documents, etc. (meaning the keeping of the documents or electronic or magnetic records under Article 782, paragraph (1) of the Companies Act (Act No. 86 of 2005) or the keeping of the documents or electronic or magnetic records under Article 803, paragraph (1) of that Act; the same applies in the following paragraph) connected with a Reorganization in which new Securities are issued (including cases specified by Cabinet Office Ordinance as being similar thereto (such cases are referred to as "Procedures for Cases Similar to the Issuance of Securities During a Reorganization" in the following paragraph)), and other acts specified by Cabinet Order.

(3) The term "Procedures Related to the Delivery of Securities During a Reorganization" as used in this Chapter means the Keeping of Documents, etc. connected to a Reorganization in which existing Securities are delivered (excluding cases that fall under the category of Procedures for Cases Similar to the Issuance of Securities During a Reorganization), and other acts specified by Cabinet Order.

(4) The term "Specified Procedures Related to the Issuance of Securities During a Reorganization" as used in this Chapter means, among Procedures Related to the Issuance of Securities During a Reorganization, those that fall under cases specified in item (i) or (ii) below if the Procedures Related to the Issuance of Securities During a Reorganization involve Article 2(1) Securities, and those that fall under cases specified in item (iii) if the Procedures Related to the Issuance of Securities During a Reorganization involve Article 2(2) Securities:

(i) cases specified by Cabinet Order as those in which a large number of persons are holders of share certificates (including share option certificates and other Securities specified by Cabinet Order) whose issuer is a company that, due to a Reorganization, will become a Company Disappearing in an Absorption-Type Merger (meaning a Company Disappearing in an Absorption-Type Merger as defined in Article 749, paragraph (1), item (i) of the Companies Act), or a Wholly Owned Subsidiary Company in a Share Exchange (meaning the Wholly Owned Subsidiary Company in a Share Exchange as defined in Article 768, paragraph (1), item (i) of that Act), or whose issuer is any other company specified by Cabinet Order (referred to as the "Reorganizing Company" in Article 4, paragraph (1), item (ii), sub-item (a)) (such holders are hereinafter referred to as the "Reorganizing Company's Shareholders, etc.")(such cases exclude those in which the Reorganizing Company's Shareholders, etc. consist exclusively of Qualified Institutional Investors);

(ii) cases other than those provided for in the preceding item, which do not fall under any of the following:

(a) cases in which the Reorganizing Company's Shareholders, etc. consist exclusively of Qualified Institutional Investors, and which are specified by Cabinet Order as those in which there is little likelihood of the Securities that are subject to the Procedures Related to the Issuance of Securities During a Reorganization being transferred from a person that acquires them to any person other than a Qualified Institutional Investor; or

(b) cases other than those specified in the preceding item (i) or in sub-item (a) (excluding cases satisfying the requirements that are specified by Cabinet Order in consideration of the status, etc. of issuance and delivery of Securities of the same class as the Securities subject to the Procedures Related to the Issuance of Securities During the Reorganization), which are specified by Cabinet Order as those in which there is little likelihood of the Securities that are subject to said Procedures Related to the Issuance of Securities During the Reorganization being held by a large number of persons.

(iii) cases specified by Cabinet Order as those in which the Reorganizing Company's Shareholders, etc. constitute a considerably large number of persons.

(5) The term "Specified Procedures Related to the Delivery of Securities During a Reorganization" as used in this Chapter means, among the Procedures Related to the Delivery of Securities During a Reorganization, those that fall under cases specified in item (i) or item (ii) if the Procedures Related to the Delivery of Securities During a Reorganization involve Article 2(1) Securities, and those that fall under cases specified in item (iii) if the Procedures Related to the Delivery of Securities During a Reorganization involve Article 2(2) Securities:

(i) cases specified by Cabinet Order as those in which the Reorganizing Company's Shareholders, etc. constitute a large number of persons (excluding cases in which the Reorganizing Company's Shareholders, etc. consist exclusively of Qualified Institutional Investors); and

(ii) cases other than those provided for in the preceding item, which do not fall under any of the following:

(a) cases in which the Reorganizing Company's Shareholders, etc. consist exclusively of Qualified Institutional Investors, and which are specified by Cabinet Order as those in which there is little likelihood of the Securities that are subject to the Procedures Related to the Delivery of Securities During a Reorganization being transferred from a person that acquires them to any person other than a Qualified Institutional Investor; and

(b) cases other than those specified in the preceding item or in sub-item (a) (excluding cases satisfying the requirements that are specified by Cabinet Order in consideration of the status, etc. of issuance and delivery of Securities of the same class as the Securities subject to the Procedures Related to the Delivery of Securities During a Reorganization), which are specified by Cabinet Order as those in which there is little likelihood of the Securities that are subject to said Procedures Related to the Delivery of Securities During a Reorganization being held by a large number of persons; and

(iii) cases specified by Cabinet Order as those in which the Reorganizing Company's Shareholders, etc. constitute a considerably large number of persons.

(Exempted Securities)

Article 3 The provisions of this Chapter do not apply to the following Securities:

(i) Securities set forth in Article 2, paragraph (1), items (i) and (ii);

(ii) Securities set forth in Article 2, paragraph (1), items (iii), (vi), and (xii) (excluding Securities that are specified by Cabinet Order as Securities with regard to which the public interest or the protection of investors makes it necessary and appropriate for corporate affairs to be disclosed); and

(iii) rights set forth in the items of Article 2, paragraph (2) which are deemed to be Securities pursuant to the provisions of Article 2, paragraph (2) (excluding the following rights (hereinafter referred to as "Rights in a Securities Investment Business, etc." in Article 24, paragraph (1)):

(a) among the rights set forth in Article 2, paragraph (2), item (v), those specified by Cabinet Order as a right in Invested Business (meaning Invested Business as defined in Article 2, paragraph (2), item (v)) that is mainly conducted through investment in Securities;

(b) among the rights set forth in Article 2, paragraph (2), items (i) to (iv) inclusive, (vi), or (vii), those specified by Cabinet Order as being similar to the rights set forth in sub-item (a) above; and

(c) other rights specified by Cabinet Order.

(iv) corporate bond certificates for which the government guarantees the redemption of the principal or the payment of interest; and

(v) Securities specified by Cabinet Order other than those set forth in the preceding items.

(Notification of Public Offering or Secondary Distribution)

Article 4 (1) It is not permitted for a person to conduct a Public Offering of Securities (including Specified Procedures Related to the Issuance of Securities During a Reorganization; the same applies hereinafter in this Chapter and the following Chapter, except in Article 13 and Article 15, paragraphs (2) to (6) inclusive) or a Secondary Distribution of Securities (excluding those falling under the category of General Solicitation Involving for Securities Acquired by a Qualified Institutional Investor as defined in the following paragraph or of General Solicitation Involving Securities Acquired by a Professional Investor as defined in paragraph (3), but including Specified Procedures Related to the Delivery of Securities During a Reorganization; hereinafter the same applies in this paragraph) unless the Issuer has filed a notification of the Public Offering or Secondary Distribution of Securities with the Prime Minister; provided, however, that this does not apply to a Public Offering or Secondary Distribution of Securities that falls under one of the following items:

(i) a Public Offering or Secondary Distribution of Securities in a case specified by Cabinet Order as one in which the other parties thereto have already obtained or can easily obtain information about the particulars set forth in the items of paragraph (1) of the following Article for the relevant Securities;

(ii) a Public Offering or Secondary Distribution of Securities for which the pertinent Procedures Related to the Issuance of Securities During a Reorganization or Procedures Related to the Delivery of Securities During a Reorganization fall under either of the following cases (excluding a Public Offering or Secondary Distribution as specified in the preceding item)

(a) cases not falling under a case in which disclosure has been made with regard to share certificates (including share option certificates and other Securities specified by Cabinet Order) whose issuer is the Reorganization Company; or

(b) a case in which disclosure has been made with regard to the Securities that will be newly issued in connection with the Procedures Related to the Issuance of Securities During a Reorganization, or a case in which disclosure has been made with regard to previously issued Securities subject to the Procedures Related to the Delivery of Securities During a Reorganization.

(iii) a Secondary Distribution of Securities in a case in which disclosure has been made with regard to the Securities (excluding a Secondary Distribution provided for in the preceding two items);

(iv) a Secondary Distribution of Securities that have already been issued in a foreign state or of Securities specified by Cabinet Order as being equivalent thereto (limited to those conducted by a Financial Services Provider, etc.), which satisfies the requirement that information on the trading price of the Securities in Japan can be easily obtained and any other requirements specified by Cabinet Order (excluding a Secondary Distribution provided for in the preceding three items); or

(v) a Public Offering or Secondary Distribution of Securities with a total issue value or total distribution value of less than 100 million yen, which is specified by Cabinet Office Ordinance (excluding those specified in the preceding items).

(2) It is not permitted for a person to issue a solicitation with a view to delivering existing securities (meaning an Offer to Sell, etc. or Procedures Related to the Delivery of Securities During a Reorganization; the same applies hereinafter) that involves Securities that have been involved in a solicitation with a view to issuing new securities (meaning the Solicitation of Offers to Acquire or the Procedures Related to the Issuance of Securities During a Reorganization; the same applies hereinafter) or a solicitation with a view to delivering existing securities falling under any of the following cases (in the case set forth in item (ii), limited to the Securities acquired by qualified institutional investors that have been excluded from the large number of persons pursuant to Article 2, paragraph (3), item (i), and in the case set forth in item (iv), limited to the Securities acquired by qualified institutional investors that have been excluded from the large number of persons pursuant to paragraph (4), item (i) of that Article), and that involves a qualified institutional investor soliciting persons other than qualified institutional investors (such a solicitation is hereinafter referred to as a "General Solicitation Involving Securities Acquired by a Qualified Institutional Investor"), unless the Issuer of the Securities has filed a notification of the relevant General Solicitation Involving for Securities Acquired by the a Qualified Institutional Investor with the Prime Minister; provided, however, that this does not apply to a case in which disclosure has been made with regard to the Securities, or to a case in which the General Solicitation Involving for Securities Acquired by the Qualified Institutional Investor will be issued for a compelling reason specified by Cabinet Office Ordinance, or otherwise satisfies the requirements specified by Cabinet Office Ordinance:

(i) the case set forth in Article 2, paragraph (3), item (ii), sub-item (a);

(ii) the case set forth in Article 2, paragraph (3), item (ii), sub-item (c) (but only if it comes to no longer fall under the case set forth in item (i) of that paragraph due to the qualified institutional investors' being excluded from the large number of persons pursuant to that item);

(iii) the case set forth in Article 2, paragraph (4), item (ii), sub-item (a);

(iv) the case set forth in Article 2, paragraph (4), item (ii), sub-item (c) (but only if it comes to no longer fall under the case set forth in item (i) of that paragraph due to the qualified institutional investors' being excluded from the large number of persons pursuant to that item);

(v) the case set forth in Article 2-2, paragraph (4), item (ii), sub-item (a); and

(vi) the case set forth in Article 2-2, paragraph (5), item (ii), sub-item (a).

(3) It is not permitted for a person to issue a solicitation with a view to delivering existing securities that involves Securities falling under any of the following items (excluding Securities falling under any of the items of Article 24, paragraph (1) or Securities specified by Cabinet Order as those which it is found are unlikely to be held by a large number of Professional Investors; hereinafter referred to as the "Securities for Professional Investors"), but that does not involve a Financial Services Provider, etc. being entrusted to solicit Professional Investors, etc. (with the exception of a solicitation issued to the State, the Bank of Japan, or qualified institutional investors, and also with the exception of solicitation specified by Cabinet Order; hereinafter referred to as a "General Solicitation Involving Securities Acquired by a Professional Investor"), unless the Issuer of Securities has filed a notification of the relevant General Solicitation Involving Securities Acquired by a Professional Investor with the Prime Minister; provided, however, that this does not apply in a case in which disclosure has been made with regard to the Securities for Professional Investors and in any other case that is specified by Cabinet Office Ordinance as one in which the non-filing of a notification for a General Solicitation Involving Securities Acquired by a Professional Investor does not damage the public interest or result in insufficient investor protection:

(i) Securities for which the Solicitation of Offers to Acquire fell under the case specified in Article 2, paragraph (3), item (ii), sub-item (b) (hereinafter referred to as a "Exclusive Solicitation of Offers to Acquire Targeting Professional Investors");

(ii) Securities for which the Offer to Sell, etc. was an exclusive Offer to Sell, etc. to Professional Investors;

(iii) Securities issued by an Issuer of the Securities provided for in either of the preceding two items, which are specified by Cabinet Office Ordinance as being the same class of Securities as those provided for in either of the preceding two items; or

(iv) Specified Listed Securities and other Securities specified by Cabinet Order as having equivalent distribution statuses thereto.

(4) If a Public Offering or Secondary Distribution of Securities (including a General Solicitation Involving Securities Acquired by a Qualified Institutional Investor (excluding those falling under the category of a Secondary Distribution of Securities), a General Solicitation Involving Securities Acquired by a Professional Investor (excluding those falling under the category of a Secondary Distribution of Securities), and Procedures Related to the Delivery of Securities During a Reorganization; hereinafter the same applies in this Chapter and the following Chapter, except in the following paragraph and paragraph (6) of this Article, Article 13, and Article 15, paragraphs (2) to (6) inclusive) will be made for the shareholders (including preferred equity investors provided for in the Act on Preferred Equity Investment) that have been stated or recorded in the shareholder register (including the preferred equity investor register provided for in the Act on Preferred Equity Investment) as of a certain date, the notification for the Public Offering or Secondary Distribution under the preceding three paragraphs must be made 25 days prior; provided, however, that this does not apply in the cases that are specified by Cabinet Office Ordinance in consideration of the issue price or distribution price of the Securities or other factors.

(5) Materials that are used for a Public Offering or Secondary Distribution of Securities specified in paragraph (1), item (v), for a General Solicitation for Involving Securities Acquired by a Qualified Institutional Investor which is excluded from the application of the main clause of paragraph (2) pursuant to the proviso to that paragraph, or for a General Solicitation Involving Securities Acquired by a Professional Investorwhich is excluded from the application of the main clause of paragraph (3) pursuant to the proviso to that paragraph, which falls under the category of a Secondary Distribution of Securities, or which does not fall under the category of a Secondary Distribution of Securities and does not fall under a case in which disclosure has been made (hereinafter referred to as a "Specified Public Offering" in this paragraph and the following paragraph), and materials that are used in causing the Securities in a Specified Public Offering to be acquired or in selling such Securities, must indicate that the main clause of paragraph (1), the main clause of paragraph (2) or the main clause of paragraph (3) does not apply to said Specified Public Offering.

(6) Whenever a Specified Public Offering or Secondary Distribution of Securities set forth in paragraph (1), item (iii) (hereinafter collectively referred to as a "Specified Public Offering, etc." in this paragraph) is conducted, the Issuer of the Securities in the Specified Public Offering, etc. shall submit a written notice of the Specified Public Offering, etc. to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance, by the day preceding the day on which the Specified Public Offering, etc. begins; provided, however, that this does not apply to a Secondary Distribution of Securities as set forth in paragraph (4) whose total distribution value is less than 100 million yen in a case in which disclosure has been made, nor to a Secondary Distribution of Securities as set forth in paragraph (1), item (iii) conducted by a person other than the Issuer of said Securities or a person specified by Cabinet Office Ordinance, nor to a Public Offering or Secondary Distribution of Securities as set forth in item (v) of that paragraph whose total issue value or total distribution value is less than the amount specified by Cabinet Office Ordinance.

(7) As set forth in sub-items (a) and (b) of item (ii) and item (iii) of paragraph (1), paragraph (2), paragraph (3) and the preceding two paragraphs, a case in which disclosure has been made means one of the following cases:

(i) a notification under paragraph (1) is in effect for a Public Offering or Secondary Distribution which has already been conducted with regard to the relevant Securities (excluding one that falls under the category of a General Solicitation Involving Securities Acquired by a Qualified Institutional Investor or a General Solicitation Involving Securities Acquired by a Professional Investor); a notification under paragraph (2) is in effect for a General Solicitation Involving Securities Acquired by a Qualified Institutional Investor which has already been conducted with regard to said Securities; or a notification under paragraph (3) is in effect for a General Solicitation Involving Securities Acquired by a Professional Investor which has already been conducted with regard to said Securities (unless the proviso to Article 24, paragraph (1) is applicable (including as applied mutatis mutandis pursuant to Article 24, paragraph (5) and as these provisions apply mutatis mutandis pursuant to Article 27) to the Issuer of the Securities); or

(ii) cases specified by Cabinet Office Ordinance as being equivalent to the cases provided for in the preceding item.

(Submission of Registration Statements)

Article 5 (1) If an Issuer seeking to file a notification for a Public Offering or Secondary Distribution of Securities under paragraphs (1) to (3) inclusive of the preceding Article (excluding a Public Offering or Secondary Distribution of Securities for regulated Securities (meaning Securities specified by Cabinet Order as those for which the information materially influencing investors' investment decisions is information on asset management or other similar business that the Issuer conducts; hereinafter the same applies in this paragraph and paragraph (5) of this Article and Article 24); hereinafter the same applies in this paragraph and the following paragraph) is a company (including a foreign company; the same applies hereinafter, except in Article 50-2, paragraph (9), Article 66-40, paragraph (5) and Article 156-3, paragraph (2), item (iii)) (including if the company will be incorporated by the issuance of said Securities (excluding regulated Securities; hereinafter the same applies in this paragraph to paragraph (4) inclusive)), it must submit a statement to the Prime Minister in which it states the following particulars, pursuant to the provisions of Cabinet Office Ordinance; provided, however, that, if it is necessary to conduct the Public Offering of Securities before deciding their issue price or in other cases specified by Cabinet Office Ordinance, the Issuer may submit the statement without giving the issue price or other particulars in item (i) that are specified by Cabinet Office Ordinance:

(i) the particulars of the Public Offering or Secondary Distribution; and

(ii) the trade name of the company, the financial condition of the corporate group (meaning the group consisting of the relevant company and persons (limited to companies and other entities specified by Cabinet Office Ordinance) satisfying the requirements that Cabinet Office Ordinance specifies, as other companies in which the relevant company holds majority voting rights or as persons that are otherwise closely related to the relevant company; the same applies hereinafter) to which the company belongs and the company's own financial condition and other material particulars about the company's business, and other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors.

(2) In its statement, a person not falling under any of the following items which seeks to submit a statement set forth in the preceding paragraph for a Public Offering or a Secondary Distribution of Securities to which the main clause of paragraph (1), the main clause of paragraph (2), or the main clause of paragraph (3) of the preceding Article applies, the total issue value or the total distribution value of which is less than 500 million yen and which is specified by Cabinet Office Ordinance for this purpose (such a Public Offering or Secondary Distribution of Securities is referred to as "Low Value Public Offering, etc." in Article 24, paragraph (2)), may state the particulars set forth in Article 24, paragraph (2), item (ii) which is specified by Cabinet Office Ordinance as being pertinent with regard to the relevant company, instead of stating the particulars set forth in that item:

(i) an Issuer of Securities that fall under any of the categories specified in Article 24, paragraph (1), item (i), (ii) or (iv);

(ii) a person that submits or is required to submit a statement under the preceding paragraph in which it states the particulars set forth in item (ii) of the preceding paragraph for a Public Offering or Secondary Distribution of Securities to which the main clause of paragraph (1), the main clause of paragraph (2), or the main clause of paragraph (3) of the preceding Article has been applied (excluding the persons specified in the preceding item); or

(iii) a person that has already submitted an Annual Report (meaning a report as set forth in Article 24, paragraph (1); hereinafter the same applies in this Article) in which it states the particulars set forth in the main clause of Article 24, paragraph (1), a Quarterly Report as set forth in Article 24-4-7, paragraph (1) or (2) (hereinafter referred to as a "Quarterly Report" in this Article) which it states the particulars set forth in Article 24-4-7, paragraph (1), or a Semiannual Report (meaning a report as set forth in Article 24-5, paragraph (1); hereinafter the same applies in this Article and Article 24, paragraph (2)) which it states the particulars set forth in Article 24-5, paragraph (1) (excluding a person provided for in the preceding two items).

(3) If a person that has continuously filed Annual Reports as specified by Cabinet Office Ordinance during the period specified by Cabinet Office Ordinance seeks to file a notification under paragraphs (1) to (3) inclusive of the preceding Article, instead of stating the particulars set forth in paragraph (1), item (ii), such person, pursuant to the provisions of Cabinet Office Ordinance, may interfile a copy of its latest Annual Report and the accompanying documents, a copy of any Quarterly Report or Semiannual Report submitted after the submission of the Annual Report, and a copy of any amended report connected with the foregoing reports in the statement set forth in paragraph (1), and enter in that statement any facts specified by Cabinet Office Ordinance which come into play after the submission of the Annual Report.

(4) If a person that satisfies all of the requirements set forth below seeks to file a notification under paragraphs (1) to (3) inclusive of the preceding Article, and the person enters in the statement set forth in paragraph (1), pursuant to the provisions of Cabinet Office Ordinance, that reference should be made to the latest Annual Report and accompanying documents, the Quarterly Report, Semiannual Report, or Ad Hoc Report (meaning a report as set forth in Article 24-5, paragraph (4)) submitted after the submission of the Annual Report, or any amended report connected with them (hereinafter collectively referred to as "Reference Documents"), the person is deemed to have stated the particulars set forth in item (ii) of paragraph (1) in the statement:

(i) the person must have continuously filed Annual Reports as specified by Cabinet Office Ordinance during the period specified by Cabinet Office Ordinance; and

(ii) the person must satisfy the criteria specified by Cabinet Office Ordinance as a person with regard to which information about the particulars set forth in paragraph (1), item (ii) is widely available to the public, with regard to the status of transactions on Financial Instruments Exchange Markets in issued Securities of which the person is the issuer.

(5) The provisions of paragraph (1) to the preceding paragraph inclusive apply mutatis mutandis if the Securities for which the notification set forth in paragraph (1) is filed are regulated Securities. In this case, in paragraph (1), the phrase "excluding a Public Offering or Secondary Distribution of Securities" is deemed to be replaced with "limited to a Public Offering or Secondary Distribution of Securities" and the phrase "said Securities (excluding regulated Securities; hereinafter the same applies in this paragraph to paragraph (4) inclusive)" is deemed to be replaced with "said Securities"; in item (ii) of that paragraph, the phrase "trade name of the company, the financial condition of the corporate group (meaning the group consisting of the relevant company and persons (limited to companies and other entities specified by Cabinet Office Ordinance) satisfying the requirements that Cabinet Office Ordinance specifies, as other companies in which the relevant company holds majority voting rights or as persons that are otherwise closely related to the relevant company; the same applies hereinafter) to which the company belongs and the company's own financial condition and other material particulars of the company's business" is deemed to be replaced with "financial condition of its asset management or other similar business conducted by the company and other material particulars of the company's assets"; in paragraph (2), the phrase "a Public Offering or Secondary Distribution of Securities" is deemed to be replaced with "a Public Offering or Secondary Distribution of regulated Securities"; in item (i) of that paragraph, the phrase "Securities falling under any of the categories" is deemed to be replaced with "regulated Securities falling under any of the categories of Securities"; in item (ii) of that paragraph, the phrase "Public Offering or Secondary Distribution of Securities" is deemed to be replaced with "Public Offering or Secondary Distribution of regulated Securities"; in item (iii) of that paragraph, the phrase "the main clause of Article 24, paragraph (1)" is deemed to be replaced with "the main clause of Article 24, paragraph (1) as applied mutatis mutandis pursuant to Article 24, paragraph (5)", the phrase "Article 24-4-7, paragraph (1) or (2)" is deemed to be replaced with "Article 24-4-7, paragraph (1) or (2) as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (3)", the phrase "the particulars set forth in Article 24-4-7, paragraph (1)" is deemed to be replaced with "the particulars set forth in Article 24-4-7, paragraph (1) as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (3)", and the phrase "the particulars set forth in Article 24-5, paragraph (1)" is deemed to be replaced with "the particulars set forth in Article 24-5, paragraph (1) as applied mutatis mutandis pursuant to Article 24-5, paragraph (3)"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(6) The articles of incorporation or other documents that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors must accompany the statement set forth in paragraph (1).

(Submission of Statements and Other Documents to a Financial Instruments Exchange, etc.)

Article 6 An Issuer of the Securities set forth in the following items shall submit a copy of the statement and other documents set forth in paragraph (1) and paragraph (6) of the preceding Article to the person specified in the relevant item without delay after filing the notification under Article 4, paragraphs (1) to (3) inclusive:

(i) Securities listed on a Financial Instruments Exchange: said Financial Instruments Exchange; and

(ii) Securities specified by Cabinet Order as having equivalent distribution statuses to the Securities referred to in the preceding item: the Authorized Financial Instruments Busines Association specified by Cabinet Order.

(Voluntary Submission of Amended Statements)

Article 7 If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes or any other circumstance arises that is specified by Cabinet Office Ordinance as necessitating that the content of such documents be amended in the public interest or for the protection of investors, the person filing the notification (or, if it is after a company is incorporated through the issuance of the Securities for which the notification was filed, the company; the same applies hereinafter) must submit an amended statement to the Prime Minister. The same also applies in the absence of such a reason, if the person filing the notification finds there to be something in the statement or other document that necessitates an amendment.

(Effective Date of Notifications)

Article 8 (1) A notification under Article 4, paragraphs (1) to (3) inclusive comes into effect on the day on which 15 days have elapsed since the day on which the Prime Minister accepted the statement under Article 5, paragraph (1) (or, if the particulars referred to in the proviso to Article 5, paragraph (1) are not stated in the statement, the amended statement under the preceding Article which is connected with said particulars; the same applies in the following paragraph).

(2) With regard to the application of the preceding paragraph if an amended statement under the preceding Article is submitted within the period set forth in the preceding paragraph, the statement set forth in Article 5, paragraph (1) is deemed to be accepted by the Prime Minister on the day that the Prime Minister accepts the amended statement.

(3) If the Prime Minister finds that the statement or other documents under Article 5, paragraph (1) or paragraph (6) or the preceding Article are easily understandable to the public or finds that information about the particulars set forth in Article 5, paragraph (1), item (ii) with regard to the person that submitted the statement and other documents is already widely available to the public, the Prime Minister may designate a period for the person which is shorter than that referred to in paragraph (1), or may notify the person that the notification under Article 4, paragraphs (1) to (3) inclusive will become effective immediately or on the day after the day on which the Prime Minister accepts the statement referred to in paragraph (1). In such a case, a notification under Article 4, paragraphs (1) to (3) inclusive becomes effective on the day on which the shorter period has elapsed if a shorter period has been designated, or immediately or on the following day if the person has been so notified.

(4) The provisions of paragraph (2) apply mutatis mutandis if a shorter period is designated as under the preceding paragraph.

(Order to Submit an Amended Statement Due to a Formal Deficiency, etc.)

Article 9 (1) If the Prime Minister finds a formal deficiency in a statement or other document under Article 5, paragraph (1) or paragraph (6) or Article 7, or finds such statement or other document to insufficiently state a material particular that is required to be stated, the Prime Minister may order the person that submitted it to submit an amended statement. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act (Act No. 88 of 1993), the Prime Minister must conduct a hearing.

(2) Notwithstanding the provisions of the preceding Article, if the disposition under the preceding paragraph has been reached, the notification under Article 4, paragraphs (1) to (3) inclusive becomes effective on the day on which the period designated by the Prime Minister has elapsed.

(3) The provisions of paragraphs (2) to (4) inclusive of the preceding Article apply mutatis mutandis in the case referred to in the preceding paragraph.

(4) The disposition under paragraph (1) may not be reached on or after the day on which the notification under Article 4, paragraphs (1) to (3) inclusive becomes effective; provided, however, that this does not apply to any amended statement submitted pursuant to Article 7 on or after that day.

(Order to Submit an Amended Statement and Order Suspending the Validity of a Notification Due to a False Statement, etc.)

Article 10 (1) If the Prime Minister discovers that a Registration Statement contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, the Prime Minister, at any time, may order the person submitting the Registration Statement to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) The provisions of paragraphs (2) and (3) of the preceding Article apply mutatis mutandis if an order to submit an amended statement under the preceding paragraph is issued before the notification under Article 4, paragraphs (1) to (3) inclusive comes into effect.

(3) If an order for suspension under paragraph (1) is issued and an amended statement under that paragraph is submitted, and if the Prime Minister finds the amended statement to be appropriate, the Prime Minister is to cancel the order for suspension under that paragraph.

(Suspension of the Validity of Notifications Made Within One Year After the Submission of a Registration Statement Containing a False Statement)

Article 11 (1) If a Registration Statement contains a false statement about a material particular and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may issue an order against the person submitting the Registration Statement with regard to said Registration Statement or with regard to any other statement as set forth in Article 5, paragraph (1), Shelf Registration Statement as set forth in Article 23-3, paragraph (1), or Shelf Registration Supplements as set forth in Article 23-8, paragraph (1) which the person submitting said Registration Statement submits within one year of the day on which the person submitted said Registration Statement, ordering the suspension of the validity of the notification or of the Shelf Registration under the relevant Shelf Registration Statement or Shelf Registration Supplements, or may extend the period stipulated in Article 8, paragraph (1) (including as applied mutatis mutandis pursuant to Article 23-5, paragraph (1)), for the period that the Prime Minister considers appropriate in the public interest or for the protection of investors. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) If a disposition under the preceding paragraph is reached and the Prime Minister finds that the content of an amended statement submitted pursuant to Article 7 or paragraph (1) of the preceding Article in relation to the false statement referred to in the preceding paragraph is appropriate, and that allowing the acquisition or sale of Securities issued by the person that submitted the Registration Statement through a Public Offering or Secondary Distribution will not compromise the public interest or the protection of investors, the Prime Minister may cancel the disposition under the preceding paragraph.

(Submission of a Copy of an Amended Statement to a Financial Instruments Exchange, etc.)

Article 12 The provisions of Article 6 apply mutatis mutandis when an amended statement is submitted pursuant to Article 7, Article 9, paragraph (1) or Article 10, paragraph (1).

(Preparation of the Prospectus and Prohibition against the Use of a Prospectus Containing a False Statement)

Article 13 (1) The Issuer of Securities whose Public Offering or Secondary Distribution (including General Solicitation Involving Securities Acquired by a Qualified Institutional Investor (excluding anything falling under the category of a Secondary Distribution of Securities) and also including General Solicitation Involving Securities Acquired by a Professional Investor excluding anything falling under the category of a Secondary Distribution of Securities); hereinafter the same applies in this Article and paragraphs (2) to (4) inclusive and paragraph (6) of Article 15) is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2) or the main clause of Article 4, paragraph (3), shall prepare a Prospectus for such Public Offering or Secondary Distribution. The same applies to an Issuer of Securities whose Secondary Distribution (excluding one with a total distribution value of less than 100 million yen or one that falls under the categories specified by Cabinet Office Ordinance) falls under a Case In Which Disclosure Has Been Made (meaning a Case In Which Disclosure Has Been Made as referred to in Article 4, paragraph (7); hereinafter the same applies in this Chapter) (such Securities are hereinafter referred to as "Securities for Which Disclosure Has Already Been Made" in this Chapter).

(2) For the category of cases set forth in one of the following items, the details of the particulars that are specified in that item must be stated in the Prospectus referred to in the preceding paragraph; provided, however, that if a statement under the main clause of Article 5, paragraph (1) has been submitted pursuant to the proviso to Article 5, paragraph (1), without the issue price or any other particular specified by Cabinet Office Ordinance being stated among those in item (i) of that paragraph (hereinafter referred to as the "Issue Price, etc." in this paragraph and Article 15, paragraph (5)), the Prospectus in the case set forth in item (i), below, is not required to state the Issue Price, etc.:

(i) if the Prospectus must be delivered pursuant to the main clause of Article 15, paragraph (2): for a category of Securities specified in the following sub-item (a) or (b), the particulars set forth in the relevant sub-item:

(a) Securities whose Public Offering or Secondary Distribution is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3): the following particulars:

1. among those set forth in the items of Article 5, paragraph (1), the particulars specified by Cabinet Office Ordinance as having a very material influence on investors' investment decisions; and

2. particulars specified by Cabinet Office Ordinance other than those set forth in the items of Article 5, paragraph (1).

(b) Securities for Which Disclosure Has Already Been Made: the following particulars:

1. the particulars set forth in sub-item (a)1., above; and

2. particulars specified by Cabinet Office Ordinance other than those set forth in the items of Article 5, paragraph (1).

(ii) if the Prospectus must be delivered pursuant to Article 15, paragraph (3): for a category of Securities specified in the following sub-item (a) or (b), the particulars specified in the relevant sub-item:

(a) Securities whose Public Offering or Secondary Distribution is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3): the following particulars:

1. among those set forth in the items of Article 5, paragraph (1), the particulars specified by Cabinet Office Ordinance as having a material influence on investors' investment decisions; and

2. particulars specified by Cabinet Office Ordinance other than those set forth in the items of Article 5, paragraph (1).

(b) Securities for Which Disclosure Has Already Been Made: the following particulars:

1. the particulars set forth in sub-item (a)1., above; and

2. particulars specified by Cabinet Office Ordinance other than those set forth in the items of Article 5, paragraph (1).

(iii) if the Prospectus must be delivered pursuant to the main clause of Article 15, paragraph (4): the particulars stated in the amended statement under Article 7.

(3) If, in a Prospectus under item (i) or (ii) of the preceding paragraph that a person submitting a notification to which the provisions of Article 5, paragraph (4) apply (including as applied mutatis mutandis pursuant to paragraph (5) of that Article; the same shall apply hereinafter) is required to prepare or that a person satisfying all of the requirements specified in the items of Article 5, paragraph (4) is required to prepare in connection with Securities for Which Disclosure Has Already Been Made, the relevant person has stated that reference should be made to the Reference Documents, said person is deemed to have stated the particulars set forth in Article 5, paragraph (1), item (ii).

(4) It is prohibited for any person to use a Prospectus referred to in paragraph (1) that contains a false statement or omits a statement as to a detail that is required to be stated, for a Public Offering or Secondary Distribution of Securities that is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3), or for a Public Offering or Secondary Distribution of Securities for Which Disclosure Has Already Been Made.

(5) It is prohibited for any person to make a false or misleading representation in documents, drawings, sounds, or other materials (this includes anything that shows the contents of information that has been recorded in electronic or magnetic records (meaning records used in computer data processing which are created in electronic form, magnetic form, or any form that is otherwise impossible to perceive through the human senses alone; the same applies hereinafter), if such materials have been prepared as electronic or magnetic records; the same applies in Article 17) other than the Prospectus referred to in paragraph (1), which are used for the purpose of a Public Offering or Secondary Distribution of Securities that is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3) or for a Public Offering or Secondary Distribution Securities for Which Disclosure Has Already Been Made.

Article 14 Deleted

(Prohibition of Transactions in Securities Prior to a Notification Coming into Effect, and Delivery of Prospectus)

Article 15 (1) It is prohibited for an Issuer, person that conducts a Secondary Distribution of Securities, Underwriter (including a person that, with regard to a General Solicitation Involving Securities Acquired by a Qualified Institutional Investor (except in a Case In Which Disclosure Has Been Made with regard to the Securities for which the general solicitation is issued) or with regard to a General Solicitation Involving Securities Acquired by a Professional Investor (except in a Case In Which Disclosure Has Been Made with regard to the Securities for which the general solicitation is issued), conducts any of the acts specified in the items of Article 2, paragraph (6); hereinafter the same applies in this Chapter), Financial Services Provider, registered financial institution, or Financial Instruments Intermediary to cause Securities to be acquired whose Public Offering or Secondary Distribution is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3), nor may it sell such Securities through a Public Offering or Secondary Distribution, unless the notification under the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3) has become effective.

(2) When an Issuer, person that conducts a Secondary Distribution of Securities, Underwriter, Financial Services Provider, registered financial institution, or Financial Instruments Intermediary causes Securities referred to in the preceding paragraph, or Securities for Which Disclosure Has Already Been Made, to be acquired through a Public Offering or Secondary Distribution, or when it sells such Securities through a Public Offering or Secondary Distribution, it shall deliver a Prospectus that states the particulars specified in Article 13, paragraph (2), item (i) to the other person in advance or at the same time; provided, however, that this does not apply in the following cases:

(i) the Securities are acquired by or sold to a qualified institutional investor (unless the qualified institutional investor requests to be delivered the Prospectus by the time it acquires or is sold the Securities through the Public Offering or Secondary Distribution); or

(ii) the Securities are acquired by or sold to a person set forth in the following, and such person has consented not to be delivered the Prospectus (unless the consenting person requests to be delivered the Prospectus by the time it acquires or is sold the Securities through the Public Offering or Secondary Distribution):

(a) a person that already holds the same issue of Securities as the relevant Securities; or

(b) a person living with the consenting person has already received the Prospectus or is reliably expected to receive the Prospectus.

(3) When an Issuer, person that conducts a Secondary Distribution of Securities, Underwriter, Financial Services Provider, registered financial institution, or Financial Instruments Intermediary causes Securities referred to in paragraph (1) (limited to those specified by Cabinet Order; hereinafter the same applies in this paragraph), or Securities for Which Disclosure Has Already Been Made, to be acquired through a Public Offering or Secondary Distribution, or when it sells such Securities through a Public Offering or Secondary Distribution, if the counterparty requests to be delivered a Prospectus that states the particulars specified in Article 13, paragraph (2), item (ii) by the time the counterparty acquires or is sold the Securities through the Public Offering or Secondary Distribution, the Issuer, person that conducts the Secondary Distribution of Securities, Underwriter, Financial Services Provider, registered financial institution, or Financial Instruments Intermediary shall deliver said Prospectus immediately.

(4) When an Issuer, person that conducts a Secondary Distribution of Securities, Underwriter, Financial Services Provider , registered financial institution, or Financial Instruments Intermediary causes Securities referred to in paragraph (1) or Securities for Which Disclosure Has Already Been Made to be acquired through a Public Offering or Secondary Distribution, or when it sells such Securities through a Public Offering or Secondary Distribution, if an amended statement under Article 7 has been submitted in connection with the statement referred to in the main clause of Article 5, paragraph (1) for the relevant Securities, the Issuer, person that conducts the Secondary Distribution of Securities, Underwriter, Financial Services Provider registered financial institution, or Financial Instruments Intermediary shall deliver a Prospectus that states the particulars specified in Article 13, paragraph (2), item (iii) in advance, or at the same time; provided, however, that this does not apply in the cases specified in the items of paragraph (2).

(5) The main clause of the preceding paragraph does not apply if an indication that the Issue Price, etc. will be announced separately and the means of its announcement (limited to means specified by Cabinet Office Ordinance) are stated in a Prospectus referred to under paragraph (2) which has been delivered without the Issue Price, etc. being stated pursuant to the proviso to Article 13, paragraph (2), and if the Issue Price, etc. has actually been announced by said means.

(6) The provisions of paragraph (2) to the preceding paragraph apply mutatis mutandis if the remainder of the Securities referred to in paragraph (1) that are not acquired by any person through a Public Offering or Secondary Distribution (excluding Securities that fall under any of the categories specified in Article 24, paragraph (1), items (i) and (ii)) is caused to be acquired or is sold other than through a Public Offering or Secondary Distribution within three months (excluding, if an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) has been issued, the period from the day on which the order for suspension was issued until the day on which the order was canceled) from the day on which the notification under Article 4, paragraphs (1) to (3) inclusive for the Public Offering or Secondary Distribution came into effect.

(Compensatory Liability of Violators)

Article 16 A person violates the preceding Article in causing Securities to be acquired is liable to compensate the person that acquires the Securities for damage arising from the violation.

(Compensatory Liability of a Person Using a Prospectus Containing a False Statement)

Article 17 A person that, in a Public Offering or Secondary Distribution of Securities that is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2) or the main clause of Article 4, paragraph (3) or of Securities for Which Disclosure Has Already Been Made, causes Securities to be acquired while using a Prospectus referred to in Article 13, paragraph (1) that contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, or while using materials that contain a false or misleading representation about a material particular, or that omit a representation of material fact that is necessary to prevent them from being misleading, is liable to compensate for damage sustained by a person that acquires the Securities without knowing that the statement is false or has been omitted, that the representation is false or misleading, or that a representation has been omitted; provided, however, that this does not apply if the person that would be liable to compensate proves it did not know, and in the exercise of reasonable care could not have known, that the statement was false or had been omitted, or that the representation was false or misleading.

(Compensatory Liability of the Person Submitting a Registration Statement Containing a False Statement)

Article 18 (1) If a Registration Statement contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, the person that submitted the Registration Statement is liable to compensate for damage sustained by a person that acquires the Securities through the Public Offering or Secondary Distribution; provided, however, that this does not apply if the person that acquires the Securities knows that the statement is false or has been omitted at the time the person offers to acquire the Securities.

(2) The preceding paragraph applies mutatis mutandis if a Prospectus referred to in Article 13, paragraph (1) contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in the preceding paragraph, the phrase "the person that submitted the Registration Statement" is deemed to be replaced with "the Issuer that prepared the Prospectus" and the phrase "through the Public Offering or Secondary Distribution" is deemed to be replaced with "through the Public Offering or Secondary Distribution after receiving the Prospectus."

(Amount of Compensatory Liability Person Submitting a Registration Statement That Contains a False Statement, etc.)

Article 19 (1) The amount of compensation for which a person is liable pursuant to the preceding Article is the amount calculated by deducting the amount specified in each of the following items from the amount that the claimant paid to acquire the Securities:

(i) the market value of the Securities at the time the claimant claims damages pursuant to the preceding Article (or, if they have no market value, their estimated disposal value at such time); or

(ii) the disposal value of the Securities, if they were disposed of before the time referred to in the preceding item.

(2) If the person that would be liable to compensate pursuant to the preceding Article proves that the whole or part of the damage sustained by the claimant is due to circumstances other than the decline in the value of the Securities that would have arisen from the Registration Statement or the Prospectus containing a false statement about a material particular, omitting a statement as to a material particular that is required to be stated, or omitting a statement of material fact that is necessary to prevent it from being, the person is not liable for the whole or such part of the compensation.

(Prescription of the Right to Claim Compensation from the Person Submitting a Registration Statement That Contains a False Statement, etc.)

Article 20 A claim for compensation under Article 18 extinguishes if compensation is not claimed within three years of when the claimant comes to know, or in exercise of reasonable care could have come to know, that the Registration Statement or the Prospectus includes a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. The same applies if compensation is not claimed within seven years (excluding, if an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) has been issued, the period from the day on which the order for suspension is issued to the day on which the order is canceled) of the time that the notification under Article 4, paragraphs (1) to (3) inclusive for the relevant Public Offering or Secondary Distribution of the Securities comes into effect or the Prospectus is delivered.

(Compensatory Liability of the Officers, etc. of a Company Submitting a Statement That Contains a False Statement)

Article 21 (1) If a Registration Statement contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, the following persons are liable to compensate a person that acquires the relevant Securities through a Public Offering or Secondary Distribution, for damage arising from the statement being false or having been omitted; provided, however, that this does not apply if the person that acquires the Securities knows that the statement is false or has been omitted at the time the person offers to acquire the Securities:

(i) a person that, at the time of submission of the Registration Statement, is an officer (meaning a director, accounting advisor, company auditor, executive officer, or a person equivalent thereto; the same applies hereinafter, except in Article 163 to Article 167 inclusive) of the company that submitted the Registration Statement, or an incorporator of said company (limited to cases in which the Registration Statement was submitted before the incorporation of the company);

(ii) the holder of the Securities subject to the Secondary Distribution (or, if the holder had acquired the Securities from their previous holder by entering into a contract specifying that the Securities would be sold through a Secondary Distribution, the previous holder that is the other party to the contract);

(iii) a certified public accountant or the auditing firm that, in the audit certification provided for in Article 193-2, paragraph (1) in connection with the Registration Statement, certifies a statement in the documents under the audit certification which is false or has been omitted, as not being false or as not having been omitted; and

(iv) the Financial Services Provider or registered financial institution that concludes the Original Underwriting Contract with the Issuer of the Securities subject to the Public Offering or with either person specified in item (ii).

(2) In the case referred to in the preceding paragraph, a person set forth in one of the following items is not liable for the compensation set forth in that paragraph, if said person proves the particular set forth in the relevant item:

(i) the person specified in item (i) or (ii) of the preceding paragraph: it did not know, and in the exercise of reasonable care could not have known, that the statement was false or had been omitted;

(ii) a person or firm specified in item (iii) of the preceding paragraph: it did not intentionally or negligently provide such inappropriate certification; and

(iii) the person or firm specified in item (iv) of the preceding paragraph: it did not know, and, with respect to parts other than the part involving documents related to financial accounting provided for in Article 193-2, paragraph (1), in the exercise of reasonable care it could not have known, that the statement was false or had been omitted.

(3) The provisions of items (i) and (ii) of paragraph (1) and item (i) of the preceding paragraph apply mutatis mutandis if a Prospectus referred to in Article 13, paragraph (1) contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in paragraph (1), the phrase "through the relevant Public Offering or Secondary Distribution" is deemed to be replaced with "through the relevant Public Offering or Secondary Distribution after receipt of the Prospectus", the phrase "the company that submitted the Registration Statement" is deemed to be replaced with "the company that prepared the Prospectus", the phrase "at the time of submission" is deemed to be replaced with "at the time of preparation", and the phrase "was submitted" is deemed to be replaced with "was prepared".

(4) The term "Original Underwriting Contract" as used in paragraph (1), item (iv) means either of the following contracts as concluded for a Public Offering or Secondary Distribution of Securities:

(i) a contract stipulating that the Underwriter will acquire all or part of the relevant Securities from the Issuer or holder (excluding a Financial Services Provider or registered financial institution; the same applies in the following item), with the aim of having other persons acquire them; or

(ii) a contract stipulating that if no other person acquires all or part of the relevant Securities, the Underwriter will acquire those that remain from the Issuer or holder.

(Compensatory Liability of a Person Submitting a Document That Contains a False Statement, etc.)

Article 21-2 (1) If a document set forth in one of the items of Article 25, paragraph (1) (excluding items (v) and (ix)) (hereinafter referred to as a "Document" in this Article) contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, the person submitting the Document is liable to compensate a person that, during the period the Document is being made available for public inspection as required by Article 25, paragraph (1), acquires Securities issued by the person submitting the Document (excluding a document set forth in Article 25, paragraph (1), item (xii)) or by a person whose Parent Company, etc. (meaning a Parent Company, etc. as defined by Article 24-7, paragraph (1)) is the person submitting the Document (limited to a document set forth in Article 25, paragraph (1), item (xii)) other than through a Public Offering or Secondary Distribution, for damage arising from the statement being false or having been omitted (hereinafter collectively referred to as being a "False Statement, etc." in this Article), to an extent not exceeding the amount calculated in accordance with the rule provided in Article 19, paragraph (1); provided, however, that this does not apply if the person that acquires the Securities knows of the False Statement, etc. at the time of the acquisition.

(2) In the case referred to in the main clause of the preceding paragraph, if the fact that a false statement, etc. in the relevant Document is contained is disclosed , a person that has acquired the relevant Securities within the one year prior to the day of the disclosure of the existence of the false statement, etc. (hereinafter referred to as the "Disclosure Date" in this paragraph) and that continues to hold the Securities on the Disclosure Date, may assert the amount calculated by deducting the average market value (or, if no market value exists, the estimated disposal value; hereinafter the same applies in this paragraph) during the one month after the Disclosure Date from the average market value during one month prior to the Disclosure Date, to be the amount of damage arising from the Document's False Statement, etc.

(3) The term "disclosure of the existence of a false statement, etc." as used in the preceding paragraph means that the person submitting the Document or a person that has statutory authority over the person submitting the Document has taken measures to put the material particular that is required to be stated and that the Document's false statement, etc. concerns or the material fact that is necessary to prevent the Document from being misleading in connection with the same, into a form that allows for a large number of persons to learn of it through public inspection provided in Article 25, paragraph (1) or through other means.

(4) In the case referred to in paragraph (2), if the person that would be liable to compensate proves that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the Securities that could have arisen from the Document's false statement, etc., the person is not liable for the whole or such part of the compensation.

(5) In a case referred to in paragraph (2) other than one referred to in the preceding paragraph, if the court finds that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the Securities that could have arisen from the Document's false statement, etc., but that it is extremely difficult to prove the amount of damage arising from such other circumstances due to the nature thereof, based on the entire import of oral arguments and the results of an examination of evidence, the court may determine an appropriate amount as the amount of damage for which the relevant person is not liable to compensate.

(Prescription of the Right to Claim Compensation from a Person Submitting a Document That Contains a False Statement, etc.)

Article 21-3 The provisions of Article 20 apply mutatis mutandis to a claim for compensation under the preceding Article. In this case, in Article 20, the phrase "Article 18" is deemed to be replaced with "Article 21-2", the phrase "the Registration Statement or the Prospectus" is deemed to be replaced with "a document set forth in one of the items of Article 25, paragraph (1) (excluding items (v) and (ix))", the phrase "three years" is deemed to be replaced with "two years", and the phrase "within seven years (excluding, if an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) has been issued, the period from the day on which the order for suspension is issued to the day on which the order is canceled) of the time that the notification under Article 4, paragraphs (1) to (3) inclusive for the relevant Public Offering or Secondary Distribution of the Securities comes into effect or the Prospectus is delivered" is deemed to be replaced with "within five years of the time that the document is submitted".

(Compensatory Liability of the Officers, etc. of a Company Submitting a Statement That Contains a False Statement, etc.)

Article 22 (1) If a Registration Statement contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, persons set forth in Article 21, paragraph (1), items (i) and (iii) are liable to compensate a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Registration Statement other than through a Public Offering or Secondary Distribution, for damage arising from the statement being false or having been omitted.

(2) The provisions of Article 21, paragraph (2), items (i) and (ii) apply mutatis mutandis to a person that would be liable for the compensation set forth in the preceding paragraph.

(Prohibition on Presuming the Veracity of a Registration Statement)

Article 23 (1) No person may deem, based on a notification under Article 4, paragraphs (1) to (3) inclusive for a Public Offering or Secondary Distribution of Securities having been made and having come into effect, nor based on the an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) having been canceled, that the Prime Minister certifies a statement contained in the Registration Statement submitted for the notification to be true and accurate, that the Prime Minister certifies that the Registration Statement does not omit a statement as to a material particular, or that the Prime Minister guarantees or recognizes the value of the Securities.

(2) No person may make a representation that is in violation of the provisions of the preceding paragraph.

(Replacement of Terms for Application of Relevant Provisions When Reference Should Be Made to Reference Documents)

Article 23-2 With regard to the application of Article 7, Articles 9 to 11 inclusive, Articles 17 to 21 inclusive, Article 22, and the preceding Article if a statement to which Article 5, paragraph (4) is applicable is submitted or an amended statement is submitted in connection with such a statement, or if a Prospectus to which Article 13, paragraph (3) is applicable is prepared, in Article 7, the phrase "a statement or other document under Article 5, paragraph (1) or paragraph (6)" is deemed to be replaced with "a statement or other document under Article 5, paragraph (1) or paragraph (6) (including the Reference Documents for the statement, if it is one to which Article 5, paragraph (4) is applicable (including as applied mutatis mutandis pursuant to Article 5, paragraph (5); the same applies in Articles 9 to 11 inclusive); the same applies in this Article)"; in Article 9, paragraph (1), the phrase "a statement or other document under Article 5, paragraph (1) or paragraph (6) or Article 7" is deemed to be replaced with "a statement or other document under Article 5, paragraph (1) or paragraph (6) or Article 7 (including the Reference Documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7 that has been submitted in connection with such a statement)"; in Article 10, paragraph (1), the term "Registration Statement" is deemed to be replaced with "Registration Statement (including the Reference Documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1) of the preceding Article or this paragraph which has been submitted in connection with such a statement)"; in Article 10, paragraph (3), the term "amended statement" is deemed to be replaced with "amended statement (including the Reference Documents for the amended statement, if it is connected with a statement to which Article 5, paragraph (4) is applicable)"; in Article 11, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "a Registration Statement (or a Registration Statement or Reference Documents for that Registration Statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, Article 9, paragraph (1) or paragraph (1) of the preceding Article which has been submitted in connection with such a statement) contains"; in Article 11, paragraph (2), the term "amended statement" is deemed to be replaced with "amended statement (including the Reference Documents for the amended statement, if it is connected with a statement to which Article 5, paragraph (4) is applicable)"; in Article 17, the term "Prospectus" is deemed to be replaced with "Prospectus (including the Reference Documents for the Prospectus, if it is a Prospectus to which Article 13, paragraph (3) is applicable)"; in Article 18, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "a Registration Statement (or a Registration Statement or Reference Documents for that Registration Statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement) contains"; in Article 18, paragraph (2), the phrase "a Prospectus referred to in Article 13, paragraph (1) contains" is deemed to be replaced with "a Prospectus referred to in Article 13, paragraph (1) (or a Prospectus or Reference Documents for that Prospectus, if it is a Prospectus to which Article 13, paragraph (3) is applicable) contains"; in Article 19, paragraph (2) and the first sentence of Article 20, the term "Registration Statement" is deemed to be replaced with "Registration Statement (including the Reference Documents for the Registration Statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)" and the term "Prospectus" is deemed to be replaced with "Prospectus (or a Prospectus or Reference Documents for that Prospectus, if it is a Prospectus to which Article 13, paragraph (3) is applicable)"; in Article 21, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "a Registration Statement (or a Registration Statement or Reference Documents for that Registration Statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement) contains"; in Article 21, paragraph (3), the phrase "a Prospectus referred to in Article 13, paragraph (1) contains" is deemed to be replaced with "a Prospectus referred to in Article 13, paragraph (1) (or a Prospectus or Reference Documents for the Prospectus, if it is a Prospectus to which Article 13, paragraph (3) is applicable) contains"; in Article 22, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "a Registration Statement (or a Registration Statement or Reference Documents for that Registration Statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement) contains"; and in paragraph (1) of the preceding Article, the term "Registration Statement" is deemed to be replaced with "Registration Statement (including the Reference Documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)."

(Submission of a Shelf Registration Statement)

Article 23-3 (1) If an Issuer of Securities that is planning a Public Offering or Secondary Distribution satisfies the requirements specified in Article 5, paragraph (4) and the total issue value or the total distribution value of the Securities for which the Issuer is planning the Public Offering or Secondary Distribution (hereinafter referred to as the "Planned Amount of Issuance") is 100 million yen or more (if the Securities for which the Issuer is planning the Public Offering or Secondary Distribution are share option certificates, this includes when the amount calculated by adding the total amount to be paid in upon the exercise of share options under said share option certificates to the Planned Amount of Issuance is 100 million yen or more), the Issuer of Securities may register said Public Offering or Secondary Distribution of Securities by submitting a document that, pursuant to the provisions of Cabinet Office Ordinance, states the particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, including the period for which the Issuer is planning the Public Offering or Secondary Distribution of the Securities (hereinafter referred to as the "Planned Issuance Period"), the class of the Securities, the Planned Amount of Issuance or the maximum outstanding balance, and the names of principal Financial Services Providers and registered financial institution Institutions that plan to underwrite the Securities (such document is hereinafter referred to as a "Shelf Registration Statement") to the Prime Minister; provided, however, that this does not apply if the Issuer is planning a Secondary Distribution or Securities that have been the subject of a solicitation with a view to issuing new securities or a solicitation with a view to delivering existing securities that fell under the category of an Exclusive Solicitation to Qualified Institutional Investors set forth in Article 23-13, paragraph (1) (limited to an Exclusive Solicitation to Qualified Institutional Investors to which the main clause of Article 23-13, paragraph (1) is applicable) (excluding a Case In Which Disclosure Has Been Made with regard to the Securities), a Secondary Distribution of Securities for Professional Investors (excluding a Case In Which Disclosure Has Been Made with regard to the Securities), or a Secondary Distribution of Securities that have been the subject of a solicitation with a view to issuing new securities that fell under the category of a Solicitation to a Small Number of Investors set forth in Article 23-13, paragraph (4) (limited to a Solicitation to a Small Number of Investors to which the main clause of Article 23-13, paragraph (4) is applicable) (excluding a Case In Which Disclosure Has Been Made for the Securities).

(2) The preceding paragraph applies only if, in addition to the particulars specified by Cabinet Office Ordinance which are referred to in said paragraph, the Shelf Registration Statement referred to in said paragraph states, pursuant to the provisions of Cabinet Office Ordinance, that reference should be made to the latest Reference Documents for said Issuer with regard to the particulars set forth in Article 5, paragraph (1), item (ii), and only if such Shelf Registration Statement is accompanied by the documents that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors.

(3) The provisions of Article 4, paragraph (1) to (3) inclusive do not apply to a Public Offering or Secondary Distribution of the Securities for which a registration under paragraph (1) (hereinafter referred to as a "Shelf Registration") has been made.

(4) A company that is the Issuer of Securities for which a Shelf Registration has been made may continue to submit Annual Reports and accompanying documents under Article 24, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24, paragraph (5); hereinafter the same applies in this paragraph), even after the obligation to submit an Annual Report under Article 24, paragraph (1) extinguishes, if their submission is necessary to satisfy the requirements set forth in Article 5, paragraph (4).

(Submission of an Amended Shelf Registration Statement)

Article 23-4 If, on or after the day on which a Shelf Registration was made and before the day on which the Shelf Registration ceases to be effective, new documents are submitted that are of the same type as the Reference Documents to which the Shelf Registration Statement states, pursuant to paragraph (2) of the preceding Article, that reference should be made or any other circumstance arises that is specified by Cabinet Office Ordinance as necessitating that the content of the Shelf Registration Statement and accompanying documents (hereinafter collectively referred to as "Shelf Registration Documents" in this Article) be amended in the public interest or for the protection of investors, the person that made the Shelf Registration (hereinafter referred to as the "Shelf Registrant") must submit an Amended Shelf Registration Statement to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance. The same also applies in the absence of such a circumstance, if the Shelf Registrant finds there to be something in the Shelf Registration Documents that necessitates an amendment. In this, the Shelf Registrant may not make an amendment in order to increase the Planned Amount of Issuance or the maximum outstanding balance, change the Planned Issuance Period, or change any other particular specified by Cabinet Office Ordinance.

(Effective Date of a Shelf Registration Statement)

Article 23-5 (1) The provisions of Article 8 apply mutatis mutandis to effectuation of a Shelf Registration Statement. In this case, in Article 8, paragraph (1), the phrase "the statement under Article 5, paragraph (1) (or, if the particulars referred to in the proviso to Article 5, paragraph (1) are not stated in the statement, the amended statement under the preceding Article which is connected with said particulars; the same applies in the following paragraph)" is deemed to be replaced with "Shelf Registration Statement provided for in Article 23-3, paragraph (1) (hereinafter referred to as a 'Shelf Registration Statement' in this Article to Article 23 inclusive)"; in Article 8, paragraph (2), the phrase "an amended statement under the preceding Article" is deemed to be replaced with "an Amended Shelf Registration Statement under Article 23-4" and the phrase "the statement set forth Article 5, paragraph (1)" is deemed to be replaced with "the Shelf Registration Statement"; and in Article 8, paragraph (3), the phrase "statement or other document under Article 5, paragraph (1) or, paragraph (6) or the preceding Article" is deemed to be replaced with "Shelf Registration Statement and accompanying documents or an Amended Shelf Registration Statement under Article 23-4 submitted before the day on which the Shelf Registration prescribed in Article 23-3, paragraph (3) (hereinafter referred to as a 'Shelf Registration' in this Article to Article 23) comes into effect" and the phrase "person submitting the statement and other documents" is deemed to be replaced with "person submitting that document".

(2) If, pursuant to the preceding Article, an Amended Shelf Registration Statement is submitted on or after the day on which a Shelf Registration comes into effect and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the suspension of the validity of the Shelf Registration during a fixed period of no longer than 15 days designated thereby.

(Planned Issuance Period for Securities under Shelf Registration)

Article 23-6 (1) The Planned Issuance Period for Securities under Shelf Registration is the period that is specified by Cabinet Office Ordinance of up to two years from the day on which the Shelf Registration comes into effect.

(2) A Shelf Registration ceases to be effective on the day on which the Planned Issuance Period under the preceding paragraph has elapsed.

(Submission of a Written Withdrawal of Shelf Registration)

Article 23-7 (1) If a Public Offering or Secondary Distribution has ended for Securities comprising the entire Planned Amount of Issuance before the day on which the Planned Issuance Period set forth in paragraph (1) of the preceding Article elapses, the Shelf Registrant shall withdraw the Shelf Registration by submitting a written withdrawal of Shelf Registration in which it indicates this to the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance.

(2) Notwithstanding the provisions of paragraph (2) of the preceding Article, in a case referred to in the preceding paragraph, the Shelf Registration ceases to be effective on the day on which the Prime Minister accepts the written withdrawal of Shelf Registration.

(Submission of Shelf Registration Supplements)

Article 23-8 (1) It is prohibited for an Issuer, person that engages in the Secondary Distribution of Securities, Underwriter, Financial Services Provider , or registered financial institution to cause Securities whose Public Offerings or Secondary Distributions have been registered in advance through a Shelf Registration to be acquired through Public Offerings or Secondary Distributions, or to sell such Securities through Public Offerings or Secondary Distributions, unless the Shelf Registration has come into effect and a document stating the total issue value or total distribution value, conditions of issuance or distribution of the Securities, and any other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (hereinafter referred to as "Shelf Registration Supplement") has been submitted to the Prime Minister for each Public Offering or Secondary Distribution, pursuant to the provisions of Cabinet Office Ordinance; provided however, that this does not apply to Public Offerings or Secondary Distributions specified by Cabinet Office Ordinance if the total issue value or total distribution value of each Public Offering or Secondary Distribution is less than 100 million.

(2) Notwithstanding the provisions of the preceding paragraph, the Issuer, person that engages in the Secondary Distribution of Securities, Underwriter, Financial Services Provider , or registered financial institution may cause short-term corporate bonds provided for in Article 66, item (i) of the Act on Book-entry Transfer of Corporate Bonds, etc. or any other bonds, etc. specified by Cabinet Order that are among the book-entry bonds, etc. set forth in Article 129, paragraph (1) of that Act (limited to those with an outstanding balance that is made available for public inspection by the Book-Entry Transfer Institution (meaning a Book-Entry Transfer Institution provided for in Article 2, paragraph (2) of that Act) that deals in the relevant book-entry bonds, etc.), whose Public Offerings or Secondary Distributions have been registered in advance through a Shelf Registration, to be acquired through Public Offerings or Secondary Distributions or to sell such bonds, etc. through Public Offerings or Secondary Distributions, if the Shelf Registration has come into effect.

(3) If a Public Offering or Secondary Distribution of Securities will be made only to shareholders that are stated or recorded in the shareholder register as of a certain date, the Shelf Registration Supplement for said Public Offering or Secondary Distribution must be submitted by 10 days prior to that date; provided, however, that this does not apply in the cases that are specified by Cabinet Office Ordinance in consideration of the issue price or distribution price or other circumstances.

(4) The provisions of Article 4, paragraphs (5) and (6) apply mutatis mutandis to a Public Offering or Secondary Distribution of Securities to which the proviso to paragraph (1) is applicable. In this case, in Article 4, paragraph (5), the phrase "in a Specified Public Offering" is deemed to be replaced with "in a Public Offering or Secondary Distribution" and the phrase "apply to said Specified Public Offering" is deemed to be replaced with "apply to said Public Offering or Secondary Distribution"; and in Article 4, paragraph (6), the phrase "the Securities in the Specified Public Offering, etc.," is deemed to be replaced with "said Securities", the phrase "the Specified Public Offering, etc. begins" is deemed to be replaced with "the Public Offering or Secondary Distribution begins", the phrase "a written notice of the Specified Public Offering, etc." is deemed to be replaced with "a written notice of the Public Offering or Secondary Distribution", and the phrase "a Secondary Distribution of Securities set forth in paragraph (4) whose total distribution value is less than 100 million yen in a Case In Which Disclosure Has Been Made, nor to a Secondary Distribution of Securities as set forth in paragraph (1), item (iii) conducted by a person other than the Issuer of said Securities or a person specified by Cabinet Office Ordinance, nor to a Public Offering or Secondary Distribution of Securities as set forth in item (v) of that paragraph whose total issue value" is deemed to be replaced with "a Public Offering or Secondary Distribution whose total issue value".

(5) As well as stating, pursuant to the provisions of Cabinet Office Ordinance and in addition to the particulars specified by Cabinet Office Ordinance which are referred to in paragraph (1), that reference should be made to the latest Reference Documents on the Issuer with regard to the particulars set forth in Article 5, paragraph (1), item (ii), the Shelf Registration Supplements referred to in paragraph (1) must be accompanied by the documents that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest for the protection of investors.

(Order to Submit an Amended Shelf Registration Statement Due to a Formal Deficiency, etc.)

Article 23-9 (1) If the Prime Minister finds a formal deficiency in a Shelf Registration Statement (including Reference Documents for that Registration Statement) or accompanying document or in an Amended Shelf Registration Statement under Article 23-4 (including Reference Documents for that Amended Registration Statement), or finds one of these documents to insufficiently state a material particular that is required to be stated therein, the Prime Minister may order the person submitting the document to submit an Amended Shelf Registration Statement. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) Notwithstanding the provisions of Article 8 as applied mutatis mutandis pursuant to Article 23-5, paragraph (1), if a disposition under the preceding paragraph is reached before the day on which the Shelf Registration comes into effect, the Shelf Registration comes into effect on the day on which the period designated by the Prime Minister elapses following the day on which the Prime Minister accepts the Shelf Registration Statement for that Shelf Registration.

(3) In a case referred to in the preceding paragraph, if an Amended Shelf Registration Statement under Article 23-4 is submitted during the period designated by the Prime Minister, the Shelf Registration Statement is deemed to have been accepted by the Prime Minister on the day on which the Prime Minister accepts the Amended Shelf Registration Statement.

(4) In a case referred to in the preceding paragraph, if the Prime Minister finds that an Amended Shelf Registration Statement under Article 23-4 is easily understandable to the public or finds that information about the particulars set forth in Article 5, paragraph (1), item (ii) with regard to the person that submitted the Amended Shelf Registration Statement is already widely available to the public, the Prime Minister may designate a period that is shorter than that which the Prime Minister has designated as under paragraph (2). In such a case, the Shelf Registration comes into effect on the day on which the shorter period has elapsed.

(5) The provisions of paragraph (3) apply mutatis mutandis if the shorter period under the preceding paragraph is designated and an Amended Shelf Registration Statement under Article 23-4 is submitted during that shorter period.

(Order to Submit an Amended Shelf Registration Statement Due to a False Statement, etc.)

Article 23-10 (1) If the Prime Minister finds that a Shelf Registration Statement (including Reference Documents for that Shelf Registration Statement) or accompanying document, an Amended Shelf Registration Statement under Article 23-4 or paragraph (1) of the preceding Article (including Reference Documents for that Amended Shelf Registration Statement), or a Shelf Registration Supplement (including a Reference Document for a Shelf Registration Supplement) or accompanying document contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading, the Prime Minister, at any time, may order the person submitting the document to submit an Amended Shelf Registration Statement. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) The provisions of paragraphs (2) to (5) inclusive of the preceding Article apply mutatis mutandis if an order is issued to submit an Amended Shelf Registration Statement under the preceding paragraph before the day on which the Shelf Registration comes into effect.

(3) If the Prime Minister finds it to be necessary upon reaching a disposition under paragraph (1) on or after the day that a Shelf Registration comes into effect the Prime Minister may order the suspension of the validity of the Shelf Registration.

(4) If an order for suspension under the preceding paragraph is issued and an Amended Shelf Registration Statement under paragraph (1) is submitted, and if the Prime Minister finds the Amended Shelf Registration Statement to be appropriate, the Prime Minister cancels the order for suspension under the preceding paragraph.

(5) The provisions of the preceding paragraphs apply mutatis mutandis if the Prime Minister finds that an Amended Shelf Registration Statement submitted pursuant to paragraph (1) (including Reference Documents referenced therein) contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading.

(Suspension of the Validity of a Shelf Registration Due to a False Statement)

Article 23-11 (1) If a Shelf Registration Statement or an accompanying document, an Amended Shelf Registration Statement under Article 23-4, Article 23-9, paragraph (1) or paragraph (1) of the preceding Article (including as applied mutatis mutandis pursuant to Article 23-10, paragraph (5)), a Shelf Registration Supplement or an accompanying document, or a Reference Document for any of the foregoing documents, contains a false statement about a material particular and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may issue an order against the person submitting that document, with regard to any Shelf Registration Statement or accompanying document, Amended Shelf Registration Statement, or Shelf Registration Supplement or accompanying document (hereinafter collectively referred to as a "Shelf Registration Document, etc." in this Article), or with regard to any statement as set forth in Article 5, paragraph (1), Shelf Registration Statement, or Shelf Registration Supplement, that the person submitting the relevant Shelf Registration Document, etc. submits within one year of the day on which the person submits said Shelf Registration Document, etc., ordering the suspension of the validity of the Shelf Registration under the Shelf Registration Document, etc., the validity of the notification under such a statement, or the validity of the Shelf Registration under such a Shelf Registration Statement or Shelf Registration Supplement, or may extend the period stipulated in Article 8, paragraph (1) (including as applied mutatis mutandis pursuant to Article 23-5, paragraph (1)), for the period that the Prime Minister considers appropriate in the public interest or for the protection of investors. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) If a disposition under the preceding paragraph is reached and the Prime Minister finds that the content of an Amended Shelf Registration Statement (including Reference Documents referenced therein) submitted pursuant to Article 23-4 or paragraph (1) of the preceding Article (including as applied mutatis mutandis pursuant to Article 23-10, paragraph (5)) in relation to the false statement referred to in the preceding paragraph is appropriate, and that allowing the acquisition or sale of Securities issued by the person that submitted the Shelf Registration Documents through a Public Offering or Secondary Distribution will not compromise the public interest or the protection of investors, the Prime Minister may cancel the disposition under the preceding paragraph.

(Mutatis Mutandis Application of Relevant Provisions for Shelf Registration Statements, etc.)

Article 23-12 (1) The provisions of Article 6 apply mutatis mutandis if a Shelf Registration Statement and accompanying documents, an Amended Shelf Registration Statement under Article 23-4, Article 23-9, paragraph (1) or Article 23-10, paragraph (1) (including as applied mutatis mutandis pursuant to Article 23-10, paragraph (5)) or Shelf Registration Supplements and accompanying documents are submitted.

(2) The provisions of Article 13, paragraph (1) apply mutatis mutandis to the Issuer of Securities for which a Shelf Registration is filed, the main clause of Article 13, paragraph (2) applies mutatis mutandis to the Prospectus prepared by the Issuer of Securities for which a Shelf Registration is filed, and the provisions of Article 13, paragraphs (4) and (5) apply mutatis mutandis to a Public Offering or Secondary Distribution of Securities for which a Shelf Registration is filed. In this case, in the main clause of Article 13, paragraph (2), the phrase "For a category set forth in one of the following items, the details of the particulars that are specified in that item" is deemed to be replaced with "The details that are required to be stated in a Shelf Registration Statement, an Amended Shelf Registration Statement under Article 23-4, or Shelf Registration Supplements, and the details specified by Cabinet Office Ordinance".

(3) The provisions of Article 15, paragraphs (2) and (6) apply mutatis mutandis to a Public Offering or Secondary Distribution of Securities for which a Shelf Registration is filed. In this case, in Article 15, paragraph (2), the phrase "a Prospectus that states the particulars specified in Article 13, paragraph (2), item (i)" is deemed to be replaced with "the Prospectus referred to in Article 13, paragraph (1) as applied mutatis mutandis pursuant to Article 23-12, paragraph (2)"; and in Article 15, paragraph (6), the phrase "paragraph (2) to the preceding paragraph" is deemed to be replaced with "paragraph (2)", the phrase "Article 10, paragraph (1) or Article 11, paragraph (1)" is deemed to be replaced with "Article 23-10, paragraph (3) or Article 23-11, paragraph (1)", and the phrase "the notification under Article 4, paragraphs (1) to (3) inclusive for the Public Offering or Secondary Distribution came into effect" is deemed to be replaced with "the Shelf Registration Supplements are submitted for a Shelf Registration that has been filed for the Public Offering or Secondary Distribution and has already come into effect".

(4) The provisions of Article 16 apply mutatis mutandis to a person that violates the provisions of Article 23-8, paragraph (1) or (2), or Article 15, paragraph (2) or (6) as applied mutatis mutandis pursuant to the preceding paragraph in causing Securities to be acquired.

(5) The provisions of Articles 17 to 21 inclusive, Article 22, and Article 23 apply mutatis mutandis to a Public Offering or Secondary Distribution of Securities for which a Shelf Registration is filed. In this case, in Article 17, the phrase "Prospectus referred to in Article 13, paragraph (1)" is deemed to be replaced with "Prospectus referred to in Article 13, paragraph (1) as applied mutatis mutandis pursuant to Article 23-12, paragraph (2) (including Reference Documents referenced therein)"; in Article 18, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "Shelf Registration Documents, an Amended Shelf Registration Statement under Article 23-4, Article 23-9, paragraph (1) or Article 23-10, paragraph (1) (including as applied mutatis mutandis pursuant to Article 23-10, paragraph (5)) (hereinafter referred to as an 'Amended Shelf Registration Statement'), Shelf Registration Supplements and accompanying documents, or Reference Documents for any of these documents (hereinafter referred to as 'Shelf Registration Documents, etc.') contain", the phrase "the Registration Statement" is deemed to be replaced with "Shelf Registration Documents, Amended Shelf Registration Statement, Shelf Registration Supplements, or accompanying documents for any of these", the phrase "a Prospectus referred to in Article 13, paragraph (1) contains" in Article 18, paragraph (2) is deemed to be replaced with "a Prospectus referred to in Article 13, paragraph (1) (including Reference Documents for that Prospectus) contains"; in Article 19, paragraph (2), the phrase "the Registration Statement" is deemed to be replaced with "the Shelf Registration Documents, etc." and the phrase "the Prospectus" is deemed to be replaced with "the Prospectus (including Reference Documents for that Prospectus)"; in Article 20, the phrase "the Registration Statement" is deemed to be replaced with "the Shelf Registration Documents, etc.", the phrase "the Prospectus contains" is deemed to be replaced with "the Prospectus (including Reference Documents for that Prospectus) contains", the phrase "Article 10, paragraph (1) or Article 11, paragraph (1)" is deemed to be replaced with "Article 23-10, paragraph (3) or Article 23-11, paragraph (1)", and the phrase "from the time that the notification under Article 4, paragraphs (1) to (3) inclusive for the relevant Public Offering or Secondary Distribution of the Securities comes into effect" is deemed to be replaced with "from the time that the Shelf Registration Supplements are submitted for a Shelf Registration that has been filed for the relevant Public Offering or Secondary Distribution and has already come into effect"; in the non-itemized part of Article 21, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "Shelf Registration Documents, etc. contain"; in items (i) and (iii) of Article 21, paragraph (1), the phrase "the Registration Statement" is deemed to be replaced with "the Shelf Registration Documents, Amended Shelf Registration Statement, Shelf Registration Supplements, or accompanying documents for any of these"; in Article 21, paragraph (3), the phrase "a Prospectus referred to in Article 13, paragraph (1) contains" is deemed to be replaced with "Prospectus referred to in Article 13, paragraph (1) (including Reference Documents for that Prospectus)"; in Article 22, paragraph (1), the phrase "a Registration Statement contains" is deemed to be replaced with "the Shelf Registration Documents, etc. contain" and the phrase "the Registration Statement" is deemed to be replaced with "the Shelf Registration Documents, Amended Shelf Registration Statement, Shelf Registration Supplements, or accompanying documents for any of these"; and in Article 23, the phrase "a notification under Article 4, paragraphs (1) to (3) inclusive for a Public Offering or Secondary Distribution of Securities having been made and having come into effect" is deemed to be replaced with "a Shelf Registration having come into effect and Shelf Registration Supplements for it having been submitted (or, for a Public Offering or Secondary Distribution of Securities referred to in Article 23-8, paragraph (2), based on the Shelf Registration for it having come into effect)", the phrase "Article 10, paragraph (1) or Article 11, paragraph (1)" is deemed to be replaced with "Article 23-10, paragraph (3) or Article 23-11, paragraph (1)", the phrase "the Registration Statement" is deemed to be replaced with "the Shelf Registration Documents, etc."; and the term "the notification" is deemed to be replaced with "the Shelf Registration".

(6) The provisions of paragraphs (2) and (3) and the provisions of Article 17, Article 18, paragraph (2) and Article 21, paragraph (3) as applied mutatis mutandis pursuant to the preceding paragraph do not apply to Securities referred to in Article 23-8, paragraph (2).

(Notification, etc. of Exclusive Solicitation to Qualified Institutional Investors)

Article 23-13 (1) A person that issues a solicitation with a view to issuing new securities or a solicitation with a view to delivering existing securities which falls under a case set forth in the following items (in item (ii), limited to a solicitation issued to qualified institutional investors that are excluded from the large number of persons pursuant to the provisions of Article 2, paragraph (3), item (i), and in a case set forth in item (iv), limited a solicitation issued to qualified institutional investors that are excluded from the large number of persons pursuant to paragraph (4), item (i) of that Article; hereinafter collectively referred to as "Exclusive Solicitation to Qualified Institutional Investors" in this Article), must notify the solicited persons that the Exclusive Solicitation to Qualified Institutional Investors falls under one of the following cases and that therefore the notification under Article 4, paragraph (1) has not been made for the Exclusive Solicitation to Qualified Institutional Investors, and of any other particular that is specified by Cabinet Office Ordinance; provided, however, that this does not apply to a Case In Which Disclosure Has Been Made with regard to the Securities that are subject to the Exclusive Solicitation to Qualified Institutional Investors nor does it apply to a case specified by Cabinet Office Ordinance that constitutes an Exclusive Solicitation to Qualified Institutional Investors with a total issue value or transfer value of less than 100 million yen:

(i) a case set forth in Article 2, paragraph (3), item (ii), sub-item (a);

(ii) a case set forth in Article 2, paragraph (3), item (ii), sub-item (c) (but only if it comes to no longer fall under the category of case set forth in item (i) of that paragraph, due to the qualified institutional investors' being excluded from the large number of persons pursuant to that item);

(iii) a case set forth in Article 2, paragraph (4), item (ii), sub-item (a);

(iv) a case set forth in Article 2, paragraph (4), item (ii), sub-item (c) (but only if it comes to no longer fall under the category of case set forth in item (i) of that paragraph, due to the qualified institutional investors' being excluded from the large number of persons pursuant to that item);

(v) a case set forth in Article 2-2, paragraph (4), item (ii), sub-item (a); or

(vi) a case set forth in Article 2-2, paragraph (5), item (ii), sub-item (a).

(2) If a person that issues an Exclusive Solicitation to Qualified Institutional Investors to which the main clause of the preceding paragraph is applicable causes Securities to be acquired or sells Securities through that Exclusive Solicitation to Qualified Institutional Investors, such person must deliver a document stating the particulars for which notice is required to be given pursuant to the preceding paragraph to the other party in advance of, or at the same time as, the acquisition or sale.

(3) A person performing an act set forth in one of the following items must notify the person solicited of the particulars provided for in the relevant item, pursuant to the provisions of Cabinet Office Ordinance; provided, however, that this does not apply to a Case In Which Disclosure Has Been Made for the Securities with regard to which such act was performed:

(i) the Exclusive Solicitation of Offers to Acquire Targeting Professional Investors or an exclusive Offer to Sell, etc. to Professional Investors: that a notification under Article 4, paragraph (1) has not been given for the Exclusive Solicitation of Offers to Acquire Targeting Professional Investors or exclusive Offer to Sell, etc. to Professional Investors, and any other particular specified by Cabinet Office Ordinance; and

(ii) solicitation with a view to delivering existing securities which is connected with Securities for Professional Investors and which does not fall under the category of either an exclusive Offer to Sell, etc. to Professional Investors or a General Solicitation Involving Securities Acquired by a Professional Investor (limited to those to which the main clause of Article 4, paragraph (3) is applicable): that the solicitation does not fall under a Case In Which Disclosure Has Been Made in connection with the Securities for Professional Investors, and any other particular specified by Cabinet Office Ordinance.

(4) A person that issues a solicitation with a view to issuing new securities or solicitation with a view to delivering existing securities that falls under a case set forth in one of the following items for the class of Securities set forth in the relevant item (excluding a case that falls under the category of a solicitation with a view to issuing new securities or solicitation with a view to delivering existing securities for the Securities set forth in Article 2, paragraph (1), item (ix) or those specified by Cabinet Order, and in the case set forth in item (i), sub-item (a) or (b), Exclusive Solicitation to Qualified Institutional Investors is excluded; hereinafter collectively referred to as the "Solicitation to a Small Number of Investors" in this Article) must notify the solicited persons that the solicitation with a view to issuing new securities falls under a case set forth in one of the following items (for item (i), sub-item (a) or (b), this excludes a case in which the Solicitation to a Small Number of Investors falls under the category of an Exclusive Solicitation to Qualified Institutional Investors) for the class of Securities set forth in the relevant item and therefore the notification under Article 4, paragraph (1) has not been given for the solicitation with a view to issuing new securities, and of any other particular that is specified by Cabinet Office Ordinance; provided, however, that this does not apply to a Case In Which Disclosure Has Been Made with regard to the Securities that are subject to the relevant Solicitation to a Small Number of Investors, nor does it apply in a case specified by Cabinet Office Ordinance that constitutes a Solicitation to a Small Number of Investors with a total issue value or transfer value of less than 100 million yen:

(i) Article 2(1) Securities: any of the following cases:

(a) one that falls under Article 2, paragraph (3), item (ii), sub-item (c);

(b) one that falls under Article 2, paragraph (4), item (ii), sub-item (c);

(c) one that falls under Article 2-2, paragraph (4), item (ii), sub-item (b);

(d) one that falls under Article 2-2, paragraph (5), item (ii), sub-item (b).

(ii) Article 2(2) Securities: any of the following cases:

(a) one that does not fall under the category of cases set forth in Article 2, paragraph (3), item (iii);

(b) one that does not fall under the category of cases set forth in Article 2-2, paragraph (4), item (iii).

(5) If a person that issues a Solicitation to a Small Number of Investors to which the main clause of the preceding paragraph is applicable causes Securities to be acquired or sells the same through the Solicitation to a Small Number of Investors, such person must deliver a document stating the particulars for which notice is required to be given pursuant to the preceding paragraph to the other party in advance of, or at the same time as, the acquisition or sale.

(Submission of Annual Reports)

Article 24 (1) If Securities issued by a company (excluding regulated Securities; hereinafter the same applies in this Article, except in the following items) fall under one of the categories set forth in the following items, the company that is the Issuer of the Securities must submit, for each business year, a report stating the trade name of the company, the financial condition of the corporate group to which the company belongs and the company's own financial condition, other material particulars of the company's business, and other particulars specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (hereinafter referred to as an "Annual Report") to the Prime Minister, within three months after the end of that business year (or, if there is a compelling reason that the company cannot submit the document within such period, within a period approved in advance by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance), for a domestic company, or within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors, for a foreign company, pursuant to the provisions of Cabinet Office Ordinance; provided however, that this does not apply if the Securities issued by the company fall under the category of Securities specified in item (iii) below (limited to share certificates and other Securities specified by Cabinet Order) and the numbers of holders of the Securities on the last day of that business year and on the last days of each of the business years that began within four years before the day on which the relevant business year began are smaller than the number calculated pursuant to the provisions of Cabinet Order, and the company receives the acknowledgement of the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, as a company whose non-submission of an Annual Report does not damage the public interest or result in insufficient investor protection (limited to a company that has already had five years elapse since the end of the first year of report submission (meaning the business year that includes the day on which the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), the main clause of Article 4, paragraph (3), or the main clause of Article 23-8, paragraph (1) or (2) became applicable to the Public Offering or Secondary Distribution of Securities, and if there are two or more First Years of Report Submission, this means the most recent one); nor does it apply if the Securities issued by the company fall under the category of Securities specified in item (iv) below, and the stated capital is less than 500 million yen (or, if the Securities are Rights in a Securities Investment Business, etc. that are deemed to be Securities pursuant to Article 2, paragraph (2), and the amount that is specified by Cabinet Order as the stated capital is less than the amount specified by Cabinet Order on the last day of that business year) or the number of holders of the Securities on the last day of that business year is smaller than the number specified by Cabinet Order; nor does it apply if the Securities issued by the company fall under the category of Securities specified in item (iii) or (iv) below, and the company receives the acknowledgement of the Prime Minister, pursuant to Cabinet Order, as a company whose non-submission of an Annual Report does not damage the public interest or result in insufficient investor protection:

(i) Securities listed on a Financial Instruments Exchange (excluding Specified Listed Securities);

(ii) Securities specified by Cabinet Order as having equivalent distribution statuses to the Securities set forth in the preceding item (excluding Securities specified by Cabinet Order as having equivalent distribution statuses to Specified Listed Securities);

(iii) Securities to whose Public Offering or Secondary Distribution the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), the main clause of Article 4, paragraph (3), or the main clause of Article 23-8, paragraph (1) or (2) applies (excluding those specified in the preceding two items); or

(iv) Securities (limited to share certificates, Rights in a Securities Investment Business, etc. that are deemed to be Securities pursuant to Article 2, paragraph (2), and other Securities specified by Cabinet Order) that are issued by the company, for which the number of holders on the last day of the relevant business year or on the last day of any of the business years that began within four years before the day on which the relevant business year began is at least the number specified by Cabinet Order (or, for Rights in a Securities Investment Business, etc. that are deemed to be Securities pursuant to Article 2, paragraph (2), if the number of holders on the last day of the relevant business year is at least the number specified by Cabinet Order) (excluding Securities specified in the preceding three items).

(2) In the Annual Report that a company must submit pursuant to the main clause of the preceding paragraph, a company that is an Issuer of Securities that fall under the category of Securities specified in item (iii) of the preceding paragraph, which has submitted a statement provided for in Article 5, paragraph (1) stating the particulars specified in Article 5, paragraph (2) with regard to a Low-Value Public Offering, etc., and which does not fall under any of the following categories, may state the particulars set forth in the main clause of the preceding paragraph that are specified by Cabinet Office Ordinance as being relevant to that company, instead of stating the particulars set forth in the main clause of the preceding paragraph:

(i) a person that has already submitted an Annual Report stating the particulars set forth in the main clause of the preceding paragraph, a Quarterly Report under Article 24-4-7, paragraph (1) or (2) stating the particulars set forth in Article 24-4-7, paragraph (1), or a Semiannual Report stating the particulars set forth in Article 24-5, paragraph (1); and

(ii) a person that has submitted or is required to submit a statement provided for in Article 5, paragraph (1) stating the particulars set forth in Article 5, paragraph (1), item (ii) for a Public Offering or Secondary Distribution of Securities to which the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3) applies (other than a person specified in the preceding item).

(3) If the Securities issued by a company to which the main clause of paragraph (1) does not apply, come to fall under a category of Securities specified in items (i) to (iii) inclusive of that paragraph (except in the cases specified by Cabinet Office Ordinance), the company must submit an Annual Report to the Prime Minister without delay for the business year immediately prior to the business year that includes the day on which the Securities come to fall under such category, pursuant to the provisions of Cabinet Office Ordinance.

(4) Necessary particulars relevant to the calculation of the number of holders set forth in paragraph (1), item (iv) are specified by Cabinet Office Ordinance.

(5) The provisions of the preceding paragraphs apply mutatis mutandis if regulated Securities issued by a company fall under a category specified in an item of paragraph (1). In this case, in the main clause paragraph (1), the phrase "the company that is the Issuer of the Securities" is deemed to be replaced with "the company that is the Issuer of the Securities (other than a person specified by Cabinet Office Ordinance, for Securities that are specified by Cabinet Office Ordinance)", the phrase "excluding regulated Securities" is deemed to be replaced with "limited to regulated Securities", the phrase "the trade name of the company, the financial condition of the corporate group to which the company belongs and the company's own financial condition, other material particulars of the company's business" is deemed to be replaced with "the status of the company's asset accounting in connection with asset management and other similar business conducted by the company, other material particulars of the company's assets", the phrase "for each business year" is deemed to be replaced with "for each of the periods of time specified by Cabinet Office Ordinance for the regulated Securities (hereinafter referred to as a "Specified Period" in this Article)", and the phrase "that business year" is deemed to be replaced with "that Specified Period"; in the proviso to that paragraph, the phrase "this does not apply if the Securities issued by the company fall under the category of Securities specified in item (iii) below (limited to share certificates and other Securities specified by Cabinet Order) and the numbers of holders of the Securities on the last day of that business year and on the last days of each of the business years that began within four years before the day on which that business year began are smaller than the number calculated pursuant to the provisions of Cabinet Order, and the company receives the acknowledgement of the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, as a company whose non-submission of an Annual Report does not damage the public interest or result in insufficient investor protection (limited to a company that has already had five years elapse since the end of the first year of report submission (meaning the business year that includes the day on which the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), the main clause of Article 4, paragraph (3), or the main clause of Article 23-8, paragraph (1) or (2) became applicable to the Public Offering or Secondary Distribution of Securities, and if there are two or more First Years of Report Submission, this means the most recent one); nor does it apply if the Securities issued by the company fall under the category of Securities specified in item (iv) below" is deemed to be replaced with "this does not apply if the regulated Securities issued by the company fall under the category of Securities specified in item (iv) below" and the phrase "or the number of holders of the Securities on the last day of that business year is smaller than the number specified by Cabinet Order; nor" is deemed to be replaced with "; nor"; in item (iv) of paragraph (1), the phrase "share certificates, Rights in a Securities Investment Business, etc. that are deemed to be Securities pursuant to Article 2, paragraph (2)" is deemed to be replaced with "Rights in a Securities Investment Business, etc. that are deemed to be Securities pursuant to Article 2, paragraph (2)" and the phrase "for which the number of holders on the last day of the relevant business year or on the last day of any of the business years that began within four years before the day on which the relevant business year began is at least the number specified by Cabinet Order (or, for Rights in a Securities Investment Business, etc. that are deemed to be Securities pursuant to Article 2, paragraph (2), if the number of holders on the last day of the relevant business year is at least the number specified by Cabinet Order)" is deemed to be replaced with "for which the number of holders on the last day of the relevant Specified Period is at least the number specified by Cabinet Order"; in paragraph (2), the phrase "Securities that fall" is deemed to be replaced with "regulated Securities that fall"; in paragraph (3), the phrase "the main clause of paragraph (1)" is deemed to be replaced with "the main clause of paragraph (1) as applied mutatis mutandis pursuant to paragraph (5)", the phrase "business year" is deemed to be replaced with "Specified Period", and the phrase "the day on which the Securities came to fall under" is deemed to be replaced with "the day on which the regulated Securities came to fall under"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(6) The articles of incorporation or other documents that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors must accompany an Annual Report.

(7) The provisions of Article 6 apply mutatis mutandis if an Annual Report and accompanying documents are submitted pursuant to paragraphs (1) to (3) inclusive (including as applied mutatis mutandis pursuant to paragraph (5)) and the preceding paragraph.

(8) In a case that is specified by Cabinet Office Ordinance as one in which this does not damage the public interest or result in insufficient investor protection, instead of an Annual Report under paragraph (1) and the documents that are required to accompany it pursuant to paragraph (6) (hereinafter collectively referred to as an "Annual Report, etc." in this Article), a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive) (including a foreign company that has submitted an Annual Report pursuant to Article 23-3, paragraph (4); hereinafter referred to as a "Reporting Foreign Company"), may submit a document that is similar to an Annual Report, etc., but that has been prepared in English and disclosed in a foreign state (meaning that it is made available for public inspection in the relevant foreign state based on the laws and regulations of that state (including the rules provided by the operator of a foreign Financial Instruments Market or other person specified by Cabinet Office Ordinance); the same applies in Article 24-4-7, paragraph (6) and Article 24-5, paragraph (7)) (such a document is hereinafter referred to as a "Foreign Company Report" in this Chapter).

(9) A Japanese translation of the summary of the particulars stated in a Foreign Company Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, as well as documents stating the particulars not stated in a Foreign Company Report that are specified by Cabinet Office Ordinance as necessary and appropriate for the public interest or for the protection of investors, and other documents specified by Cabinet Office Ordinance (such documents are hereinafter collectively referred to as "Supplementary Documents" in this Article and paragraph (4) of the following Article) must accompany a Foreign Company Report, as specified by Cabinet Office Ordinance.

(10) If a Reporting Foreign Company submits a Foreign Company Report and its Supplementary Documents instead of an Annual Report, etc. pursuant to the preceding two paragraphs, in paragraph (1), the phrase "within three months after the end of that business year (or, if there is a compelling reason that the company cannot submit the document within such period, within a period approved in advance by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance), for a domestic company, or within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors, for a foreign company" is deemed to be replaced with "within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors" and in paragraph (5), the phrase "in the main clause of paragraph (1), the term 'that business year' is deemed to be replaced with 'that Specified Period' " is deemed to be replaced with "the phrase 'within three months after the end of that business year (or, if there is a compelling reason that the company cannot submit the document within such period, within a period approved in advance by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance), for a domestic company, or within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors, for a foreign company' is deemed to be replaced with 'within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors following the Specified Period has elapsed' ".

(11) If a Reporting Foreign Company submits a Foreign Company Report and its Supplementary Documents pursuant to paragraphs (8) and (9), the Foreign Company Report and Supplementary Documents are deemed to be an Annual Report, their submission is deemed to be the submission of an Annual Report, etc., and the provisions of this Act and orders based on this Act (hereinafter referred to as the "Financial Instruments and Exchange Act and Related Regulations" in this Chapter to Chapter II-4 inclusive) apply.

(12) If the Prime Minister finds that a Reporting Foreign Company that has submitted a Foreign Company Report does not satisfy the requirements referred do in paragraph (8) for being allowed to submit a Foreign Company Report, the Prime Minister must notify the Reporting Foreign Company of this. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(13) Notwithstanding the provisions of paragraph (1), if a Reporting Foreign Company receives a notice under the preceding paragraph, it must submit an Annual Report under the provisions of paragraph (1) within the period that is specified by Cabinet Order as necessary and in the public interest or for the protection of investors, with the day on which the notice is made as the first day for the calculation of that period.

(14) If, pursuant to the provisions of Cabinet Office Ordinance, a company that is required to submit an Annual Report pursuant to paragraph (1) (but only as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this Article) submits the documents stating a part of the particulars specified by Cabinet Office Ordinance that are provided for in paragraph (1) (limited to documents prepared based on laws and regulations or the rules of a Financial Instruments Exchange (including anything specified by Cabinet Office Ordinance as being similar to such rules); such documents are hereinafter referred to as "Documents Substituted for Part of an Annual Report" in this paragraph and the following paragraph) together with an Annual Report to the Prime Minister, with regard to the application of paragraphs (1) and (2) to cases in which a company receives the acknowledgement of the Prime Minister, pursuant to Cabinet Office Ordinance, as one whose doing so does not damage the public interest or result in insufficient investor protection, in paragraph (1), the phrase "other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors" is deemed to be replaced with "other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (other than the particulars stated in the Documents Substituted for Part of the Annual Report prescribed in paragraph (14))" and in paragraph (2), the phrase "the particulars set forth in the main clause of the preceding paragraph" is deemed to be replaced with "the particulars set forth in the main clause of the preceding paragraph (other than the particulars stated in Documents Substituted for Part of the Annual Report provided for in paragraph (14))".

(15) If Documents Substituted for Part of an Annual Report are submitted together with an Annual Report referred to in paragraph (1) as it applies through the replacement of certain terms pursuant to the preceding paragraph, the Documents Substituted for Part of the Annual Report are deemed to form a part of the Annual Report, the submission of the Documents Substituted for Part of the Annual Report is deemed to be the submission of the Documents Substituted for Part of the Annual Report as a part of the Annual Report, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(Mutatis Mutandis Application of Provisions on Amended Statements)

Article 24-2 (1) The provisions of Article 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to an Annual Report and accompanying documents. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in an Annual Report or accompanying document changes", the phrase "the person filing the notification" is deemed to be replaced with "the person submitting the Annual Report", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 9, paragraph (1), the phrase "the person that submitted it" is deemed to be replaced with "the person that submitted the Annual Report" and the term "amended statement" is deemed to be replaced with "amended report"; and in Article 10, paragraph (1), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the person submitting the amended report" and the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended report".

(2) If a company that is an Issuer of Securities submits an amended report, pursuant to Article 7 or Article 10, paragraph (1) as applied mutatis mutandis pursuant to the preceding paragraph, with regard to a material particular for inclusion in its Annual Report, it must give public notice of this pursuant to the provisions of Cabinet Order.

(3) The provisions of Article 6 apply mutatis mutandis if an amended report is submitted in connection with an Annual Report or accompanying document, pursuant to Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis pursuant to paragraph (1).

(4) The provisions of paragraphs (8), (9) and (11) of the preceding Article apply mutatis mutandis if a Reporting Foreign Company submits an amended report in connection with the Foreign Company Report and Supplementary Documents that the company has submitted pursuant to Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis through the replacement of certain terms pursuant to paragraph (1).

(Suspension of the Validity of Notifications Made Within One Year After the Submission of an Annual Report Containing a False Statement)

Article 24-3 The provisions of Article 11 apply mutatis mutandis to any statement specified in Article 5, paragraph (1), Shelf Registration Statement, or Shelf Registration Supplements that a person that has submitted an Annual Report (including any amended report in connection with it; the same applies in the following Article) that contained a false statement with regard to a material particular, submits within one year from the day on which that person submits an amended report in connection with that false statement pursuant to Article 7 as applied mutatis mutandis pursuant to paragraph (1) of the preceding Article, or is ordered to submit an amended report in connection with that false statement pursuant to Article 10, paragraph (1) as applied mutatis mutandis pursuant to Article 24-2, paragraph (1).

(Compensatory Liability of the Officers, etc. of a Company Submitting an Annual Report That Contains a False Statement)

Article 24-4 The provisions of Article 22 apply mutatis mutandis if an Annual Report contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in Article 22, paragraph (1), the phrase "has acquired Securities issued by the person submitting the Registration Statement other than through a Public Offering or Secondary Distribution" is deemed to be replaced with "has acquired Securities issued by the person submitting the Registration Statement".

(Submission of a Confirmation Letter for the Content of Statements in an Annual Report)

Article 24-4-2 (1) A company that is required to submit an Annual Report under Article 24, paragraph (1) (including a company that has submitted an Annual Report under Article 23-3, paragraph (4); the same applies in the following paragraph) and which is the Issuer of Securities set forth in Article 24, paragraph (1), item (i), or any other company specified by Cabinet Order, must submit a letter to the Prime Minister in which it confirms that the content of statements in the Annual Report is appropriate and in accordance with the Financial Instruments and Exchange Act and Related Regulations (hereinafter referred to as a "Confirmation Letter" in this and the following Articles), together with said Annual Report (or a Foreign Company Report, if the company submits a Foreign Company Report instead of the Annual Report, etc. set forth in Article 24, paragraph (8), pursuant to that paragraph), pursuant to the provisions of Cabinet Office Ordinance.

(2) A company that is required to submit an Annual Report under Article 24, paragraph (1) may submit the Confirmation Letter provided for in the preceding paragraph voluntarily, even if it is not a company that is required to submit a Confirmation Letter together with an Annual Report (excluding companies as specified by Cabinet Order) pursuant to the preceding paragraph.

(3) The provisions of the preceding two paragraphs apply mutatis mutandis to a company specified by Cabinet Order that is required to submit an Annual Report under Article 24, paragraph (1) as applied mutatis mutandis pursuant to Article 24, paragraph (5) (including a company that has submitted an Annual Report under Article 23-3, paragraph (4)).

(4) The provisions of the preceding three paragraphs apply mutatis mutandis if an amended report is submitted pursuant to Article 7, Article 9, paragraph (1) and Article 10, paragraph (1) as applied mutatis mutandis through the replacement of certain terms pursuant to Article 24-2, paragraph (1). The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(5) The provisions of Article 6 apply mutatis mutandis if a Confirmation Letter is submitted pursuant to paragraph (1) or (2) (including as applied mutatis mutandis pursuant to paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph) or the preceding paragraph; hereinafter the same applies in this Article). The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(6) The provisions of Article 24, paragraphs (8), (9) and (11) to (13) inclusive apply mutatis mutandis if a Reporting Foreign Company submits a Confirmation Letter pursuant to paragraph (1) or (2) of this Article (limited to if a Reporting Foreign Company submits a Foreign Company Report). In this case, in Article 24, paragraph (8), the phrase "a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive) (including a foreign company that has submitted an Annual Report pursuant to Article 23-3, paragraph (4); hereinafter referred to as a 'Reporting Foreign Company')" is deemed to be replaced with "a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive)", the phrase "an Annual Report under paragraph (1) and the documents are required to accompany it pursuant to paragraph (6) (hereinafter collectively referred to as an 'Annual Report, etc.' in this Article)" is deemed to be replaced with "a Confirmation Letter under Article 24-4-2, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4)) or Article 24-4-2, paragraph (4))", and the phrase "similar to an Annual Report, etc., but that has been prepared in English and disclosed in a foreign state (meaning that it is made available for public inspection in the relevant foreign state based on the laws and regulations of that state (including the rules provided by the operator of a foreign Financial Instruments Market or other person specified by Cabinet Office Ordinance); the same applies in Article 24-4-7, paragraph (6) and Article 24-5, paragraph (7))" is deemed to be replaced with "in which it has stated the particulars that are required to be stated in a Confirmation Letter"; in Article 24, paragraph (9), the phrase "documents stating the particulars not stated in the Foreign Company Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, and other" is deemed to be replaced with "other"; in Article 24, paragraph (11), the term "an Annual Report, etc." is deemed to be replaced with "a Confirmation Letter under Article 24-4-2, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4)) or Article 24-4-2, paragraph (4))"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(Submission of an Amended Confirmation Letter)

Article 24-4-3 (1) The provisions of Article 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to a Confirmation Letter. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in a Confirmation Letter changes", the phrase "the person filing the notification" is deemed to be replaced with "the Person Submitting the Confirmation Letter", and the term "amended statement" is deemed to be replaced with "amended Confirmation Letter"; in Article 9, paragraph (1), the phrase "the person that submitted it" is deemed to be replaced with "the Person Submitting the Confirmation Letter" and the term "amended statement" is deemed to be replaced with "amended Confirmation Letter"; in Article 10, paragraph (1)), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the Person Submitting the Confirmation Letter" and the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended Confirmation Letter"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(2) The provisions of Article 6 apply mutatis mutandis if an amended Confirmation Letter is submitted for a Confirmation Letter pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis pursuant to the preceding paragraph. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(3) The provisions of Article 24, paragraphs (8), (9), and (11) apply mutatis mutandis if an amended Confirmation Letter is submitted for a Confirmation Letter that a foreign company has submitted pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis through the replacement of certain terms pursuant to paragraph (1). The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Evaluation of the System for Ensuring the Appropriateness of Documents and Other Information Related to Financial Accounting)

Article 24-4-4 (1) For each business year, a company required to submit an Annual Report under Article 24, paragraph (1) (including one that has submitted an Annual Report under Article 23-3, paragraph (4); the same applies in the following paragraph) which is the Issuer of Securities set forth in Article 24, paragraph (1), item (i) or which is any other company specified by Cabinet Order, shall submit a report to the Prime Minister in which the system specified by Cabinet Office Ordinance as necessary for ensuring the appropriateness of documents and other information related to the financial accounting of the corporate group to which the company belongs and of the company is evaluated pursuant to the provisions of Cabinet Office Ordinance (hereinafter referred to as an "Internal Control Report"), together with its Annual Report (or a Foreign Company Report, if the company submits a Foreign Company Report instead of the Annual Report, etc. set forth in Article 24, paragraph (8), pursuant to that paragraph), pursuant to the provisions of Cabinet Office Ordinance.

(2) A company that is required to submit an Annual Report under Article 24, paragraph (1) but that is not required to submit an Internal Control Report together with an Annual Report pursuant to the preceding paragraph (except a company specified by Cabinet Order), may voluntarily submit the Internal Control Report provided for in the preceding paragraph.

(3) The provisions of the preceding two paragraphs apply mutatis mutandis to a company specified by Cabinet Order that is required to submit an Annual Report under Article 24, paragraph (1) as applied mutatis mutandis pursuant to paragraph (5) of that Article (including a company that has submitted an Annual Report pursuant to Article 23-3, paragraph (4)). In this case, in paragraph (1), the phrase "or any other company specified by Cabinet Order" is deemed to be replaced with "or any other company specified by Cabinet Order (limited to one that is the Issuer of regulated Securities (meaning regulated Securities provided for in Article 5, paragraph (1); hereinafter the same applies in this paragraph)", the term "business year" is deemed to be replaced with "Specified Period (meaning the Specified Period provided for in Article 24, paragraph (1) as applied mutatis mutandis pursuant to Article 24, paragraph (5)) designated for the regulated Securities", the phrase "of the corporate group to which the company belongs and of the company" is deemed to be replaced with "for assets connected with the asset management and other similar business conducted by the company"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(4) A document stating the particulars of the system specified by Cabinet Office Ordinance which is referred to in paragraph (1), and other documents that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, must accompany an Internal Control Report.

(5) The provisions of Article 6 apply mutatis mutandis if an Internal Control Report and accompanying documents are submitted pursuant to paragraph (1) or (2) (including as applied mutatis mutandis pursuant to paragraph (3); hereinafter the same applies in this Article) and the preceding paragraph. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(6) The provisions of Article 24, paragraphs (8), (9), and (11) to (13) inclusive apply mutatis mutandis if a Reporting Foreign Company submits the Internal Control Report under paragraph (1) or (2) of this Article (but only if the Reporting Foreign Company submits Foreign Company Reports). In this case, in Article 24, paragraph (8), the phrase "a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive) (including a foreign company that has submitted an Annual Report pursuant to Article 23-3, paragraph (4); hereinafter referred to as a 'Reporting Foreign Company')" is deemed to be replaced with "a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive)", the phrase "an Annual Report under paragraph (1) and the documents that are required to accompany it pursuant to paragraph (6) (hereinafter collectively referred to as an "Annual Report, etc." in this Article)" is deemed to be replaced with "an Internal Control Report under Article 24-4-4, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-4, paragraph (3)) and documents that are required to accompany it pursuant to Article 24-4-4, paragraph (4) (hereinafter collectively referred to as an 'Internal Control Report, etc.')", and the phrase "similar to an Annual Report, etc., but that has been prepared in English and disclosed in a foreign state (meaning that it is made available for public inspection in the relevant foreign state based on the laws and regulations of that state (including the rules provided by the operator of a foreign Financial Instruments Market or other person specified by Cabinet Office Ordinance); the same applies in Article 24-4-7, paragraph (6) and Article 24-5, paragraph (7))" is deemed to be replaced with "in which it has stated the particulars that are required to be stated in an Internal Control Report, etc."; in Article 24, paragraph (9), the phrase "documents stating the particulars not stated in the Foreign Company Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, and other" is deemed to be replaced with "other"; in Article 24, paragraph (11), the phrase "an Annual Report, etc." is deemed to be replaced with "an Internal Control Report, etc."; and any other necessary technical replacement of terms is specified by Cabinet Order.

(Submission of an Amended Internal Control Report)

Article 24-4-5 (1) The provisions of Article 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to an Internal Control Report and accompanying documents. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in an Internal Control Report or accompanying document changes", the phrase "the person filing the notification" is deemed to be replaced with "the person submitting the Internal Control Report", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 9, paragraph (1), the phrase "the person that submitted it" is deemed to be replaced with "the person that submitted the Internal Control Report" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 10, paragraph (1)), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the person submitting the Internal Control Report" and the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended report"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(2) The provisions of Article 6 apply mutatis mutandis if an amended report is submitted pursuant to Article 7, Article 9, paragraph (1) and Article 10, paragraph (1) as applied mutatis mutandis pursuant to the preceding paragraph in connection with an Internal Control Report or accompanying document. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(3) The provisions of Article 24, paragraphs (8), (9), and (11) apply mutatis mutandis if an amended report is submitted in connection with an Internal Control Report that has been submitted by a foreign company pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1) as applied mutatis mutandis through the replacement of certain terms pursuant to paragraph (1). The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Mutatis Mutandis Application of Provisions on Compensatory Liability)

Article 24-4-6 The provisions of Article 22 apply mutatis mutandis if an Internal Control Report (including any accompanying document) contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in Article 22, paragraph (1), the phrase "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Registration Statement other than through a Public Offering or Secondary Distribution" is deemed to be replaced with "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Internal Control Report (including any amended report in connection with this)", and any other necessary technical replacement of terms is specified by Cabinet Order.

(Submission of Quarterly Reports)

Article 24-4-7 (1) For each three-month period of the business year if the business year is longer than three months (excluding periods specified by Cabinet Order; the same applies hereinafter), a company required to submit an Annual Report set forth in Article 24, paragraph (1) (including a company which submits Annual Reports under Article 23-3, paragraph (4); the same applies in the following paragraph), which is the Issuer of Securities set forth in Article 24, paragraph (1), item (i) or which is any other company specified by Cabinet Order (hereinafter, such a company is referred to as a "Listed Company, etc." in this paragraph and the following paragraph) shall submit a report (hereinafter referred to as a "Quarterly Report") stating the financial condition of the corporate group to which the company belongs and other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (hereinafter referred to as the "Particulars for Inclusion in a Quarterly Report" in this paragraph) to the Prime Minister within the period designated by Cabinet Order but not exceeding 45 days after the three-month period (if there is a compelling reason that the company cannot submit it within such a period, within a period approved in advance by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance). In this, a Listed Company, etc. conducting business specified by Cabinet Office Ordinance shall submit a Quarterly Report stating, in addition to the Particulars for Inclusion in a Quarterly Report, the financial condition of the company and other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors to the Prime Minister within the period specified by Cabinet Order but not exceeding 60 days after the three-month period (if there is a compelling reason that the company cannot submit it within such a period, within a period approved in advance by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance).

(2) A company (other than one specified by Cabinet Order) other than a Listed Company, etc. which is required to submit an Annual Report set forth in Article 24, paragraph (1) may voluntarily submit Quarterly Reports.

(3) The provisions of the preceding two paragraphs apply mutatis mutandis to a company specified by Cabinet Order which is required to submit an Annual Report under Article 24, paragraph (1) as applied mutatis mutandis pursuant to paragraph (5) of that Article (including a company that has submitted an Annual Report under Article 23-3, paragraph (4)). In this case, in paragraph (1), the phrase "specified by Cabinet Order ("is deemed to be replaced with "specified by Cabinet Order (limited to the Issuer of regulated Securities (meaning regulated Securities provided for in Article 5, paragraph (1); hereinafter the same applies in this paragraph);", the phrase "if the business year" is deemed to be replaced with "if the Specified Period (meaning a Specified Period provided for in Article 24, paragraph (1) as applied mutatis mutandis pursuant to Article 24, paragraph (5); hereinafter the same applies in this paragraph) designated for the Securities", the phrase "of the business years" is deemed to be replaced with "of the Specified Period", the phrase "the corporate group to which the company belongs" is deemed to be replaced with "asset management and other similar business conducted by the company", and the phrase "financial condition of the company" is deemed to be replaced with "asset accounting in connection with asset management and other similar business conducted by the company"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(4) The provisions of Articles 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to Quarterly Reports, and Article 22 applies mutatis mutandis if a Quarterly Report or the related amended report contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in a Quarterly Report (meaning a Quarterly Report set forth in Article 24-4-7, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (3); hereinafter the same applies in this Article, Article 9, paragraph (1), Article 11, paragraph (1) and Article 22) changes", the phrase "the person filing the notification" is deemed to be replaced with "the person submitting the Quarterly Report", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 9, paragraph (1), the phrase "the person that submitted it" is deemed to be replaced with "the person that submitted the Quarterly Report" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 10, paragraph (1), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the person submitting the Quarterly Report" and the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended report"; in Article 22, paragraph (1), the phrase "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Registration Statement other than through a Public Offering or Secondary Distribution" is deemed to be replaced with "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Quarterly Report and any amended report"; in Article 22, paragraph (2), the phrase "the preceding paragraph" is deemed to be replaced with "the preceding paragraph as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (4)"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(5) The provisions of Article 6 apply mutatis mutandis if a Quarterly Report is submitted pursuant to paragraph (1) or (2) (including as applied mutatis mutandis pursuant to paragraph (3); the same applies in the following paragraph to paragraph (11) inclusive) or if an amended report is submitted in connection with that Report pursuant to the provisions of Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis pursuant to the preceding paragraph. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(6) In a case that is specified by Cabinet Office Ordinance as one in which this does not damage the public interest or result in insufficient investor protection, instead of the Quarterly Report under paragraph (1), a Reporting Foreign Company that is required to submit a Quarterly Report pursuant to paragraph (1) (including a Reporting Foreign Company and that submits a Quarterly Report pursuant to paragraph (2); hereinafter the same applies in this Article) may submit a document that is similar to a Quarterly Report, but that has been prepared in English and disclosed in a foreign state (such a document is hereinafter referred to as a "Foreign Company Quarterly Report" in this Article).

(7) A Japanese translation of the summary of the particulars stated in a Foreign Company Quarterly Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, as well as the documents stating the particulars not stated in the Foreign Company Quarterly Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors and other documents specified by Cabinet Office Ordinance (such documents are hereinafter collectively referred to as "Supplementary Documents" in this Article) must accompany the Foreign Company Quarterly Report, pursuant to the provisions of Cabinet Office Ordinance.

(8) If a Reporting Foreign Company submits a Foreign Company Quarterly Report and Supplementary Documents pursuant to the preceding two paragraphs, the Foreign Company Quarterly Report and Supplementary Documents are deemed to be a Quarterly Report, the submission of the former is deemed to be the submission of the latter, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(9) If the Prime Minister finds that a Reporting Foreign Company that submitted a Foreign Company Quarterly Report does not satisfy the requirements for being allowed to submit the Foreign Company Quarterly Report referred to in paragraph (6), the Prime Minister must notify the Reporting Foreign Company of this. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(10) Notwithstanding the provisions of paragraph (1), if a Reporting Foreign Company receives a notice under the preceding paragraph, it must submit a Quarterly Report under paragraph (1) within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors, with the day on which the notice is made as the first day for the calculation of that period.

(11) The provisions of paragraphs (6) to (8) inclusive apply mutatis mutandis if an amended report is submitted to amend a Foreign Company Quarterly Report that has been submitted by a Reporting Foreign Company pursuant to the provisions of Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis through the replacement of certain terms pursuant to paragraph (4), or to amend its Supplementary Documents. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(12) If, pursuant to the provisions of Cabinet Office Ordinance, a company that is required to submit a Quarterly Report pursuant to paragraph (1) (limited to as applied mutatis mutandis pursuant to paragraph (3); hereinafter the same applies in this Article) (including a company that submits the Quarterly Report under paragraph (2) (limited to as applied mutatis mutandis pursuant to paragraph (3))) submits the documents stating a part of the particulars specified by Cabinet Office Ordinance under paragraph (1) (limited to documents prepared based on laws and regulations or the rules of a Financial Instruments Exchange (including anything specified by Cabinet Office Ordinance as being similar to such rules); such documents are hereinafter referred to as "Documents Substituted for Part of a Quarterly Report" in this paragraph and the following paragraph) together with a Quarterly Report to the Prime Minister, with regard to the application of paragraph (1) to a case in which a company receives the acknowledgement of the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, as one whose doing so does not damage the public interest or result in insufficient investor protection, in paragraph (1), the phrase "other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors" is deemed to be replaced with "other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (excluding particulars stated in Documents Substituted for Part of the Quarterly Report as defined in paragraph (12))".

(13) If Documents Substituted for Part of a Quarterly Report are submitted together with the Quarterly Report referred to in paragraph (1) as it applies through the replacement of certain terms pursuant to the preceding paragraph, the Documents Substituted for Part of the Quarterly Report are deemed to form a part of the Quarterly Report, the submission of the Documents Substituted for Part of the Quarterly Report is deemed to be the submission of the Documents Substituted for Part of the Quarterly Report as a part of the Quarterly Report, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(Mutatis Mutandis Application of Provisions Concerning Confirmation Letters to Quarterly Reports)

Article 24-4-8 (1) The provisions of Article 24-4-2 apply mutatis mutandis if a Quarterly Report is submitted pursuant to paragraph (1) or (2) of the preceding Article (including as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (3)) or if an amended report is submitted pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1) as applied mutatis mutandis through the replacement of certain terms pursuant to Article 24-4-7, paragraph (4). In this case, in Article 24-4-2, paragraph (1), the phrase "the content of statements in the Annual Report" is deemed to be replaced with "the content of statements in the Quarterly Report (including any amended report in connection with this; hereinafter the same applies in this Article)", the phrase "Foreign Company Report instead of the Annual Report, etc." is deemed to be replaced with "Foreign Company Quarterly Report instead of the Quarterly Report", and the phrase "or a Foreign Company Report" is deemed to be replaced with "or a Foreign Company Quarterly Report"; in Article 24-4-2, paragraph (2), the phrase "together with an Annual Report" is deemed to be replaced with "together with a Quarterly Report"; in Article 24-4-2, paragraph (6) the phrase "a Confirmation Letter under Article 24-4-2, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4)) or Article 24-4-2, paragraph (4))" is deemed to be replaced with "a Confirmation Letter under Article 24-4-2, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4)) or Article 24-4-2, paragraph (4)) as applied mutatis mutandis through the replacement of certain terms pursuant to Article 24-4-8"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(2) The provisions of Article 24-4-3 apply mutatis mutandis if an amended Confirmation Letter is submitted for a Confirmation Letter that has been submitted pursuant to the preceding paragraph. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Submission of Semiannual Reports and Ad Hoc Reports)

Article 24-5 (1) If the business year of a company that is required to submit the Annual Report set forth in Article 24, paragraph (1) (including one that has submitted an Annual Report under Article 23-3, paragraph (4); the same applies in paragraph (4)) but that is not required to submit the Quarterly Report under Article 24-4-7, paragraph (1) (including one that has submitted the Quarterly Report under Article 24-4-7, paragraph (2); the same applies in paragraph (3)) is longer than six months, that company must submit, pursuant to the provisions of Cabinet Office Ordinance, a report for each business year stating financial condition of the corporate group to which it belongs and its own financial condition, other material particulars of the company's business, and other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors in connection with the first six months of the relevant business year (such a report is hereinafter referred to as a "Semiannual Report") to the Prime Minister within three months after the end of the first six months (if there is a compelling reason that the company cannot submit it within such period, within the period approved in advance by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance).

(2) Unless it falls under any of the categories of persons specified in the following items, a company submitting or seeking to submit an Annual Report under Article 24, paragraph (1) that states the particulars specified in paragraph (2) of that Article, may state the particulars set forth in the preceding paragraph that are specified by Cabinet Office Ordinance as being relevant to that company, instead of stating all of the particulars set forth in the preceding paragraph, in the Semiannual Report that it is required to submit pursuant to the preceding paragraph:

(i) a person that has already submitted an Annual Report stating the particulars specified in the main clause of Article 24, paragraph (1) or a Semiannual Report stating the particulars specified in the preceding paragraph; and

(ii) a person that has submitted or is required to submit a statement under Article 5, paragraph (1) stating the particulars set forth in Article 5, paragraph (1), item (ii) for a Public Offering or Secondary Distribution of Securities to which the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3) applies (excluding a person set forth in the preceding item).

(3) The provisions of the preceding two paragraphs apply mutatis mutandis to a company that is required to submit the Annual Report under Article 24, paragraph (1) as applied mutatis mutandis pursuant to paragraph (5) of that Article (including a company that submits the Annual Report under Article 23-3, paragraph (4); the same applies in the following paragraph and paragraph (15)) but that is not required to submit the Quarterly Report under Article 24-4-7, paragraph (1) as applied mutatis mutandis pursuant to paragraph (3) of that Article. In this case, in paragraph (1), the phrase "of a company that is required" is deemed to be replaced with "of a company (limited to the Issuer of regulated Securities (meaning regulated Securities as defined in Article 5, paragraph (1); hereinafter the same applies in this paragraph and the following paragraph)) that is required", the term "the business year" is deemed to be replaced with "the Specified Period (meaning a Specified Period provided for in Article 24, paragraph (1) as applied mutatis mutandis pursuant to paragraph (5) of that Article; hereinafter the same applies in this paragraph) designated for the regulated Securities", the phrase "for each business year" is deemed to be replaced with "for each Specified Period", the phrase "the relevant business year" is deemed to be replaced with "the relevant Specified Period", and the phrase "financial condition of the corporate group to which it belongs and its own financial condition, other material particulars of the company's business" is deemed to be replaced with "asset accounting in connection with asset management and other similar business conducted by the company, other material particulars of the company's assets"; and in paragraph (2), the term "of Securities" is deemed to be replaced with "of regulated Securities".

(4) If a Public Offering or Secondary Distribution of Securities issued by a company that is required to submit the Annual Report under Article 24, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24, paragraph (5)) is conducted in a foreign state or in other cases that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, said company, pursuant to the provisions of Cabinet Office Ordinance, must submit a report stating the details of it (hereinafter referred to as an "Ad Hoc Report") to the Prime Minister without delay.

(5) The provisions of Article 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to Semiannual Reports and Ad Hoc Reports, and the provisions of Article 22 apply mutatis mutandis if a Semiannual Report, Ad Hoc Report, or any amended report in connection with either of these contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in a Semiannual Report (meaning a Semiannual Report as set forth in Article 24-5, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24-5, paragraph (3)); hereinafter the same applies in this Article, Article 9, paragraph (1), Article 10, paragraph (1), and Article 22) or an Ad Hoc Report (meaning an Ad Hoc Report as set forth in Article 24-5, paragraph (4); hereinafter the same applies in this Article, Article 9, paragraph (1), Article 10, paragraph (1), and Article 22) changes", the phrase "the person filing the notification" is deemed to be replaced with "the person submitting the Semiannual Report or Ad Hoc Report", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 9, paragraph (1), the phrase "the person that submitted it" is deemed to be replaced with "the person that submitted the Semiannual Report or Ad Hoc Report" and the phrase "amended statement" is deemed to be replaced with "amended report"; in Article 10, paragraph (1), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the person submitting the Semiannual Report or Ad Hoc Report"; in Article 10, paragraph (1), the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended report"; in Article 22, paragraph (1), the phrase "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Registration Statement other than through a Public Offering or Secondary Distribution" is deemed to be replaced with "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Semiannual Report or Ad Hoc Report, or any amended report in connection with these"; and in Article 22, paragraph (2), the phrase "the preceding paragraph" is deemed to be replaced with "the preceding paragraph as applied mutatis mutandis pursuant to Article 24-5, paragraph (5)".

(6) The provisions of Article 6 apply mutatis mutandis if a Semiannual Report or Ad Hoc Report is submitted pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (3); the same applies in the following paragraph to paragraph (12) inclusive) or paragraph (4) and an amended report is submitted in connection with it pursuant to the provisions of Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis pursuant to the preceding paragraph.

(7) In a case that is specified by Cabinet Office Ordinance as one in which this does not damage the public interest or result in insufficient investor protection, instead of a Semiannual Report under paragraph (1), a Reporting Foreign Company that is required to submit a Semiannual Report pursuant to paragraph (1) may submit a document that is similar to a Semiannual Report, but that has been prepared in English and disclosed in a foreign state (such documents are hereinafter referred to as a "Foreign Company Semiannual Report" in this Article).

(8) A Japanese translation of the summary of the particulars stated in a Foreign Company Semiannual Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, as well as documents stating the particulars not stated in a Foreign Company Semiannual Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, and other documents that are specified by Cabinet Office Ordinance (such documents are hereinafter collectively referred to as "Supplementary Documents" in this Article) must accompany a Foreign Company Semiannual Report, pursuant to the provisions of Cabinet Office Ordinance.

(9) If a Reporting Foreign Company submits a Foreign Company Semiannual Report and Supplementary Documents pursuant to the preceding two paragraphs, the Foreign Company Semiannual Report and Supplementary Documents are deemed to be a Semiannual Report, the submission of the former is deemed to be the submission of the latter, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(10) If the Prime Minister finds that a Reporting Foreign Company that has submitted a Foreign Company Semiannual Report does not satisfy the requirements for being allowed to submit a Foreign Company Semiannual Report under paragraph (7), the Prime Minister must notify the Reporting Foreign Company of this. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(11) Notwithstanding the provisions of paragraph (1), if a Reporting Foreign Company receives a notice under the preceding paragraph, it must submit a Semiannual Report under paragraph (1) within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors, with the day on which the notice is made as the first day for the calculation of that period.

(12) The provisions of paragraphs (7) to (9) inclusive apply mutatis mutandis if an amended report is submitted to amend a Foreign Company Semiannual Report and Supplementary Documents for it that has have submitted by a Reporting Foreign Company pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis through the replacement of certain terms pursuant to paragraph (5).

(13) If, pursuant to the provisions of Cabinet Office Ordinance, a company that is required to submit the Semiannual Report under paragraph (1) (limited to as applied mutatis mutandis pursuant to paragraph (3); hereinafter the same applies in this paragraph and following paragraph) submits the documents stating a part of the particulars specified by Cabinet Office Ordinance under paragraph (1) (limited to documents prepared based on laws and regulations or the rules of a Financial Instruments Exchange (including anything specified by Cabinet Office Ordinance as being similar to such rules); such documents are hereinafter referred to as "Documents Substituted for Part of a Semiannual Report" in this paragraph and the following paragraph) together with a Semiannual Report to the Prime Minister, with regard to the application of paragraphs (1) and (2) to cases in which a company receives the acknowledgement of the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, as one whose doing so does not damage the public interest or result in insufficient investor protection, in paragraph (1), the phrase "other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors" is deemed to be replaced with "other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (excluding particulars stated in Documents Substituted for Part of a Semiannual Report as defined in paragraph (13))" and in paragraph (2), the term "the particulars set forth in the preceding paragraph" is deemed to be replaced with "the particulars set forth in the preceding paragraph (excluding particulars stated in the Documents Substituted for Part of a Semiannual Report as defined in paragraph (13))".

(14) If Documents Substituted for Part of a Semiannual Report are submitted together with the Semiannual Report referred to in paragraph (1) as it applies through the replacement of certain terms pursuant to the preceding paragraph, the Documents Substituted for Part of the Semiannual Report are deemed to form a part of the Semiannual Report, the submission of the Documents Substituted for Part of the Semiannual Report is deemed to be the submission of the Documents Substituted for Part of the Semiannual Report as a part of the Semiannual Report, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(15) If, pursuant to the provisions of Cabinet Office Ordinance, a company that is required to submit an Ad Hoc Report pursuant to paragraph (4) (limited to a company that is required to submit the Annual Report under Article 24, paragraph (1) as applied mutatis mutandis pursuant to Article 24, paragraph (5)) submits documents stating a part of the contents that are required to be stated in an Ad Hoc Report set forth in paragraph (4) (limited to documents prepared based on laws and regulations or rules of a Financial Instruments Exchange (including anything specified by Cabinet Office Ordinance as being similar to such rules); such documents are hereinafter referred to as "Documents Substituted for Part of an Ad Hoc Report" in this paragraph and the following paragraph) together with an Ad Hoc Report to the Prime Minister, with regard to the application of paragraph (4) to cases in which a company receives the acknowledgement of the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, as one whose doing so does not damage the public interest or result in insufficient investor protection, in paragraph (4), the phrase "a report stating the details of it" is deemed to be replaced with "a report stating the details of it (excluding the details stated in Documents Substituted for Part of an Ad Hoc Report as defined in paragraph (15)".

(16) If Documents Substituted for Part of an Ad Hoc Report are submitted together with the Ad Hoc Report referred to in paragraph (4) as it applies through the replacement of certain terms pursuant to the preceding paragraph, the Documents Substituted for Part of the Ad Hoc Report are deemed to form a part of the Ad Hoc Report, the submission of the Documents Substituted for Part of the Ad Hoc Report is deemed to be the submission of the Documents Substituted for Part of the Ad Hoc Report as a part of the Ad Hoc Report, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(Mutatis Mutandis Application of Provisions on Confirmation Letters to Semiannual Reports)

Article 24-5-2 (1) The provisions of Article 24-4-2 apply mutatis mutandis if a Semiannual Report is submitted pursuant to paragraph (1) of the preceding Article (including as applied mutatis mutandis pursuant to Article 24-5, paragraph (3)) or if an amended report is submitted pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis through the replacement of certain terms pursuant to Article 24-5, paragraph (5). In this case, in Article 24-4-2, paragraph (1), the phrase "a Foreign Company Report" is deemed to be replaced with "a Foreign Company Semiannual Report", the phrase "Foreign Company Report instead of the Annual Report, etc." is deemed to be replaced with "Foreign Company Semiannual Report instead of the Semiannual Report", and the phrase "the content of statements in the Annual Report" is deemed to be replaced with "the content of statements in the Semiannual Report (including any amended report in connection with this; hereinafter the same applies in this Article)"; in Article 24-4-2, paragraph (2), the phrase "together with an Annual Report" is deemed to be replaced with "together with a Semiannual Report"; in Article 24-4-2, paragraph (6), the phrase "a Confirmation Letter under Article 24-4-2, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4)) or Article 24-4-2, paragraph (4))" is deemed to be replaced with "a Confirmation Letter under Article 24-4-2, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4)) or Article 24-4-2, paragraph (4)) as applied mutatis mutandis through the replacement of certain terms pursuant to Article 24-5-2"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(2) The provisions of Article 24-4-3 apply mutatis mutandis if an amended Confirmation Letter is submitted for a Confirmation Letter that has been submitted pursuant to the preceding paragraph. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Submission of Reports on Repurchase)

Article 24-6 (1) If a resolution of shareholders meeting or a resolution of board of directors set forth in Article 156, paragraph (1) of the Companies Act (including as it applies through the replacement of certain terms pursuant to Article 165, paragraph (3) of that Act) has been adopted, a company that has issued share certificates that are listed on a Financial Instruments Exchange, share certificates specified by Cabinet Order as having equivalent distribution statuses to share certificates listed on a Financial Instruments Exchange, or other Securities specified by Cabinet Order (hereinafter collectively referred to as "Listed Share Certificates, etc." in this Article, Articles 27-22-2 to 27-22-4 inclusive, and Article 167) must submit a report that, pursuant to the provisions of Cabinet Office Ordinance, states the particulars of the status of any repurchase of the Listed Share Certificates, etc. of which it is the Issuer, that it conducts based on the resolution of the shareholders or board of directors (hereinafter referred to as the "Shareholders, etc." in this paragraph), during each month from the month that includes the day on which the Shareholders, etc. resolution is adopted to the month that includes the day on which the period set forth in Article 156, paragraph (1), item (iii) of that Act expires (each month is referred to as a "Reporting Month" in this paragraph) (including if no buyback is conducted) and other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors to the Prime Minister by the 15th day of the month following each Reporting Month.

(2) The provisions of Article 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to a report set forth in the preceding paragraph (hereinafter referred to as a "Report on Repurchase"), and the provisions of Article 22 apply mutatis mutandis if a Report on Repurchase contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in a Report on Repurchase (meaning a report set forth in Article 24-6, paragraph (1); hereinafter the same applies in this Article, Article 9, paragraph (1), Article 10, paragraph (1), and Article 22) changes", the phrase "the person filing the notification" is deemed to be replaced with "the person submitting the Report on Repurchase", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 9, paragraph (1) the phrase "the person that submitted it" is deemed to be replaced with "the person that submitted the Report on Repurchase" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 10, paragraph (1), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the person submitting the Report on Repurchase" and the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended report"; in Article 22, paragraph (1), the phrase "persons set forth in Article 21, paragraph (1), items (i) and (iii)" is deemed to be replaced with "person that, at the time of submission of the Report on Repurchase, is an officer of the company that submitted that Report", and the phrase "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Registration Statement other than through a Public Offering or Secondary Distribution" is deemed to be replaced with "a person that, without knowing that the statement is false or has been omitted, acquires Securities issued by the person submitting the Report on Repurchase"; and in Article 22, paragraph (2), the phrase "Article 21, paragraph (2), items (i) and (ii)" is deemed to be replaced with "Article 21, paragraph (2), item (i)" and the phrase "the preceding paragraph" is deemed to be replaced with "the preceding paragraph as applied mutatis mutandis pursuant to Article 24-6, paragraph (2)".

(3) The provisions of Article 6 apply mutatis mutandis if a Report on Repurchase is submitted pursuant to paragraph (1) and if an amended report is submitted in connection with a Report on Repurchase, pursuant to Article 7, Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis pursuant to the preceding paragraph.

(Submission of a Parent Company, etc. Status Report)

Article 24-7 (1) A company that holds the majority of voting rights in a company that is required to submit an Annual Report pursuant to Article 24, paragraph (1) (but only one that is the Issuer of Securities set forth in Article 24, paragraph (1), item (i) or (ii); such a company is referred to as a "Subsidiary Company Submitting an Annual Report" in paragraph (4) of this Article, paragraph (5) of the following Article and Article 27-30-10), or which is otherwise specified by Cabinet Order as being closely related to a company that is required to submit an Annual Report (excluding a company that is required to submit an Annual Report pursuant to Article 24, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24, paragraph (5); the same applies in the items of paragraph (4) of this Article) (including a company that has submitted an Annual Report pursuant to Article 23-3, paragraph (4) or that is otherwise specified by Cabinet Office Ordinance); hereinafter, a company that holds the majority of voting rights in, or is otherwise closely related to, such a company, is referred to as a "Parent Company, etc." in this Article and paragraphs (2), (4) and (5) of the following Article) shall submit a report that, pursuant to the provisions of Cabinet Office Ordinance, states the particulars of persons that hold shares in the Parent Company, etc. and other particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, for each business year of the Parent Company, etc. (or for each period specified by Cabinet Office Ordinance, if the Parent Company, etc. is an Issuer of regulated Securities; hereinafter the same applies in this paragraph and the following paragraph) (hereinafter referred to as a "Parent Company, etc. Status Report") to the Prime Minister within three months after the end of each business year (or, if the Parent Company, etc. is a foreign company, within the period that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors); provided, however, that this does not apply if a company receives the acknowledgement of the Prime Minister, pursuant to the provisions of Cabinet Order, as a company whose non-submission of a Parent Company, etc. Status Report does not damage the public interest or result in insufficient investor protection.

(2) If a company that is excluded from the application of the main clause of the preceding paragraph becomes a Parent Company, etc., the company that has become a Parent Company, etc. must submit a Parent Company, etc. Status Report to the Prime Minister without delay, pursuant to the provisions of Cabinet Office Ordinance, for the business year immediately prior to the business year that includes the day on which the company becomes a Parent Company, etc.; provided, however, that this does not apply if the company has received the acknowledgment of the Prime Minister, pursuant to the provisions of Cabinet Order, as a company whose non-submission of a Parent Company, etc. Status Report does not damage the public interest or result in insufficient investor protection.

(3) The provisions of Article 7, Article 9, paragraph (1), and Article 10, paragraph (1) apply mutatis mutandis to a Parent Company, etc. Status Report. In this case, in Article 7, the phrase "If, on or after the day on which a notification under Article 4, paragraphs (1) to (3) inclusive is filed and before the day on which that notification comes into effect, a material particular that is required to be stated in a statement or other document under Article 5, paragraph (1) or paragraph (6) changes" is deemed to be replaced with "If a material particular that is required to be stated in a Parent Company, etc. Status Report (meaning a Parent Company, etc. Status Report as provided for in Article 24-7, paragraph (1); the same applies hereinafter) changes", the phrase "the person filing the notification" is deemed to be replaced with "the person submitting the Parent Company, etc. Status Report", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 9, paragraph (1) the phrase "the person that submitted it" is deemed to be replaced with "the person submitting the Parent Company, etc. Status Report" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 10, paragraph (1)), the phrase "the person submitting the Registration Statement" is deemed to be replaced with "the person submitting the Parent Company, etc. Status Report" and the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended report"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(4) A Parent Company, etc. that has submitted a Parent Company, etc. Status Report pursuant to the main clause of paragraph (1) or the main clause of paragraph (2), or that has submitted an amended report in connection with a Parent Company, etc. Status Report pursuant to Article 7, Article 9, paragraph (1), or Article 10, paragraph (1), as applied mutatis mutandis pursuant to the preceding paragraph, shall send a copy of it to the Subsidiary Company Submitting Annual Reports without delay, and shall also submit a copy of it to the person specified in the relevant of following items for the category of Securities set forth in said item that were issued by the Subsidiary Company Submitting Annual Reports:

(i) Securities set forth in Article 24, paragraph (1), item (i): the Financial Instruments Exchange referred to in Article 24, paragraph (1), item (i); or

(ii) Securities set forth in Article 24, paragraph (1), item (ii): the Authorized Financial Instruments Business Association specified by Cabinet Order.

(5) The provisions of Article 24, paragraphs (8), (9), and (11) to (13) inclusive apply mutatis mutandis if a Parent Company, etc. that is a foreign company submits a Parent Company, etc. Status Report. In this case, in Article 24, paragraph (8), the phrase "a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive) (including a foreign company that has submitted an Annual Report pursuant to Article 23-3, paragraph (4); hereinafter referred to as a 'Reporting Foreign Company')" is deemed to be replaced with "a Parent Company, etc. (meaning Parent Company, etc. as defined by Article 24-7, paragraph (1); hereinafter the same applies in this Article) which is a foreign company that is required to submit an Annual Report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph to paragraph (13) inclusive)" and the phrase "similar to an Annual Report, etc., but that has been prepared in English and disclosed in a foreign state (meaning that it is made available for public inspection in the relevant foreign state based on the laws and regulations of that state (including the rules provided by the operator of a foreign Financial Instruments Market or other person specified by Cabinet Office Ordinance); the same applies in Article 24-4-7, paragraph (6) and Article 24-5, paragraph (7))" is deemed to be replaced with "in which it has stated the particulars that are required to be stated in the Parent Company, etc. Status Report"; in Article 24, paragraph (9), the phrase "documents stating the particulars not stated in the Foreign Company Report that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors, and other" is deemed to be replaced with "other"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(6) The provisions of the preceding paragraphs apply mutatis mutandis if the Parent Company, etc. is a person other than a company. In this case, in paragraph (1), the phrase "A company that holds the majority of voting rights" is deemed to be replaced with "A person that is other than a company and that holds the majority of voting rights", the phrase "which is otherwise specified by Cabinet Order as being closely related to" is deemed to be replaced with "that is otherwise specified by Cabinet Order as being a person that is other than a company and that is closely related to", and the phrase "persons that hold shares in the Parent Company, etc." is deemed to be replaced with "equity investors in the Parent Company, etc. and other persons"; in paragraph (2), the term "company" is deemed to be replaced with "person that is other than a company and"; in the preceding paragraph the phrase "that is a foreign company" is deemed to be replaced with "that is a foreign person"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(Public Inspection of Registration Statements, etc.)

Article 25 (1) The Prime Minister shall make the documents set forth in each of the following items (hereinafter referred to as "Public Documents" in this Article and the following Article) available for public inspection pursuant to the provisions of Cabinet Office Ordinance, for the period specified in the relevant item from the day on which the Prime Minister receives the Public Document (or for an amended statement, Amended Shelf Registration Statement, amended report, or amended Confirmation Letter set forth in one of the following items, the period specified in the relevant item from the day on which the Prime Minister receives the statement and accompanying documents under Article 5, paragraphs (1) and (6), the statement and accompanying documents to which Article 5, paragraph (4) is applicable, or the Shelf Registration Statement and accompanying documents, Annual Report and accompanying documents, Confirmation Letter, Internal Control Report and accompanying documents, Quarterly Report, Semiannual Report, Ad Hoc Report, Report on Repurchase, or Parent Company, etc. Status Report subject to that amendment; and for a Confirmation Letter set forth in item (v) or (ix) (but only if the subject of the Confirmation Letter is an amended report connected with an Annual Report and accompanying documents, an amended report connected with a Quarterly Report, or an amended report connected with a Semiannual Report), the period specified in the relevant item from the day on which the Prime Minister receives the Annual Report and accompanying documents, Quarterly Report, or Semiannual Report that is subject to that amendment):

(i) a statement and accompanying documents under Article 5, paragraphs (1) and (6), as well as any amended statement connected with them (excluding a statement and accompanying documents or amended statement connected with them, to which Article 5, paragraph (4) is applicable): five years;

(ii) a statement and accompanying documents, as well as any amended statement connected with them, to which Article 5, paragraph (4) is applicable: one year;

(iii) a Shelf Registration Statement and accompanying documents or Shelf Registration Supplements and accompanying documents, as well as any Amended Shelf Registration Statement connected with them: until the Shelf Registration Statement ceases to be effective;

(iv) an Annual Report and accompanying documents, as well as any amended report connected with them: five years;

(v) a Confirmation Letter under Article 24-4-2 and any amended Confirmation Letter connected with it: five years;

(vi) an Internal Control Report and accompanying documents, as well as any amended report connected with them: five years;

(vii) a Quarterly Report and any amended report connected with it: three years;

(viii) a Semiannual Report and any amended report connected with it: three years;

(ix) a Confirmation Letter under Article 24-4-2 as applied mutatis mutandis pursuant to Article 24-4-8 or Article 24-5-2, and any amended Confirmation Letter connected with it: three years;

(x) an Ad Hoc Report and any amended report connected with it: one year;

(xi) a Report on Repurchase and any amended report connected with it: one year; and

(xii) a Parent Company, etc. Status Report and any amended report connected with it: five years.

(2) An Issuer of Securities that has submitted a document set forth in one of the items (i) to (xi) inclusive of the preceding paragraph, or an Issuer of Securities whose Parent Company, etc. has submitted the document set forth in item (xii) of the preceding paragraph, shall keep a copy of such document at its head office and principal branch offices, and make the document available for public inspection for the period from the day on which the document is submitted to the Prime Minister to the day on which the period specified in the relevant item of the preceding paragraph has elapsed, pursuant to the provisions of Cabinet Office Ordinance.

(3) Pursuant to the provisions of Cabinet Office Ordinance, Financial Instruments Exchanges and the Authorized Financial Instruments Business Associations specified by Cabinet Order shall keep copies of the documents submitted pursuant to Article 6 (including as applied mutatis mutandis pursuant to Article 12; Article 23-12, paragraph (1); Article 24, paragraph (7); Article 24-2, paragraph (3); Article 24-4-2, paragraph (5) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (1) and Article 24-5-2, paragraph (1)); Article 24-4-3, paragraph (2) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (2) and Article 24-5-2, paragraph (2)); Article 24-4-4, paragraph (5); Article 24-4-5, paragraph (2); Article 24-4-7, paragraph (5); Article 24-5, paragraph (6); and Article 24-6, paragraph (3); the same applies in paragraph (5)) and paragraph (4) of the preceding Article at their office, and make copies of the Public Documents available for public inspection for the period from the day on which the copies of these documents are submitted to the day on which the period specified in the relevant item of paragraph (1) has elapsed.

(4) Notwithstanding the provisions of the preceding three paragraphs, if, due to a need to maintain the confidentiality of a trade secret, an Issuer of Securities that has submitted a document set forth in one of items (i) to (x) inclusive of paragraph (1), or a Parent Company, etc. that has submitted a document set forth in item (xii) of that paragraph, files a petition with the Prime Minister for a part of the documents referred to in the preceding three paragraphs not to be made available for public inspection and the Prime Minister approves it, that part of the documents is not to be made available for public inspection.

(5) When an Issuer of Securities or Parent Company, etc. that has obtained the approval referred to in the preceding paragraph sends a copy of a Public Document to a Subsidiary Company Submitting Annual Reports or submits a copy of such documents to a Financial Instruments Exchange or to an Authorized Financial Instruments Business Association specified by Cabinet Order pursuant to Article 6 or paragraph (4) of the preceding Article, before sending or submitting the copy of such documents, it may remove or delete from them the part that, pursuant to the preceding paragraph, it has been decided will not be made available for public inspection.

(6) Notwithstanding the provisions of paragraph (1), if the Prime Minister issues one of the following dispositions, the Prime Minister may decide that all or part of the Public Documents that are connected with the disposition are not to be made available for public inspection:

(i) an order to submit an amended statement under the provisions of Article 9, paragraph (1) or Article 10, paragraph (1);

(ii) an order to submit an Amended Shelf Registration Statement under Article 23-9, paragraph (1) or Article 23-10, paragraph (1), or under Article 23-10, paragraph (1) as applied mutatis mutandis pursuant to Article 23-10, paragraph (5);

(iii) an order to submit an amended report under Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis pursuant to Article 24-2, paragraph (1); Article 24-4-5, paragraph (1); Article 24-4-7, paragraph (4); Article 24-5, paragraph (5); Article 24-6, paragraph (2); or paragraph (3) of the preceding Article (including as applied mutatis mutandis pursuant to paragraph (6) of that Article); or

(iv) an order to submit an amended Confirmation Letter under Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis pursuant to Article 24-4-3, paragraph (1).

(7) In the case referred to in the preceding paragraph, the Prime Minister is to notify a person that makes copies of Public Documents available for public inspection pursuant to paragraph (2) (or the person submitting such Public Documents and the person that makes copies of them available for public inspection, if the Public Documents comprise a Parent Company, etc. Status Report or an amended report in connection with one; such a person is referred to as the "Submitter, etc." in the following paragraph), as well as the Financial Instruments Exchange or the Authorized Financial Instruments Business Association specified by Cabinet Order which is referred to in paragraph (3), which makes copies of those Public Documents available for public inspection pursuant to the provisions of paragraph (3), that the Prime Minister has decided that all or part of those Public Documents will not be made available for public inspection.

(8) If the Submitter, etc. or a Financial Instruments Exchange or Authorized Financial Instruments Business Association has been notified by the Prime Minister pursuant to the provisions of the preceding paragraph, the provisions of paragraphs (2) and (3) do not apply thereafter to the copies of the Public Documents for which the notice was made.

(Collection of Reports and Inspection of a Person Submitting a Registration Statement, etc.)

Article 26 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a person that has submitted Public Documents, a person that is found to be required to submit such documents, an Underwriter of Securities, or any other concerned party or witnesses, to submit reports or materials that should serve as a reference, and may have the relevant officials inspect that person's books and documents or any other articles.

(Mutatis Mutandis Application of Provisions for an Issuer That Is Not a Company)

Article 27 The provisions of Article 2-2; Articles 5 to 13 inclusive; Articles 15 to 24-5-2 inclusive; and Article 24-7 to the preceding Article inclusive apply mutatis mutandis if the Issuer is a person other than a company (with regard to the mutatis mutandis application of Article 24, paragraphs (8) to (13) inclusive; Article 24-2, paragraph (4); Article 24-4-2, paragraph (6) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (1) and Article 24-5-2, paragraph (1)); Article 24-4-3, paragraph (3); Article 24-4-4, paragraph (6); Article 24-4-5, paragraph (3); Article 24-4-7, paragraphs (6) to (11) inclusive; and Article 24-5, paragraphs (7) to (12) inclusive, this is limited to if the Issuer is a foreign person). In this case, in Article 24, paragraph (8), the phrase "a foreign company that is required to submit" is deemed to be replaced with "a foreign person other than a company which is required to submit"; in Article 24, paragraphs (8) and (10) to (13) inclusive; Article 24-2, paragraph (4); Article 24-4-7, paragraphs (6) and (8) to (11) inclusive; and Article 24-5, paragraphs (7) and (9) to (12) inclusive, the phrase "Reporting Foreign Company" is deemed to be replaced with "Reporting Foreign Person"; and any other necessary technical replacement of terms or other necessary particulars relevant to the application of these provisions is specified by Cabinet Order.

Chapter II-2 Disclosure in a Tender Offer

Section 1 Tender Offers for Share Certificates, etc. by Persons Other than the Issuer

(Tender Offers for Share Certificates, etc. by Persons Other than the Issuer)

Article 27-2 (1) Any purchase, etc. of share certificates, corporate bond certificates with share options, or other Securities specified by Cabinet Order (hereinafter collectively referred to as "Share Certificates, etc." in this Chapter and Article 27-30-11 (excluding Article 27-30-11, paragraph (4))) (a purchase, etc. means a purchase or other acquisition for compensation of Share Certificates, etc., and includes acts specified by Cabinet Order as being similar to this; hereinafter the same applies in this Section) whose Issuer is required to submit an Annual Report, or of the Share Certificates, etc. of an Issuer of Specified Listed Securities (including those specified by Cabinet Order as having equivalent distribution statuses to these, and limited to Share Certificates, etc.), which is effected by a person other than the Issuer and which falls under any of the categories set forth in the following items, must be effected by means of a Tender Offer; provided, however, that this does not apply to a purchase, etc. of Share Certificates, etc. that the holder of share options effects by exercising those share options, to a purchase, etc. of Share Certificates, etc. that the person effecting the purchase, etc. makes from its Specially Related Party (limited to a person set forth in paragraph (7), item (i) and specified by Cabinet Office Ordinance), or to any other purchase, etc. of Share Certificates, etc. that is specified by Cabinet Order:

(i) a purchase, etc. of Share Certificates, etc. outside a Financial Instruments Exchange Market (excluding a purchase, etc. of Share Certificates, etc. effected through a transaction specified by Cabinet Order as being equivalent to the purchase and sale, etc. of Securities on a Financial Instruments Exchange Market and excluding a purchase, etc. of Share Certificates, etc. that is specified by Cabinet Order as a purchase, etc. made from an extremely small number of persons), if after that purchase, etc. the Ownership Ratio of Share Certificates, etc., in terms of the Share Certificates, etc. that the relevant person holds (including cases specified by Cabinet Order as equivalent to holding them; hereinafter the same applies in this Section) (or, if the person has any Specially Related Parties (other than Specially Related Parties specified in paragraph (7), item (i) and specified by Cabinet Office Ordinance), the Ownership Ratio of Share Certificates, etc. calculated by adding the Ownership Ratio of Share Certificates, etc. of the Specially Related Parties to that of the person; hereinafter the same applies in this paragraph), exceeds five percent;

(ii) a purchase, etc. of Share Certificates, etc. outside a Financial Instruments Exchange Market (excluding a purchase, etc. of Share Certificates, etc. effected through a transaction specified by Cabinet Order as being equivalent to the purchase and sale, etc. of Securities on a Financial Instruments Exchange Market; the same applies in item (iv)) which falls under the category of a purchase, etc. of Share Certificates, etc. that is specified by Cabinet Order as a purchase, etc. made from an extremely small number of persons, if after that purchase, etc. the Ownership Ratio of Share Certificates, etc., in terms of the Share Certificates, etc. that the relevant person holds, exceeds one third;

(iii) a purchase, etc. of Share Certificates, etc. through a purchase and sale, etc. of Securities on a Financial Instruments Exchange Market which is specified by the Prime Minister as being a purchase and sale, etc. of Securities based on a method other than an auction method (such a purchase and sale, etc. of Securities is hereinafter referred to as a "Specified Purchase and Sale, etc." in this paragraph), if after that purchase, etc. the Ownership Ratio of Share Certificates, etc., in terms of the Share Certificates, etc. that the relevant person holds, exceeds one third;

(iv) a purchase, etc. of Share Certificates, etc., if Share Certificates, etc. in excess of the proportion specified by Cabinet Order are acquired during the period of not more than six months that is specified by Cabinet Order, through that purchase, etc. of Share Certificates, etc. or through the acquisition of a new issue (meaning the acquisition of Share Certificates, etc. newly issued by their Issuer; hereinafter the same applies in this item) (if the acquisition is effected through a purchase, etc. of Share Certificates, etc., this is limited to an acquisition through a purchase, etc. of Share Certificates, etc. in excess of the proportion specified by Cabinet Order that is effected through a Specified Purchase and Sale, etc. or that is effected outside a Financial Instruments Exchange Market (excluding one effected through a Tender Offer)), and if after the purchase, etc. or acquisition, the Ownership Ratio of Share Certificates, etc., in terms of the Share Certificates, etc. that the relevant person holds, exceeds one third (other than purchases, etc. set forth in the preceding three items);

(v) a purchase, etc. of Share Certificates, etc., if a Tender Offer is underway for those Share Certificates, etc., and a person other than the Issuer of the Share Certificates, etc. effects a purchase, etc. of them in excess of the proportion specified by Cabinet Order during the period of not more than six months that is specified by Cabinet Order (but only if the Ownership Ratio of Share Certificates, etc. in terms of the Share Certificates, etc. that the person holds, exceeds one third) (other than purchases, etc. set forth in the preceding items); and

(vi) any other purchase, etc. of Share Certificates, etc. specified by Cabinet Order as being equivalent to a purchase, etc. of Share Certificates, etc. set forth in any of the preceding items.

(2) A purchase, etc. of Share Certificates, etc. through a Tender Offer, as specified in the main clause of the preceding paragraph, must be effected after a purchase, etc. period is set that is within the scope of the period specified by Cabinet Order.

(3) If a purchase, etc. of Share Certificates, etc. is effected through a Tender Offer, as provided for in the main clause of paragraph (1), the purchase, etc. price (or, for anything other than a purchase, etc., the thing that is specified by Cabinet Order as being equivalent to the purchase, etc. price; hereinafter the same applies in this Section) must be based on a single set of conditions, pursuant to the provisions of Cabinet Order.

(4) If a purchase, etc. of Share Certificates, etc. is effected through a Tender Offer, as provided in the main clause of paragraph (1), a Financial Services Provider (limited to one engaged in Type I Financial Instruments Business as defined in Article 28, paragraph (1); the same applies in Article 27-12, paragraph (3)) or a bank, etc. (meaning a bank, Cooperative Financial Institution, or other financial institution specified by Cabinet Order; the same applies in Article 27-12, paragraph (3)) must be made to manage the Share Certificates, etc., effect payment for the purchase, etc., and conduct other affairs specified by Cabinet Order.

(5) If a purchase, etc. of Share Certificates, etc. is effected through a Tender Offer, as provided in the main clause of paragraph (1), it must be in accordance with the conditions and methods specified by Cabinet Order, in addition to what is prescribed in the preceding three paragraphs and other provisions of this Section.

(6) As used in this Article, effecting a "Tender Offer" means offering to effect purchase, etc. of Share Certificates, etc. or soliciting offers to sell, etc. them (meaning effecting a sale or other transfer for consideration; hereinafter the same applies in this Section) from many and unspecified persons through a public notice, and then effecting the purchase, etc. of Share Certificates, etc. outside of a Financial Instruments Exchange Market.

(7) The term "Specially Related Party" as used in paragraph (1) means one of the following persons:

(i) a person with a shareholding relationship, familial relationship, or other special relationship specified by Cabinet Order to the person effecting the purchase, etc. of Share Certificates, etc.; and

(ii) a person with which a person effecting a purchase, etc. of Share Certificates, etc. has agreed to jointly acquire or transfer the Share Certificates, etc. or to jointly exercise voting rights or other rights as shareholders in the Issuer of the Share Certificates, etc., or to transfer or acquire the Share Certificates, etc. to or from each other after the purchase, etc. of the Share Certificates, etc.

(8) The term "Ownership Ratio of Share Certificates, etc." as used in paragraph (1) means either of the following:

(i) in terms of the person effecting a purchase, etc. of Share Certificates, etc., the ratio arrived at, pursuant to the provisions of Cabinet Office Ordinance, when the total number of voting rights (meaning the number of voting rights represented by shares calculated pursuant to the provisions of Cabinet Office Ordinance, for share certificates, or the number of voting rights specified by Cabinet Office Ordinance, for Securities other than share certificates; hereinafter the same applies in this paragraph) with respect to the Share Certificates, etc. that the person holds (excluding those that are specified by Cabinet Office Ordinance in consideration of the manner in which they are held or other circumstances; hereinafter the same applies in this paragraph), are divided by the number arrived at when the total number of voting rights issued by the Issuer is added to the number of voting rights with respect to corporate bond certificates with share options and other Securities specified by Cabinet Order issued by the Issuer and held by that person and Specially Related Parties of that person; or

(ii) for Specially Related Parties as defined in the preceding paragraph (excluding persons that fall under the category specified in item (ii) of the preceding paragraph and that purchase, etc. any Share Certificates, etc. issued by the Issuer of the Share Certificates, etc.), the rate arrived at, pursuant to the provisions of Cabinet Office Ordinance, when the number of voting rights with respect to the Share Certificates, etc. that the party holds, is divided by the number arrived at when the total of the number of voting rights issued by the Issuer is added to the number of voting rights with respect to corporate bond certificates with share options and other Securities specified by Cabinet Order issued by the Issuer and held by that party and the person effecting a purchase, etc. of Share Certificates, etc. that is set forth in the preceding item.

(Public Notice of the Commencement of a Tender Offer and Submission of a Tender Offer Statement)

Article 27-3 (1) A person that, pursuant to the main clause of paragraph (1) of the preceding Article, is required to effect any purchase, etc. of Share Certificates, etc. through a Tender Offer as prescribed in Article 27-2, paragraph (1) (hereinafter referred to as a "Tender Offer" in this Section) shall, pursuant to the provisions of Cabinet Order, issue public notice of the purpose of the Tender Offer, the purchase, etc. price, the number of Share Certificates, etc. sought for purchase (meaning the number of shares, for share certificates, or the number of shares specified by Cabinet Office Ordinance for Securities other than share certificates; hereinafter the same applies in this Section), the purchase, etc. period, and other particulars specified by Cabinet Office Ordinance. In this, if the purchase, etc. period is shorter than the period specified by Cabinet Order, it must be clearly indicated in the public notice that the purchase, etc. period may be extended pursuant to Article 27-10, paragraph (3).

(2) A person that issues the public notice under the preceding paragraph (hereinafter referred to as a "Public Notice of the Commencement of a Tender Offer" in this Section) (such a person is hereinafter referred to as a "Tender Offeror" in this Section) must submit a document stating the following particulars and the accompanying documents specified by Cabinet Office Ordinance (hereinafter collectively referred to as the "Tender Offer Statement" in this Section and Articles 167, 197 and 197-2) to the Prime Minister on the day on which it issues the Public Notice of the Commencement of the Tender Offer, pursuant to the provisions of Cabinet Office Ordinance; provided, however, that, if the day on which the person is required to submit the Tender Offer Statement falls on a Sunday or other day specified by Cabinet Office Ordinance, that person is to submit the Tender Offer Statement on the following day:

(i) the purchase, etc. price, the number of Share Certificates, etc. sought for purchase, the purchase, etc. period (including the detail indicated in the public notice pursuant to the second sentence of the preceding paragraph), the terms of delivery in connection with the purchase, etc., and other terms of settlement and purchase, etc. set by the Tender Offeror (hereinafter collectively referred to as the "Terms of Purchase, etc." in this Section);

(ii) the details of any contract to purchase, etc. the Share Certificates, etc. that are subject to the Tender Offer, other than through said Tender Offer, on or after the day on which the Tender Offeror issues the Public Notice of the Commencement of the Tender Offer; and

(iii) the purpose of the Tender Offer, the particulars of the Tender Offeror, and other particulars specified by Cabinet Office Ordinance.

(3) It is prohibited for a Tender Offeror, the Specially Related Party of a Tender Offeror (meaning a Specially Related Party as defined in Article 27-2, paragraph (7); hereinafter the same applies in this Section), or any other relevant party specified by Cabinet Order (hereinafter collectively referred to as the "Tender Offeror, etc." in this Section) to solicit offers to sell, etc. Share Certificates, etc. or to perform other acts specified by Cabinet Order in connection with a Tender Offer, on or after the day following the day on which the Public Notice of the Commencement of the Tender Offer is issued, unless the Tender Offeror has submitted the Tender Offer Statement to the Prime Minister.

(4) Immediately after the submission of a Tender Offer Statement, the Tender Offeror shall send a copy of the Tender Offer Statement to the Issuer of the Share Certificates, etc. involved in the Tender Offer (and to any person that has already submitted a Tender Offer Statement for the Share Certificates, etc. of that Issuer as of the day on which the Tender Offeror submits the Tender Offer Statement), and, if the Share Certificates, etc. involved in the Tender Offer fall under a category set forth in one of the following items, the Tender Offeror must also send a copy of the Tender Offer Statement to the person specified in the relevant item for the category of Share Certificates, etc. set forth in that item. The necessary particulars relevant to the sending of the copies in such a case is specified by Cabinet Office Ordinance:

(i) Share Certificates, etc. listed on a Financial Instruments Exchange: the Financial Instruments Exchange; and

(ii) Share Certificates, etc. specified by Cabinet Order as having equivalent distribution statuses to the Share Certificates, etc. referred to in the preceding item: the Authorized Financial Instruments Business Association specified by Cabinet Order.

(Purchases, etc. in Which Securities Are Delivered as the Consideration)

Article 27-4 (1) Except in a case provided for in the following paragraph, if a Tender Offeror, etc. makes Securities the consideration for its purchases, etc. in a Tender Offer, and a Public Offering or Secondary Distribution of the relevant Securities is subject to the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3), the Tender Offeror, etc. must not solicit offers to sell, etc. or perform other acts specified by Cabinet Office Ordinance in connection with the Tender Offer unless the Issuer of the Securities provides the Prime Minister with the notification under those provisions at the same time as the submission of the Tender Offer Statement or an amended statement.

(2) In a case referred to in the preceding paragraph, if a Shelf Registration has been made for the Securities referred to in that paragraph, the Tender Offeror, etc. must not solicit offers to sell, etc. or perform other acts specified by Cabinet Order in connection with the Tender Offer unless the Shelf Registration has come into effect and the Shelf Registrant of the Securities submits Shelf Registration Supplements to the Prime Minister at the same time as the submission of the Tender Offer Statement or an amended statement.

(3) Notwithstanding the provisions of paragraph (2) of the preceding Article, in a Tender Offer that has Securities as the consideration for purchase, etc., if the notification under Article 4, paragraphs (1) to (3) inclusive has been made or the Shelf Registration Supplements have been submitted for the Securities, part of the particulars that are required to be included in a Tender Offer Statement and accompanying documents may be omitted as specified by Cabinet Office Ordinance in the Tender Offer Statement that is required to be submitted for the Tender Offer.

(Prohibition of Purchases, etc. Not through a Tender Offer)

Article 27-5 A Tender Offeror, etc. must not purchase, etc. Share Certificates, etc. that are issued by the Issuer of the Share Certificates, etc. involved in the relevant Tender Offer, other than through said Tender Offer, during the Tender Offer period (meaning the period from the day on which it issues the Public Notice of the Commencement of the Tender Offer to the last day of the purchase, etc. period, and including the extended period, if any; hereinafter the same applies in this Section); provided, however, that this does not apply in the following cases:

(i) if the contract for effecting a purchase, etc. of Share Certificates, etc. that are issued by the Issuer of the relevant Share Certificates, etc., other than through said Tender Offer, is concluded before the Public Notice of the Commencement of the Tender Offer, and the existence and details of that contract are stated in the Tender Offer Statement;

(ii) if a person set forth in Article 27-2, paragraph (7), item (i) (except one that also falls under the category of persons specified in Article 27-2, paragraph (7), item (ii)) notifies the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, that the person does not fall under the category of persons specified in Article 27-2, paragraph (7), item (ii); or

(iii) other cases specified by Cabinet Order.

(Changes to the Terms of Purchase, etc. for a Tender Offer)

Article 27-6 (1) A Tender Offeror may not make any of the following changes to the Terms of Purchase, etc.:

(i) the lowering of the purchase, etc. price (excluding what is implemented if the Public Notice of the Commencement of the Tender Offer and the Tender Offer Statement states, as one of the Terms of Purchase, etc., that the purchase, etc. price may be lowered according to the standards specified by Cabinet Office Ordinance if the Target Company (meaning a Target Company provided for in Article 27-10, paragraph (1)) conducts a share split or performs any other act specified by Cabinet Order during the Tender Offer period);

(ii) reduction of the number of Share Certificates, etc. sought for purchase;

(iii) shortening of the purchase, etc. period; or

(iv) any other changes in the Terms of Purchase, etc. specified by Cabinet Order.

(2) A Tender Offeror may make any change to the Terms of Purchase, etc. other than one that is specified in the items of the preceding paragraph. In this, a Tender Offeror seeking to make such a change must issue public notice of the details of the change to the Terms of Purchase, etc. (excluding an extension of the purchase, etc. period, if it is extended pursuant to Article 27-10, paragraph (3)) and other particulars specified by Cabinet Office Ordinance during the Tender Offer period, pursuant to the provisions of Cabinet Order.

(3) If it is difficult for a Tender Offeror to issue the public notice under the preceding paragraph by the last day of the Tender Offer period, the Tender Offeror must publicly announce the details and the particulars specified in the preceding paragraph pursuant to the provisions of Cabinet Office Ordinance, and issue a public notice based on the rules provided for in the preceding paragraph immediately after that.

(Amendment of a Public Notice of the Commencement of a Tender Offer)

Article 27-7 (1) If a Tender Offeror that has issued a Public Notice of the Commencement of a Tender Offer (including a public notice under paragraph (2) or (3) of the preceding Article and a public announcement under Article 27-6, paragraph (3); the same applies in the following paragraph) finds a formal deficiency in the content of said notice or finds that the content of the notice conflicts with the facts of the matter, the Tender Offeror must amend its content and issue a public notice or a public announcement pursuant to the provisions of Cabinet Office Ordinance.

(2) If the Prime Minister finds it to be necessary for a Public Notice of the Commencement of a Tender Offer to be amended, the Prime Minister may order the Tender Offeror that issued the Public Notice of the Commencement of the Tender Offer to issue a public notice or a public announcement of the details of the amendment pursuant to the provisions of Cabinet Office Ordinance, within the time limit designated by the Prime Minister.

(3) A disposition under the preceding paragraph may not be reached after the last day of the Tender Offer period (including the period by which it is required to be extended pursuant to paragraph (8) of the following Article).

(Submission of an Amended Statement in Connection with a Tender Offer Statement)

Article 27-8 (1) If a Tender Offeror that has submitted a Tender Offer Statement (including any amended statement in connection with it; hereinafter the same applies in this Article) finds that there is a formal deficiency in the Tender Offer Statement, that its content conflicts with the facts of the matter, that it insufficiently states or omits a statement as to a particular that is required to be stated, or that it insufficiently states or omits a statement as to a fact that is necessary to prevent it from being misleading, the Tender Offeror must submit an amended statement to the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance.

(2) If, on or after the day on which a Tender Offer Statement is submitted and before the last day of the Tender Offer period, the Terms of Purchase, etc. change (other than an extension of the purchase, etc. period under Article 27-10, paragraph (3)), any other material particular that is required to be stated in a Tender Offer Statement changes, or any other circumstance specified by Cabinet Office Ordinance arises that requires the Tender Offer Statement to be amended, the Tender Offeror that submitted the Tender Offer Statement must immediately submit an amended statement to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(3) If Prime Minister finds it to be clear that any of the following facts have occurred, the Prime Minister may order the Tender Offeror that submitted the Tender Offer Statement to submit an amended statement within the time limit designated by the Prime Minister:

(i) the Tender Offer Statement contains a formal deficiency;

(ii) the Terms of Purchase, etc. stated in the Tender Offer Statement do not comply with the provisions of this Section; or

(iii) the change in the Terms of Purchase, etc. that is stated in the amended statement violates Article 27-6, paragraph (1).

(4) Except in a case under the provisions of the preceding paragraph, on discovering any of the following facts to have occurred, the Prime Minister may order a Tender Offeror that has submitted a Tender Offer Statement to submit an amended statement within the time limit designated by the Prime Minister. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing:

(i) the Tender Offer Statement contains a false statement about a material particular; or

(ii) the Tender Offer Statement omits a statement as to a material particular that is required to be stated or omits a statement of material fact that is necessary to prevent it from being misleading.

(5) A disposition under paragraph (3) may not be reached after the last day of the Tender Offer period (including the period by which it is required to be extended pursuant to paragraph (8); the same applies in paragraph (7)) (or, for a disposition resulting in an amended statement being submitted after the last day of the Tender Offer period, after the day on which five years have elapsed since the day following the last day of the Tender Offer period), and a disposition under the preceding paragraph may not be reached after the day on which five years have elapsed since the day following the last day of the Tender Offer period.

(6) The provisions of Article 27-3, paragraph (4) apply mutatis mutandis if an amended statement is submitted pursuant to the provisions of paragraphs (1) to (4) inclusive.

(7) If a disposition under paragraph (3) or (4) is reached during the Tender Offer period, the Tender Offeror, etc. must not solicit offers to sell, etc. or perform any other act specified by Cabinet Order for the Tender Offer until the amended statement required by the disposition is submitted.

(8) If an amended statement under paragraph (1) or (2) is submitted or an order to submit an amended statement under paragraph (3) or (4) is issued during the Tender Offer period, except in a case specified by Cabinet Office Ordinance, the Tender Offeror must extend the purchase, etc. period in that Tender Offer by a period specified by Cabinet Office Ordinance and immediately issue public notice of this or publicly announce it, pursuant to the provisions of Cabinet Office Ordinance.

(9) If the purchase, etc. period in a Tender Offer is required to be extended pursuant to the preceding paragraph, the Tender Offeror must not acquire the Share Certificates, etc. subject to the Tender Offer or conduct other settlement procedures for the Tender Offer until the last day of the required period of extension.

(10) If the purchase, etc. period in a Tender Offer is required to be extended pursuant to paragraph (8), the provisions of Article 27-5 apply mutatis mutandis until the last day of the required period of extension.

(11) If a Tender Offeror submits an amended statement pursuant to the provisions of paragraphs (1) to (4) inclusive, it shall issue public notice of the contents stated in the amended statement that pertain to the contents stated in the Tender Offer Statement, pursuant to the provisions of Cabinet Order, or publicly announce them pursuant to the provisions of Cabinet Office Ordinance; provided, however, that this does not apply if the Tender Offeror has issued the public notice under Article 27-6, paragraph (2) or issued a public notice and public announcement under Article 27-6, paragraph (3), nor does it apply if the Tender Offeror has submitted an amended statement under paragraph (1) that is specified by Cabinet Office Ordinance as one whose content is of minor importance.

(12) The preceding Article applies mutatis mutandis to a public notice or public announcement under paragraph (8) or the preceding paragraph.

(Preparation and Delivery of a Tender Offer Explanation, etc.)

Article 27-9 (1) A Tender Offeror shall prepare a document that states the particulars specified by Cabinet Office Ordinance from among the particulars that are required to be stated in a Tender Offer Statement and the particulars that are specified by Cabinet Office Ordinance as necessary and appropriate in the public interest or for the protection of investors (hereinafter referred to as a "Tender Offer Explanation" in this Section and Articles 197-2 and 200), pursuant to the provisions of Cabinet Office Ordinance.

(2) When effecting a purchase, etc. of Share Certificates, etc. through a Tender Offer, the Tender Offeror shall deliver a Tender Offer Explanation to a person seeking to sell, etc. those Share Certificates, etc., pursuant to the provisions of Cabinet Office Ordinance.

(3) If a Tender Offeror has submitted an amended statement pursuant to the provisions of paragraphs (1) to (4) inclusive of the preceding Article, it must immediately amend the Tender Offer Explanation pursuant to the provisions of Cabinet Office Ordinance and deliver the amended Tender Offer Explanation to any person to which the Tender Offer Explanation has already been delivered.

(Submission of a Target Company's Position Statement, Tender Offeror's Answer, etc.)

Article 27-10 (1) The Issuer of the Share Certificates, etc. involved in a Tender Offer (hereinafter referred to as the "Target Company" in this Section and Article 27-30-11, paragraph (3)), pursuant to the provisions of Cabinet Office Ordinance, shall submit a document that states its opinion about the Tender Offer and other particulars specified by Cabinet Office Ordinance (hereinafter referred to as the "Target Company's Position Statement") to the Prime Minister within a period specified by Cabinet Order from the date on which the Public Notice of the Commencement of the Tender Offer is issued.

(2) The Target Company may include the following particulars in the Target Company's Position Statement, in addition to its opinion about the Tender Offer:

(i) questions for the Tender Offeror; or

(ii) a request for an extension of the purchase, etc. period indicated in the Public Notice of the Commencement of the Tender Offer to the period specified by Cabinet Order (but only if the purchase, etc. period is shorter than the period specified by Cabinet Order).

(3) If the request set forth in item (ii) of the preceding paragraph has been included in the Target Company's Position Statement pursuant to the preceding paragraph and the Prime Minister makes the Target Company's Position Statement available for public inspection pursuant to Article 27-14, paragraph (1), the Tender Offeror must extend the purchase, etc. period to the period specified by Cabinet Order.

(4) If a Target Company makes the request set forth in item (ii) of paragraph (2) in the Target Company's Position Statement under paragraph (2), the Target Company, pursuant to the provisions of Cabinet Order, must issue public notice of the purchase, etc. period after the extension under the preceding paragraph, and of the other particulars specified by Cabinet Office Ordinance, by the day following the last day of the period set forth in paragraph (1).

(5) If a Target Company that issues the public notice under the preceding paragraph (hereinafter referred to as the "Public Notice of a Request for a Period Extension" in the following paragraph) finds a formal deficiency in the content of said public notice or finds that its content conflicts with the facts of the matter, the Target Company must amend this content and issue a public notice or a public announcement pursuant to the provisions of Cabinet Office Ordinance.

(6) If the Prime Minister finds it to be necessary for the Public Notice of a Request for a Period Extension to be amended, the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, may order the Target Company that issued said public notice to issue a public notice or public announcement of the details of the amended statement within the time limit designated by the Prime Minister.

(7) A disposition under the preceding paragraph may not be reached after the last day of the Tender Offer period (including the period by which it is required to be extended pursuant to Article 27-8, paragraph (8)).

(8) The provisions of Article 27-8, paragraphs (1) to (5) inclusive (excluding Article 27-8, paragraph (3), items (ii) and (iii)) apply mutatis mutandis to a Target Company's Position Statement. In this case, in Article 27-8, paragraph (1), the term "Tender Offeror" is deemed to be replaced with "Target Company as defined in Article 27-10, paragraph (1)" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (2), the phrase "the Terms of Purchase, etc. change" is deemed to be replaced with "opinion about the Tender Offer changes", the term "Tender Offeror" is deemed to be replaced with "Target Company defined in Article 27-10, paragraph (1)", and the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraphs (3) and (4), the term "Tender Offeror" is deemed to be replaced with "Target Company defined in Article 27-10, paragraph (1)" and the term "amended statement" is deemed to be replaced with "amended report"; and in Article 27-8, paragraph (5), the phrase "A disposition under paragraph (3)" is deemed to be replaced with "A disposition under paragraph (3) as applied mutatis mutandis pursuant to Article 27-10, paragraph (8)", the term "amended statement" is deemed to be replaced with "amended report", and the phrase "disposition under the preceding paragraph" is deemed to be replaced with "disposition under the preceding paragraph as applied mutatis mutandis pursuant to Article 27-10, paragraph (8)".

(9) Immediately after submitting a Target Company's Position Statement, the Target Company in a Tender Offer shall send a copy of the Target Company's Position Statement to the Tender Offeror involved in the Tender Offer (and to any person that has already submitted a Tender Offer Statement for Share Certificates, etc. of which the Target Company is the Issuer as of the day on which it submits the Target Company's Position Statement), and, if the Share Certificates, etc. involved in the Tender Offer fall under a category set forth in one of the items of Article 27-3, paragraph (4), the Target Company must also send a copy of the Target Company's Position Statement to the person specified in the relevant item for the category of Share Certificates, etc. set forth in that item.

(10) The preceding paragraph applies mutatis mutandis if an amended report is submitted pursuant to Article 27-8, paragraphs (1) to (4) inclusive as applied mutatis mutandis pursuant to paragraph (8).

(11) If a question referred to in paragraph (2), item (i) has been included in a Target Company's Position Statement, a Tender Offeror that receives a copy of the Target Company's Position Statement pursuant to paragraph (9) must submit a document, pursuant to the provisions of Cabinet Office Ordinance, stating an answer to the question (or, if it finds that it is not necessary to answer the question, the reason why it finds this to be so) and other particulars specified by Cabinet Office Ordinance (hereinafter referred to as the "Tender Offeror's Answer") to the Prime Minister within a period specified by Cabinet Order from the date on which it receives the copy of the Target Company's Position Statement.

(12) The provisions of Article 27-8, paragraphs (1) to (5) inclusive (excluding Article 27-8, paragraph (3), items (ii) and (iii)) apply mutatis mutandis to a Tender Offeror's Answer. In this case, in Article 27-8, paragraph (1), the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (2), the phrase "Terms of Purchase, etc. change" is deemed to be replaced with "answer changes" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraphs (3) and (4), the term "amended statement" is deemed to be replaced with "amended report"; and in Article 27-8, paragraph (5), the phrase "A disposition under paragraph (3)" is deemed to be replaced with "A disposition under paragraph (3) as applied mutatis mutandis pursuant to Article 27-10, paragraph (12)", the term "amended statement" is deemed to be replaced with "amended report", and the phrase "disposition under the preceding paragraph" is deemed to be replaced with "disposition under the preceding paragraph as applied mutatis mutandis pursuant to Article 27-10, paragraph (12)".

(13) Immediately after submitting a Tender Offeror's Answer, the Tender Offeror shall send a copy of the Tender Offeror's Answer to the Target Company (and to any person that has already submitted a Tender Offer Statement for Share Certificates, etc. of which the Target Company is the Issuer as of the day on which it submits the Tender Offeror's Answer), and, if the Share Certificates, etc. involved in the Tender Offer fall under a category set forth in one of the items of Article 27-3, paragraph (4), the Tender Offeror must also send a copy of the Tender Offeror's Answer to the person specified in the relevant item for the category of Share Certificates, etc. set forth in that item.

(14) The provisions of the preceding paragraph apply mutatis mutandis if an amended report is submitted pursuant to Article 27-8, paragraphs (1) to (4) inclusive as applied mutatis mutandis pursuant to paragraph (12).

(Tender Offer Withdrawal, etc. and Cancellation of Contracts by the Tender Offeror)

Article 27-11 (1) A Tender Offeror may not withdraw offers or cancel contracts in connection with a Tender Offer (hereinafter collectively referred to as "Tender Offer Withdrawal, etc." in this Section) after having issued Public Notice of the Commencement of the Tender Offer; provided, however, that this does not apply if the Tender Offeror states as one of the Terms of Purchase, etc. in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement that the Tender Offer may be withdrawn if a material change occurs in the business or property of the Issuer of the Share Certificates, etc. that are involved in the Tender Offer or in its Subsidiary (meaning a Subsidiary as defined in Article 2, item (iii) of the Companies Act) or any other circumstance occurs that would significantly compromise its ability to achieve the purpose of the Tender Offer (limited to circumstances specified by Cabinet Order), or if an order to commence bankruptcy proceedings is issued against the Tender Offeror or any other material change in circumstances specified by Cabinet Order occurs.

(2) If the Tender Offeror seeks to effect a Tender Offer Withdrawal, etc. under the proviso to the preceding paragraph, the Tender Offeror must issue a public notice indicating that it will effect a Tender Offer Withdrawal, etc., the reason for this, and other particulars specified by Cabinet Office Ordinance by the last day of the Tender Offer period, pursuant to the provisions of Cabinet Order; provided, however, that if it is difficult for the Tender Offeror to issue such a public notice by the last day of the Tender Offer period, the Tender Offeror is to issue a public announcement of the details that are required to be stated in the public notice, pursuant to the provisions of Cabinet Office Ordinance, and issue the public notice immediately following.

(3) A person issuing a public notice or public announcement under the preceding paragraph shall submit a document to the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, in which it states the details that are required to be stated in the public notice provided for in the preceding paragraph and other particulars specified by Cabinet Office Ordinance (hereinafter referred to as a "Written Tender Offer Withdrawal Notice" in this Section and Articles 167, 197 and 197-2) on the day on which said person issues the public notice or public announcement.

(4) The provisions of Article 27-3, paragraph (4) apply mutatis mutandis to a Written Tender Offer Withdrawal Notice. In this case, in Article 27-3, paragraph (4), the phrase "the Issuer of the Share Certificates, etc. involved in the Tender Offer is made (and to any person that has already submitted a Tender Offer Statement for the Share Certificates, etc. of that Issuer as of the day on which the Tender Offeror submits the Tender Offer Statement)" is deemed to be replaced with "the Issuer of the Share Certificates, etc. involved in the Tender Offer".

(5) A Tender Offer Withdrawal, etc. comes into effect only if public notice is given pursuant to paragraph (2). In this, the Tender Offer Withdrawal, etc. comes into effect at the time at which the public notice is given (or at the time when the public announcement is made, if the public announcement and the public notice are given pursuant to the proviso to paragraph (2)).

(Cancellation of a Contract by a Tendering Shareholder, etc.)

Article 27-12 (1) A tendering shareholder, etc. (meaning a person that accepts an offer to purchase, etc. the Share Certificates, etc. involved in a Tender Offer or that offers to sell, etc. them; hereinafter the same applies in this Section) may cancel a contract involving a Tender Offer at any time during the Tender Offer period (including the period by which it is required to be extended pursuant to Article 27-8, paragraph (8); the same applies in paragraphs (1) and (4) of the following Article, Article 27-14, paragraph (1) and Article 27-21, paragraphs (1) and (2)).

(2) If a Public Notice of the Commencement of a Tender Offer and a Tender Offer Statement includes the condition that any cancellation of a contract connected with the Tender Offer be done by a method specified by Cabinet Order, a tendering shareholder, etc. that cancels a contract pursuant to the preceding paragraph must do so by that method. In this, the cancellation of the contract comes into effect at the time specified by Cabinet Order.

(3) If a tendering shareholder, etc. cancels a contract pursuant to paragraph (1), the Tender Offeror may not request the tendering shareholder, etc. to pay damages or penalties, and if the Tender Offeror is having a Financial Services Provider or a bank, etc. manage the tendered Share Certificates, etc. (meaning Share Certificates, etc. that the tendering shareholders, etc. sell, etc. in response to the Tender Offer; hereinafter the same applies in this Section), the Tender Offeror bears the cost required to return them.

(Public Notice of the Number of Tendered Share Certificates, etc. in a Tender Offer and Submission of a Tender Offer Report, etc.)

Article 27-13 (1) A Tender Offeror, pursuant to the provisions of Cabinet Order, shall issue a public notice or public announcement of the number of tendered Share Certificates, etc. and other particulars specified by Cabinet Office Ordinance on the day following the last day of the Tender Offer period; provided, however, that this does not apply if a public notice has been issued pursuant to Article 27-11, paragraph (2).

(2) A Tender Offeror issuing a public notice or public announcement under the main clause of the preceding paragraph shall submit a document to the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, in which it states the details of that public notice or public announcement and other particulars specified by Cabinet Office Ordinance (hereinafter referred to as a "Tender Offer Report" in this Section and Articles 197 and 197-2) on the day on which it issues the public notice or public announcement.

(3) The provisions of Article 27-3, paragraph (4) and Article 27-8, paragraphs (1) to (6) inclusive apply mutatis mutandis to a Tender Offer Report. In this case, in Article 27-3, paragraph (4), the phrase "the Tender Offeror shall send a copy of the Tender Offer Statement to the Issuer of the Share Certificates, etc. involved in the Tender Offer (and to any person that has already submitted a Tender Offer Statement for the Share Certificates, etc. of that Issuer as of the day on which the Tender Offeror submits the Tender Offer Statement)" is deemed to be replaced with "the Issuer of the Share Certificates, etc. involved in the Tender Offer"; in Article 27-8, paragraph (1), the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (2), the phrase "submitted and before the last day of the Tender Offer period, the Terms of Purchase, etc. change (other than an extension of the purchase, etc. period under Article 27-10, paragraph (3)), any other material particular that is required to be stated in a Tender Offer Statement changes, or any other circumstance specified by Cabinet Office Ordinance arises that requires the Tender Offer Statement to be amended" is deemed to be replaced with "submitted, the number of Share Certificates, etc. for which a purchase, etc. will be effected is fixed by the Pro Rata Method set forth in Article 27-13, paragraph (5)" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (3), the term "amended statement" is deemed to be replaced with "amended report", the term "Terms of Purchase, etc." is deemed to be replaced with "delivery and other settlement methods", the phrase "the provisions of this Section" is deemed to be replaced with "Article 27-13, paragraphs (4) and (5)", the phrase "the change in the Terms of Purchase, etc. that is stated in the amended statement violates Article 27-6, paragraph (1)" is deemed to be replaced with "the result of calculations for deciding the number of Share Certificates, etc. being purchased, etc. contravenes the Pro Rata Method specified by Cabinet Office Ordinance that is stipulated in Article 27-13, paragraph (5)"; in Article 27-8, paragraph (4), the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (5), the phrase "disposition under paragraph (3)" is deemed to be replaced with "disposition under paragraph (3) and the preceding paragraph as applied mutatis mutandis pursuant to Article 27-13, paragraph (3)" and the phrase "the last day of the Tender Offer period (including the period by which it is required to be extended pursuant to paragraph (8); the same applies in paragraph (7)) (or, for a disposition resulting in an amended statement being submitted after the last day of the Tender Offer period, after the day on which five years have elapsed since the day following the last day of the Tender Offer period), and the disposition under the preceding paragraph may not be reached after the day on which five years have elapsed since the day following the last day of the Tender Offer period" is deemed to be replaced with "the day on which five years have elapsed since the day following the last day of the Tender Offer period"; and in Article 27-8, paragraph (6), the term "amended statement" is deemed to be replaced with "amended report" and the phrase "paragraphs (1) to (4) inclusive" is deemed to be replaced with "paragraphs (1) to (4) inclusive as applied mutatis mutandis pursuant to Article 27-13, paragraph (3)".

(4) Unless a Tender Offeror, during the Tender Offer period, effects a Tender Offer Withdrawal, etc. pursuant to the proviso to Article 27-11, paragraph (1) for all of the tendered Share Certificates, etc., or unless the Tender Offeror has included one of the following conditions in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement (if the Tender Offeror has included the condition referred to in item (ii), this is only if the Ownership Ratio of Share Certificates, etc. (meaning Ownership Ratio of Share Certificates, etc. as defined in Article 27-2, paragraph (8)), in terms of the Share Certificates, etc. that the Tender Offeror will hold after the Tender Offer (if the Tender Offeror has a Specially Related Party as specified in Article 27-2, paragraph (1), item (i), the Ownership Ratio of Share Certificates, etc. as defined in Article 27-2, paragraph (8), in terms of the Share Certificates, etc. that Specially Related Party holds, is added to calculate this) will be below the proportion specified by Cabinet Order), the Tender Offeror must acquire or otherwise effect settlement procedures for its purchase, etc. based on the Terms of Purchase, etc. it has stated in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement (or, if it has changed the Terms of Purchase, etc. in accordance with a public notice under Article 27-6, paragraph (2) or a public announcement and public notice under Article 27-6, paragraph (3), based on the Terms of Purchase, etc. after the change) for all tendered Share Certificates, etc.:

(i) that if the total number of tendered Share Certificates, etc. does not reach the number of Share Certificates, etc. designated in advance in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement as the whole number of Share Certificates, etc. sought for purchase or a portion of them, the Tender Offeror will not purchase, etc. any of the tendered Share Certificates, etc.; or

(ii) that if the total number of tendered Share Certificates, etc. exceeds the number of Share Certificates, etc. sought for purchase, the Tender Offeror will not purchase, etc. tendered Share Certificates, etc. in excess of the number of Share Certificates, etc. sought for purchase.

(5) If the condition specified in item (ii) of the preceding paragraph has been given, and the total number of tendered Share Certificates, etc. exceeds the number of Share Certificates, etc. sought for purchase, the Tender Offeror must acquire Share Certificates, etc. and effect other settlement procedures for their purchase, etc. using the pro rata method specified by Cabinet Office Ordinance (hereinafter referred to as the "Pro Rata Method" in this Section).

(Public Inspection of a Tender Offer Statement, etc.)

Article 27-14 (1) The Prime Minister must make a Tender Offer Statement (including any amended statement in connection with it; the same applies in paragraph (1) of the following Article), Written Tender Offer Withdrawal Notice, Tender Offer Report, Target Company's Position Statement, and Tender Offeror's Answer (including any amended report in connection with them; the same applies in paragraph (1) of the following Article) available for public inspection, pursuant to the provisions of Cabinet Office Ordinance, during the period from the day that the Prime Minister accepts them to the day on which five years have elapsed since the day following the last day of the Tender Offer period in the relevant Tender Offer.

(2) Pursuant to the provisions of Cabinet Office Ordinance, a person that has submitted a document prescribed in the preceding paragraph (hereinafter referred to as a "Public Document" in this Article) (such a person is hereinafter referred to as the "Submitter" in this Article) must keep a copy of that Public Document at its head office or principal office and make it available for public inspection during the period that the Prime Minister makes that Public Document available for public inspection pursuant to the preceding paragraph.

(3) Pursuant to the provisions of Cabinet Office Ordinance, Financial Instruments Exchanges and the Authorized Financial Instruments Business Associations specified by Cabinet Order must keep copies of the Public Documents they have been sent pursuant to Article 27-3, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (6), Article 27-11, paragraph (4) and paragraph (3) of the preceding Article), Article 27-10, paragraph (9) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (10)), and Article 27-10, paragraph (13) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (14)) at their offices and make them available for public inspection during the period that the Prime Minister makes those Public Documents available for public inspection pursuant to the provisions of paragraph (1).

(4) Beyond what is provided for in the preceding three paragraphs, the necessary matters relevant to the public inspection referred to in paragraph (1) are specified by Cabinet Office Ordinance.

(5) Notwithstanding the provisions of paragraph (1), if the Prime Minister issues one of the following dispositions, the Prime Minister may decide not to make all or part of the Public Documents that are connected with the disposition available for public inspection:

(i) an order to submit an amended statement under the provisions of Article 27-8, paragraph (3) or (4);

(ii) an order to submit an amended report under Article 27-8, paragraph (3) or (4) as applied mutatis mutandis pursuant to Article 27-10, paragraph (8) or (12), or paragraph (3) of the preceding Article.

(6) In a case referred to in the preceding paragraph, the Prime Minister is to notify the Submitter that makes the copies of the Public Documents available for public inspection pursuant to paragraph (2), as well as the Financial Instruments Exchanges or the Authorized Financial Instruments Business Associations specified by Cabinet Order which are referred to in paragraph (3), which make copies of the Public Documents available for public inspection pursuant to the provisions of paragraph (3), that the Prime Minister has decided that all or part of the Public Documents will not be made available for public inspection.

(7) If a Submitter or a Financial Instruments Exchange or Authorized Financial Instruments Business Association has been notified by the Prime Minister pursuant to the provisions of the preceding paragraph, the provisions of paragraphs (2) and (3) do not apply after that time to the copies of the Public Documents to which the notice pertains.

(Prohibition on Presuming the Veracity of a Tender Offer Statement, etc.)

Article 27-15 (1) No person may deem, due to a Tender Offer Statement, Written Tender Offer Withdrawal Notice, Tender Offer Report, Target Company's Position Statement, or Tender Offeror's Answer having been accepted, that the Prime Minister certifies a statement contained in these documents to be true and accurate, or that the Prime Minister certifies these documents not to omit a statement as to a material particular.

(2) It is not permitted for the Tender Offeror, etc. or the Target Company to make a representation that is in violation of the preceding paragraph.

(Compensatory Liability for Violations Connected with a Tender Offer)

Article 27-16 The provisions of Article 16 apply mutatis mutandis to a person that violates the provisions of Article 27-3, paragraph (3) or Article 27-8, paragraph (7) in performing an act specified by Cabinet Office Ordinance, or that violates the provisions of Article 27-9, paragraph (2) or (3) in effecting a purchase, etc. of Share Certificates, etc. In this case, in Article 16, the phrase "the person that acquires the Securities" is deemed to be replaced with "the person that sells, etc. its Share Certificates, etc. in response to the Tender Offer".

Article 27-17 (1) A Tender Offeror, etc. that violates the provisions of Article 27-5 (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (10); hereinafter the same applies in this paragraph) in effecting a purchase, etc. of Share Certificates, etc. is liable to compensate for damage sustained by a person that sells, etc. its Share Certificates, etc. in response to the Tender Offer (excluding persons that sell, etc. Share Certificates, etc. to which Article 27-5 is applicable and the part of the persons that are prescribed in paragraph (2), item (i) of the following Article).

(2) The amount of compensation for which the Tender Offeror, etc. is liable pursuant to the preceding paragraph is the price that the Tender Offeror, etc. pays at the time it effects a purchase, etc. referred to in the preceding paragraph (this includes providing a benefit equivalent to such a price, and if prices are not the same for all purchases, etc., the most favorable of them is used) less the Tender Offer price (meaning the purchase, etc. price stated in the Public Notice of the Commencement of the Tender Offer and Tender Offer Statement, or, if the Tender Offeror, etc. changes the purchase, etc. price pursuant to a public notice or public announcement under Article 27-6, paragraph (2) or (3), this means the purchase, etc. price after the change; hereinafter the same applies in this Section), multiplied by the number of tendered Share Certificates, etc. of a claimant under the preceding paragraph (excluding tendered Share Certificates, etc. that could not have been sold, etc. through the Pro Rata Method; the same applies in paragraph (2) of the following Article and Article 27-20, paragraph (2)).

Article 27-18 (1) A person that, in acquiring Share Certificates, etc. or effecting other settlement procedures for a purchase, etc. of Share Certificates, etc. through a Tender Offer (hereinafter referred to as a "Tender Offer Purchaser" in this Article) violates the provisions of Article 27-13, paragraph (4), is liable to compensate for damage sustained by a person that sells, etc. its Share Certificates, etc. in response to the Tender Offer (in a case set forth in item (i) of the following paragraph, this excludes a person that sells, etc. its Share Certificates, etc. at a price that is more favorable than the Tender Offer price (this includes being provided with a benefit equivalent to such a price; hereinafter the same applies in this Article); and in a case set forth in item (ii) of the following paragraph, it includes a person that could not sell, etc. its Share Certificates, etc. due to the Tender Offer Purchaser's use of the different method referred to in item (ii)).

(2) In the following cases, the amount of compensation for which a Tender Offer Purchaser is liable pursuant to the preceding paragraph is the amount specified in the relevant of the following items for the category set forth in that item:

(i) if the Tender Offer Purchaser only purchases, etc. Share Certificates, etc. at a price that is more favorable than the Tender Offer price from a part of the persons that sell, etc. their Share Certificates, etc. in response to the Tender Offer: the favorable price (if two or more favorable prices are used for the purchases, etc., the most favorable price) less the Tender Offer price, multiplied by the number of tendered Share Certificates, etc. of a claimant under the preceding paragraph; and

(ii) if the Tender Offer Purchaser purchases, etc. Share Certificates, etc. through a method that is different from the Pro Rata Method stated in the Tender Offer Statement: the number of Share Certificates, etc. that should have been purchased, etc. from a claimant under the preceding paragraph, as calculated using that Pro Rata Method, less the number of Share Certificates, etc. that the Tender Offer Purchaser actually purchased, etc. from the claimant (or, if the Tender Offer Purchaser did not purchase, etc. any Share Certificates, etc. from the claimant, the number of the Share Certificates, etc. that should have been purchased, etc. from the claimant, as calculated using that Pro Rata Method), multiplied by the difference between the Tender Offer price (or the price paid by the Tender Offeror as specified in Article 27-17, paragraph (2), in a case to which paragraph (1) of the preceding Article is also applicable; the favorable price referred to in the preceding item, in a case to which the preceding item is also applicable; or the more favorable of these prices, in a case to which both Article 27-17, paragraph (1) and the preceding item are also applicable) and the market price of the Share Certificates, etc. at the time the claimant claims damages under the preceding paragraph (this is the estimated disposal price, if there is no market price for the Share Certificates, etc., or the disposal price, if the Share Certificates, etc. are disposed of prior to the claim being filed).

(Compensatory Liability of a Person Using a Tender Offer Explanation That Contains a False Statement, etc.)

Article 27-19 The provisions of Article 17 apply mutatis mutandis to a person that has caused a person to sell, etc. Share Certificates, etc. through the use of a Tender Offer Explanation or other representation that contains a false statement about a material particular, omits a representation as to a material particular that is required to be represented, or omits a representation of material fact that is necessary to prevent it from being misleading. In this case, in Article 17, the phrase "a person that acquires the Securities" is deemed to be replaced with "a person that sells, etc. its Share Certificates, etc. in response to the Tender Offer".

(Compensatory Liability of a Person Issuing a Public Notice of the Commencement of a Tender Offer Which Contains a False Statement, etc.)

Article 27-20 (1) The provisions of Article 18, paragraph (1) apply mutatis mutandis to the following persons. In this case, in Article 18, paragraph (1), both the phrase "person that acquires the Securities through the Public Offering or Secondary Distribution" and the phrase "person that acquires the Securities" are deemed to be replaced with "person that sells, etc. its Share Certificates, etc. in response to the Tender Offer", and the phrase "at the time the person offers to acquire the Securities" is deemed to be replaced with "at the time the person sells, etc. its Share Certificates, etc.":

(i) a person that issues a Public Notice of the Commencement of the Tender Offer or a public notice or public announcement under Article 27-6, paragraph (2) or (3), Article 27-7, paragraph (1) or (2) (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (12)) or Article 27-8, paragraph (8) or (11) (hereinafter collectively referred to as "Public Notice of the Commencement of a Tender Offer, etc." in this and the following Article) that contains a false representation about a material particular, omits a representation as to a material particular that is required to be represented, or omits a representation of material fact that is necessary to prevent it from being misleading;

(ii) a person that submits a Tender Offer Statement (including any amended statement in connection with it; hereinafter the same applies in this and the following Articles) that contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading;

(iii) a person that prepares a Tender Offer Explanation (including a Tender Offer Explanation amended pursuant to Article 27-9, paragraph (3); hereinafter the same applies in this and the following Articles) that contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading; and

(iv) a person that submits a Tender Offeror's Answer (including any amended report in connection with this; hereinafter the same applies in this and the following Articles) that contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading.

(2) If the provisions of the preceding paragraph (excluding items (i) and (iv)) are applicable and, in spite of having concluded a contract to purchase, etc., after the last day of the Tender Offer period, Share Certificates, etc. that are subject to the Tender Offer other than through that Tender Offer, the Tender Offeror does not state this in the Tender Offer Statement or Tender Offer Explanation but then effects the purchase, etc. under the contract after the last day of the Tender Offer period, the amount of compensation that the Tender Offer is liable for to a person that sells, etc. its Share Certificates, etc. in response to the Tender Offer (excluding a person that sells, etc. Share Certificates, etc. pursuant to such a contract, a person that sells, etc. Share Certificates, etc. to which Article 27-5 is applicable, and the part of the persons referred to in Article 27-18, paragraph (2), item (i)) is the price at which the Tender Offeror, etc. purchases, etc. them (this includes providing a benefit equivalent to such a price, and if prices are not the same for all purchases, etc., the most favorable of them is used) less the Tender Offer price, multiplied by the number of tendered Share Certificates, etc. of the claimant under Article 18, paragraph (1) as applied mutatis mutandis pursuant to the preceding paragraph.

(3) Except for cases to which the preceding paragraph is applicable, the persons specified in the following items are jointly and severally liable for compensation under paragraph (1) with the persons set forth in the items of paragraph (1); provided, however, that this does not apply if the person specified in the following items proves that it did not know, and in the exercise of reasonable care could not have known, that the statement was false or had been omitted:

(i) the Specially Related Party (limited to a person specified in Article 27-2, paragraph (7), item (ii)) of a person set forth in one of the items of paragraph (1); and

(ii) if a person set forth in one of the items of paragraph (1) is a corporation or other organization, its director, accounting advisor, company auditor, executive officer, board member, auditor, or person equivalent thereto, at the time it submitted the Public Notice of the Commencement of the Tender Offer, etc., the Tender Offer Statement, or the Tender Offeror's Answer, or at the time it prepared the Tender Offeror Explanation.

(Prescription of the Right to Claim Compensation Due to a Violation of Provisions Relevant to a Tender Offer)

Article 27-21 (1) A claim under Article 27-17, paragraph (1) or a claim under Article 27-18, paragraph (1) in a case to which Article 27-18, paragraph (2) is applicable extinguishes by prescription if it is not exercised within one year from when the claimant comes to know, or in exercise of reasonable care could have come to know, of the violation. The same applies if the claim is not exercised within five years from the day following the last day of the Tender Offer period in the relevant Tender Offer.

(2) A claim under Article 27-20, paragraph (1) in a case to which paragraph (2) of the preceding Article is applicable extinguishes by prescription if it is not exercised within one year from when the claimant comes to know, or in exercise of reasonable care could have come to know, that the Public Notice of the Commencement of the Tender Offer, etc., Tender Offer Statement, Tender Offer Explanation, or Tender Offeror's Answer contains a false statement or false representation about a material particular, omits a statement as to a material particular that is required to be stated or represented, or omits a statement of material fact that is necessary to prevent it from being misleading. The same applies if the claim is not exercised within five years from the day following the last day of the Tender Offer period in the relevant Tender Offer.

(Collection of Reports and Inspection of a Tender Offeror)

Article 27-22 (1) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Tender Offeror, a person that that is found to be required to purchase, etc. Share Certificates, etc. through a Tender Offer pursuant to the main clause of Article 27-2, paragraph (1), a Specially Related Party of either of these persons, or any other concerned party or witness, to submit reports or materials that should serve as a reference, and may have the relevant officials inspect these persons' books and documents or any other articles.

(2) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a person that has submitted a Target Company's Position Statement, a person that is found to be required to submit the same, or any other concerned party or witness, to submit reports or materials that should serve as a reference, and may have the relevant officials inspect these persons' books and documents or any other articles.

Section 2 Tender Offers for Listed Share Certificates, etc. by the Issuer

(Tender Offers for Listed Share Certificates, etc. by the Issuer)

Article 27-22-2 (1) A purchase, etc. (meaning a purchase or other acquisition for compensation; hereinafter the same applies in this and the following Articles) of Listed Share Certificates, etc. outside a Financial Instruments Exchange Market by the Issuer of those Listed Share Certificates, etc. must be effected by means of a Tender Offer, if it falls under one of the following categories; provided, however, that this does not apply to a purchase, etc. through a transaction specified by Cabinet Order as being equivalent to a purchase and sale, etc. of Securities on a Financial Instruments Exchange Market:

(i) a purchase, etc. under Article 156, paragraph (1) of the Companies Act (including as it applies through the replacement of certain terms pursuant to Article 165, paragraph (3) of that Act) (unless the Issuer gives the notice under Article 158, paragraph (1) of that Act as provided in Article 160, paragraph (1) of that Act); or

(ii) a purchase, etc. effected by an Issuer of Listed Share Certificates, etc. that is a foreign company, which is specified by Cabinet Order as a purchase, etc. effected by a method that makes the particulars of that purchase, etc. available to a large number of persons.

(2) The provisions of Article 27-2, paragraphs (2) to (6) inclusive; Article 27-3 (excluding the second sentence of paragraph (1) and item (ii) of paragraph (2)); Article 27-4; Article 27-5 (limited to the non-itemized part thereof; the same applies in paragraph (5) and Article 27-22-3, paragraph (5)); Articles 27-6 to 27-9 inclusive (excluding Article 27-8, paragraphs (6), (10), and (12)); Article 27-11 to 27-15 inclusive (excluding Article 27-11, paragraph (4) and Article 27-13, paragraph (3) and paragraph (4), item (i)); Article 27-17; Article 27-18; Article 27-21, paragraph (1); and paragraph (1) of the preceding Article apply mutatis mutandis if a purchase, etc. is effected through a Tender Offer pursuant to the preceding paragraph. In this case, in these provisions (excluding Article 27-3, paragraph (4) and the proviso to Article 27-11, paragraph (1)), the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc."; in Article 27-2, paragraph (6), the phrase "sell, etc. them (meaning effecting a sale or other transfer for consideration; hereinafter the same applies in this Section)" is deemed to be replaced with "sell, etc. them"; in Article 27-3, paragraph (2), the phrase "the following particulars" is deemed to be replaced with "the particulars set forth in items (i) and (iii) below"; in Article 27-3, paragraph (2), item (i), the phrase "purchase, etc. period (including the detail indicated in the public notice pursuant to the second sentence of the preceding paragraph)" is deemed to be replaced with "purchase, etc. period"; in Article 27-3, paragraph (3), the phrase "a Tender Offeror, the Specially Related Party of a Tender Offeror (meaning a Specially Related Party as defined in Article 27-2, paragraph (7); hereinafter the same applies in this Section), or any other relevant party specified by Cabinet Order" is deemed to be replaced with "a Tender Offeror or any other relevant party specified by Cabinet Order"; in the first sentence of Article 27-3, paragraph (4), the phrase "the Tender Offeror shall send a copy of the Tender Offer Statement to the Issuer of the Share Certificates, etc. involved in the Tender Offer (and to any person that has already submitted a Tender Offer Statement for the Share Certificates, etc. of that Issuer as of the day on which the Tender Offeror submits the Tender Offer Statement), and, if the Share Certificates, etc. involved in the Tender Offer fall under a category set forth in one of the following items, the Tender Offeror must also send a copy of the Tender Offer Statement to the person specified in the relevant item for the category of Share Certificates, etc. set forth in that item" is deemed to be replaced with "the Tender Offeror, for the categories of Listed Share Certificates, etc. set forth in the following items, shall send the person set forth in the relevant item a copy of the Tender Offer Statement, and shall also send a copy of the Tender Offer Statement to any person that has already submitted a Tender Offer Statement for Share Certificates, etc. of which the Tender Offeror is the Issuer, as of the day on which it submits the Tender Offer Statement"; in the items of Article 27-3, paragraph (4), the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc."; in the proviso to Article 27-5, the phrase "the following cases" is deemed to be replaced with "the cases specified by Cabinet Order"; in Article 27-6, paragraph (1), item (i), the phrase "the lowering of the purchase, etc. price (excluding what is implemented if the Public Notice of the Commencement of the Tender Offer and the Tender Offer Statement states, as one of the Terms of Purchase, etc., that the purchase, etc. price may be lowered according to the standards specified by Cabinet Office Ordinance if the Target Company (meaning a Target Company provided for in Article 27-10, paragraph (1)) conducts a share split or performs any other act specified by Cabinet Order during the Tender Offer period)" is deemed to be replaced with "the lowering of the purchase, etc. price"; in Article 27-6, paragraph (2), the phrase "the details of the change to the Terms of Purchase, etc. (excluding the extension of the purchase, etc. period, if it is extended pursuant to Article 27-10, paragraph (3))" is deemed to be replaced with "the details of the change to the Terms of Purchase, etc."; in Article 27-8, paragraph (2), the phrase "the Terms of Purchase, etc. change (other than an extension of the purchase, etc. period under Article 27-10, paragraph (3))" is deemed to be replaced with "the Terms of Purchase, etc. change"; in the proviso to Article 27-11, paragraph (1), the phrase "the Tender Offeror states as one of the Terms of Purchase, etc. in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement that the Tender Offer may be withdrawn if a material change occurs in the business or property of the Issuer of the Share Certificates, etc. that are involved in the Tender Offer or in its Subsidiary (meaning a Subsidiary as defined in Article 2, item (iii) of the Companies Act) or any other circumstance occurs that would significantly compromise its ability to achieve the purpose of the Tender Offer (limited to circumstances specified by Cabinet Order), or if an order to commence bankruptcy proceedings is issued against the Tender Offeror or any other material change in circumstances specified by Cabinet Order occurs" is deemed to be replaced with "effecting a purchase, etc. of Listed Share Certificates, etc. through the Tender Offer would violate any other law or regulation, or if any circumstance occurs that is specified by Cabinet Order as involving a risk of violation of any other law or regulation"; in Article 27-13, paragraph (4), the phrase "has included one of the following conditions in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement (if the Tender Offeror has included the condition referred to in item (ii), this is only if the Ownership Ratio of Share Certificates, etc. (meaning Ownership Ratio of Share Certificates, etc. as defined in Article 27-2, paragraph (8)), in terms of the Share Certificates, etc. that the Tender Offeror will hold after the Tender Offer (if the Tender Offeror has a Specially Related Party as specified in Article 27-2, paragraph (1), item (i), the Ownership Ratio of Share Certificates, etc. as defined in Article 27-2, paragraph (8) in terms of the Share Certificates, etc. that Specially Related Party holds is added to calculate this) will be below the proportion specified by Cabinet Order)" is deemed to be replaced with "has included the condition specified in item (ii) below in the Public Notice of the Commencement of the Tender Offer and in the Tender Offer Statement"; in Article 27-14, paragraph (1), the phrase "Tender Offer Report, the Target Company's Position Statement, and the Tender Offeror's Answer (including any amended report in connection with them" is deemed to be replaced with "and a Tender Offer Report (including any amended report in connection with it"; in Article 27-14, paragraph (3), the phrase ", Article 27-10, paragraph (9) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (10)) and Article 27-10, paragraph (13) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (14)) at" is deemed to be replaced with "at"; in Article 27-14, paragraph (5), item (i), the phrase "Article 27-8, paragraph (3)" is deemed to be replaced with "Article 27-8, paragraph (3) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)"; in Article 27-14, paragraph (5), item (ii), the phrase "Article 27-10, paragraph (8) or (12), or paragraph (3) of the preceding Article" is deemed to be replaced with "Article 27-22-2, paragraph (7)"; in Article 27-15, paragraph (1), the phrase ", Tender Offer Report, Target Company's Position Statement, or Tender Offeror's Answer" is deemed to be replaced with "or Tender Offer Report"; in Article 27-15, paragraph (2), the phrase "Tender Offeror, etc. and the Target Company" is deemed to be replaced with "Tender Offeror, etc."; and in paragraph (1) of the preceding Article, the phrase "a person that that is found to be required to purchase, etc. Share Certificates, etc. through a Tender Offer pursuant to the main clause of Article 27-2, paragraph (1), a Specially Related Party of either of these persons" is deemed to be replaced with "a person that is found to be required to purchase, etc. Listed Share Certificates, etc. through a Tender Offer pursuant to the main clause of Article 27-22-2, paragraph (1)".

(3) The provisions of Article 27-3, paragraph (4) apply mutatis mutandis if an amended statement is submitted pursuant to Article 27-8, paragraphs (1) to (4) inclusive as applied mutatis mutandis pursuant to the preceding paragraph. In this case, in the first sentence of Article 27-3, paragraph (4), the phrase "the Tender Offeror shall send a copy of the Tender Offer Statement to the Issuer of the Share Certificates, etc. involved in the Tender Offer (and to any person that has already submitted a Tender Offer Statement for the Share Certificates, etc. of that Issuer as of the day on which the Tender Offeror submits the Tender Offer Statement), and, if the Share Certificates, etc. involved in the Tender Offer fall under a category set forth in one of the following items, the Tender Offeror must also send a copy of the Tender Offer Statement to the person specified in the relevant item for the category of Share Certificates, etc. set forth in that item" is deemed to be replaced with "the Tender Offeror, for the categories of Listed Share Certificates, etc. set forth in the following items, shall send the person set forth in the relevant item a copy of the Tender Offer Statement, and shall also send a copy of the Tender Offer Statement to any person that has already submitted a Tender Offer Statement for Share Certificates, etc. of which the Tender Offeror is the Issuer, as of the day on which it submits the amended statement"; and in the items of Article 27-3, paragraph (4), the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc."

(4) A Tender Offeror (meaning Tender Offeror as defined in Article 27-3, paragraph (2) as applied mutatis mutandis pursuant to paragraph (2); hereinafter the same applies in this Section), immediately after submitting a Written Tender Offer Withdrawal Notice (meaning a Written Tender Offer Withdrawal Notice as defined in Article 27-11, paragraph (3) as applied mutatis mutandis pursuant to paragraph (2); hereinafter the same applies in this Section) or Tender Offer Report (meaning a Tender Offer Report as defined in Article 27-13, paragraph (2) as applied mutatis mutandis pursuant to paragraph (2); hereinafter the same applies in this Section), shall send a copy of the Written Tender Offer Withdrawal Notice or Tender Offer Report to the person specified in the relevant item of Article 27-3, paragraph (4) for the category of Listed Share Certificates, etc. set forth in that item. The necessary particulars relevant to the sending of those copies in such a case are specified by Cabinet Office Ordinance.

(5) If the purchase, etc. period in a Tender Offer is required to be extended pursuant to Article 27-8, paragraph (8) as applied mutatis mutandis pursuant to paragraph (2), the provisions of Article 27-5 apply mutatis mutandis until the last day of the required period of extension. In this case, in Article 27-5, the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc." and the phrase "the following cases" is deemed to be replaced with "the cases specified by Cabinet Order".

(6) The provisions of Article 27-7 apply mutatis mutandis to a public notice or public announcement under Article 27-8, paragraphs (8) and (11) as applied mutatis mutandis pursuant to paragraph (2).

(7) The provisions of Article 27-8, paragraphs (1) to (5) inclusive apply mutatis mutandis to a Tender Offer Report. In this case, in Article 27-8, paragraph (1), the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (2), the phrase "submitted and before the last day of the Tender Offer period, the Terms of Purchase, etc. change (other than an extension of the purchase, etc. period under Article 27-10, paragraph (3)), any other material particular that is required to be stated in a Tender Offer Statement changes, or any other circumstance specified by Cabinet Office Ordinance arises that requires the Tender Offer Statement to be amended" is deemed to be replaced with "submitted, the number of Listed Share Certificates, etc. for which a purchase, etc. will be effected is fixed by the Pro Rata Method set forth in Article 27-13, paragraph (5) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) on or after the day on which the Tender Offer Statement is submitted" and the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (3), the term "amended statement" is deemed to be replaced with "amended report", the phrase "the Terms of Purchase, etc. stated in the Tender Offer Statement do not comply with the provisions of this Section" is deemed to be replaced with "the delivery and other settlement methods for the purchase, etc. stated in the Tender Offer Statement do not comply with Article 27-13, paragraph (4) (excluding 27-13, paragraph (4), item (i)) and Article 27-13, paragraph (5) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)", and the phrase "the change in the Terms of Purchase, etc. that is stated in the amended statement violates Article 27-6, paragraph (1)" is deemed to be replaced with "the result of calculation stated in the amended statement for deciding the number of Listed Share Certificates, etc. to purchase, etc., contravenes the pro rata method specified by the Cabinet Office Ordinance set forth in Article 27-13, paragraph (5) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)"; in Article 27-8, paragraph (4), the term "amended statement" is deemed to be replaced with "amended report"; in Article 27-8, paragraph (5), the phrase "disposition under paragraph (3)" is deemed to be replaced with "disposition under paragraph (3) or the preceding paragraph as applied mutatis mutandis pursuant to Article 27-22, paragraph (7)", and the phrase "the last day of the Tender Offer period (including the period by which it is required to be extended under paragraph (8); the same applies in paragraph (7)) (or, for a disposition resulting in an amended statement being submitted after the last day of the Tender Offer period, after the day on which five years have elapsed since the day following the last day of the Tender Offer period), and the disposition under the preceding paragraph may not be reached after the day on which five years have elapsed since the day following the last day of the Tender Offer period" is deemed to be replaced with "the day on which five years have elapsed since the day following the last day of the Tender Offer period".

(8) The provisions of paragraph (4) apply mutatis mutandis to an amended report provided for in Article 27-8, paragraphs (1) to (4) inclusive as applied mutatis mutandis pursuant to the preceding paragraph. In this case, in Article 27-8, paragraph (4), the phrase "Written Tender Offer Withdrawal Notice (meaning a Written Tender Offer Withdrawal Notice as defined in Article 27-11, paragraph (3) as applied mutatis mutandis pursuant to paragraph (2); hereinafter the same applies in this Section) or Tender Offer Report (meaning a Tender Offer Report as defined in Article 27-13, paragraph (2) as applied mutatis mutandis pursuant to paragraph (2); hereinafter the same applies in this Section)" is deemed to be replaced with "amended report (meaning an amended report provided for in Article 27-8, paragraphs (1) to (4) inclusive as applied mutatis mutandis pursuant to paragraph (7)" and the phrase "the Written Tender Offer Withdrawal Notice or Tender Offer Report" is deemed to be replaced with "the amended report".

(9) The provisions of Article 16 apply mutatis mutandis to a person that violates the provisions of Article 27-3, paragraph (3) or Article 27-8, paragraph (7) as applied mutatis mutandis pursuant to paragraph (2) in performing the act specified by Cabinet Office Ordinance or that violates the provisions of Article 27-9, paragraph (2) or (3) as applied mutatis mutandis pursuant to paragraph (2) in effecting a purchase, etc. of Listed Share Certificates, etc. In this case, in Article 16, the term "the person that acquires the Securities" is deemed to be replaced with "the person that sells, etc. its Listed Share Certificates, etc. in response to the Tender Offer".

(10) The provisions of Article 17 apply mutatis mutandis to a person that has caused a person to sell, etc. its Listed Share Certificates, etc. through the use of a Tender Offer Explanation (meaning Tender Offer Explanation as defined in Article 27-9, paragraph (1) as applied mutatis mutandis pursuant to paragraph (2); hereinafter the same applies in this Section) or other representation that contains a false statement about a material particular, omits a representation as to a material particular that is required to be represented, or omits a representation of material fact that is necessary to prevent it from being misleading. In this case, in Article 17, the phrase "the person that acquires the Securities" is deemed to be replaced with "the person that sells, etc. its Listed Share Certificates, etc. in response to the Tender Offer".

(11) The provisions of Article 18, paragraph (1) apply mutatis mutandis to the following persons. In this case, in Article 18, paragraph (1), both of the phrases "person that acquires the Securities through the Public Offering or Secondary Distribution" and "person that acquires the Securities" are deemed to be replaced with "person that sells, etc. its Listed Share Certificates, etc. in response to the Tender Offer", and the term "at the time the person offers to acquire the Securities" is deemed to be replaced with "at the time the person sells, etc. its Listed Share Certificates":

(i) a person that issues a Public Notice of the Commencement of a Tender Offer as defined in Article 27-3, paragraph (2) as applied mutatis mutandis pursuant to paragraph (2), or a public notice or public announcement under Article 27-6, paragraph (2) or (3); Article 27-7, paragraph (1) or (2); or Article 27-8, paragraph (8) or (11) as applied mutatis mutandis pursuant to paragraph (2); or Article 27-7, paragraph (1) or (2) as applied mutatis mutandis pursuant to paragraph (6) (collectively referred to as a "Public Notice of the Commencement of the Tender Offer, etc." in the following paragraph) that contains a false representation about a material particular, omits a representation as to a material particular that is required to be represented, or omits a representation of material fact that is necessary to prevent it from being misleading;

(ii) a person that submits a Tender Offer Statement as defined in Article 27-3, paragraph (2) as applied mutatis mutandis pursuant to paragraph (2) (including any amended statement in connection with it; the same applies in the following paragraph) that contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading; or

(iii) a person that prepares a Tender Offer Explanation (including a Tender Offer Explanation amended pursuant to Article 27-9, paragraph (3) as applied mutatis mutandis pursuant to paragraph (2); the same applies in the following paragraph) that contains a false statement about a material particular, omits a statement as to a material particular that is required to be stated, or omits a statement of material fact that is necessary to prevent it from being misleading.

(12) In a case to which Article 18, paragraph (1) is applicable as applied mutatis mutandis pursuant to the preceding paragraph, an officer of the Issuer at the time of its submission of a Public Notice of the Commencement of the Tender Offer, etc. or Tender Offer Statement, or at the time of the preparation of the Tender Offer Explanation is jointly and severally liable with the Issuer for compensation under the preceding paragraph; provided, however, that this does not apply if the officer proves that that officer did not know, and in the exercise of reasonable care could not have known, that the statement was false or had been omitted.

(13) In a case referred to in paragraph (2), (3), or (5) to (11) inclusive, beyond what is provided for in those provisions, any other necessary technical replacement of terms is specified by Cabinet Order.

(Disclosure of a Material Fact About Business)

Article 27-22-3 (1) If a material fact has occurred with regard to a company that seeks to purchase, etc. Listed Share Certificates, etc. through a Tender Offer provided for in paragraph (1) of the preceding Article (meaning a material fact about its business which is provided for in Article 166, paragraph (1) (excluding those specified by Cabinet Office Ordinance); hereinafter the same applies in this and the following Articles), and this has not been disclosed as provided for in Article 166, paragraph (1), the company must disclose that material fact pursuant to the provisions of Cabinet Office Ordinance before the day on which it submits the Tender Offer Statement (meaning a Tender Offer Statement as defined in Article 27-3, paragraph (2) as applied mutatis mutandis pursuant to paragraph (2) of the preceding Article; hereinafter the same applies in this and the following Articles).

(2) If a purchase, etc. of Listed Share Certificates, etc. is effected through a Tender Offer as provided for in paragraph (1) of the preceding Article, and any new material fact occurs at the company that is the Tender Offeror (including if it becomes clear that a material fact had occurred before the day on which the Tender Offeror submitted the Tender Offer Statement, but that this has not been disclosed as provided for in Article 166, paragraph (1)) between the day on which it submits the Tender Offer Statement and the last day of the Tender Offer period (including the period by which it is required to be extended pursuant to Article 27-8, paragraph (8) as applied mutatis mutandis pursuant to paragraph (4) of this Article; the same applies in the following Article) as defined in Article 27-5 as applied mutatis mutandis pursuant to paragraph (2) of the preceding Article, the company must immediately disclose the material fact and notify persons that have accepted the offer to purchase, etc. Listed Share Certificates, etc. through the Tender Offer, persons that have offered to sell, etc. their Listed Share Certificates, etc. in connection with the Tender Offer, and persons seeking to sell, etc. such Listed Share Certificates, etc., of the content of what it has disclosed, pursuant to the provisions of Cabinet Office Ordinance .

(3) Once the period specified by Cabinet Order has elapsed after the disclosure under the preceding two paragraphs is made, the disclosure prescribed in Article 166, paragraph (1) is deemed to have been made.

(4) The provisions of Article 27-8, paragraphs (8) and (9) apply mutatis mutandis to the disclosure under paragraph (2). In this case, in Article 27-8, paragraph (8), the phrase "If an amended statement under paragraph (1) or (2) is submitted or an order to submit an amended statement under paragraph (3) or (4) is issued during the Tender Offer period, except in a case specified by Cabinet Office Ordinance" is deemed to be replaced with "If a material fact is required to be disclosed pursuant to Article 27-22-3, paragraph (2)"; and in Article 27-8, paragraph (9), the phrase "the preceding paragraph" is deemed to be replaced with "the preceding paragraph as applied mutatis mutandis pursuant to Article 27-22-3, paragraph (4)" and the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc.".

(5) If the purchase, etc. period in a Tender Offer is required to be extended pursuant to Article 27-8, paragraph (8) as applied mutatis mutandis pursuant to the preceding paragraph, the provisions of Article 27-5 apply mutatis mutandis until the last day of the required period of extension. In this case, in Article 27-5, the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc." and the phrase "the following cases" is deemed to be replaced with "the cases specified by Cabinet Order".

(6) The provisions of Article 18, paragraph (1) apply mutatis mutandis to a company that issues a public notice or public announcement under Article 27-8, paragraph (8) as applied mutatis mutandis pursuant to paragraph (4), which contains a false representation with regard to a material particular, omits a representation as to a material particular that is required to be represented, or omits a representation of material fact that is necessary to prevent it from being misleading. In this case, in Article 18, paragraph (1), both the phrase "person that acquires the Securities through the Public Offering or Secondary Distribution" and the phrase "person that acquires the Securities" are deemed to be replaced with "person that sells, etc. the Listed Share Certificates, etc. in response to the Tender Offer", and the phrase "at the time the person offers to acquire the Securities" is deemed to be replaced with "at the time the person sells, etc. the Listed Share Certificates".

(7) In a case to which Article 18, paragraph (1) is applicable as applied mutatis mutandis pursuant to the preceding paragraph, an officer of a company at the time the company issues a public notice or public announcement provided for in the preceding paragraph is jointly and severally liable with the company for compensation under the preceding paragraph; provided, however, that this does not apply if the officer proves that the officer did not know, and in the exercise of reasonable care could not have known, that the statement was false or had been omitted.

(8) The provisions of Article 27-17 apply mutatis mutandis if a person violates the provisions of Article 27-5 as applied mutatis mutandis pursuant to paragraph (5) in purchasing, etc. Listed Share Certificates, etc. In this case, in Article 27-17, the term "Share Certificates, etc." is deemed to be replaced with "Listed Share Certificates, etc.", and any other necessary technical replacement of terms is specified by Cabinet Order.

(Compensatory Liability for Damage Due to Failure to Disclose or False Disclosure)

Article 27-22-4 (1) A company that fails to make a disclosure or issue a notice under paragraph (1) or (2) of the preceding Article (hereinafter collectively referred to as "Disclosure" in this Article) with regard to a material fact requiring Disclosure, or a company that makes a false Disclosure with regard to such a fact, is liable to compensate a person that sells, etc. its Listed Share Certificates, etc. in response to the Tender Offer, for damage arising from the company's failure to make Disclosure or from its false Disclosure; provided, however, that this does not apply in the following cases:

(i) the person that sells, etc. the Listed Share Certificates, etc. in response to the Tender Offer knows that the material fact has occurred at the company or knows that the content of the Disclosure is false; or

(ii) the company proves that it did not know that the material fact had occurred at said company or that the content of the Disclosure was false, and that in the exercise of reasonable care it could not have known this at the time of the Tender Offer (meaning when the Public Notice of the Commencement of the Tender Offer is submitted, in terms of disclosure under paragraph (1) of the preceding Article, or the period between when the Public Notice of the Commencement of the Tender Offer is submitted and the last day of the Tender Offer period, in terms of the disclosure or notice under Article 27-22-3, paragraph (2); the same applies in the following paragraph).

(2) In a case to which the main clause of the preceding paragraph is applicable, an officer of a company at the time of a Tender Offer is jointly and severally liable with the company for compensation under the preceding paragraph; provided, however, that this does not apply if the officer proves that the officer did not know that the material fact had occurred at the company or that the content of the Disclosure was false, and in the exercise of reasonable care could not have known this at the time of the Tender Offer.

Chapter II-3 Disclosure of the Status of Large-Volume Holdings in Share Certificates, etc.

(Submission of Statements of Large-Volume Holdings)

Article 27-23 (1) A holder of Subject Securities (including what is specified by Cabinet Order as indicating a right connected to Securities set forth in Article 2, paragraph (1), item (xix) and other Securities specified by Cabinet Order that indicate an Option on Subject Securities (limited to an Option that causes the person that exercises it to acquire the position of the buyer in a purchase and sale of the Subject Securities linked to the Option (hereinafter collectively referred to as "Share Certificates, etc." in this Chapter and Article 27-30-11, paragraph (4))) issued by a corporation (or, with regard to the Securities specified by Cabinet Office Ordinance, a person specified by Cabinet Office Ordinance; hereinafter the same applies in this Chapter and Article 27-30-11, paragraph (4), except for Article 27-30, paragraph (2)) that is the Issuer of share certificates, corporate bond certificates with share options, and other Securities specified by Cabinet Order (hereinafter referred to as the "Share-related Securities" in this paragraph) that are listed on a Financial Instruments Exchange (including the Share-related Securities specified by Cabinet Order as having equivalent distribution statuses to said Securities), and whose Ownership Ratio of Share Certificates, etc. with respect to the relevant Share Certificates, etc. exceeds five percent (such a holder is hereinafter referred to as a "Large-Volume Holder" in this Chapter) must submit a statement in which it states the particulars of its Ownership Ratio of Share Certificates, etc., the particulars of the funds for the acquisition, the purpose of the holdings, and any other particulars specified by Cabinet Office Ordinance (such a statement is hereinafter referred to as a "Statement of Large-Volume Holdings") to the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, within five days from the date on which it becomes a Large-Volume Holder (Sundays and other holidays specified by Cabinet Order are not included for the purpose of counting days; the same applies in Article 27-25, paragraph (1) and Article 27-26); provided, however, that this does not apply if the total number of Share Certificates, etc. held which are provided for in paragraph (4) does not increase, nor does it apply in any other case specified by Cabinet Office Ordinance.

(2) The term "Subject Securities" as used in the preceding paragraph means the share certificates, corporate bond certificates with share options, and other Securities specified by Cabinet Order.

(3) The holder referred to in paragraph (1) includes the following persons, in addition to persons that own Share Certificates, etc. in their own names or in the name of another person (or under a fictitious name) (including a person that holds the right to request the delivery of Share Certificates, etc. under a purchase and sale contract or any other contract, or any other person specified by Cabinet Order as being equivalent); provided, however, that the person set forth in item (i) is deemed to become a holder on the day on which that person comes to know that the person has the authority prescribed in that item, only within the scope of the Share Certificates, etc. (including the Securities set forth in Article 2, paragraph (1), item (xx) indicating the rights to Share Certificates, etc., and other Securities specified by Cabinet Office Ordinance; hereinafter the same applies in this paragraph and the following Article) regarding which the person comes to know that said that person has that authority:

(i) a person that has the authority to exercise voting rights or any other rights as a shareholder in the Issuer of the Share Certificates, etc., or to give instructions as to the exercise of said voting rights or any other rights, based on a money trust contract or any other contract or the provisions of the law (except for a person that falls under the following item), and that has the aim of controlling the business activities of said Issuer; or

(ii) a person that has the necessary authority to invest in Share Certificates, etc., based on a Discretionary Investment Contract or any other contract or the provisions of the law.

(4) The term " Ownership Ratio of Share Certificates, etc." as used in paragraph (1) means the ratio arrived at when the number of Share Certificates, etc. issued by the Issuer of the relevant Share Certificates, etc., which the holder (meaning a holder as set forth in paragraph (1); hereinafter the same applies in this Chapter) is obligated to transfer (excluding those that the holder is obligated to transfer to a Joint Holder) due to having acquired them through a margin transaction provided for in Article 161-2, paragraph (1) or any other transaction method specified by Cabinet Office Ordinance, is deducted from the total number of Share Certificates, etc. (excluding the Share Certificates, etc. that are specified by Cabinet Office Ordinance in consideration of the manner in which they are held or any other circumstance; hereinafter the same applies in this paragraph) held by the holder of the relevant Share Certificates, etc. (meaning the number of represented shares, if they are share certificates, or the number specified by Cabinet Office Ordinance, if they are other Securities; hereinafter the same applies in this Chapter) (this includes if the holder has the authority set forth in the items of the preceding paragraph with regard to those Share Certificates, etc.; hereinafter the same applies in this Chapter) (the number of Share Certificates, etc. after this deduction is hereinafter referred to as the "Number of Share Certificates, etc. Held" in this Chapter); the Number of Share Certificates, etc. Held by Joint Holders of the Share Certificates, etc. issued by that Issuer (excluding those for which a right to request delivery or any other right specified by Cabinet Order exists between the holder and a Joint Holder) is added (the number of Share Certificates, etc. after this addition is hereinafter referred to as the "Total Number of Share Certificates, etc. Held" in this Chapter); and this is divided by the sum of either the total number of the Issuer's issued shares or the number specified by Cabinet Office Ordinance as being equivalent to this, and the number of Share Certificates, etc. that are held by the holder and the Joint Holders (excluding share certificates and other Securities that are specified by Cabinet Office Ordinance).

(5) The term "Joint Holder" as used in the preceding paragraph means the other holder of the relevant Share Certificates, etc., in a case in which the holder of Share Certificates, etc. has agreed to jointly acquire or transfer said Share Certificates, etc., or to jointly exercise voting rights and other rights as the Issuer's shareholder, together with another holder of Share Certificates, etc. issued by the Issuer of the relevant Share Certificates, etc.

(6) If a first holder of Share Certificates, etc. and another holder of Share Certificates, etc. that are issued by the Issuer of the relevant Share Certificates, etc. are related to each other through a shareholding relationship, familial relationship, or other special relationship specified by Cabinet Order, the other holder is deemed to be a Joint Holder referred to in paragraph (4) in relation to that holder; provided, however, that this does not apply if the Number of Share Certificates, etc. Held by either the first holder or the other holder is the number specified by Cabinet Office Ordinance or less.

(Preparation and Delivery of a Written Notice of Shareholding Status)

Article 27-24 A person set forth in paragraph (3), item (ii) of the preceding Article, pursuant to the provisions of Cabinet Office Ordinance, shall prepare a written notice that accounts for the status of holdings in the relevant Share Certificates, etc. and deliver it to customers that have the authority to exercise their voting rights or any other rights as shareholders in the Issuer of those Share Certificates, etc. or to give instructions as to the exercise of their voting rights or any other rights, at least once a month.

(Submission of a Statement of Changes to a Statement of Large-Volume Holdings)

Article 27-25 (1) If, after the day on which a person that is required to submit a Statement of Large-Volume Holdings has become a Large-Volume Holder, the Ownership Ratio of Share Certificates, etc. (meaning the Ownership Ratio of Share Certificates, etc. set forth in Article 27-23, paragraph (4); hereinafter the same applies in this Chapter) has increased or decreased by one percent or more (unless this is not linked to an increase or decrease in the Total Number of Share Certificates, etc. Held by said person; hereinafter the same applies in this Chapter), or if there has been any other change that is specified by Cabinet Order as a change in a material particular that is required to be stated in the Statement of Large-Volume Holdings, such person must submit a report on the particulars of the change (hereinafter referred to as a "Statement of Changes") to the Prime Minister, within five days after the day of the change, pursuant to the provisions of Cabinet Office Ordinance; provided, however, that this does not apply if a Statement of Changes has already been submitted due to a decrease of one percent or more in the Ownership Ratio of Share Certificates, etc., and in this it is stated that the Ownership Ratio of Share Certificates, etc. is five percent or less, nor does it apply in other cases specified by Cabinet Office Ordinance.

(2) In a case that falls under the criteria specified by Cabinet Order as a case in which a large number of Share Certificates, etc. have been transferred within a short period, a person that submits a Statement of Changes due to a decrease in the Ownership Ratio of Share Certificates, etc. must also state in said Statement of Changes the particulars of the party to which the Share Certificates, etc. have been transferred and the consideration received, pursuant to the provisions of Cabinet Office Ordinance.

(3) Notwithstanding the provisions of the main clause of paragraph (1), if, by the day before that on which a person submits a Statement of Large-Volume Holdings or a Statement of Changes, any cause requiring the person to submit a new Statement of Changes has arisen, the person must submit the new Statement of Changes to the Prime Minister at the same time as the person submits these unsubmitted documents.

(4) If a person that has submitted a Statement of Large-Volume Holdings or a Statement of Changes finds that its content conflicts with the facts of the matter, that such a document insufficiently states or omits a statement as to a material particular that is required to be stated, or that such a document insufficiently states or omits a statement as to a material fact that is necessary to prevent it from being misleading, said person shall submit an amended report to the Prime Minister.

(Special Provisions for Statements by Large-Volume Holders of Share Certificates, etc. Subject to Special Provisions)

Article 27-26 (1) Notwithstanding the provisions of the main clause of Article 27-23, paragraph (1), a Statement of Large-Volume Holdings in Share Certificates, etc. that a Financial Services Provider (limited to one that engages in Type I Financial Instruments Business provided for in Article 28, paragraph (1), or that engages in Investment Management provided for in paragraph (4) of that Article; hereinafter the same applies in this Article), a bank, or any other person specified by Cabinet Office Ordinance (limited to one that has notified the Prime Minister of the reference date provided for in paragraph (3)) holds, but which it does not hold for the purpose of performing an act specified by Cabinet Order as something that materially changes or materially influences the business activities of the Issuer of said Share Certificates, etc. (such an act is referred to as a "Material Proposal" in paragraphs (4) and (5)) (unless the Ownership Ratio of Share Certificates, etc. exceeds the ratio specified by Cabinet Office Ordinance and excluding any other cases that are specified by Cabinet Office Ordinance in consideration of the manner in which the Share Certificates, etc. are held and other circumstances), or which are held by the State, local government, or any other person specified by Cabinet Office Ordinance (limited to those that have notified the Prime Minister of the reference date provided for in paragraph (3)) (such Share Certificates, etc. are hereinafter collectively referred to as "Share Certificates, etc. Subject to Special Provisions" in this Article) must be submitted to the Prime Minister with a statement of the particulars specified by Cabinet Office Ordinance with regard to the status of Share Certificate, etc. holdings as of the reference date on which the Ownership Ratio of Share Certificates, etc. comes to exceed five percent for the first time, within five days from said reference date, pursuant to the provisions of Cabinet Office Ordinance.

(2) Notwithstanding the provisions of the main clause of Article 27-25, paragraph (1), a Statement of Changes for Share Certificates, etc. Subject to Special Provisions (excluding a Statement of Changes for a change that occurs if the relevant Share Certificates, etc. come to fall under a category other than Share Certificates, etc. Subject to Special Provisions) must be submitted to the Prime Minister by the date that is specified in the relevant of the following items for the category of cases set forth in that item, pursuant to the provisions of Cabinet Office Ordinance:

(i) if the Ownership Ratio of Share Certificates, etc. as of the reference date that comes after the reference date of the Statement of Large-Volume Holdings set forth in the preceding paragraph increases or decreases by one percent or more from the Ownership Ratio of Share Certificates, etc. that is stated in said Statement of Large-Volume Holdings, or if there has been any other change that is specified by Cabinet Order as a change in a material particular that is required to be stated in said Statement of Large-Volume Holdings: within five days from the later reference date;

(ii) if the Ownership Ratio of Share Certificates, etc. as of the reference date that comes after the reference date of the Statement of Changes increases or decreases by one percent or more from the Ownership Ratio of Share Certificates, etc. that was stated in said Statement of Changes, or if there has been any other change that is specified by Cabinet Order as a change in a material particular that is required to be stated in the Statement of Large-Volume Holdings: within five days from the later reference date;

(iii) if the Ownership Ratio of Share Certificates, etc. falls below the ratio specified by Cabinet Office Ordinance, and the relevant Share Certificates, etc. have become Share Certificates, etc. Subject to Special Provisions: within five days from the date on which the Share Certificates, etc. become Share Certificates, etc. Subject to Special Provisions; and

(iv) a case specified by Cabinet Office Ordinance as being equivalent to any of the preceding three items: the date specified by Cabinet Office Ordinance.

(3) The reference date referred to in the preceding two paragraphs means the date on which a Holder of Share Certificates, etc. Subject to Special Provisions notifies the Prime Minister pursuant to the provisions of Cabinet Office Ordinance, from among the combinations of two or more days in each month designated pursuant to the provisions of Cabinet Order.

(4) Notwithstanding the provisions of paragraph (1), if the Financial Services Provider, bank, or other person specified by Cabinet Office Ordinance provided for in that paragraph makes a Material Proposal within a period specified by Cabinet Order from the date on which the Ownership Ratio of Share Certificates, etc. comes to exceed five percent, it must submit the Statement of Large-Volume Holdings referred to in that paragraph to the Prime Minister by five days prior to the date on which it makes the Material Proposal, pursuant to the provisions of Cabinet Office Ordinance.

(5) Notwithstanding the provisions of paragraph (2), if the Ownership Ratio of Share Certificates, etc. of the Financial Services Provider, bank, or other person specified by Cabinet Office Ordinance provided for in paragraph (1) increases by one percent or more after the submission of the Statement of Large-Volume Holdings referred to in that paragraph or the Statement of Changes referred to in paragraph (2), and if it makes a Material Proposal within the period specified by Cabinet Order from the date of the increase, it must submit the Statement of Changes referred to in that paragraph to the Prime Minister by five days prior to the date on which it makes the Material Proposal, pursuant to the provisions of Cabinet Office Ordinance.

(6) The provisions of paragraph (4) of the preceding Article apply mutatis mutandis to the Statement of Large-Volume Holdings referred to in paragraph (1) or (4), or the Statement of Changes referred to in paragraph (2) or the preceding paragraph.

(Submission of a Copy of a Statement of Large-Volume Holdings, etc. to a Financial Instruments Exchange, etc.)

Article 27-27 If a Holder of Share Certificates, etc. has submitted a Statement of Large-Volume Holdings, Statement of Changes, or amended reports in connection with them, said holder must send the copies of these documents without delay to the Issuer of the relevant Share Certificates, etc., and to the person specified in the relevant of the following items for the category of Share Certificates, etc. set forth in that item:

(i) Share Certificates, etc. issued by an Issuer of Share Certificates, etc. listed on a Financial Instruments Exchange: said Financial Instruments Exchange; and

(ii) Share Certificates, etc. issued by an Issuer of Share Certificates, etc., which are specified by Cabinet Order as having equivalent distribution statuses to the Share Certificates, etc. set forth in the preceding item: the Authorized Financial Instruments Business Association specified by Cabinet Order.

(Public Inspection of Statements of Large-Volume Holdings)

Article 27-28 (1) The Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, must make Statements of Large-Volume Holdings and Statements of Changes, as well as amended reports in connection with them, available for public inspection for five years from the day on which the Prime Minister accepts these documents.

(2) Pursuant to the provisions of Cabinet Office Ordinance, Financial Instruments Exchanges and the Authorized Financial Instruments Business Associations specified by Cabinet Order must keep at their offices the copies of the documents prescribed in the preceding paragraph that have been sent to them pursuant to the provisions of the preceding Article (hereinafter referred to as "Public Documents" in this Article), and must make copies of them available for public inspection for five years from the day on which they receive those copies of the Public Documents.

(3) Notwithstanding the provisions of paragraph (1), with regard to the particulars of funds for acquisition as stated in a Public Document, if said funds have been borrowed from a bank, Cooperative Financial Institution, or any other financial institution specified by Cabinet Order (hereinafter collectively referred to as a "Bank, etc." in this paragraph) (excluding the cases specified by Cabinet Office Ordinance), the Prime Minister is not to make the name of the Bank, etc. available for public inspection, and the person that has submitted the Public Documents is to delete the name of the Bank, etc. before sending the copy of the Public Document.

(4) Notwithstanding the provisions of paragraph (1), if the Prime Minister issues a submission order for an amended report under Article 9, paragraph (1) or Article 10, paragraph (1) as applied mutatis mutandis pursuant to paragraph (1) of the following Article, the Prime Minister may decide not to make all or part of the Public Document that is connected with the order available for public inspection.

(5) In a case referred to in the preceding paragraph, the Prime Minister is to notify a Large-Volume Holder, and the Financial Instruments Exchange or the Authorized Financial Instruments Business Association specified by Cabinet Order that is referred to in paragraph (2), that makes copies of Public Documents available for public inspection pursuant to the provisions of paragraph (2), that the Prime Minister has decided that all or part of the Public Document will not be made available for public inspection.

(6) If a Financial Instruments Exchange or an Authorized Financial Instruments Business Association receives a notice from the Prime Minister pursuant to the provisions of the preceding paragraph, the provisions of paragraph (2) do not apply after that time to the Public Document to which the notice pertains.

(Order to Submit an Amended Report in Connection with a Statement of Large-Volume Holdings, etc.)

Article 27-29 (1) The provisions of Article 9, paragraph (1) and Article 10, paragraph (1) apply mutatis mutandis to Statements of Large-Volume Holdings and Statements of Changes. In this case, in Article 10, paragraph (1), the phrase "to submit an amended statement, and if the Prime Minister finds it to be necessary, the Prime Minister may order the suspension of the validity of a notification under Article 4, paragraphs (1) to (3) inclusive" is deemed to be replaced with "to submit an amended statement".

(2) The provisions of the preceding two Articles apply mutatis mutandis if an amended report in connection with a Statement of Large-Volume Holdings or a Statement of Changes has been submitted pursuant to the provisions of Article 9, paragraph (1) or Article 10, paragraph (1), as applied mutatis mutandis pursuant to the preceding paragraph.

(Collection of Reports and Inspection of a Person Submitting a Statement of Large-Volume Holdings, etc.)

Article 27-30 (1) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a person that has submitted a Statement of Large-Volume Holdings, a person that is found to be required to submit the same, a Joint Holder (meaning a Joint Holder as prescribed in Article 27-23, paragraph (5)) of either of such persons, or any other concerned party or witness to submit reports or materials that should serve as a reference, and may have the relevant officials inspect that person's books and documents or any other articles.

(2) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the company that is the Issuer of Share Certificates, etc. to which a Statement of Large-Volume Holdings pertains or a witness, to submit reports or materials that should serve as a reference.

Chapter II-4 Special Provisions, etc. on Carrying Out Procedures Via an Electronic Data Processing System for Disclosure

(Definition of Electronic Data Processing Systems for Disclosure)

Article 27-30-2 The term "Electronic Data Processing System for Disclosure" as used in this Chapter means an electronic data processing system through which a computer used by the Cabinet Office (including its input and output devices; hereinafter the same applies in this Chapter), and the input and output devices used by a person that carries out the procedures under the provisions of Article 5, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27); Article 7 (including as applied mutatis mutandis pursuant to Article 24-2, paragraph (1); Article 24-4-3, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (2) and Article 24-5-2, paragraph (2)); Article 24-4-5, paragraph (1); Article 24-4-7, paragraph (4); Article 24-5, paragraph (5) and Article 24-7, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); Article 24-6, paragraph (2); and Article 27)); Article 9, paragraph (1) (excluding the second sentence of that paragraph, and including as applied mutatis mutandis pursuant to Article 24-2, paragraph (1); Article 24-4-3, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (2) and Article 24-5-2, paragraph (2)); Article 24-4-5, paragraph (1); Article 24-4-7, paragraph (4); Article 24-5, paragraph (5) and Article 24-7, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); Article 24-6, paragraph (2); and Article 27); Article 10, paragraph (1) (excluding the second sentence of that paragraph, and including as applied mutatis mutandis pursuant to Article 24-2, paragraph (1); Article 24-4-3, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (2) and Article 24-5-2, paragraph (2)); Article 24-4-5, paragraph (1); Article 24-4-7, paragraph (4); Article 24-5, paragraph (5) and Article 24-7, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); Article 24-6, paragraph (2); and Article 27); Article 23-3, paragraph (1) and (4) (including as applied mutatis mutandis pursuant to Article 27); Article 23-4 (including as applied mutatis mutandis pursuant to Article 27); Article 23-7, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27); Article 23-8, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27); Article 23-9, paragraph (1) (excluding the second sentence of that paragraph, and including as applied mutatis mutandis pursuant to Article 27); Article 23-10, paragraph (1) (excluding the second sentence of that paragraph, and including as applied mutatis mutandis pursuant to Article 23-10, paragraph (5) (including as applied mutatis mutandis pursuant to Article 27); and Article 27), Article 24, paragraph (1) and (3) (including as applied mutatis mutandis pursuant to Article 24, paragraph (5) (including as applied mutatis mutandis pursuant to Article 27) and Article 27); Article 24-4-2, paragraph (1) and (2) (including as applied mutatis mutandis pursuant to Article 24-2, paragraph (3) (including as applied mutatis mutandis pursuant to Article 24-2, paragraph (4)) and Article 24-2, paragraph (4) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (1) and Article 24-5-2, paragraph (1), and including as applied mutatis mutandis pursuant to Article 27) and Article 27); Article 24-4-4, paragraph (1) and (2) (including as applied mutatis mutandis pursuant to Article 24-4-4, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27) and Article 27); Article 24-4-7, paragraph (1) and (2) (including as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27) and Article 27); Article 24-5, paragraph (1) (including as applied mutatis mutandis pursuant to Article 24-5, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); Article 24-5, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27); Article 24-6, paragraph (1); Article 24-7, paragraph (1) and (2) (including as applied mutatis mutandis pursuant to Article 24-7, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27); and Article 27); Article 25, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27); Article 27-3, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); Article 27-8, paragraphs (1) to (4) inclusive (excluding the second sentence of paragraph (4), and including as applied mutatis mutandis pursuant to Article 27-10, paragraphs (8) and (12); Article 27-13, paragraph (3); and Article 27-22-2, paragraphs (2) and (7)); Article 27-10, paragraph (1) and (11); Article 27-11, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); Article 27-13, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); Article 27-23, paragraph (1); Article 27-25, paragraphs (1), (3), and (4); the paragraphs of Article 27-26; or the provisions of Article 9, paragraph (1) (excluding the second sentence of that paragraph) and Article 10, paragraph (1) (excluding the second sentence of that paragraph) as applied mutatis mutandis pursuant to Article 27-29, paragraph (1) (including the submission of anything that must accompany documents if they are submitted via these procedures; hereinafter referred to as "Electronic Disclosure" in this Chapter); or the procedures under Article 4, paragraph (6) (including as applied mutatis mutandis pursuant to Article 23-8, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27)), the procedures prescribed in Article 27-5, item (ii), and other procedures specified by Cabinet Order (including the submission of anything that must accompany documents if they are submitted through these procedures; hereinafter referred to as "Voluntary Electronic Disclosure" in this Chapter) are connected over a telecommunications line, or an electronic data processing system through which a computer used by the Cabinet Office and the input and output devices used by a Financial Instruments Exchange or by a Authorized Financial Instruments Business Association designated by Cabinet Order are connected over a telecommunications line.

(Use of an Electronic Data Processing System for Disclosure for Electronic Disclosure)

Article 27-30-3 (1) A person that carries out Electronic Disclosure must use an Electronic Data Processing System for Disclosure to do so, pursuant to the provisions of Cabinet Order.

(2) A person that carries out Voluntary Electronic Disclosure may use an Electronic Data Processing System for Disclosure to do so, pursuant to the provisions of Cabinet Order.

(3) Electronic Disclosure or Voluntary Electronic Disclosure that is carried out pursuant to the provisions of the preceding two paragraphs is deemed to reach the Cabinet Office when it is recorded in a file stored on the computer referred to in the preceding Article (hereinafter simply referred to as the "File" in this Chapter).

(4) Electronic Disclosure or Voluntary Electronic Disclosure that is carried out pursuant to the provisions of paragraph (1) or (2) is deemed to have been carried out using the paper documents specified in the provisions of the Financial Instruments and Exchange Act and Related Regulations which stipulate that these procedures are to be carried out using paper documents, and the Financial Instruments and Exchange Act and Related Regulations apply.

(5) The provisions of Article 3 of the Act on the Utilization of Information and Communications Technology in Administrative Procedures (Act No. 151 of 2002) do not apply to Electronic Disclosure and Voluntary Electronic Disclosure.

(Special Provisions for Times When an Electronic Data Processing System for Disclosure Is Unusable)

Article 27-30-4 (1) Notwithstanding the provisions of paragraph (1) of the preceding Article, if a person that carries out Electronic Disclosure is unable to carry out Electronic Disclosure through the use of an Electronic Data Processing System for Disclosure due to a failure in telecommunication lines or any other cause, the person may carry out Electronic Disclosure by submitting a magnetic disk (including anything on which it is possible to reliably record specific particulars through use of a similar means; hereinafter the same applies in this Chapter), instead of using an Electronic Data Processing System for Disclosure, with the approval of the Prime Minister and pursuant to the provisions of Cabinet Order.

(2) If a person that carries out Voluntary Electronic Disclosure by use of an Electronic Data Processing System for Disclosure is unable to carry out Voluntary Electronic Disclosure using an Electronic Data Processing System for Disclosure due to a failure in telecommunication lines or any other cause, said person may carry out Voluntary Electronic Disclosure by submitting a magnetic disk, instead of using an Electronic Data Processing System for Disclosure, with an approval of the Prime Minister and pursuant to the provisions of Cabinet Order.

(3) If Electronic Disclosure or Voluntary Electronic Disclosure is carried out through the submission of a magnetic disk pursuant to the provisions of the preceding two paragraphs, the Prime Minister must immediately record the particulars recorded on that magnetic disk into the File, pursuant to the provisions of Cabinet Office Ordinance. In this, the particulars recorded on the magnetic disk are deemed to reach the Cabinet Office when those particulars are recorded into the File.

(4) The provisions of paragraph (4) of the preceding Article apply mutatis mutandis to Electronic Disclosure or Voluntary Electronic Disclosure carried out pursuant to the provisions of the preceding three paragraphs.

(Special Provisions for Times When an Electronic Data Processing System for Disclosure Malfunctions, etc.)

Article 27-30-5 (1) The provisions of Article 27-30-3, paragraph (1) do not apply to a case that falls under one of the following items, if the Prime Minister gives approval:

(i) it is found that there has been a malfunction in the computer referred to in Article 27-30-2 or there are otherwise found to be grounds specified by Cabinet Order; or

(ii) it is found to be extremely difficult for the relevant person to carry out Electronic Disclosure using an Electronic Data Processing System for Disclosure.

(2) The procedures for the approval referred to in the preceding paragraph are specified by Cabinet Office Ordinance.

(Notice in Lieu of the Submission, etc. of Copies of Documents to a Financial Instruments Exchange, etc.)

Article 27-30-6 (1) Notwithstanding the provisions of Article 6 (including as applied mutatis mutandis pursuant to Article 12; Article 23-12, paragraph (1); Article 24, paragraph (7); Article 24-2, paragraph (3); Article 24-4-2, paragraph (5) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (1) and Article 24-5-2, paragraph (1)); Article 24-4-3, paragraph (2) (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (2) and Article 24-5-2, paragraph (2)); Article 24-4-4, paragraph (5); Article 24-4-5, paragraph (2); Article 24-4-7, paragraph (5) and Article 24-5, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27); Article 24-6, paragraph (3); and Article 27)); Article 24-7, paragraph (4) (including as applied mutatis mutandis pursuant to Article 24-7, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27) and Article 27); Article 27-3, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27-13, paragraph (3)); Article 27-11, paragraph (4); Article 27-13, paragraph (3); and Article 27-22-2, paragraphs (2) and (3)); Article 27-10, paragraph (9) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (10)); and Article 27-10, paragraph (13) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (14)); Article 27-22-2, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (8)); and Article 27-27 (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)); if a person that carries out Electronic Disclosure or Voluntary Electronic Disclosure has carried out such procedures using an Electronic Data Processing System for Disclosure (including if the person has carried out those procedures by submission of a magnetic disk), in lieu of copies of the documents that are required to be submitted or sent to a Financial Instruments Exchange or to an Authorized Financial Instruments Business Association specified by Cabinet Order pursuant to the provisions referred to above, that person is to notify these persons of the particulars, as per the copies of those documents (excluding the parts that are not to be made available for public inspection pursuant to the provisions of Article 27-28, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)), that are required to be stated in the documents set forth in the items of Article 25, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27) or the documents prescribed in Article 27-14, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)) or Article 27-27 (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)); provided, however, that the person may elect not to notify these persons of a part that is not to be made available for public inspection pursuant to the provisions of Article 25, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27).

(2) The notice under the provisions of the preceding paragraph is deemed to have been sent by a person that has carried out the Electronic Disclosure or Voluntary Electronic Disclosure referred to in the preceding paragraph at the time it is recorded in the File, and is presumed to have reached the addressee of the notice at the time that the period normally required to output it has elapsed after its recording.

(Public Inspection When Procedures Are Carried Out by Use of an Electronic Data Processing System for Disclosure)

Article 27-30-7 (1) If Electronic Disclosure or Voluntary Electronic Disclosure has been carried out by use of an Electronic Data Processing System for Disclosure (including if such procedures have been carried out through the submission of a magnetic disk), the Prime Minister is to make the particulars (excluding the parts that are not to be made available for public inspection pursuant to the provisions of Article 25, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27) or Article 27-28, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)) and also excluding the Specified Portion) that have been recorded into the File in connection with the documents prescribed in Article 25, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27); Article 27-14, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); or Article 27-28, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)), or documents stating those particulars, available for public inspection, pursuant to the provisions of Cabinet Order,.

(2) The term "Specified Portion" as used in the preceding paragraph means the portion of a document that is not to be made available for public inspection pursuant to the provisions of Article 25, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27), Article 27-14, paragraph (5) (including as applied mutatis mutandis through the replacement of certain terms pursuant to Article 27-22-2, paragraph (2)), or Article 27-28, paragraph (4).

(3) The provisions of Article 5 of the Act on the Utilization of Information and Communications Technology in Administrative Procedures do not apply to the public inspection of documents under the provisions of paragraph (1).

(4) If the particulars that have been recorded into the File set forth in paragraph (1) or documents stating those particulars are made available for public inspection pursuant to the provisions of paragraph (1), the documents prescribed in Article 25, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27); Article 27-14, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); and Article 27-28, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)) are deemed to have been made available for public inspection pursuant to those provisions, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(5) In a case referred to in paragraph (1), if the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may make an indication of having rendered a disposition set forth in one of the items of Article 25, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27) or in one of the items of Article 27-14, paragraph (5) (including as applied mutatis mutandis through the replacement of certain terms pursuant to Article 27-22-2, paragraph (2)), an indication of having issued a submission order under Article 27-28, paragraph (4), or any other information with a bearing on the particulars set forth in paragraph (1), which has a material influence on investors' investment decisions (hereinafter referred to as "Material Reference Information" in the following paragraph) available for public inspection, together with the relevant particulars.

(6) In a case referred to in the preceding paragraph, the Prime Minister is to notify the Financial Instruments Exchange or the Authorized Financial Instruments Business Association specified by Cabinet Order referred to in paragraph (1) of the following Article, that makes the particulars set forth in that paragraph that involve Material Reference Information available for public inspection pursuant to the provisions of that paragraph, and the person that makes the particulars set forth in the relevant Article that involve Material Reference Information available for public inspection pursuant to the provisions of Article 25, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27) and Article 27-14, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)) or Article 27-30-10, that the Material Reference Information has been made available for public inspection pursuant to the provisions of the preceding paragraph.

(Public Inspection by a Financial Instruments Exchange, etc.)

Article 27-30-8 (1) A Financial Instruments Exchange or an Authorized Financial Instruments Business Association specified by Cabinet Order which has been notified pursuant to the provisions of Article 27-30-6 is to make the particulars (excluding the parts that are not to be made available for public inspection pursuant to the provisions of Article 25, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27) and also excluding the Specified Portion (meaning the Specified Portion prescribed in paragraph (2) of the preceding Article; the same applies in Article 27-30-10) of which it has been notified pursuant to the provisions of Article 27-30-6 in connection with the copies of documents prescribed in Article 25, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); Article 27-14, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); or Article 27-28, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)), or the documents stating those particulars, available for public inspection, pursuant to the provisions of Cabinet Order.

(2) If particulars under a notification that is set forth in the preceding paragraph or a document stating those particulars is made available for public inspection pursuant to the provisions of that paragraph, the documents prescribed in Article 25, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); Article 27-14, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); and Article 27-28, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)) are deemed to have been made available for public inspection pursuant to those provisions, and the provisions of the Financial Instruments and Exchange Act and Related Regulations apply.

(Providing, etc. Persons with the Particulars Stated in a Prospectus by Means of an Electronic Data Processing System or by Other Means)

Article 27-30-9 (1) In the cases specified by Cabinet Office Ordinance, in lieu of delivering a Prospectus, a person that is required to deliver a Prospectus pursuant to the provisions of Article 15, paragraphs (2) to (4) inclusive (including as applied mutatis mutandis pursuant to Article 15, paragraph (6) (including as applied mutatis mutandis pursuant to Article 23-12, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27) and Article 27); Article 23-12, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27); and Article 27) may provide the relevant persons with the particulars that have been stated in the Prospectus by means of an electronic data processing system or by any other means specified by Cabinet Office Ordinance. In such a case, the person that provides the other person with those particulars is deemed to have delivered the Prospectus.

(2) The provisions of the preceding paragraph apply mutatis mutandis to documents that are required to be delivered pursuant to the provisions of Article 23-14, paragraph (2); to a Tender Offer Explanation (meaning a Tender Offer Explanation provided for in Article 27-9, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)), and also including an amended Tender Offer Explanation) that is required to be delivered pursuant to the provisions of Article 27-9, paragraph (2) or (3) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)); and to a written notice that is required to be delivered pursuant to the provisions of Article 27-24.

(Public Inspection by the Issuer, etc.)

Article 27-30-10 In a case specified by Cabinet Office Ordinance, in lieu of making the copies of the documents that are required to be made available for public inspection pursuant to the provisions of Article 25, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27) or Article 27-14, paragraph (2) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)) available for public inspection, the Subsidiary Company Submitting Annual Reports of a person that has carried out Electronic Disclosure for the documents set forth in Article 25, paragraph (1), items (i) to (xi) inclusive (including as applied mutatis mutandis pursuant to Article 27); the Subsidiary Company Submitting Annual Reports of a person that has carried out Electronic Disclosure for the documents set forth in Article 25, paragraph (1), item (xii) (including as applied mutatis mutandis pursuant to Article 27); or a person that has carried out Electronic Disclosure for the document prescribed in Article 27-14, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)) may make the particulars, as per the copies of those documents (excluding the parts that are not to be made available for public inspection pursuant to the provisions of Article 25, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27) and also excluding the Specified Portion), that are required to be stated in the documents set forth in each item of Article 25, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27) or the documents prescribed in Article 27-14, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)) available for public inspection by displaying those particulars on the screen of an output device or by any other means specified by Cabinet Office Ordinance. In such a case, the person that makes those particulars available for public inspection is deemed to have made the copies of those documents available for public inspection.

(Providing, etc. Persons with the Particulars Stated in a Tender Offer Statement by Means of an Electronic Data Processing System or by Other Means)

Article 27-30-11 (1) In the cases specified by Cabinet Office Ordinance, in lieu of sending the copies of the documents that a Tender Offeror (meaning a Tender Offeror as prescribed in Article 27-3, paragraph (2); hereinafter the same applies in this paragraph and paragraph (3)) is required to send to the Issuer (and to any person that has already submitted a Tender Offer Statement for the Share Certificates, etc. of that Issuer as of the day on which the Tender Offeror submits the Tender Offer Statement in connection with the relevant Tender Offer (meaning a Tender Offer Statement as prescribed in Article 27-3, paragraph (2) and including any amended statement in connection with it; hereinafter the same applies in this paragraph and paragraph (3))) of the Share Certificates, etc. that are subject to the Tender Offer (meaning a Tender Offer as prescribed in Article 27-3, paragraph (1); hereinafter the same applies in this paragraph and paragraph (3)), pursuant to the provisions of Article 27-3, paragraph (4) (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (6) (including as applied mutatis mutandis pursuant to Article 27-13, paragraph (3)); Article 27-11, paragraph (4); and Article 27-13, paragraph (3)) or Article 27-10, paragraph (13) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (14)), the Tender Offeror may provide the Issuer with the particulars, as per the copies of those documents, that are required to be stated in the Tender Offer Notification, Written Tender Offer Withdrawal Notice (meaning a Written Tender Offer Withdrawal Notice as prescribed in Article 27-11, paragraph (3)), Tender Offer Report (meaning a Tender Offer Report as prescribed in Article 27-13, paragraph (2) and including any amended report in connection with it), and Tender Offeror's Answer, by means of an electronic data processing system or by any other means specified by Cabinet Office Ordinance. In such a case, the Tender Offeror is deemed to have sent the copies of those documents.

(2) In the cases specified by Cabinet Office Ordinance, in lieu of sending the copies of the documents that a Tender Offeror (meaning a Tender Offeror as prescribed in Article 27-3, paragraph (2) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2); hereinafter the same applies in this paragraph) is required to send pursuant to the provisions of Article 27-3, paragraph (4) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) or (3) if a person has already submitted a Tender Offer Statement (meaning a Tender Offer Statement as prescribed in Article 27-3, paragraph (2)) for Share Certificates, etc. issued by the company that is the Tender Offeror, as of the date on which the Tender Offeror submits the Tender Offer Statement (meaning a Tender Offer Statement as prescribed in Article 27-3, paragraph (2) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2), and including any amended statement in connection with it) in the relevant Tender Offer (meaning a Tender Offer as prescribed in Article 27-3, paragraph (1) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2); hereinafter the same applies in this paragraph), the Tender Offeror may provide the relevant person with the particulars for that Tender Offer that are required to be stated in the Tender Offer Statement (meaning the Tender Offer Statement prescribed in Article 27-3, paragraph (2) as applied mutatis mutandis to Article 27-22-2, paragraph (2), and including any amended statement in connection with it) by means of an electronic data processing system or by any other means specified by Cabinet Office Ordinance. In such a case, the Tender Offeror is deemed to have sent the copies of those documents.

(3) In the cases specified by Cabinet Office Ordinance, in lieu of sending the copies of the documents that the Target Company of a Tender Offer is required to send to the Tender Offeror that is involved in the relevant Tender Offer pursuant to the provisions of Article 27-10, paragraph (9) (including as applied mutatis mutandis pursuant to Article 27-10, paragraph (10)) (and to any person other than the Tender Offeror that has already submitted a Tender Offer Statement for the Share Certificates, etc. of the Issuer that are subject to said Tender Offer as of the day on which the Target Company submits the Target Company's Position Statement in connection with the relevant Tender Offer (including any amended reports in connection with it; hereinafter the same applies in this paragraph)),the Target Company may provide the Tender Offeror with the particulars that are required to be stated in the Target Company's Position Statement by means of an electronic data processing system or by any other means specified by Cabinet Office Ordinance. In such a case, the Target Company of the Tender Offer is deemed to have sent the copies of those documents.

(4) , In the cases specified by Cabinet Office Ordinance, in lieu of sending the copies of the documents that the holder of Share Certificates, etc. is required to send to the company that is the Issuer of those Share Certificates, etc. pursuant to the provisions of Article 27-27 (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)), the holder of the Share Certificates, etc. may provide the company with the particulars, as per the copies of those documents, that are required to be stated in the documents prescribed in Article 27-27 (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2)) (excluding parts that are not to be made available for public inspection pursuant to the provisions of Article 27-28, paragraph (3) (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2))) by means of an electronic data processing system or by any other means specified by Cabinet Office Ordinance. In such a case, the holder of Share Certificates, etc. is deemed to have delivered the copies of those documents.

Chapter II-5 Provision or Disclosure of Specified Information on Securities, etc.

(Provision or Disclosure of Specified Information on Securities)

Article 27-31 (1) An Issuer may not issue an Exclusive Solicitation of Offers to Acquire Targeting Professional Investors or any other category of solicitation with a view to issuing new securities specified by Cabinet Order which is not subject to the application of the main clause of Article 4, paragraph (1) (hereinafter referred to as "Exclusive Solicitation of Offers to Acquire" in this Article and Chapter VI-2) or an exclusive Offer to Sell, etc. to Professional Investors (unless the Securities subject to the relevant exclusive Offer to Sell, etc. to Professional Investors fall under the category of Securities for Professional Investors, and the exclusive Offer to Sell, etc. to Professional Investors falls under the category of a case specified by Cabinet Order as one in which a small number of persons are the other parties) or any other category of solicitation with a view to delivering existing securities specified by Cabinet Order that is not subject to the application of the main clause of Article 4, paragraph (1), the main clause of Article 4, paragraph (2), or the main clause of Article 4, paragraph (3) (hereinafter referred to as a "Specified Offer to Sell, etc." in this Article and Chapter VI-2) unless the Issuer of the Securities that are subject to the Exclusive Solicitation of Offers to Acquire or the Specified Offer to Sell, etc. (hereinafter collectively referred to as "Specified Solicitation, etc.") has provided to the solicited person, or has disclosed, information specified by Cabinet Office Ordinance as the basic information about the Securities and the Issuer that must be disclosed to investors (hereinafter referred to as "Specified Information on Securities"), prior to the Specified Solicitation, etc. and pursuant to the provisions of the following paragraph.

(2) An Issuer seeking to provide or disclose Specified Information on Securities must provide the Specified Information on Securities itself or entrust another party to do so, or must disclose such information using the Internet or through other means, pursuant to the provisions of Cabinet Office Ordinance.

(3) When an Issuer that has been disclosing Information on the Issuer (meaning Information on the Issuer as prescribed in paragraph (1) of the following Article; hereinafter the same applies in this paragraph) continuously for the period specified by Cabinet Office Ordinance pursuant to the provisions of paragraph (1) of the following Article seeks to provide or disclose Specified Information on Securities pursuant to the provisions of the preceding paragraph, and the Issuer has indicated in said Specified Information on Securities, pursuant to the provisions of Cabinet Office Ordinance, that reference should be made to the latest Information on the Issuer and to the Amended Information on the Issuer set forth in paragraph (3) of that Article with respect that that Issuer (hereinafter referred to as "Reference Information"), the Issuer is deemed to have provided or disclosed the information specified by Cabinet Office Ordinance as information about the Issuer that is part of the Specified Information on Securities.

(4) If, between the day on which an Issuer that provides or discloses Specified Information on Securities pursuant to the provisions of paragraph (2), provides or discloses that information and the day on which one year has elapsed since that day (or, in the cases specified by Cabinet Office Ordinance as those in which it is found not to damage the public interest or result in insufficient investor protection, within the period specified by Cabinet Office Ordinance), there is a particular requiring amendment in the Specified Information on Securities, the Issuer must provide or disclose information indicating that it is amending that particular (hereinafter referred to as "Amended Specified Information on Securities"), pursuant to the provisions of Cabinet Office Ordinance.

(5) An Issuer that has disclosed Specified Information on Securities pursuant to the provisions of paragraph (2) must continue to disclose such Specified Information on Securities (if any Amended Specified Information on Securities has been disclosed, such Amended Specified Information on Securities is included), until one year has elapsed since the date that it disclosed the Specified Information on Securities (or, in the cases specified by Cabinet Office Ordinance as those in which it is found not to damage the public interest or result in insufficient investor protection, for the period specified by Cabinet Office Ordinance).

(Provision or Disclosure of Information on the Issuer)

Article 27-32 (1) The Issuer set forth in each of the following items, pursuant to the provisions of Cabinet Office Ordinance, must provide the holders of the Securities set forth in the relevant item with the information about that Issuer that is specified by Cabinet Office Ordinance (hereinafter referred to as "Information on the Issuer") or disclose the same, at least once each business year (if the Issuer is not a company or in any other cases specified by Cabinet Office Ordinance, the period specified by Cabinet Office Ordinance; the same applies in paragraph (4), Article 172-11, paragraph (1) and Article 185-7, paragraph (29), item (v)); provided, however, that this does not apply in the cases that are specified by Cabinet Office Ordinance as those in which, in consideration of liquidity and other circumstances, not doing so is found not to damage the public interest or result in insufficient investor protection:

(i) an Issuer of Securities for Professional Investors: Securities for Professional Investors issued by the Issuer; or

(ii) an Issuer that has provided or disclosed Specified Information on Securities pursuant to the provisions of paragraph (2) of the preceding Article (excluding the Issuer specified in the preceding item): the Securities to which the provided or disclosed Specified Information on Securities pertains.

(2) If Securities that did not fall under the category of Securities for Professional Investors have come to fall under this category (except in a case specified by Cabinet Office Ordinance), the Issuer of such Securities must provide the holder of such Securities with the Information on the Issuer or disclose the same, without delay, pursuant to the provisions of Cabinet Office Ordinance.

(3) If there is a particular that is required to be amended in the Information on the Issuer, an Issuer set forth in one of the items of paragraph (1) must provide or disclose information indicating that it is amending that particular (hereinafter referred to as the "Amended Information on the Issuer"), pursuant to the provisions of Cabinet Office Ordinance.

(4) An Issuer that has disclosed the Information on the Issuer pursuant to the provisions of paragraph (1) or (2) must continue to disclose such Information on the Issuer (if any Amended Information on the Issuer has been disclosed, such Amended Information on the Issuer is included), from the date on which it discloses that Information on the Issuer until the date on which it provides or discloses the Information on the Issuer for the business year following that in which it discloses the relevant Information on the Issuer (if Securities for Professional Investors to which the Information on the Issuer pertains come to no longer fall under the category of Securities for Professional Investors or in any other case specified by Cabinet Office Ordinance, for the period specified by Cabinet Office Ordinance).

(Provision or Disclosure of Foreign Securities Information)

Article 27-32-2 (1) If a Financial Services Provider, etc. sells Securities through a Secondary Distribution of Securities falling under Article 4, paragraph (1), item (iv) (hereinafter referred to as a "Secondary Distribution of Foreign Securities"), the Financial Services Provider, etc., in advance of selling of, or at the same time as it sells such Securities, must provide the other party with the information specified by Cabinet Office Ordinance as information about the Securities and about the Issuer of the Securities (hereinafter collectively referred to as the "Foreign Securities Information"), or must disclose such information; provided, however, that this does not apply if the Issuer of the Securities has already disclosed Specified Information on Securities, etc. for the relevant Securities, nor does it apply in any other case specified by Cabinet Office Ordinance.

(2) If a Financial Services Provider, etc. making a Secondary Distribution of Foreign Securities is so requested by a person that acquires the Securities through the Secondary Distribution of Foreign Securities and entrusts those Securities to the custody of the Financial Services Provider, etc.; if it is so requested by a person specified by Cabinet Office Ordinance as being equivalent thereto; or in a case specified by Cabinet Office Ordinance as one in which a fact has occurred that may have a material influence on the investors' investment decisions, the Financial Services Provider, etc. must provide the Foreign Securities Information to that person or must disclose such information; provided, however that this does not apply in the cases that are specified by Cabinet Office Ordinance as those in which, in light of the availability of information on the relevant Securities, the status of holding of the Securities, and other considerations, not doing so is found not to damage the public interest or result in insufficient investor protection.

(3) A Financial Services Provider, etc. seeking to provide or disclose Foreign Securities Information pursuant to the preceding two paragraphs must provide the Foreign Securities Information personally or entrust another party to do so, or must disclose the same using the Internet or through any other means, pursuant to the provisions of Cabinet Office Ordinance.

(Compensatory Liability in Connection with False Specified Information on Securities, etc.)

Article 27-33 The provisions of Article 18, paragraph (1); Article 19; Article 20; and Article 21 (excluding item (iii) of paragraph (1); items (ii) and (iii) of paragraph (2); and also excluding paragraph (3)) apply mutatis mutandis to the Specified Information on Securities, etc. (meaning the Specified Information on Securities, the Reference Information in connection with Specified Information on Securities to which Article 27-31, paragraph (3) is applicable, or the Amended Specified Information on Securities (including Reference Information in connection with the Amended Specified Information on Securities; the same applies hereinafter)). In this case, in Article 18, paragraph (1), the term "a Registration Statement" is deemed to be replaced with "any Specified Information on Securities, etc. (meaning the Specified Information on Securities, etc. prescribed in Article 27-33; the same applies hereinafter)", the phrase "false statement" is deemed to be replaced with "false information", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", the phrase "omits a statement of material fact" is deemed to be replaced with "omits to give information concerning a material fact", the phrase "the person that submitted the Registration Statement" is deemed to be replaced with "the Issuer that provided or disclosed the Specified Information on Securities, etc.", the phrase "person that acquires the Securities through the Public Offering or Secondary Distribution" is deemed to be replaced with "person that acquires the Securities through a Specified Solicitation, etc. (meaning a Specified Solicitation, etc. prescribed in Article 27-31, paragraph (1); the same applies hereinafter) to which the Specified Information on Securities, etc. pertains (if the Specified Information on Securities, etc. has not been disclosed, this is limited to a person that has been provided with the Specified Information on Securities, etc.; hereinafter the same applies in this paragraph and Article 21 as applied mutatis mutandis through the replacement of certain terms pursuant to Article 27-33), and the phrase "statement was false" is deemed to be replaced with the "information was false"; in Article 19, paragraph (2), the phrase "the Registration Statement or the Prospectus" is deemed to be replaced with the "Specified Information on Securities, etc.", the phrase "false statement" is deemed to be replaced with "false information", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", and the phrase "omits a statement of material fact" is deemed to be replaced with "omits to give information concerning a material fact"; in Article 20, the phrase "Article 18" is deemed to be replaced with "Article 18 as applied mutatis mutandis through the replacement of certain terms pursuant to Article 27-33", the phrase "the Registration Statement or the Prospectus" is deemed to be replaced with "the Specified Information on Securities, etc.", the phrase "false statement" is deemed to be replaced with "false information", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", the phrase "omits a statement of material fact" is deemed to be replaced with "omits to give information concerning a material fact", and the phrase "within seven years (excluding, if an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) has been issued, the period from the day on which the order for suspension is issued to the day on which the order is canceled) of the time that the notification under Article 4, paragraphs (1) to (3) inclusive for the relevant Public Offering or Secondary Distribution of the Securities comes into effect or the Prospectus is delivered" is deemed to be replaced with "within seven years of the time that the Specified Information on Securities, etc. is provided or disclosed"; in the non-itemized part of Article 21, paragraph (1), the term "Registration Statement" is deemed to be replaced with "Specified Information on Securities, etc.", the phrase "false statement" is deemed to be replaced with "false information", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", the phrase "omits a statement of material fact" is deemed to be replaced with "omits to give information concerning a material fact", the phrase "Public Offering or Secondary Distribution" is deemed to be replaced with "Specified Solicitation, etc.", and the phrase "statement was false" is deemed to be replaced with "information was false"; in Article 21, paragraph (1), item (i), the phrase "company that submitted the Registration Statement" is deemed to be replaced with "Issuer that has provided or disclosed the Specified Information on Securities, etc.", the phrase "at the time of submission of the Registration Statement" is deemed to be replaced with "at the time that the Specified Information on Securities, etc. was provided or disclosed", the phrase "incorporator of the company" is deemed to be replaced with "incorporator of the Issuer or any other person that can be regarded as equivalent thereto", and the phrase "the Registration Statement was submitted before the incorporation of the company" is deemed to be replaced with "the Specified Information on Securities, etc. was provided or disclosed before the establishment or inauguration of the Issuer"; in Article 21, paragraph (1), item (ii), the phrase "for which the Secondary Distribution was made" is deemed to be replaced with "for which the Specified Solicitation, etc. (limited to Specified Solicitation, etc. falling under the category of a Specified Offer to Sell, etc. (meaning a Specified Offer to Sell, etc. as prescribed in Article 27-31, paragraph (1); hereinafter the same applies in this item) was made" and the phrase "through a Secondary Distribution" is deemed to be replaced with "through a Specified Offer to Sell, etc."; in Article 21, paragraph (1), item (iv), the phrase "the Public Offering" is deemed to be replaced with "the Specified Solicitation, etc. (limited to Specified Solicitation, etc. falling under the category of an Exclusive Solicitation of Offers to Acquire (meaning an Exclusive Solicitation of Offers to Acquire as prescribed in Article 27-31, paragraph (1)); in Article 21, paragraph (2), item (i), the phrase "or (ii)" is deemed to be replaced with ", (ii), or (iv)"; in Article 21, paragraph (2), item (i), the phrase "statement was false" is deemed to be replaced with "information was false"; in Article 21, paragraph (4), the phrase "Public Offering or Secondary Distribution of Securities" is deemed to be replaced with "Specified Solicitation, etc."; in item (i) of that paragraph, the term "Securities" is deemed to be replaced with "Securities for which the Specified Solicitation, etc. was made"; in Article 21, paragraph (4), item (ii), the term "Securities" is deemed to be replaced with "Securities for which the Specified Solicitation, etc. was made"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(Compensatory Liability in Connection with False Specified Information)

Article 27-34 The provisions of Articles 21-2 to 22 inclusive apply mutatis mutandis to Specified Information (meaning Specified Information on Securities, etc. or Information on the Issuer, etc. (meaning Information on the Issuer or Amended Information on the Issuer; the same applies hereinafter); the same applies in Article 27-35). In this case, in Article 21-2, paragraph (1), the phrase "a document set forth in one of the items of Article 25, paragraph (1) (excluding items (v) and (ix)) (hereinafter referred to as a 'Document' in this Article)" is deemed to be replaced with "the Specified Information (meaning the Specified Information prescribed in Article 27-34; the same applies hereinafter) disclosed pursuant to the provisions of Article 27-31, paragraph (2), (4), or (5) or Article 27-32 (hereinafter referred to as 'Disclosed Information')", the phrase "false statement" is deemed to be replaced with "false information", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", the phrase "omits a statement of material fact" is deemed to be replaced with "omits to give information concerning a material fact", the phrase "the person submitting the Document" is deemed to be replaced with "the Issuer disclosing the Disclosed Information", the phrase "a person that, during the period that the Document is being made available for public inspection as required by Article 25, paragraph (1), acquires Securities issued by the person submitting that Document (excluding a document set forth in Article 25, paragraph (1), item (xii)) or by a person whose Parent Company, etc. (meaning a Parent Company, etc. as defined by Article 24-7, paragraph (1)) is the person submitting the document (limited to a document set forth in Article 25, paragraph (1), item (xii))" is deemed to be replaced with "a person that, during the period that the Document is being disclosed pursuant to any of these provisions, acquires Securities issued by said Issuer", the phrase "or Secondary Distribution" is deemed to be replaced with ", Secondary Distribution, or Specified Solicitation, etc. (meaning the Specified Solicitation, etc. prescribed in Article 27-31, paragraph (1); the same applies hereinafter)", the phrase "statement being false" is deemed to be replaced with "information being false", and the phrase "False Statement, etc." is deemed to be replaced with "False Information, etc."; in Article 21-2, paragraph (2), the phrase "False Statement, etc. in the relevant Document" is deemed to be replaced with "False Information, etc. that pertains to the relevant Disclosed Information" and the phrase "the day of the Disclosure of the False Statement, etc." is deemed to be replaced with "the day of the Disclosure of the False Information, etc."; in Article 21-2, paragraph (3), the phrase "Disclosure of a False Statement, etc." is deemed to be replaced with "Disclosure of False Information, etc.", the phrase "means that the person submitting the document" is deemed to be replaced with "means that the Issuer disclosing the Disclosed Information", the phrase "over the person submitting the Document" is deemed to be replaced with "over the Issuer", the phrase "that the Document's False Statement, etc. concerns" is deemed to be replaced with "that the False Statement, etc. in the Disclosed Information concerns", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", and the phrase "through public inspection provided for in Article 25, paragraph (1) or through other means" is deemed to be replaced with "pursuant to the provisions of Cabinet Office Ordinance"; in Article 21-2, paragraphs (4) and (5), the phrase "the Document's False Statement, etc." is deemed to be replaced with "the False Information, etc. in the Disclosed Information"; in Article 21-3, the phrase "Article 21-2" is deemed to be replaced with "Article 21-2 as applied mutatis mutandis through the replacement of certain terms pursuant to Article 27-34", the phrase "a document set forth in one of the items of Article 25, paragraph (1) (excluding Article 25, paragraph (1), items (v) and (ix))" is deemed to be replaced with "the Disclosed Information (meaning the Disclosed Information prescribed in Article 21-2, paragraph (1) as applied mutatis mutandis through the replacement of certain terms pursuant to Article 27-34; the same applies hereinafter))", the phrase "the phrase 'three years' is deemed to be replaced with 'two years' " is deemed to be replaced with "the phrase 'false statement' is deemed to be replaced with 'false information', the phrase 'that is required to be stated' is deemed to be replaced with 'that is required to be provided or disclosed', the phrase 'omits a statement as to a material particular' is deemed to be replaced with 'omits to give information concerning a material fact', the phrase 'three years' is deemed to be replaced with 'two years' ", and the phrase "within five years of the time that the document is submitted" is deemed to be replaced with "within five years of the day on which the Disclosed Information is disclosed"; in Article 22, paragraph (1), the phrase "If a Registration Statement contains" is deemed to be replaced with "If Specified Information contains", the phrase "a false statement" is deemed to be replaced with "false information", the phrase "that is required to be stated" is deemed to be replaced with "that is required to be provided or disclosed", the phrase "omits a statement as to a material particular" is deemed to be replaced with "omits to give information concerning a material fact", the phrase "persons set forth in Article 21, paragraph (1), items (i) and (iii)" is deemed to be replaced with "a person that, at the time of the provision or disclosure of the Specified Information, is an officer (meaning an officer as prescribed in Article 21, paragraph (1), item (i)) of the Issuer that provided or disclosed said Specified Information, or an incorporator or founder of the Issuer or any other person equivalent thereto (but only if the Specified Information, etc. is provided or disclosed before the incorporation or inauguration of the Issuer)", the phrase "statement is false" is deemed to be replaced with the "information is false", the phrase "issued by the person submitting the Registration Statement" is deemed to be replaced with "of the Issuer that provided or disclosed the Specified Information", and the phrase "other than through a Public Offering or Secondary Distribution" is deemed to be replaced with "(if the Specified Information has not been disclosed, this is limited to the persons that have been provided with the Specified Information; and, if the Specified Information falls under the category of Specified Information on Securities, etc. (meaning the Specified Information on Securities, etc. prescribed in Article 27-33), this is limited to a person that has acquired such Securities other than through a Public Offering, Secondary Distribution, or Specified Solicitation, etc.)"; in Article 22, paragraph (2), the phrase "Article 21, paragraph (2), items (i) and (ii)" is deemed to be replaced with "Article 21, paragraph (2), item (i)"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(Compensatory Liability of a Violator in Connection with Foreign Securities Information)

Article 27-34-2 (1) A Financial Services Provider, etc. that violates the provisions of Article 27-32-2, paragraph (1) in selling Securities is liable to compensate a person that purchases those Securities, for damage arising from the violation.

(2) A Financial Services Provider, etc. that sells Securities through a Secondary Distribution of Foreign Securities, using Foreign Securities Information that contains false information about a material particular, omits information about a material particular that is required to be provided or disclosed, or omits to give information concerning a material fact that is necessary to prevent it from being misleading, is liable to compensate for damage sustained by a person that purchases said Securities without knowing that the information is false or has been omitted; provided, however, that this does not apply if the Financial Services Provider, etc. that would be liable for such compensation proves that it did not know, and in the exercise of reasonable care could not have known, that the information was false or had been omitted.

(3) If Foreign Securities Information that is disclosed pursuant to the provisions of Article 27-32-2, paragraph (3) (hereinafter referred to as "Disclosed Information" in this paragraph) contains false information about a material particular, omits information about a material particular that is required to be provided or disclosed, or omits to give information concerning a material fact that is necessary to prevent it from being misleading, the Financial Services Provider, etc. that discloses the Disclosed Information is liable to compensate a person that, without knowing that the information is false or has been omitted, acquires Securities to which the Disclosed Information pertains from the Financial Services Provider other than through a Public Offering or Secondary Distribution or Exclusive Solicitation of Offers to Acquire, etc., during the period in which the Disclosed Information is being disclosed pursuant to paragraph (3) of that Article, for damage arising from the information being false or having been omitted; provided, however, that this does not apply if the Financial Services Provider, etc. that would be liable for such damages proves that it did not know, and in the exercise of reasonable care could not have known, that the information was false or had been omitted.

(Collection of Reports and Inspection of a Provider of Specified Information)

Article 27-35 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order an Issuer that has provided or disclosed Specified Information, an Issuer that is found to be required to provide or disclose Specified Information, the Underwriter of Securities to which Specified Information pertains, or any other concerned party or witness to submit reports or materials that should serve as a reference, and may have the relevant officials inspect that person's books and documents or any other articles of theirs.

Chapter III Financial Services Providers, etc.

Section 1 General Provisions

Subsection 1 General Rules

Article 28 (1) The term "Type I Financial Instruments Business" as used in this Chapter means the performance of one of the following acts in the course of trade, within the Financial Instruments Business:

(i) an act set forth in Article 2, paragraph (8), items (i) to (iii) inclusive, item (v), item (viii), or item (ix) with regard to Securities (excluding rights set forth in the items of Article 2, paragraph (2) that are deemed to be Securities pursuant to the provisions of that paragraph);

(ii) an act set forth in Article 2, paragraph (8), item (iv), or an act set forth in item (v) of that paragraph in relation to Over-the-Counter Derivatives Transactions;

(iii) an act falling under one of the following sub-items (a) to (c) inclusive:

(a) the Wholesale Underwriting of Securities that is specified by Cabinet Order as involving a high necessity to manage the risk of loss;

(b) the Wholesale Underwriting of Securities other than that which is set forth in sub-item (a); or

(c) an act set forth in Article 2, paragraph (8), item (vi) other than the Wholesale Underwriting of Securities.

(iv) an act set forth in Article 2, paragraph (8), item (x); or

(v) an act set forth in Article 2, paragraph (8), item (xvi) or (xvii).

(2) The term "Type II Financial Instruments Business" as used in this Chapter means the performance of one of the following acts in the course of trade, within the Financial Instruments Business:

(i) an act set forth in Article 2, paragraph (8), item (vii);

(ii) an act set forth in Article 2, paragraph (8), items (i) to (iii) inclusive, item (v), item (viii), or item (ix) with regard to rights set forth in the items of Article 2, paragraph (2) that are deemed to be Securities pursuant to the provisions of that paragraph;

(iii) an act set forth in Article 2, paragraph (8), items (i) to (iii) inclusive or item (v) (other than one that is set forth in item (i) or (ii) of the preceding paragraph or the preceding item); or

(iv) an act set forth in Article 2, paragraph (8), item (xviii).

(3) The term "Investment Advisory and Agency Services" as used in this Chapter means the performance of one of the following acts in the course of trade, within the Financial Transaction Business:

(i) an act set forth in Article 2, paragraph (8), item (xi); or

(ii) an act set forth in Article 2, paragraph (8), item (xiii).

(4) The term "Investment Management" as used in this Chapter means the performance of one of the following acts in the course of trade, within the Financial Instruments Business, and includes the performance of such an act by a bank, by a Cooperative Financial Institution, or by any other financial institution specified by Cabinet Order, in the course of trade:

(i) an act set forth in Article 2, paragraph (8), item (xii);

(ii) an act set forth in Article 2, paragraph (8), item (xiv); or

(iii) an act set forth in Article 2, paragraph (8), item (xv).

(5) The term "Securities, etc. Management" as used in this Chapter means services within the Type I Financial Instruments Business which are connected with the act set forth in paragraph (1), item (v).

(6) The term "Investment Advisory Services" as used in this Chapter means services within Investment Advisory and Agency Services which are connected with the act set forth in paragraph (3), item (i).

(7) The term "Wholesale Underwriting of Securities" as used in this Chapter means the underwriting of Securities prescribed in Article 2, paragraph (8), item (vi) which falls under a category set forth in one of the following items:

(i) the acquisition of all or part of the relevant Securities from the Issuer or holder (excluding Financial Services Providers and registered financial institutions; the same applies in the following item) with the aim of having other persons acquire said Securities; or

(ii) the conclusion of a contract stipulating that if no other person acquires all or part of the relevant Securities, the Underwriter will acquire those that remain from the Issuer or holder.

(8) The term "Securities Services" as used in this Chapter means the performance of one of the following acts in the course of trade:

(i) the purchase and sale of Securities, or intermediation, brokerage (excluding Brokerage for the Clearing of Securities, etc.), or agency for the same;

(ii) intermediation, brokerage, or agency for entrustment of the purchase and sale of Securities on a Financial Instruments Exchange Market or foreign Financial Instruments Market;

(iii) the following transactions, among Market Transactions of Derivatives:

(a) a transaction comprising a purchase and sale in which the parties to the purchase and sale promise to deliver and take delivery of a Security (including a standardized instrument as set forth in Article 2, paragraph (24), item (v) which is connected with a Security, other than one that is specified by Cabinet Order; hereinafter the same applies in this item) and its value at a fixed time in the future, and which the parties may settle by delivering and taking delivery of the difference in values if they sell or buy back the underlying Security;

(b) a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the numerical value of a Securities indicator upon which the parties agree in advance (hereinafter referred to as the "Agreed Figure for the Securities" in this Chapter) and the actual numerical value of the Securities indicator at a fixed time in the future (hereinafter referred to as the "Actual Figure for the Securities" in this Chapter);

(c) a transaction comprising the first party's promise to grant the second party the option of effecting one of the following transactions between them by a unilateral manifestation of the second party's intention alone, and the second party's promise to pay the value of that option:

1. a purchase and sale of Securities; and

2. a transaction set forth in one of sub-items (a), (b), (d), or (e) (including a transaction equivalent to the transaction set forth in sub-item (b) that is prescribed by the Financial Instruments Exchange).

(d) a transaction comprising the parties' mutual promise that, for the amount of money they have set as the principal, the first party will pay money to the second based on the interest rate, etc. of agreed-upon Securities or based on the rate of change in an agreed-upon Securities indicator (excluding the interest rate, etc. of Securities and numerical values calculated based on them; the same applies in this sub-item (d) and sub-item (e) of the following item) during the period they have agreed to, and the second party will pay money to the first based on an agreed-upon money rate or the interest rate, etc. of agreed-upon Securities, or based on the value of an agreed-upon currency or the rate of change in an agreed-upon Securities indicator during the period they have agreed to (including transactions in which the parties promise that, in addition to paying such amounts, they will also deliver and take delivery of money or Securities equivalent to the amount they have set as the principal); and

(e) a transaction specified by Cabinet Order which is similar to one of the transactions set forth in sub-items (a) to (d) inclusive.

(iv) the following transactions, among Over-the-Counter Derivatives Transactions:

(a) a transaction comprising a purchase and sale in which the parties to the purchase and sale promise to deliver and take delivery of a Security (other than one specified by Cabinet Order; hereinafter the same applies in this item) and its value at a fixed time in the future, and which the parties may settle by delivering and taking delivery of the difference in values if they sell back or buy back the underlying Security or if they take some other action that is specified by Cabinet Order;

(b) a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the Agreed Figure for the Securities and the Actual Figure for the Securities, or a transaction similar thereto;

(c) a transaction comprising the first party's promise to grant the second party the option of effecting one of the following transactions between them by a unilateral manifestation of the second party's intention alone, and the other party's promise to pay the value of that option, or any transaction similar thereto:

1. a purchase and sale of Securities; and

2. a transaction set forth in sub-items (a), (b), (e), and (f).

(d) a transaction comprising, on one side, the first party's promise to grant the second party the option of effecting a transaction by a unilateral manifestation of the second party's intention alone, in which the parties pay and receive the amount of money calculated based on the difference between the numerical value that they have agreed in advance to use as the Agreed Figure for the relevant Securities indicator if the second party manifests the intention to effect the transaction, and the Actual Figure of the Securities indicator at the time the second party manifests that intention, and, on the other side, the second party's promise to pay the value of that option, or any transaction similar thereto;

(e) a transaction comprising the parties' mutual promise that, for the amount of money they have set as the principal, the first party will pay money to the second based on the interest rate, etc. of agreed-upon Securities or based on the rate of change in an agreed-upon Securities indicator during the period they have agreed to, and the second party will pay money to the first based on an agreed-upon money rate or the interest rate, etc. of agreed-upon Securities, or based on the value of agreed-upon currencies or the rate of change in an agreed-upon Securities indicator during the period they have agreed to (including transactions comprising the parties' promise that, in addition to paying such amounts, they will also deliver and take delivery of money or Securities equivalent to the amount they have set as the principal), or any transaction similar thereto; and

(f) a transaction, other than what is set forth in sub-items (a) to (e) inclusive, that has an economic nature similar to these, and that is specified by Cabinet Order as a transaction regarding which it is found to be necessary to ensure the public interest or the protection of investors.

(v) a transaction conducted on a foreign Financial Instruments Market that is similar to a transaction set forth in item (iii);

(vi) intermediation, brokerage (excluding Brokerage for the Clearing of Securities, etc.), or agency for a transaction set forth in one of the preceding three items (hereinafter referred to as a "Transaction of Securities-Related Derivatives") or intermediation, brokerage, or agency for the entrustment of a transaction set forth in item (iii) or the preceding item;

(vii) an act set forth in Article 2, paragraph (8), item (v) that is connected with the purchase and sale of a Security, a Transaction of Securities-Related Derivatives, or any other transaction specified by Cabinet Order; or

(viii) an act set forth in Article 2, paragraph (8), item (vi), (viii), or (ix).

Subsection 2 Financial Services Providers

(Registration)

Article 29 A person may not engage in Financial Instruments Business if that person has not been registered by the Prime Minister.

(Application for Registration)

Article 29-2 (1) A person seeking the registration referred to in the preceding Article must submit a written application for registration to the Prime Minister, in which it states the following particulars. In this, a foreign corporation seeking to engage in Type I Financial Instruments Business must designate a domestic representative (limited to one that takes charge of business at all business offices or offices that said foreign corporation has in Japan so as to engage in Type I Financial Instruments Business) before submitting the written application for registration:

(i) the person's trade name or name;

(ii) the amount of stated capital or the total amount of contributions, if it is a corporation (or if it is a foreign corporation seeking to engage in Type I Financial Instruments Business, the amount of stated capital or the total amount of contributions and the amount of brought-in capital (meaning assets corresponding to the stated capital that are brought into Japan; the same applies hereinafter));

(iii) the names of its officers, if it is a corporation (including the domestic representative, if it is a foreign corporation; hereinafter the same applies in this Chapter (excluding Article 29-4, paragraph (1), item (v), sub-item (e)3.) and Section 5) to Chapter III-3 inclusive);

(iv) if the person has an employee as specified by Cabinet Order, the name of that employee;

(v) the business category (meaning which of the acts set forth in Article 28, paragraph (1), item (i), item (ii), item (iii), sub-items (a) to (c) inclusive, or item (iv), or which, among Securities, etc. Management, Type II Financial Instruments Business, Investment Advisory and Agency Services, or Investment Management, is the business category for which the person seeks registration);

(vi) the name and location of the head office and other business offices or offices (or if it is a foreign corporation, the head office, and the principal business office or office in Japan, or other business offices or offices in Japan);

(vii) if the person engages in other business, the business type; and

(viii) other particulars specified by Cabinet Office Ordinance.

(2) The following documents must accompany the written application for registration referred to in the preceding paragraph:

(i) a document pledging that the applicant does not fall under any of the items of Article 29-4, paragraph (1) (other than item (i), sub-items (c) and (d) or item (v), sub-item (c));

(ii) a document stating the things specified by Cabinet Office Ordinance as constituting the business outline and business methods, and any other documents specified by Cabinet Office Ordinance; and

(iii) in addition to what is set forth in the preceding two items, if the person is a corporation, its articles of incorporation, its certificate of registered information, and any other document specified by Cabinet Office Ordinance.

(3) As concerns the documents set forth in item (iii) of the preceding paragraph accompanying a written application for registration, if the articles of incorporation have been prepared as electronic or magnetic records, such electronic or magnetic records (limited to those specified by Cabinet Office Ordinance) may accompany the written application in lieu of paper documents.

(4) Calculation of brought-in capital is specified by Cabinet Order.

(Registration in the Register)

Article 29-3 (1) Whenever an application is filed for the registration referred to in Article 29, unless the Prime Minister refuses the registration pursuant to the provisions of paragraph (1) of the following Article, the Prime Minister shall register the following particulars in the Financial Services Providers' register:

(i) the particulars set forth in the items of paragraph (1) of the preceding Article; and

(ii) the date of registration and the registration number.

(2) The Prime Minister must make the Financial Services Providers register available for public inspection.

(Refusal of Registration)

Article 29-4 (1) The Prime Minister must refuse to effect a registration if the applicant for registration falls under one of the following items, or if the written application for registration or a document or electronic or magnetic record that is required to accompany it contains a false statement or record or omits a statement or record of a material fact:

(i) a person falling under one of the following:

(a) a person that has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 52, paragraph (1); Article 53, paragraph (3); or Article 57-6, paragraph (3); had the permission referred to in Article 60, paragraph (1) rescinded pursuant to the provisions of Article 60-8, paragraph (1); had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1); or had the registration referred to in Article 66-27 rescinded pursuant to the provisions of Article 66-42, paragraph (1); if five years have not yet passed since the date of the rescission; or a person that had obtained a registration or license of the same kind in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including authorization or any other administrative disposition similar to such a license or registration), but that has had that registration or license rescinded, if five years have not yet passed since the date of the rescission;

(b) a person that has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of this Act; the Secured Bonds Trust Act (Act No. 52 of 1905); the Act on Engagement in Trust Business by a Financial Institution (Act No. 43 of 1943); the Commodity Futures Act; the Act on Investment Trusts and Investment Corporations; the Real Estate Brokerage Act (Act No. 176 of 1952); the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates (Act No. 195 of 1954); the Installment Sales Act (Act No. 159 of 1961); the Money Lending Business Act (Act No. 32 of 1983); the Act on the Deposit, etc. Transaction Agreements of Specified Commodities, etc. (Act No. 62 of 1986); the Act Regulating Business Involving Commodity Investment (Act No. 66 of 1991); the Specified Joint Real Estate Ventures Act; the Act on the Securitization of Assets; the Act on Corporate Bond Issuance for Financial Corporations' Loan Business (Act No. 32 of 1999); the Trust Business Act (Act No. 154 of 2004); or any other Act specified by Cabinet Order, or for violating the provisions of a foreign law or regulation that is equivalent to one of these Acts, if five years have not yet passed since the day on which the person finished serving the sentence or ceased to be subject to its enforcement;

(c) a person that does other business which is found to be contrary to the public interest; or

(d) a person that does not have a sufficient personnel structure to perform Financial Instruments Business (excluding Investment Advisory and Agency Services) in an appropriate manner.

(ii) a corporation that has a person falling under one of the following as its officer (including an advisor, consultant, or any other person, irrespective of title, that is found to have at least the same amount of authority over the corporation as a director, executive officer, or any equivalent person; hereinafter the same applies in this item, Article 52, paragraph (2); Article 52-2, paragraph (2); and Article 57-20, paragraph (1), item (i) and paragraph (3)) or among those of its employees as are specified by Cabinet Order:

(a) an adult ward, a person under curatorship, or a person that is treated in the same manner under foreign laws and regulations;

(b) a person that has become subject to an order to commence bankruptcy proceedings and has not obtained a restoration of rights, or a person that is treated in the same manner under foreign laws and regulations;

(c) a person that has been sentenced to imprisonment or a heavier punishment (including an equivalent sentence under foreign laws and regulations), if five years have not yet passed since the day on which that person finished serving the sentence or ceased to be subject to its enforcement;

(d) a person that, during the 30 days prior to the date of rescission, was the officer of a corporation, in a case in which the corporation was a Financial Services Provider but has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 52, paragraph (1), Article 53, paragraph (3), or Article 57-6, paragraph (3); in a case in which the corporation was an Authorized Operator for On-Exchange Transactions prescribed in Article 60-4, paragraph (1) but has had the permission referred to in Article 60, paragraph (1) rescinded pursuant to the provisions of Article 60-8, paragraph (1); in a case in which the corporation was a Financial Instruments Intermediary but has had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1); in a case in which the corporation was a Credit Rating Agency but has had the registration referred to in Article 66-27 rescinded pursuant to the provisions of Article 66-42, paragraph (1); or in a case in which the corporation had obtained a registration or permission of the same kind in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including authorization or any other administrative disposition similar to such a registration or permission), but has had that registration or permission rescinded; if five years have not yet passed since the date of the rescission;

(e) an individual that was a Financial Services Provider but that has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 52, paragraph (1); an individual that was a Financial Instruments Intermediary but that has had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1); or an individual that had obtained a registration of the same kind in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including permission or any other administrative disposition similar to such a registration) or that had obtained permission of the same kind as the permission referred to in Article 60, paragraph (1) in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including permission or any other administrative disposition that is similar to such permission), but that has had that registration or permission rescinded; if five years have not yet passed since the date of the rescission;

(f) a person falling under the category of an officer whose dismissal or removal has been ordered pursuant to the provisions of Article 52, paragraph (2); Article 60-8, paragraph (2); Article 66-20, paragraph (2); or Article 66-42, paragraph (2); or an officer whose dismissal or removal has been ordered in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act, if five years have not yet passed since the day of the disposition; or

(g) a person that has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of one of the Acts prescribed in sub-item (b) of the preceding item or the Act to Prevent Illegal Activities by Members of Organized Crime Groups (Act No. 77 of 1991) (excluding the provisions of Article 32-2, paragraph (7) of that Act), or for violating the provisions of a foreign law or regulation that is equivalent to one of these Acts, or committing a crime specified by the Penal Code (Act No. 45 of 1907) or the Act on Punishment of Violent Acts (Act No. 60, 1926), if five years have not yet passed since the day on which the person finished serving the sentence or ceased to be subject to its enforcement.

(iii) an individual that falls under any of sub-items (a) to (f) inclusive or (g) (excluding the part that involves the provisions of Acts prescribed in item (i), sub-item (b)) of the preceding item, or an individual that has an employee specified by Cabinet Order that falls under any of sub-items (a) to (g) inclusive of the preceding item;

(iv) a person (other than an individual) seeking to engage in Type I Financial Instruments Business, Type II Financial Instruments Business, or Investment Management, whose stated capital or contributions in total are less than the amount of money that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors;

(v) a person falling under one of the following and seeking to engage in Type I Financial Instruments Business or Investment Management:

(a) a person other than a stock company (limited to one that has a board of directors, company auditors, or Committees (meaning Committees prescribed in Article 2, item (xii) of the Companies Act)) and a corporation of the same kind as a company with a board of directors incorporated in compliance with foreign laws and regulations (if a person seeks to engage in Type I Financial Instruments Business, limited to a person that engages in the same kind of business as Type I Financial Instruments Business in a foreign state in compliance with foreign laws and regulations (including a person specified by Cabinet Order as equivalent to such a person) and that has a business office or office in Japan);

(b) a person whose net assets (meaning the figure arrived at when the total amount of liabilities is deducted from the total amount of assets pursuant to the provisions of Cabinet Office Ordinance) are less than the amount of money that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors;

(c) a person engaged in other business that does not fall under one of the categories of business prescribed in Article 35, paragraph (1) or business set forth in the items of Article 35, paragraph (2), and that is found to compromise investor protection due to difficulties in managing the risk of loss in connection with said business;

(d) a corporation (excluding a foreign corporation) that has a person falling under one of the following as an individual Major Shareholder (if the applicant is a Subsidiary Company of a Holding Company (meaning a holding company as prescribed in Article 9, paragraph (4), item (i) of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade (Act No. 54 of 1947); hereinafter the same applies in this item and Article 32-4), this includes a Major Shareholder of said Holding Company; the same applies in sub-items (e) and (f)):

1. an adult ward or a person under curatorship, or a person that is treated in the same manner under foreign laws and regulations, whose statutory representative falls under one of sub-items (a) to (g) inclusive of item (ii); or

2. a person falling under one of sub-items (b) to (g) inclusive of item (ii).

(e) a corporation (excluding a foreign corporation) that has a person falling under one of the following as a corporate Major Shareholder; or

1. a corporation falling under item (i), sub-item (a);

2. a corporation that has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of one of the Acts prescribed in item (i), sub-item (b) or for violating the provisions of a foreign law or regulation that is equivalent to one of such Acts, if five years have not yet passed since the day on which the person finished serving the sentence or ceased to be subject to its enforcement; or

3. a corporation that has a person falling under one of sub-items (a) to (g) inclusive of item (ii) among the officers that represent it.

(f) a foreign corporation for which the foreign regulatory authority (meaning the Foreign Regulatory Authority for Financial Instruments defined in Article 189, paragraph (1) or any other regulatory authority specified by Cabinet Order that enforces foreign laws and regulations) has not confirmed that a person equivalent to a Major Shareholder is unlikely to compromise the sound and appropriate operation of Financial Instruments Business.

(vi) a person falling under one of the following and seeking to engage in Type I Financial Instruments Business:

(a) a person whose ratio as calculated based on the provisions of Article 46-6, paragraph (1) is less than 120 percent; or

(b) a person seeking to use a trade name that another Financial Services Provider (limited to those engaged in Type I Financial Instruments Business; the same applies in this sub-item (b)) is already using or a trade name that could give rise to the misconception that it is another Financial Services Provider.

(2) The term "Major Shareholder" as used in sub-items (d) to (f) inclusive of item (v) of the preceding paragraph means a person that holds voting rights (excluding the voting rights that are specified by Cabinet Office Ordinance in consideration of the manner in which they are held and other circumstances; hereinafter referred to as "Subject Voting Rights" in paragraph (4), Article 32, paragraphs (1) and (4)) constituting 20 percent or more (or 15 percent or more, if a fact has occurred that is specified by Cabinet Office Ordinance as something that is presumed to have a material influence on decisions about the company's financial and operational policies) of all shareholders', etc. voting rights (meaning the voting rights of all shareholders, all members, all partners, and all equity investors, and for a stock company, excluding voting rights in respect of shares that do not allow voting rights to be exercised with regard to all matters that can be resolved at a shareholders meeting, and including voting rights in respect of shares that are deemed to have voting rights pursuant to the provisions of Article 879, paragraph (3) of the Companies Act; the same applies hereinafter).

(3) The term "Subsidiary Company" as used in paragraph (1), item (v), sub-item (d) means a second company in which a first company holds the majority of all shareholders', etc. voting rights. In such a case, a second company in which a first company and one or more of its Subsidiary Companies hold the majority of all shareholders', etc. voting rights, or in which one or more of a first company's Subsidiary Companies hold the majority of all shareholders', etc. voting rights, is deemed to be the Subsidiary Company of said first company.

(4) With regard to the application of the provisions of paragraph (2) in a case set forth in one of the following items, the person set forth in the relevant item is deemed to hold the Subject Voting Rights prescribed in that item:

(i) if a person has the authority to exercise the company's Subject Voting Rights or the authority to give instructions on the exercise of said voting rights based on a money trust contract or other contract or based on the provisions of the law: said Subject Voting Rights; and

(ii) if a person that is related to the relevant person through a shareholding relationship, familial relationship, or other special relationship specified by Cabinet Order, holds Subject Voting Rights in a corporation: the Subject Voting Rights held by the person with the special relationship to the relevant person.

(5) The necessary particulars relevant to the application of the provisions of paragraph (2) and the preceding paragraph are specified by Cabinet Order.

(Authorization)

Article 30 (1) A Financial Services Provider must obtain the authorization of the Prime Minister if it seeks to perform the acts set forth in Article 2, paragraph (8), item (x) in the course of trade.

(2) Upon granting the authorization referred to in the preceding paragraph to a Financial Services Provider, the Prime Minister shall note this in said Financial Services Provider's registration.

(Conditions on Authorization)

Article 30-2 (1) The Prime Minister may attach conditions to the authorization referred to in paragraph (1) of the preceding Article.

(2) The conditions referred to in the preceding paragraph must constitute the minimum level of conditions that are necessary in the public interest and for the protection of investors.

(Application for Authorization)

Article 30-3 (1) A Financial Services Provider seeking the authorization referred to in Article 30, paragraph (1) must submit a written application for authorization to the Prime Minister, in which it states the following particulars:

(i) its trade name; and

(ii) the date of registration and its registration number.

(2) A document stating how the person manages the risk of loss, how duties are divided, and the other things specified by Cabinet Office Ordinance as constituting the business outline and business methods, and other documents specified by Cabinet Office Ordinance must accompany the written application for authorization referred to in the preceding paragraph.

(Criteria for Authorization)

Article 30-4 Before seeking to grant the authorization referred to in Article 30, paragraph (1), the Prime Minister shall examine whether there is compliance with the following criteria:

(i) an appropriate system and regulations are in place for managing the risk of loss;

(ii) the amount of stated capital exceeds the amount of money that is specified by Cabinet Order as necessary and appropriate in the public interest or for the protection of investors;

(iii) the amount of net assets exceeds the amount of money prescribed in the preceding item;

(iv) the provisions of Article 46-6, paragraph (2) are not being violated; and

(v) the applicant's price formation method, its methods of transfer and other settlement, and its Cabinet-Office-Ordinance-specified business outline and business methods are necessary and appropriate in the public interest or for the protection of investors.

(Registration of a Change)

Article 31 (1) If a particular set forth in the items of Article 29-2, paragraph (1) (excluding item (v)) changes, the Financial Services Provider must notify the Prime Minister of this within two weeks from the day of the change.

(2) Upon accepting a notification under the preceding paragraph, the Prime Minister shall register the particulars given in the notification in the Financial Services Provider register.

(3) If the business outline or business methods that a Financial Services Provider has stated in the documents set forth in Article 29-2, paragraph (2), item (ii) change, the Financial Services Provider must notify the Prime Minister of this without delay pursuant to the provisions of Cabinet Office Ordinance.

(4) If a Financial Services Provider seeks to change the particular set forth in Article 29-2, paragraph (1), item (v), it must have that change registered by the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(5) The provisions of Article 29-3 and Article 29-4 apply mutatis mutandis to the registration of a change referred to in the preceding paragraph. In this case, in Article 29-3, paragraph (1), the phrase "the following particulars" is deemed to be replaced with "the particulars subject to the change"; in Article 29-4, paragraph (1), the phrase "the following items" is deemed to be replaced with "the following items (excluding item (i), sub-items (a) to (c) inclusive, item (ii), and item (iii))"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(6) Notwithstanding the provisions of paragraph (3), if a Financial Services Provider that has obtained the authorization referred to in Article 30, paragraph (1) seeks to change the way it manages the risk of loss, its price formation method, its methods of transfer and other settlement, or the Cabinet-Office-Ordinance-specified business outline and business methods for which it has obtained that authorization, it must obtain the authorization of the Prime Minister.

(Security Deposits for Operations)

Article 31-2 (1) A Financial Services Provider (limited to individuals seeking to engage in Type II Financial Instruments Business and persons seeking to engage in Investment Advisory and Agency Services only; hereinafter the same applies in this Article) must deposit a business security deposit with the deposit office nearest to its principal business office or office.

(2) The amount of the business security deposit referred to in the preceding paragraph is specified by Cabinet Order in consideration of the actual condition of a Financial Services Provider's business and the need to protect investors.

(3) If a Financial Services Provider concludes a contract stating that the required business security deposit of the Financial Services Provider will be deposited if ordered by the Prime Minister, and has notified the Prime Minister of this, pursuant to the provisions of Cabinet Order, so long as that contract remains valid, the Financial Services Provider may refrain from depositing all or part of the business security deposit referred to in paragraph (1), in line with the amount of money that will be deposited pursuant to the contract (hereinafter referred to as the "Contract Amount" in this Article).

(4) If the Prime Minister finds it to be necessary for the protection of investors, the Prime Minister may order a person that has concluded a contract as referred to in the preceding paragraph with a Financial Services Provider, or may order the relevant Financial Services Provider, to deposit all or part of the amount equivalent to the Contract Amount.

(5) A Financial Services Provider must not begin Financial Instruments Business until it deposits the business security deposit referred to in paragraph (1) (or until it concludes a contract set forth in paragraph (3)) and notifies the Prime Minister of this.

(6) A person that concludes an Investment Advisory Contract with a Financial Services Provider, a person that concludes an Investment Advisory Contract or Discretionary Investment Contract based on a Financial Services Provider's agency or intermediation for that Investment Advisory Contract or an Discretionary Investment Contract, or a person that concludes a purchase and sale contract for Securities based on a Financial Services Provider's purchase and sale of Securities or its intermediation, brokerage, or agency for such a purchase and sale, has the right to receive payment of a claim arising from such a contract out of the business security deposit furnished by the Financial Services Provider, in preference over other creditors.

(7) The necessary particulars relevant to the exercise of the right referred to in the preceding paragraph are specified by Cabinet Order.

(8) If the amount of a business security deposit (including the Contract Amount; the same applies in paragraph (10)) comes to fall short of the amount specified by Cabinet Order as prescribed in paragraph (2) due to the exercise of the right referred to in paragraph (6) or for any other reason, the Financial Services Provider shall deposit the shortfall (or conclude a contract set forth in paragraph (3)) within three weeks from the day specified by Cabinet Office Ordinance and notify the Prime Minister of this without delay.

(9) National government bonds, municipal bonds, and other Securities specified by Cabinet Office Ordinance may serve as a business security deposit that is deposited pursuant to the provisions of paragraph (1) or the preceding paragraph.

(10) If the registration referred to in Article 29 is rescinded pursuant to the provisions of Article 52, paragraph (1) or (4) or Article 54, if the registration referred to in Article 29 loses its effect pursuant to the provisions of Article 50-2, paragraph (2), if a person has had a change registered as referred to in paragraph (4) of the preceding Article in connection with its engagement in the Financial Instruments Business other than in Type II Financial Instruments Business (but only if an individual engages in such business) or Investment Advisory and Agency Services, or if the amount of a business security deposit exceeds the amount specified by Cabinet Order as prescribed in paragraph (2), all or part of the business security deposit that is deposited pursuant to the provisions of paragraph (1), (4), or (8) may be refunded pursuant to the provisions of Cabinet Order.

(11) Beyond what is prescribed in the preceding paragraphs, the necessary particulars relevant to a business security deposit are specified by Cabinet Office Ordinance and by Ordinance of the Ministry of Justice.

(Restriction on the Use of Trade Names)

Article 31-3 A person that is not a Financial Services Provider must not use a trade name or name that refers to it as a Financial Services Provider, and must not use any trade name or name that is confusingly similar to this.

(Notification on Assumption of the Position of Director)

Article 31-4 (1) If the director or executive officer of a Financial Services Provider (limited to a person engaged in Type I Financial Instruments Business or Investment Management; hereinafter the same applies in this paragraph) assumes the position of director, accounting advisor (or, if the accounting advisor is a corporation, the position of a staff member that performs those duties; hereinafter the same applies in this and the following paragraphs), company auditor, or executive officer of another company (including if a director, accounting advisor, company auditor, or executive officer of another company is to concurrently hold the position of director or executive officer of the Financial Services Provider), or if that person resigns from the position of director, accounting advisor, company auditor, or executive officer of another company, that person must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(2) If the director or executive officer of a Financial Services Provider (limited to a person engaged in Securities Services other than Type I Financial Instruments Business) assumes the position of director, accounting advisor, company auditor, or executive officer of the Parent Bank, etc. or Subsidiary Bank, etc. of said Financial Services Provider (including if a director, accounting advisor, company auditor or executive officer of the Parent Bank, etc. or Subsidiary Bank, etc. comes to concurrently hold the position of director or executive officer of the Financial Services Provider), or if that person resigns from the position of director, accounting advisor, company auditor, or executive officer of the Parent Bank, etc. or Subsidiary Bank, etc., that person must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(3) The term "Parent Bank, etc." as used in the preceding paragraph means a bank or Cooperative Financial Institution, or a person that falls under any other category of financial institution specified by Cabinet Order, which Cabinet Order specifies as satisfying the requirement of being a corporation or other organization that holds the majority of all shareholders', etc. voting rights in a Financial Services Provider, or of being a corporation or other organization which is otherwise closely related to such a Financial Services Provider (such a corporation or other organization is referred to as a "Parent Corporation, etc." in Article 33-3, paragraph (2), item (iii) and Article 44-3).

(4) The term "Subsidiary Bank, etc." as used in paragraph (2) means a bank or Cooperative Financial Institution, or a person that falls under any other category of financial institution specified by Cabinet Order, which Cabinet Order specifies as satisfying the requirement of being a corporation or other organization in which a Financial Services Provider holds the majority of all shareholders', etc. voting rights, or of being a corporation or other organization which is otherwise closely related to such a Financial Services Provider (such a corporation or other organization is referred to as a "Subsidiary Corporation, etc." in Article 33-3, paragraph (2), item (iii) and Article 44-3).

(5) The necessary particulars relevant to a determination of whether the majority of all shareholders', etc. voting rights are held as prescribed in paragraph (3) are specified by Cabinet Office Ordinance in consideration of the manner in which they are held and other circumstances.

(Eligibility as a Director)

Article 31-5 The provisions of the proviso to Article 331, paragraph (2) (including as applied mutatis mutandis pursuant to Article 335, paragraph (1) of the Companies Act); Article 332, paragraph (2) (including as applied mutatis mutandis pursuant to Article 334, paragraph (1) of that Act); Article 336, paragraph (2); and the proviso to Article 402, paragraph (5) of that Act do not apply to Financial Services Providers (limited to those engaged in Type I Financial Instruments Business or Investment Management).

Subsection 3 Major Shareholders

(Submission of a Statement of Holdings in Subject Voting Rights)

Article 32 (1) A person that has become the Major Shareholder (meaning a Major Shareholder as prescribed in Article 29-4, paragraph (2); hereinafter the same applies in this Section) of a Financial Services Provider (limited to one engaged in Type I Financial Instruments Business or Investment Management and excluding foreign corporations; hereinafter the same applies in this Subsection) must submit a statement of holdings in Subject Voting Rights which states the Subject Voting Right holding rate (meaning the rate arrived at when the number of Subject Voting Rights held by the holder of said Subject Voting Rights is divided by the number of all shareholders', etc. voting rights in said Financial Services Provider), the purpose for which they are held, and other particulars specified by Cabinet Office Ordinance to the Prime Minister, without delay, pursuant to the provisions of Cabinet Office Ordinance.

(2) A document pledging that the relevant person does not fall under the purview of Article 29-4, paragraph (1), item (v), sub-item (d)1. or 2., or sub-item (e)1. to 3. inclusive, and other documents specified by Cabinet Office Ordinance must accompany the statement of holdings in Subject Voting Rights referred to in the preceding paragraph.

(3) If a Major Shareholder other than the Specified Major Shareholder of a Financial Services Provider becomes the Specified Major Shareholder of said Financial Services Provider, it must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(4) The term "Specified Major Shareholder" as used in the preceding paragraph means a person that holds Subject Voting Rights exceeding 50 percent of all shareholders', etc. voting rights in a company.

(5) The provisions of Article 29-4, paragraph (4) apply mutatis mutandis if the provisions of the preceding paragraph are applicable.

(Order for Measures to Be Taken by a Major Shareholder)

Article 32-2 (1) If the Major Shareholder of a Financial Services Provider falls under one of the categories in Article 29-4, paragraph (1), item (v), sub-item (d)1. or 2. or sub-item (e)1. to 3. inclusive, the Prime Minister may order said Major Shareholder to take measures so that it will cease to be the Major Shareholder of said Financial Services Provider or to take any other necessary measures within a fixed period of no longer than three months.

(2) If the Prime Minister finds it to be particularly necessary in the public interest or for the protection of investors in light of state of the business or assets of the Specified Major Shareholder (meaning a Specified Major Shareholder as provided for in paragraph (4) of the preceding Article; the same applies hereinafter) of a Financial Services Provider (if such a Specified Major Shareholder is a corporation, this includes the state of the assets of a Subsidiary Corporation, etc. of such Specified Major Shareholder (meaning a person falling under the category of a corporation or other organization in which the Specified Major Shareholder holds the majority of all shareholders', etc. voting rights, or that otherwise satisfies the requirements specified by Cabinet Order as a corporation or other organization that is closely related to the Specified Major Shareholder)), the Prime Minister, within the scope of this necessity, may order said Specified Major Shareholder to take measures that are necessary for improving the Financial Services Provider's business operations or the state of its assets.

(3) If the Specified Major Shareholder of a Financial Services Provider violates an order under the preceding paragraph, the Prime Minister may order the Specified Major Shareholder to take measures so that it will cease to be the Major Shareholder of said Financial Services Provider or to take other necessary measures within a fixed period of no longer than three months.

(Notification of Having Ceased to Be a Major Shareholder)

Article 32-3 (1) If the Major Shareholder of a Financial Services Provider ceases to be the Major Shareholder of said Financial Services Provider, it must notify the Prime Minister of this without delay.

(2) If the Specified Major Shareholder of a Financial Services Provider becomes a Major Shareholder other than the Specified Major Shareholder of said Financial Services Provider, it shall notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(Mutatis Mutandis Application of Provisions on Major Shareholders)

Article 32-4 The provisions of Article 32, paragraphs (1) and (2), Article 32-2, paragraph (1) and paragraph (1) of the preceding Article apply mutatis mutandis to the shareholders or equity investors of a Holding Company that has a Financial Services Provider as its Subsidiary Company (meaning a Subsidiary Company as prescribed in Article 29-4, paragraph (3)).

Subsection 4 Registered Financial Institutions

(Prohibition on Engagement in Securities Services by Financial Institutions)

Article 33 (1) It is prohibited for a bank or Cooperative Financial Institution, or for any other financial institution specified by Cabinet Order (hereinafter collectively referred to as a "Financial Institution" in this Article, the following Article and Article 201) to engage in Securities Services or Investment Management; provided, however, that with regard to Securities Services, this does not apply if the Financial Institution conducts the sale and purchase of Securities or Transactions of Securities-Related Derivatives for the purpose of investment pursuant to the provisions of other Acts or on the account of a person that entrusts it to do so based on a trust contract.

(2) The provisions of the main clause of the preceding paragraph do not apply if a Financial Institution conducts brokerage with written orders (meaning conducting a purchase and sale of Securities or a Transaction of Securities-Related Derivatives on a customer's account upon receiving written orders from the customer, and excluding transactions conducted based on its solicitation of a customer for such an order and transactions conducted upon the receipt of an order from the customer in connection with the Financial Institution's Investment Advisory Services; the same applies in item (i) of the following Article) or performs the act set forth in the relevant of the following items in connection with the Securities or transactions set forth in that item:

(i) Securities set forth in Article 2, paragraph (1), items (i) and (ii); Securities set forth in Article 2, paragraph (1), item (iii) (limited to those for which the government guarantees the redemption of the principal or the payment of interest, short-term bonds prescribed in Article 54-4, paragraph (1) of the Credit Union Act (Act No. 238 of 1951), and short-term agriculture and forestry bonds prescribed in Article 62-2, paragraph (1) of the Agriculture and Forestry Credit Union Act (Act No. 93 of 2001)); Securities set forth in Article 2, paragraph (1), item (iv); Securities set forth in Article 2, paragraph (1), item (v) (limited to those for which the government guarantees the redemption of the principal or the payment of interest, and short-term corporate bonds prescribed in Article 66, paragraph (1) of the Act on the Transfer of Corporate Bonds, etc. or those specified by Cabinet Order as similar to these); Securities set forth in Article 2, paragraph (1), item (viii); Securities set forth in Article 2, paragraph (1), item (xi) (limited to short-term investment corporation bonds prescribed in Article 139-12, paragraph (1) of the Act on Investment Trusts and Investment Corporations and those specified by Cabinet Order as similar to these; referred to as "Short-Term Investment Corporation Bonds, etc." in the following item); Securities set forth in Article 2, paragraph (1), items (xii) to (xiv) inclusive; Securities set forth in Article 2, paragraph (1), item (xv) (limited to those with a term between the day of issuance and the day of redemption of less than one year); Securities set forth in Article 2, paragraph (1), item (xvi); Securities specified by Cabinet Order among those set forth in Article 2, paragraph (1), item (xvii); Securities set forth in Article 2, paragraph (1), item (xviii); Securities specified by Cabinet Order among those set forth in Article 2, paragraph (1), item (xxi); and rights set forth in the items of Article 2, paragraph (2) that are deemed to be Securities pursuant to the provisions of that paragraph (excluding rights specified by Cabinet Order set forth in item (iv)): acts set forth in Article 2, paragraph (8), items (i) to (iii) inclusive, (vi), (viii), and (ix);

(ii) Securities set forth in Article 2, paragraph (1), items (x) and (xi) (excluding Short-Term Investment Corporation Bonds, etc.): acts set forth in Article 2, paragraph (8), items (i) to (iii) inclusive, and acts set forth in Article 2, paragraph (8), item (ix) (excluding dealings in a Secondary Distribution of Securities and in an exclusive Offer to Sell, etc. to Professional Investors);

(iii) Securities set forth in Article 2, paragraph (1), item (xvii) that have the nature set forth in Article 2, paragraph (1), item (i): the following acts:

(a) Market Transactions of Derivatives, Foreign Market Transaction of Derivatives, and acts set forth in Article 2, paragraph (8), item (ii) or (iii) in connection with these transactions;

(b) dealings in a Private Placement; and

(c) acts set forth in Article 2, paragraph (11), items (i) to (iii) inclusive (excluding those set forth in sub-items (a) and (b)) that the Financial Institution is entrusted with by a Financial Services Provider (limited to those engaged in Type I Financial Instruments Business) and performs for said Financial Services Provider.

(iv) Securities other than those set forth in the preceding three items, and rights set forth in Article 2, paragraph (2), items (iii) and (iv) that are deemed to be Securities pursuant to the provisions of Article 2, paragraph (2) and that are specified by Cabinet Order: the following acts:

(a) dealings in a Private Placement (excluding those involving Securities specified by Cabinet Order); and

(b) acts set forth in Article 2, paragraph (11), items (i) to (iii) inclusive (excluding those set forth in sub-item (a)) that the Financial Institution is entrusted with by a Financial Services Provider (limited to those engaged in Type I Financial Instruments Business) and performs for said Financial Services Provider.

(v) the following transactions: acts set forth in Article 2, paragraph (8), item (iv) (with regard to transactions set forth in sub-item (b), excluding those that fall under the category of cases specified by Cabinet Order as those in which the transaction is conducted with a large number of persons as the other parties thereto):

(a) Over-the-Counter Derivatives Transactions of Securities set forth in item (i) (including indices calculated by the method agreed upon between the parties based on the prices of two or more Securities connected with the relevant Securities); and

(b) Over-the-Counter Derivatives Transactions that are connected with the Securities set forth in the preceding three items (including indices calculated by the method agreed between the parties based on prices of two or more Securities pertaining to said Securities), and that can only be settled through the delivery and receipt of the difference in prices.

(vi) the purchase and sale of Securities, Transactions of Securities-Related Derivatives, and other transactions specified by Cabinet Order: Brokerage for the Clearing of Securities, etc.

(3) The provisions of Article 29 do not apply if a Financial Institution performs acts other than those set forth in Article 28, paragraph (8), items (iii) to (vi) inclusive (hereinafter referred to as "Transactions of Securities-Related Derivatives, etc.") among the following acts (hereinafter referred to as "Derivatives Transactions, etc.") in the course of trade, performs acts other than those set forth in Article 28, paragraph (8), item (vii) among those specified in Article 2, paragraph (8), item (v) in the course of trade, performs acts set forth in Article 2, paragraph (8), item (vii) in the course of trade, or provides Investment Advisory and Agency Services or Securities, etc. Management:

(i) Market Transactions of Derivatives, etc. (meaning Market Transactions of Derivatives and acts set forth in Article 2, paragraph (8), item (ii) or (iii) in connection with the same);

(ii) Over-the-Counter Derivatives Transactions, etc.; and

(iii) Foreign Market Transaction of Derivatives, etc. (meaning Foreign Market Transaction of Derivatives and acts set forth in Article 2, paragraph (8), item (ii) or (iii) in connection with the same).

(Registration of Financial Institutions)

Article 33-2 A Financial Institution must be registered by the Prime Minister if it seeks to perform any of the following acts in the course of trade, or if it seeks to provide Investment Advisory and Agency Services or engage in Securities, etc. Management:

(i) brokerage with written orders;

(ii) an act specified in one of the items of paragraph (2) of the preceding Article in connection with the Securities or transactions set forth in the relevant item (excluding those falling under the proviso to paragraph (1) of that Article);

(iii) Derivatives Transactions, etc. other than Transactions of Securities-Related Derivatives, etc. (excluding those conducted for the purpose of investment pursuant to the provisions of other Acts or on the account of a person that entrusts the Financial Institution to do so based on a trust contract), or acts other than those set forth in Article 28, paragraph (8), item (vii) among those specified in Article 2, paragraph (8), item (v); or

(iv) acts set forth in Article 2, paragraph (8), item (vii).

(Application for the Registration of a Financial Institution)

Article 33-3 (1) A person seeking the registration referred to in the preceding Article must submit a written application for registration to the Prime Minister, in which it states the following particulars:

(i) its trade name or name;

(ii) the amount of stated capital, the total amount of funds, or the total amount of contributions;

(iii) the names of its officers;

(iv) the names of its accounting advisors, if it is a company with accounting advisors;

(v) the names and locations of its head office and other business offices or offices;

(vi) if the person engages in other business, the business type; and

(vii) other particulars specified by Cabinet Office Ordinance.

(2) The following documents must accompany the written application for registration referred to in the preceding paragraph:

(i) a document pledging that the applicant does not fall under Article 33-5, paragraph (1), items (i) and (ii);

(ii) a document stating the person's way of managing the risk of loss, the way that duties are divided, and the other things specified by Cabinet Office Ordinance as constituting the business outline and business methods;

(iii) a document stating the things specified by Cabinet Office Ordinance as constituting the person's status as a Parent Corporation, etc., Subsidiary Corporation, etc., or other affiliated company; and

(iv) its articles of incorporation, certificate of registered information, balance sheet, profit and loss statement, and other documents specified by Cabinet Office Ordinance, other than those that are set forth in the preceding three items.

(3) As concerns the documents set forth in item (iv) of the preceding paragraph accompanying a written application for registration, if the articles of incorporation or balance sheet have been prepared as electronic or magnetic records or if electronic or magnetic records have been prepared for a profit and loss statement in lieu of a written document, such electronic or magnetic records (limited to those specified by Cabinet Office Ordinance) may accompany the written application for registration in lieu of the written documents.

(Registration in a Financial Institutions Register)

Article 33-4 (1) Whenever an application is filed for the registration referred to in Article 33-2, unless the Prime Minister refuses the registration pursuant to the provisions of paragraph (1) of the following Article, the Prime Minister shall register the following particulars in a financial institutions register:

(i) the particulars set forth in the items of paragraph (1) of the preceding Article; and

(ii) the date of registration and the registration number.

(2) The Prime Minister must make the financial institutions register available for public inspection.

(Refusal etc. to Register a Financial Institution)

Article 33-5 (1) The Prime Minister must refuse to effect a registration if the applicant for registration falls under one of the following items (with regard to item (iii), this excludes if the applicant seeks to conduct only Investment Advisory and Agency Services), or if the written application for registration or a document or electronic or magnetic record that is required to accompany it contains a false statement or record or omits a statement or record of a material fact:

(i) a person that has had the registration referred to in Article 33-2 rescinded pursuant to the provisions of Article 52-2, paragraph (1); that has had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1); or that has had the registration referred to in Article 66-27 rescinded pursuant to Article 66-42, paragraph (1); if five years have not yet passed since the date of that rescission; or a person that had obtained a registration of the same kind in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including permission or any other administrative disposition similar to such a registration), but that has had that registration rescinded, if five years have not yet passed since the date of the rescission;

(ii) a person that has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of this Act; the Secured Bonds Trust Act; the Act on Engagement in Trust Business by a Financial Institution; the Commodity Futures Act; the Act on Investment Trusts and Investment Corporations; the Real Estate Brokerage Act; the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates; the Installment Sales Act; the Money Lending Business Act; the Act on the Deposit, etc. Transaction Agreements of Specified Commodities, etc.; the Act Regulating Business Involving Commodity Investment; the Specified Joint Real Estate Ventures Act; the Act on the Securitization of Assets; the Act on Corporate Bond Issuance for Financial Corporations' Loan Business; the Trust Business Act; or any other Act specified by Cabinet Order, or for violating the provisions of a foreign law or regulation that is equivalent to one of these Acts, if five years have not yet passed since the day on which the person finished serving the sentence or ceased to be subject to its enforcement; or

(iii) a person that does not have a sufficient personnel structure to perform the services of a registered financial institution (meaning business in connection with the registration set forth in Article 33-2; the same applies hereinafter) in an appropriate manner.

(2) If the Prime Minister registers that a bank or Cooperative Financial Institution, or any other financial institution specified by Cabinet Order, performs the act specified in Article 33, paragraph (2), item (v) in connection with transactions set forth in that item in the course of trade, the Prime Minister must add the conditions specified by Cabinet Office Ordinance within the necessary scope for ensuring fair transactions in connection with share certificates.

(Notification of a Change)

Article 33-6 (1) If the particulars set forth in one of the items of Article 33-3, paragraph (1) changes, the registered financial institution must notify the Prime Minister of this within two weeks from the day of the change.

(2) Upon accepting a notification under the preceding paragraph, the Prime Minister shall register the particulars given in the notification in a financial institutions register.

(3) If the business outline or business methods that a registered financial institution has stated in the documents set forth in Article 33-3, paragraph (2), item (ii) change, the registered financial institution must notify the Prime Minister of this without delay pursuant to the provisions of Cabinet Office Ordinance.

(Provisions on Interpretation)

Article 33-7 The provisions of Article 33 do not preclude the Prime Minister from granting the registration referred to in Article 29 or the authorization referred to in Article 30, paragraph (1) to a person in which a bank or Cooperative Financial Institution, or any other financial institution specified by Cabinet Order, holds the majority of all shareholders', etc. voting rights

(Special Provisions, etc. for When Trust Business Is Engaged In)

Article 33-8 (1) With regard to the application of the provisions of Article 33, paragraphs (1) and (2); Article 33-2; and Article 52-2, paragraph (1), item (iv) if a bank or Cooperative Financial Institution, or any other financial institution specified by Cabinet Order, is a financial institution that has obtained the authorization referred to in Article 1, paragraph (1) of the Act on Engagement in Trust Business by a Financial Institution, in Article 33, paragraph (1), the phrase "Securities Services or Investment Management" is deemed to be replaced with "Securities Services"; in Article 33, paragraph (2), the term "excluding transactions conducted based on its solicitation of a customer for such an order and transactions conducted upon the receipt of an order from the customer in connection with the Financial Institution's Investment Advisory Services" is deemed to be replaced with "excluding transactions conducted based on its solicitation of a customer for such an order"; in Article 33-2, the term "Investment Advisory and Agency Services or Securities, etc. Management" is deemed to be replaced with "Investment Advisory and Agency Services, Investment Management (excluding the business of performing the acts set forth in Article 2, paragraph (8), item (xiv) or (xv) (limited to acts performed with the money under these provisions or other properties held as trust property); hereinafter the same applies in this Chapter), or Securities, etc. Management"; and in Article 52-2, paragraph (1), item (iv), the term "Investment Advisory and Agency Services" is deemed to be replaced with "Investment Advisory and Agency Services or Investment Management".

(2) The provisions of Article 29 do not apply if a person set forth in one of the following items acts as the agent for a registered financial institution in providing the services prescribed in the relevant item (hereinafter referred to as "Specified Financial Instruments Transaction Services" in this Article) pursuant to the provisions of Cabinet Order. In this case, the person that provides Specified Financial Instruments Transaction Services is deemed to be an employee of the registered financial institution that the person acts as the agent for, and the provisions of this Act apply:

(i) a person that acts as the agent for a registered financial institution and that is specified by Cabinet Order: the business of performing acts specified in Article 33, paragraph (2), item (ii) with regard to Securities set forth in that item;

(ii) a person that acts as agent for a registered financial institution and that is set forth in the following: among transactions set forth in Article 2, paragraph (22), item (ii) that are connected with the Financial Indicators set forth in Article 2, paragraph (25), item (ii), the business of performing acts in which the registered financial institution promises to receive money from the other party to a transaction and to pay the other party the amount of money calculated based on the difference between the Agreed Figure and the Actual Figure (but only if said other party has no risk of incurring a loss exceeding the amount of money the other party has paid in advance due to the fluctuation of a Financial Indicator set forth in Article 2, paragraph (25), item (ii));

(a) a Non-life Insurance Agent (meaning a Non-life Insurance Agent as prescribed in Article 2, paragraph (21) of the Insurance Business Act; hereinafter the same applies in this item) that is an individual;

(b) the employee of an individual Non-life Insurance Agent, for which the notification under the provisions of Article 302 of the Insurance Business Act has been made;

(c) the officer or employee of a corporate Non-life Insurance Agent, for which a notification under the provisions of Article 302 of the Insurance Business Act has been made; and

(d) an officer that holds the authority of representation for a corporate Non-life Insurance Agent.

(3) A registered financial institution for which a person that provides Specified Financial Instruments Transaction Services acts as an agent is liable for the damages that the person causes to a customer in connection with Specified Financial Instruments Transaction Services; provided, however, that this does not apply if the registered financial institution exercises due care in appointing the person, and endeavors to prevent the damage that the person causes to a customer in connection with the Specified Financial Instruments Transaction Services that the person performs.

Subsection 5 Professional Investors

(Obligation to Notify Professional Investors)

Article 34 If a Financial Services Provider, etc. (meaning a Financial Services Provider or registered financial institution; the same applies hereinafter) receives an offer from a Professional Investor (limited to one set forth in Article 2, paragraph (31), item (iv)) for a contract for the Financial Services Provider, etc. to perform an act that constitutes a Financial Instruments transaction (meaning an act as set forth in the items of Article 2, paragraph (8); the same applies hereinafter) with the customer as the other party or on behalf of the customer (hereinafter such contract is referred to as a "Financial Instruments Transaction Contract"), and has never in the past concluded a Financial Instruments Transaction Contract with that Professional Investor of a type specified by Cabinet Office Ordinance as constituting the same contract type as the Financial Instruments Transaction Contract to which the offer pertains (hereinafter referred to as a "Contract Type" in this Subsection), the Financial Services Provider, etc., before concluding the Financial Instruments Transaction Contract to which the offer pertains, must notify that Professional Investor that the Professional Investor may make a request under the provisions of paragraph (1) of the following Article.

(Cases in Which a Professional Investor Is Deemed to Be a Customer Other Than a Professional Investor)

Article 34-2 (1) For each Contract Type, a Professional Investor (limited to one as set forth in Article 2, paragraph (31), item (iv)) may request a Financial Services Provider, etc. to treat the Professional Investor as a customer other than a Professional Investor with regard to Financial Instruments Transaction Contracts that are of the same Contract Type.

(2) Upon receiving a request under the provisions of the preceding paragraph, a Financial Services Provider, etc. must approve that request by the time it solicits the conclusion of the first Financial Instruments Transaction Contract thereafter that is of the same Contract Type as that to which the request pertains (hereinafter referred to as a "Subject Contract" in this Article) or by the time it concludes such a contract.

(3) Before a Financial Services Provider, etc. approves a request pursuant to the provisions of the preceding paragraph, it shall deliver a document stating the following particulars to the Professional Investor that submitted the request under paragraph (1) (hereinafter referred to as a "Applicant" in this Article):

(i) the day on which the request is approved pursuant to the provisions of the preceding paragraph (hereinafter referred to as the "Approval Date" in this Article);

(ii) the Contract Type to which the Subject Contract belongs;

(iii) an indication that it will treat the Applicant as a customer other than a Professional Investor if it solicits the Applicant to conclude a Subject Contract or concludes a Subject Contract with the Applicant on or after the Approval Date; and

(iv) other particulars specified by Cabinet Office Ordinance.

(4) With the consent of the Applicant and pursuant to the provisions of Cabinet Order, in lieu of delivering the document under the provisions of the preceding paragraph, a Financial Services Provider, etc. may provide the Applicant with the particulars that are required to be stated in that document by means of an electronic data processing system or by any other means of information and communications technology specified by Cabinet Office Ordinance. In doing this, the Financial Services Provider, etc. is deemed to have delivered the document.

(5) With regard to the application of the provisions of this Act (excluding this Subsection) if a Financial Services Provider, etc. gives the approval under the provisions of paragraph (2) or delivers the document under the provisions of paragraph (3), and the Applicant is a person set forth in one of the following items, the Applicant is deemed to be a customer other than a Professional Investor:

(i) the other party to the Financial Services Provider's, etc. solicitation to conclude a Subject Contract on or after the Approval Date; or

(ii) the other party with which the Financial Services Provider, etc. concludes a Subject Contract on or after the Approval Date.

(6) If the preceding paragraph applies to an Applicant with regard to the conclusion of a Subject Contract (limited to one that entails the Financial Services Provider, etc. acting as an agent as provided in Article 2, paragraph (8), items (ii) to (iv) inclusive, (x) and (xiii); hereinafter referred to as a "Specified Subject Contract" in this paragraph and paragraph (8)), before the Financial Services Provider, etc. concludes a Financial Instruments Transaction Contract on behalf of the Applicant based on the Specified Subject Contract, the Financial Services Provider, etc. must notify the other Financial Services Provider, etc. with which the Financial Instruments Transaction Contract is to be concluded (hereinafter referred to as the "Counterparty Financial Services Provider, etc." in the following paragraph and paragraph (8)) that the Applicant is deemed to be a customer other than a Professional Investor in connection with the Financial Instruments Transaction Contract.

(7) If a Financial Services Provider, etc. gives a notification under the preceding paragraph, the provisions of the preceding Article do not apply to the Counterparty Financial Services Provider, etc.

(8) If a Financial Services Provider, etc. that has concluded a Specified Subject Contract gives a notification under the provisions of paragraph (6), the Applicant is deemed to be a customer other than a Professional Investor with regard to any Financial Instruments Transaction Contract that the Financial Services Provider, etc. concludes with the Counterparty Financial Services Provider, etc. on behalf of the Applicant based on the Specified Subject Contract, and the provisions of this Act (excluding this Subsection) apply.

(9) If an Applicant newly becomes a qualified institutional investor on or after the Approval Date, the provisions of paragraphs (5) to (9) inclusive do not apply to the Applicant on or after the day on which the Applicant becomes a qualified institutional investor.

(10) An Applicant may request a Financial Services Provider, etc. to treat the Applicantas a Professional Investor again with regard to Subject Contracts, at any time on or after the Approval Date;

(11) Before approving a request under the preceding paragraph, a Financial Services Provider, etc. must obtain the written consent of the person making that request (such person is referred to as the "Person Requesting Reinstatement" in the following paragraph), on a document that states the day on which the request has the approval under this paragraph and any other particulars specified by Cabinet Office Ordinance.

(12) With the agreement of the Person Requesting Reinstatement and pursuant to the provisions of Cabinet Order, in lieu of obtaining the written consent under the preceding paragraph, a Financial Services Provider, etc. may obtain written consent by means of an electronic data processing system or any other means of information and communications technology that is specified by Cabinet Office Ordinance. In doing this, the Financial Services Provider, etc. is deemed to have obtained written consent.

(13) If a Financial Services Provider, etc. gives the approval under paragraph (11), the provisions of paragraphs (5), (6), and (8) do not apply during the period from the day on which it gives the approval under paragraph (11) until the day immediately preceding the day on which it gives the new approval pursuant to paragraph (2).

(When a Customer Other than a Professional Investor Is a Corporation and That Corporation Is Deemed to Be a Professional Investor)

Article 34-3 (1) For each Contract Type, a corporation (excluding a Professional Investor) may request a Financial Services Provider, etc. to treat it as a Professional Investor with regard to Financial Instruments Transaction Contracts that are of the same Contract Type.

(2) Before approving a request under the preceding paragraph, a Financial Services Provider, etc. must obtain the written consent of the corporation making the request (hereinafter referred to as the "Applicant" in this Article), on a document that states the following particulars. In this, it shall make the End Date provided for in item (ii) the day on which one year elapses counting from the Approval Date provided for in item (i) (or, in a case specified by Cabinet Office Ordinance, a day before that one year elapses, which is specified by Cabinet Office Ordinance):

(i) the day on which it gives the approval under this paragraph (hereinafter referred to as the "Approval Date" in this Article);

(ii) the last day of the period during which it will treat the Applicant as a Professional Investor in soliciting the Applicant to conclude a Financial Instruments Transaction Contract that is of the same Contract Type as the one to which the request pertains (hereinafter such a contract is referred to as a "Subject Contract" in this Article; hereinafter such day is referred to as the "End Date" in this Article) or in concluding a Subject Contract with said Applicant before the End Date;

(iii) the Contract Type to which the Subject Contract belongs;

(iv) an indication that the Applicant understands the following particulars:

(a) particulars specified by Cabinet Office Ordinance as special provisions for the application of this Act if a Professional Investor is solicited to conclude a Subject Contract by a Financial Services Provider, etc., if a Professional Investor offers a Subject Contract to the Financial Services Provider, etc., or concludes a Subject Contract with the Financial Services Provider, etc.; and

(b) an indication of the risk of insufficient protection involved, if a person that it is inappropriate to treat as a Professional Investor in connection with the Subject Contracts, in light of its knowledge, experience, and the state of its assets, will be treated as a Professional Investor.

(v) an indication that it will treat the Applicant as a Professional Investor in soliciting the Applicant to conclude a Subject Contract before the End Date or in concluding a Subject Contract with the Applicant before the End Date;

(vi) an indication that it will treat the Applicant as a customer other than a Professional Investor in soliciting the Applicant to conclude a Subject Contract after the End Date or in concluding a Subject Contract with the Applicant after the End Date; and

(vii) other particulars specified by Cabinet Office Ordinance.

(3) The provisions of paragraph (12) of the preceding Article apply mutatis mutandis to the written consent under the preceding paragraph.

(4) With regard to the application of the provisions of this Act (excluding this Subsection) if a Financial Services Provider, etc. gives the approval under paragraph (2), the Applicant gives the written consent under that paragraph, and the Applicant is a person set forth in one of the following items, the Applicant is deemed to be a Professional Investor:

(i) a person that the Financial Services Provider, etc. solicits to conclude a Subject Contract during the period from the Approval Date to the End Date; or

(ii) a person with which the Financial Services Provider, etc. concludes a Subject Contract during the period from the Approval Date to the End Date.

(5) If the preceding paragraph applies to an Applicant in connection with the conclusion of a Subject Contract (limited to one that entails the Financial Services Provider, etc. acting as an agent as provided in Article 2, paragraph (8), items (ii) to (iv) inclusive, (x) and (xiii); hereinafter referred to as a "Specified Subject Contract" in this and the following paragraphs), and the Financial Services Provider, etc., acting as the Applicant's agent based on that Specified Subject Contract, concludes a Financial Instruments Transaction Contract before the Approval Date, it must notify the Counterparty Financial Services Provider, etc. with which the Financial Instruments Transaction Contract is to be concluded (referred to as the "Counterparty Financial Services Provider, etc." in the following paragraph) in advance, that the Applicant is deemed to be a Professional Investor with regard to the Financial Instruments Transaction Contract.

(6) If a Financial Services Provider, etc. that has concluded a Specified Subject Contract gives a notification under the preceding paragraph, the Applicant is deemed to be a Professional Investor with regard to a Financial Instruments Transaction Contract that the Financial Services Provider, etc. concludes with the Counterparty Financial Services Provider, etc. while acting as the agent of the Applicant pursuant to the Specified Subject Contract (limited to a Financial Instruments Transaction Contract concluded before the End Date), and the provisions of this Act (excluding this Subsection) apply.

(7) If the Applicant makes a request under paragraph (1) before the End Date for the same Contract Type as the Subject Contracts (such a request is referred to as the "Request for Renewal" in the following paragraph), the Applicant must do so on or after the day on which the period specified by Cabinet Office Ordinance elapses counting from the Approval Date.

(8) With regard to the application of the provisions of paragraph (2) and the preceding paragraph if a Applicant makes a Request for Renewal, in paragraph (2), the phrase "Approval Date prescribed in item (i)" is deemed to be replaced with "day following the previous End Date" and in the preceding paragraph, the term "Approval Date" is deemed to be replaced with "day following the previous End Date".

(9) An Applicant may request a Financial Services Provider, etc. to treat it as a customer other than a Professional Investor again with regard to Subject Contracts, at any time on or after the Approval Date.

(10) After receiving a request under the provisions of the preceding paragraph, a Financial Services Provider, etc. must approve said request by the time it solicits the conclusion of the first Subject Contract thereafter or by the time it first concludes such a contract thereafter.

(11) Before approving a request pursuant to the provisions of the preceding paragraph, a Financial Services Provider, etc. must deliver a document stating the day on which it gives the approval under the preceding paragraph and any other particulars specified by Cabinet Office Ordinance to the corporation that submitted the request under paragraph (9).

(12) The provisions of paragraph (4) of the preceding Article apply mutatis mutandis to the delivery of documents under the preceding paragraph.

(13) If a Financial Services Provider, etc. gives the approval under paragraph (10), the provisions of paragraphs (4) to (9) inclusive do not apply for the period from the day of approval under paragraph (10) to the day immediately preceding the day on which it newly gives approval under paragraph (2).

(When a Customer Other Than a Professional Investor Is an Individual and That Individual Is Deemed to Be a Professional Investor)

Article 34-4 (1) For each Contract Type, an individual set forth in the following (excluding qualified institutional investors) may request a Financial Services Provider, etc. to treat that individual as a Professional Investor with regard to Financial Instruments Transaction Contracts that are of the same Contract Type:

(i) an individual that is the proprietor of a business and that has concluded an silent partnership agreement as prescribed in Article 535 of the Commercial Code (excluding those specified by Cabinet Office Ordinance), or any other individual specified by Cabinet Office Ordinance as being similar thereto; and

(ii) an individual other than one set forth in the preceding item, which satisfies the requirements specified by Cabinet Office Ordinance as a person equivalent to a Professional Investor, in light of such individual's knowledge and experience and the state of that individual's assets.

(2) If a Financial Services Provider, etc. receives a request under the preceding paragraph, it must deliver a document stating the particulars set forth in paragraph (2), item (iv), sub-items (a) and (b) of the preceding Article to the individual that submitted the request (hereinafter referred to as a "Applicant" in this Article), and must confirm that the Applicant falls under one of the categories of persons set forth in the items of the preceding paragraph.

(3) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of a document under the preceding paragraph.

(4) An Applicant may request a Financial Services Provider, etc. to treat it as a customer other than a Professional Investor again with regard to Financial Instruments Transaction Contracts that are of the same Contract Type as the one to which the request under paragraph (1) pertains, at any time on or after the day on which the Financial Services Provider, etc. gives the approval under paragraph (2) of the preceding Article as applied mutatis mutandis pursuant to paragraph (6).

(5) After receiving a request under the provisions of the preceding paragraph, a Financial Services Provider, etc. must approve said request by the time it solicits the conclusion of the first Financial Instruments Transaction Contract thereafter that is of the Contract Type to which the request pertains, or by the time it concludes the first such contract thereafter.

(6) The provisions of paragraphs (2) to (8) inclusive of the preceding Article apply mutatis mutandis if a Financial Services Provider, etc. approves a request under paragraph (1), and the provisions of paragraphs (11) to (13) inclusive of that Article apply mutatis mutandis if a Financial Services Provider, etc. approves a request under paragraph (4). In this case, in Article 34-3, paragraph (2), the phrase "the corporation making the request" is deemed to be replaced with "the Applicant under paragraph (2) of the following Article"; in Article 34-3, paragraph (4), the phrase "the approval under paragraph (2)" is deemed to be replaced with "the delivery of a document and the confirmation under paragraph (2) of the following Article and the approval under paragraph (2)"; in Article 34-3, paragraph (7), the term "paragraph (1)" is deemed to be replaced with "paragraph (1) of the following Article"; in Article 34-3, paragraph (11), the phrase "the preceding paragraph" is deemed to be replaced with "paragraph (5) of the following Article" and the phrase "the corporation that submitted the request under paragraph (9)" is deemed to be replaced with "the individual that submitted the request under paragraph (4) of that Article"; in Article 34-3, paragraph (13), the term "paragraph (10)" is deemed to be replaced with "paragraph (5) of the following Article", the phrase "gives approval under paragraph (2)" is deemed to be replaced with "delivers the documents and makes the confirmation under the provisions of paragraph (2) of that Article, as well as giving approval under paragraph (2)", and the term "(9) inclusive" is deemed to be replaced with "(8) inclusive and paragraph (4) of the following Article"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(Delegation to Cabinet Order)

Article 34-5 Beyond what is provided for in this Subsection, procedures for if a Professional Investor is deemed to be a customer other than a Professional Investor or if a customer other than a Professional Investor is deemed to be a Professional Investor and necessary particulars otherwise relevant to the application of the provisions of this Subsection are specified by Cabinet Order.

Section 2 Services

Subsection 1 General Rules

(Scope of Services for Persons Engaged in Type I Financial Instruments Business or Investment Management)

Article 35 (1) A Financial Services Provider (limited to one engaged in Type I Financial Instruments Business or Investment Management; hereinafter the same applies in this Article), in addition to the Financial Instruments Business, may perform the following acts in the course of trade and provide any other services incidental to the Financial Instruments Business:

(i) the lending and borrowing of Securities, or intermediation or agency for the same;

(ii) money lending incidental to margin transactions prescribed in Article 156-24, paragraph (1);

(iii) money lending secured by Securities that are deposited for safe custody by customers (limited to those specified by Cabinet Office Ordinance);

(iv) the provision of agency for customers in connection with Securities;

(v) the provision of agency for services by the settlor company of an investment trust defined in Article 2, paragraph (11) of the Act on Investment Trusts and Investment Corporations, which involve the payment of earnings, redemption moneys, or cancellation moneys in connection with Securities set forth in Article 2, paragraph (1), item (x), or for services by such a settler company which involve the delivery of Securities or any other assets that are among trust property in connection with the relevant Securities;

(vi) the provision of agency for services by an investment corporation as defined in Article 2, paragraph (12) of the Act on Investment Trusts and Investment Corporations, which involve the distribution of money, the distribution of refunds or residual assets, or the payment of interest or redemption moneys in connection with Securities set forth in Article 2, paragraph (1), item (xi) conducted;

(vii) the conclusion of a contract for cumulative investment (meaning a contract in which a Financial Services Provider (limited to one that engages in Securities, etc. Management) receives money deposited by a customer and sells Securities to that customer continuously on dates designated in advance while receiving consideration from that money) (limited to contracts specified by Cabinet Office Ordinance);

(viii) the provision of information or advice in relation to Securities (excluding acts falling under Article 2, paragraph (8), item (xi));

(ix) the provision of agency for services by a Counterparty Financial Services Provider, etc. (limited to agency involving the Financial Instruments Business (including services of a registered financial institution conducted by a registered financial institution) and any other services incidental to the Financial Instruments Business (excluding services prescribed in this item), which the relevant Financial Services Provider, etc. may conduct, and excluding those specified in item (v) above);

(x) the retention of the assets of a registered investment corporation as defined in Article 2, paragraph (13) of the Act on Investment Trusts and Investment Corporations;

(xi) the provision of consultation to any other person or firm in businesswith regard to a business transfer, merger, company split, share exchange, or share transfer, or intermediation in connection with the same;

(xii) the provision of consultation to any other person or firm in business with regard to management;

(xiii) the purchase and sale of currencies and other assets specified by Cabinet Order as being related to Derivatives Transactions (excluding Transactions of Securities-Related Derivatives) or intermediation, brokerage, or agency for the same;

(xiv) the purchase and sale of negotiable deposits and other monetary claims (excluding those that fall under the category of Securities), or intermediation, brokerage, or agency for the same; and

(xv) investment of invested assets (meaning money and other property invested by a Financial Services Provider, etc. that engages in Investment Management on behalf of a rights holder as provided for in Article 42, paragraph (1), as investments in the following assets; the same applies hereinafter):

(a) specified assets defined in Article 2, paragraph (1) of the Act on Investment Trusts and Investment Corporations (excluding real estate and other assets specified by Cabinet Order); and

(b) assets specified by Cabinet Order other than those set forth in sub-item (a).

(2) A Financial Services Provider, in addition to the Financial Instruments Business and other services provided pursuant to the provisions of the preceding paragraph, may provide the following services:

(i) services connected with transactions on a commodity market, etc. defined in Article 2, paragraph (21) of the Commodity Futures Act;

(ii) services connected with transactions conducted by using fluctuations in commodity prices and other indicators, market gaps, etc. as specified by Cabinet Office Ordinance (other than services already specified in the preceding item);

(iii) services connected with the money lending business as defined in Article 2, paragraph (1) of the Money Lending Business Act or other money loans, or intermediation for the lending and borrowing of money;

(iv) services connected with real estate brokerage as defined in Article 2, item (ii) of the Real Estate Brokerage Act or with the lease of real estate prescribed in item (i) of that Article;

(v) specified joint real estate ventures as defined in Article 2, paragraph (4) of the Specified Joint Real Estate Ventures Act;

(v)-2 services for investing money or other assets on behalf of another person, by means of commodity investment defined by Article 2, paragraph (1) of the Act Regulating Business Involving Commodity Investment, or through the acquisition (including production), transfer, or use of goods with substantial price volatility or goods specified by Cabinet Order as goods that make it difficult to estimate the profit generated from their use (excluding the designated goods prescribed in item (iii) of that paragraph) or by means of having such goods used (excluding services that fall under the category of service set forth in items (i) and (ii));

(vi) services for investing invested assets (excluding services that fall under the category of services that entails performing the acts specified in item (xv) of the preceding paragraph, and also excluding services that fall under the category of services specified in items (i), (ii), and the preceding item) as an investment in assets other than Securities or rights arising from Derivatives Transactions; and

(vii) other services specified by Cabinet Office Ordinance.

(3) If a Financial Services Provider comes to engage in any of the services set forth in the items of the preceding paragraph, it must notify the Prime Minister of this without delay pursuant to the provisions of Cabinet Office Ordinance.

(4) A Financial Services Provider, in addition to the Financial Instruments Business and the services provided pursuant to paragraph (1) and paragraph (2), may perform services for which it has obtained the approval of the Prime Minister.

(5) When an application is filed for the approval referred to in the preceding paragraph, the Prime Minister may only choose not to grant approval if it is found that the provision of the services under the application would be contrary to the public interest or if it is found that they would compromise the protection of investors due to the difficulty in managing the risk of loss in connection with the services.

(6) If a Financial Services Provider discontinues services of which it has given notice pursuant to paragraph (3) or services for which it has obtained approval pursuant to paragraph (4), it must notify the Prime Minister of this without delay.

(7) If a Financial Services Provider engages in services set forth in the items of paragraph (1) or items of paragraph (2) or engages in services for which it has received the approval referred to in paragraph (4), the provisions of paragraph (1), paragraph (2), and paragraph (4) must not be construed to preclude the application of Acts concerning these services.

(Scope of Concurrent Business by Persons Who Only Engage in Type II Financial Instruments Business or Investment Advisory and Agency Services)

Article 35-2 (1) A Financial Services Provider (limited to one that only engages in Type II Financial Instruments Business or Investment Advisory and Agency Services; the same applies in the following paragraph), in addition to doing Financial Instruments Business (limited to Type II Financial Instruments Business or Investment Advisory and Agency Services), may also do other business, concurrently.

(2) If a Financial Services Provider does any other business concurrently as prescribed in the preceding paragraph, the provisions of that paragraph must not be construed to preclude the application of Acts concerning that business.

(Duty of Sincerity to Customers)

Article 36 (1) A Financial Services Provider, etc. as well as its officers and employees must be sincere and fair to customers in the performance of its services.

(2) A Specified Financial Services Provider, etc., pursuant to the provisions of Cabinet Office Ordinance, must appropriately manage information connected with Financial Instruments services (meaning services entailing acts that constitute Financial Instruments transactions and any other services specified by Cabinet Office Ordinance), and must establish a system for properly supervising the implementation status of Financial Instruments services and take any other measures as are necessary, in line with the transactions that the Specified Financial Services Provider, etc. or its Parent Financial Institution, etc. or Subsidiary Financial Institution, etc. conducts, so that the interests of the customers of the Financial Instruments services that the Specified Financial Services Provider, etc. or its Subsidiary Financial Institution, etc. provides are not unjustly prejudiced.

(3) The term "Specified Financial Services Provider, etc." as used in this Article means a Financial Services Provider, etc. that conducts Securities Services (limited to a person registered as referred to in Article 29 to engage in Type I Financial Instruments Business), or that is specified by Cabinet Order.

(4) The term "Parent Financial Institution, etc." as used in paragraph (2) means a Financial Services Provider, a bank, a Cooperative Financial Institution, or any other person engaged in finance that is specified by Cabinet Order, which Cabinet Order specifies as being a person that holds the majority of all shareholders', etc. voting rights in a Specified Financial Services Provider, etc. or as being otherwise closely related to the relevant Specified Financial Services Provider.

(5) The term "Subsidiary Financial Institution, etc." as used in paragraph (2) means a Financial Services Provider, a bank, a Cooperative Financial Institution, or any other person engaged in finance that is specified by Cabinet Order, which Cabinet Order specifies as being a person in which a Specified Financial Services Provider, etc. holds the majority of all shareholders', etc. voting rights or as being otherwise closely related to the relevant Specified Financial Services Provider, etc.

(Posting of Signs)

Article 36-2 (1) A Financial Services Provider, etc. must post a sign in the format specified by Cabinet Office Ordinance in a place that is accessible to the public at each of its business offices or other offices.

(2) A person other than a Financial Services Provider, etc. must not post the sign referred to in the preceding paragraph or a sign similar thereto.

(Prohibition on Name Lending)

Article 36-3 A Financial Services Provider, etc. must not allow another person to engage in Financial Instruments Business (or, if it is a registered financial institution, to engage in the services of a registered financial institution; hereinafter the same applies in this Subsection) using the name of said Financial Services Provider, etc.

(Prohibition on Corporate Bond Management)

Article 36-4 (1) A Financial Services Provider (limited to one that engages in Securities Services; the same applies in the following paragraph) may not become a bond manager as provided for in Article 702 of the Companies Act, nor may it become the trustee company under a trust contract provided for in Article 2, paragraph (1) of the Secured Bonds Trust Act.

(2) Notwithstanding the provisions of other Acts, a Financial Services Provider may become an Underwriter.

(Regulation of Advertising)

Article 37 (1) When advertising the contents of its Financial Instruments Business or performing any similar act specified by Cabinet Office Ordinance, a Financial Services Provider, etc. must give the following particulars, pursuant to the provisions of Cabinet Office Ordinance:

(i) the trade name or name of the Financial Services Provider, etc.;

(ii) an indication that it is a Financial Services Provider, etc., and its registration number; and

(iii) the particulars of the contents of the Financial Instruments Business that the Financial Services Provider, etc. engages in, which is specified by Cabinet Order as material particulars that may have an impact on customers' judgment.

(2) When advertising the contents of its Financial Instruments Business or engaging in any similar act specified by Cabinet Office Ordinance, a Financial Services Provider, etc. must not make a representation that significantly conflicts with the fact of the matter or that could cause a person to have a serious misconception about the prospect of profiting from the performance of an act that constitutes a Financial Instruments transaction, or about any other matter that is specified by Cabinet Office Ordinance.

(Obligation to Clarify the Conditions of Transactions in Advance)

Article 37-2 When a Financial Services Provider, etc. has had an order from a customer for the purchase or sale of Securities or for an Over-the-Counter Derivatives Transaction, it must give the customer clear notice, in advance, regarding whether said Financial Services Provider, etc. will conclude the purchase and sale or the transaction with the customer personally, as the other party, or whether it will conduct intermediation, brokerage, or agency for the purchase and sale or the transaction.

(Delivery of Documents Prior to the Conclusion of a Contract)

Article 37-3 (1) If a Financial Services Provider, etc. seeks to conclude a Financial Instruments Transaction Contract, it must deliver a document stating the following particulars to the customer in advance, pursuant to the provisions of Cabinet Office Ordinance; provided, however, that this does not apply in cases specified by Cabinet Office Ordinance as those in which its not doing so does not compromise the protection of investors:

(i) the trade name or name and address of the Financial Services Provider, etc.;

(ii) an indication that it is a Financial Services Provider, etc., and its registration number;

(iii) an outline of the relevant Financial Instruments Transaction Contract;

(iv) the particulars specified by Cabinet Office Ordinance with regard to any fees, remuneration, or other consideration payable by the customer in connection with the Financial Instruments Transaction Contract;

(v) an indication of any risk that a loss will be incurred due to fluctuations in the money rate, the value of currencies, quotations on the Financial Instruments Market, and other indicators, in connection with an act that constitutes a Financial Instruments transaction carried out by the customer;

(vi) an indication of any risk that the amount of the loss set forth in the preceding item will exceed the amount of customer margin or any other security deposit specified by Cabinet Office Ordinance that is payable by the customer; and

(vii) the particulars of the contents of the relevant Financial Instruments Business other than what is set forth in the preceding items, which are specified by Cabinet Office Ordinance as material particulars that may have an impact on customers' judgment.

(2) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of a document under the preceding paragraph.

(3) Before soliciting (limited to a Public Offering or Secondary Distribution, or dealings in a Public Offering or Secondary Distribution specified by Cabinet Order) the conclusion of a Financial Instruments Transaction Contract for any of the rights set forth in the items of Article 2, paragraph (2) that are deemed to be Securities under that paragraph, a Financial Services Provider, etc. must notify the Prime Minister of the contents of the document set forth in paragraph (1) regarding said Financial Instruments Transaction Contract; provided, however, that this does not apply in cases specified by Cabinet Office Ordinance as those in which its not doing so does not compromise the protection of investors.

(Delivery of Documents upon the Conclusion of a Contract)

Article 37-4 (1) When a Financial Services Provider, etc. effects a Financial Instruments Transaction Contract or when otherwise specified by Cabinet Office Ordinance, the Financial Services Provider, etc. shall prepare a document and deliver it to the customer, without delay and pursuant to the provisions of Cabinet Office Ordinance; provided, however, that this does not apply in the cases that are specified by Cabinet Office Ordinance as those in which, in consideration of the contents of the Financial Instruments Transaction Contract and other circumstances, it is found that even if the document is not delivered to the customer, this does not compromise the public interest or the protection of investors.

(2) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of a document under the preceding paragraph.

(Delivery of Documents in Connection with the Receipt of a Security Deposit)

Article 37-5 (1) Whenever a Financial Services Provider, etc. receives a security deposit that is payable by the customer (limited to those specified by Cabinet Office Ordinance) in connection the Financial Instruments Business that it conducts, it must immediately deliver a document stating this to the customer, pursuant to the provisions of Cabinet Office Ordinance.

(2) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of a document under the preceding paragraph.

(Written Cancellation)

Article 37-6 (1) Except as otherwise specified by Cabinet Office Ordinance, a customer that has concluded a Financial Instruments Transaction Contract (limited to one that is specified by Cabinet Order in consideration of the contents of such a Financial Instruments Transaction Contract and other circumstances) with a Financial Services Provider, etc. may cancel said Financial Instruments Transaction Contract in writing, until the number of days specified by Cabinet Order has elapsed since the day on which the customer received the document set forth in Article 37-4, paragraph (1).

(2) The cancellation of a Financial Instruments Transaction Contract under the preceding paragraph takes effect when a document indicating that the Financial Instruments Transaction Contract is cancelled is issued.

(3) If a Financial Instruments Transaction Contract becomes subject to a cancelation under paragraph (1), the Financial Services Provider, etc. may not request the customer to pay damages or a penalty for the cancellation of that Financial Instruments Transaction Contract beyond the amount specified by Cabinet Office Ordinance as the amount of fees, remuneration, or other consideration payable by the customer with regard to that Financial Instruments Transaction Contract (referred to as a "Consideration" in the following paragraph) for the period until the cancellation of that Financial Instruments Transaction Contract.

(4) If a Financial Instruments Transaction Contract becomes subject to a cancellation under paragraph (1), the Financial Services Provider, etc. shall refund any Consideration paid in advance for the relevant Financial Instruments Transaction Contract to the customer that paid it; provided, however, that this does not apply to the amount specified by Cabinet Office Ordinance as prescribed in the preceding paragraph.

(5) Any special provision that is contrary to the provisions of the preceding paragraphs and disadvantageous to a customer is void.

(Obligation to Conclude a Contract with a Designated Dispute Resolution Organization)

Article 37-7 (1) A Financial Services Provider, etc. must take the measures specified in the relevant of the following items for the category of cases set forth in said item:

(i) if the Financial Services Provider, etc. (excluding a registered financial institution; the same applies in the following item to item (iv) inclusive) engages in Type I Financial Instruments Business: the measures specified in the relevant of the following sub-items (a) and (b) for the category of cases set forth in each sub-item:

(a) if there is a Designated Type I Dispute Resolution Organization (meaning a Designated Dispute Resolution Organization (meaning a Designated Dispute Resolution Organization as defined in Article 156-38, paragraph (1); hereinafter the same applies in this Chapter and Chapter V-4) for which the Category of Dispute Resolution Services (meaning the Category of Dispute Resolution Services as defined in paragraph (12) of that Article; hereinafter the same applies in this Chapter and Chapter V-4) is Specified Type I Financial Instruments Transaction Services (meaning Specified Type I Financial Instruments Transaction Services as defined in paragraph (2) of that Article; hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures (meaning a Basic Contract for the Implementation of Dispute Resolution Procedures as defined in paragraph (13) of that Article; hereinafter the same applies in this Chapter and Chapter V-4) in connection with Specified Type I Financial Instruments Transaction Services with a single Designated Type I Dispute Resolution Organization);

(b) if there is no Designated Type I Dispute Resolution Organization: complaint processing measures (meaning measures to have the person set forth in Article 156-50, paragraph (3), item (iii) provide advice or guidance to the employee or any other workers engaged in the business of processing complaints from customers (including the rights holders provided for in Article 42, paragraph (1) that are other than customers; the same applies in this sub-item (b)) or any other measures specified by Cabinet Office Ordinance as being equivalent thereto; hereinafter the same applies in this Chapter and Chapter V-4)) and dispute resolution measures (meaning measures to resolve disputes with customers through Certified Dispute Resolution Procedures (meaning Certified Dispute Resolution Procedures as defined in Article 2, item (iii) of the Act on Promotion of Use of Alternative Dispute Resolution (Act No. 151 of 2004)) or any other measures specified by Cabinet Office Ordinance as being equivalent thereto) in connection with Specified Type I Financial Instruments Transaction Services.

(ii) if the Financial Services Provider, etc. engages in Type II Financial Instruments Business: the measures specified in the relevant of the following sub-items (a) and (b) for the category of cases set forth in each sub-item:

(a) if there is a Designated Type II Dispute Resolution Organization (meaning a Designated Dispute Resolution Organization for which the Category of Dispute Resolution Services is Specified Type II Financial Instruments Transaction Services (meaning Specified Type II Financial Instruments Transaction Services defined in Article 156-38, paragraph (3); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures in connection with Specified Type II Financial Instruments Transaction Services with a single Designated Type II Dispute Resolution Organization;

(b) if there is no Designated Type II Dispute Resolution Organization: complaint processing measures and dispute resolution measures in connection with Specified Type II Financial Instruments Transaction Services;

(iii) if the Financial Services Provider, etc. engages in Investment Advisory and Agency Services: the measures specified in the relevant of the following sub-items (a) and (b) for the category of cases set forth in each sub-item:

(a) if there is a Designated Investment Advisory and Agency Services Dispute Resolution Organization (meaning a Designated Dispute Resolution Organization for which the Category of Dispute Resolution Services is Specified Investment Advisory and Agency Services (meaning Specified Investment Advisory and Agency Services as defined in Article 156-38, paragraph (4); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures in connection with Specified Investment Advisory and Agency Services with a single Designated Investment Advisory and Agency Services Dispute Resolution Organization:

(b) if there is no Designated Investment Advisory and Agency Services Dispute Resolution Organization: complaint processing measures and dispute resolution measures in connection with Specified Investment Advisory and Agency Services;

(iv) if the Financial Services Provider, etc. engages in Investment Management: the measures specified in the relevant of the following sub-items (a) and (b) for the category of cases set forth in each sub-item:

(a) if there is a Designated Investment Management Dispute Resolution Organization (meaning a Designated Dispute Resolution Organization for which the Category of Dispute Resolution Services is Specified Investment Management (meaning Specified Investment Management as defined in Article 156-38, paragraph (5); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures in connection with Specified Investment Management with a single Designated Investment Management Dispute Resolution Organization;

(b) if there is no Designated Investment Management Dispute Resolution Organization: complaint processing measures and dispute resolution measures in connection with Specified Investment Management;

(v) if the Financial Services Provider, etc. is a registered financial institution: the measures specified in the relevant of the following sub-items (a) and (b) for the category of cases set forth in said sub-item:

(a) if there is a Designated Dispute Resolution Organization for registered financial institutions (meaning a Designated Dispute Resolution Organization for which the Category of Dispute Resolution Services is the Specified Services of a Registered Financial Institution (meaning Specified Services of a Registered Financial Institution as defined in Article 156-38, paragraph (6); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures in connection with the Specified Services of a Registered Financial Institution with a single Designated Dispute Resolution Organization for registered financial institutions;

(b) if there is no Designated Registered Financial Institutions Dispute Resolution Organization: complaint processing measures and dispute resolution measures in connection with the Specified Services of a Registered Financial Institution.

(2) Once a Financial Services Provider has taken measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures pursuant to the provisions of the preceding paragraph, it must disclose the trade name or name of the Designated Dispute Resolution Organization that is the counterparty to the Basic Contract for the Implementation of Dispute Resolution Procedures.

(3) The provisions of paragraph (1) do not apply during the period specified in the relevant of the following items for the category of cases set forth in each item:

(i) if a case that fell under a category of cases set forth in paragraph (1), item (i), sub-item (a); item (ii), sub-item (a); item (iii), sub-item (a); item (iv), sub-item (a); or item (v), sub-item (a); has come to fall under a category of cases set forth in item (i), sub-item (b); item (ii), sub-item (b); item (iii), sub-item (b); item (iv), sub-item (b); or item (v), sub-item (b) of that paragraph: the period specified by the Prime Minister as the period needed for taking the measures specified in paragraph (1), item (i), sub-item (b); item (ii), sub-item (b); item (iii), sub-item (b); item (iv), sub-item (b); or item (v), sub-item (b); at the time of granting authorization for the discontinuation of Dispute Resolution Services under Article 156-60, paragraph (1) or at the time of rescinding the designation under Article 156-61, paragraph (1);

(ii) if a case formerly fell under a category of cases set forth in paragraph (1), item (i), sub-item (a); item (ii), sub-item (a); item (iii), sub-item (a); item (iv), sub-item (a); or item (v), sub-item (a); but the discontinuation of the Dispute Resolution Services of a single Designated Type I Dispute Resolution Organization under item (i), sub-item (a) of that paragraph; a single Designated Type II Dispute Resolution Organization under item (ii), sub-item (a) of that paragraph; a single Designated Investment Advisory and Agency Services Dispute Resolution Organization under item (iii), sub-item (a) of that paragraph; a single Designated Investment Management Dispute Resolution Organization under item (iv), sub-item (a) of that paragraph; or a single Designated Dispute Resolution Organization for registered financial institutions (hereinafter collectively referred to as the "Designated Dispute Resolution Organization for Each Category of Business" in this item) has been authorized under Article 156-60, paragraph (1) or the designation under Article 156-39, paragraph (1) has been rescinded for the Designated Dispute Resolution Organization for Each Category of Business pursuant to Article 156-61, paragraph (1) (excluding in a case set forth in the preceding item): the period specified by the Prime Minister as the period needed for taking the measures specified in paragraph (1), item (i), sub-item (a); item (ii), sub-item (a); item (iii), sub-item (a); item (iv), sub-item (a); or item (v), sub-item (a); at the time of granting such authorization or at the time of rescinding the designation; and

(iii) if a case formerly fell under a category of cases set forth in paragraph (1), item (i), sub-item (b); item (ii), sub-item (b); item (iii), sub-item (b); item (iv), sub-item (b); or item (v), sub-item (b); but come to fall under the cases set forth in item (i), sub-item (a); item (ii), sub-item (a); item (iii), sub-item (a); item (iv), sub-item (a); or item (v), sub-item (a) of that paragraph: the period specified by the Prime Minister as the period needed for taking the measures specified in paragraph (1), item (i), sub-item (a); item (ii), sub-item (a); item (iii), sub-item (a); item (iv), sub-item (a); or item (v), sub-item (a) at the time of the designation under Article 156-39, paragraph (1).

(Prohibited Acts)

Article 38 It is prohibited for a Financial Services Provider, etc. or the officer or employee thereof to engage in any of the following acts; provided, however, that this excludes acts set forth in items (iv) to (vi) inclusive that are specified by Cabinet Office Ordinance as being unlikely to result in insufficient investor protection, harm the fairness of transactions, or cause a loss of confidence in the Financial Instruments Business:

(i) providing a customer with false information in connection with the conclusion of a Financial Instruments Transaction Contract or in connection with the solicitation thereof;

(ii) providing a customer with a conclusive assessment of a matter that is uncertain or with information that could mislead the customer into believing that a matter that is uncertain is actually certain, thereby soliciting the customer to conclude a Financial Instruments Transaction Contract;

(iii) supplying a customer with a Credit Rating that has been determined by a person engaged in Credit Rating Services other than a Credit Rating Agency (excluding a Credit Rating specified by Cabinet Office Ordinance as one that is found to have little likelihood of resulting in insufficient investor protection), without informing the customer that the person giving the Credit Rating is not registered as referred to in Article 66-27 and without informing the customer of the matters specified by Cabinet Office Ordinance, including the significance of such a registration and any other matters, thereby soliciting the customer to conclude a Financial Instruments Transaction Contract;

(iv) visiting or telephoning a customer that is not asking to be solicited for the conclusion of a Financial Instruments Transaction Contract (limited to one that is specified by Cabinet Order in consideration of the content of the Financial Instruments Transaction Contract and other circumstances, as a contract in connection with which it is particularly necessary to ensure the protection of investors), and soliciting such a customer to conclude a Financial Instruments Transaction Contract;

(v) soliciting a customer to conclude a Financial Instruments Transaction Contract (limited to one that is specified by Cabinet Order in consideration of the contents of the Financial Instruments Transaction Contract and other circumstances, as a contract in connection with which it is necessary to ensure the protection of investors) without obtaining confirmation from the customer, prior to solicitation, regarding whether or not the customer is willing to be solicited;

(vi) continuing to solicit a customer to conclude a Financial Instruments Transaction Contract (limited one that is specified by Cabinet Order in consideration of the content of the Financial Instruments Transaction Contract and other circumstances, as a contract in connection with which it is necessary to ensure the protection of investors) despite the customer having manifested an intention that indicates an unwillingness to conclude such a Financial Instruments Transaction Contract (including the an intention that indicates a wish not to continue to be solicited) after being solicited; and

(vii) acts other than what is set forth in the preceding items, which are specified by Cabinet Office Ordinance as acts that result in insufficient investor protection, harm the fairness of transactions, or cause a loss of confidence in the Financial Instruments Business.

Article 38-2 A Financial Services Provider, etc. must not engage in any of the following acts in connection with the Investment Advisory and Agency Services or Investment Management it conducts:

(i) using fraudulent means, committing assault, or using intimidation in connection with the conclusion or cancellation of an Investment Advisory Contract, Discretionary Investment Contract, or contract specified in Article 2, paragraph (8), item (xii), sub-item (b); and

(ii) promising a customer, at the time of solicitation, that any loss that may arise will be compensated in whole or in part.

(Prohibition on Compensation of Loss)

Article 39 (1) A Financial Services Provider, etc. must not engage in any of the following acts:

(i) making an offer or promise, or having a third party make an offer or promise, in connection with a purchase and sale or other transaction of Securities (excluding a purchase and sale with a repurchase requirement and a predetermined repurchase price, and other transactions specified by Cabinet Order) or a Derivatives Transaction (hereinafter collectively referred to as a "Purchase and Sale or Other Transaction of Securities, etc." in this Article), to a customer or to a person designated by the customer, that in the event that the customer (if a Trust Company, etc. (meaning a trust company or a financial institution that has obtained the authorization referred to in Article 1, paragraph (1) of the Act on Engagement in Trust Business by a Financial Institution; the same applies hereinafter) conducts the purchase and sale of Securities or a Derivatives Transaction on the account of a person that establishes a trust based a trust contract, this includes the person that establishes the trust; hereinafter the same applies in this Article) incurs a loss from the Securities or Derivatives Transaction (hereinafter collectively referred to as "Securities, etc." in this Article), or in the event that a predetermined amount of profit does not accrue from those Securities, etc., the Financial Services Provider, etc. or a third party will cover the whole or part of the loss or provide the customer or a third party with an economic benefit to supplement its profits;

(ii) making an offer or promise, or having a third party make an offer or promise, in connection with a Purchase and Sale or Other Transaction of Securities, etc., to a customer or to a person designated by the customer, that the Financial Services Provider, etc. or a third party will cover the whole or part of a loss that the customer has incurred in connection with the relevant Securities, etc., or will add to the profits that the customer has accrued in connection with those Securities, etc.; and

(iii) providing an economic benefit to a customer or third party, or having a third party provide an economic benefit to a customer or third party, in connection with a Purchase and Sale or Other Transaction of Securities, etc., in order to cover the whole or part of a loss that the customer has incurred in connection with the relevant Securities, etc., or in order to add to the profit that the customer has accrued in connection with those Securities, etc.

(2) The customer of a Financial Services Provider, etc. must not engage in any of the following acts:

(i) being party to, or having a third party be party to, the promise referred to in item (i) of the preceding paragraph (but only if that promise is based on a request that the customer makes personally or has a third party make), with the Financial Services Provider, etc. or a third party, in connection with a Purchase and Sale or Other Transaction of Securities, etc.;

(ii) being party to, or having a third party be party to, the promise referred to in item (ii) of the preceding paragraph (but only if that promise is based on a request that the customer makes personally or has a third party make), with the Financial Services Provider, etc. or a third party in connection with a Purchase and Sale or Other Transaction of Securities, etc.; and

(iii) receiving an economic benefit that is provided as referred to in item (iii) of the preceding paragraph or having a third party receive such an economic benefit (but only if this is based on a promise referred to in one of the preceding two items, if that promise is based on a request that the customer makes personally or has a third party make, and if the economic benefit is provided based on a request that the customer makes personally or has a third party make) from a Financial Services Provider, etc. or a third party, in connection with a Purchase and Sale or Other Transaction of Securities, etc.

(3) The provisions of paragraph (1) do not apply if the offer, promise, or provision of an economic benefit as referred to in the items of that paragraph is done in order to cover the whole or a part of a loss incurred due to problematic conduct (meaning illegal or wrongful conduct by a Financial Services Provider, etc. or its officer or employee, which is specified by Cabinet Office Ordinance as a potential cause of a dispute between a Financial Services Provider, etc. and its customer; hereinafter the same applies in this and the following Sections); provided, however, that with regard to the offer or promise referred to in item (ii) of that paragraph or the provision of an economic benefit as referred to in item (iii) of that paragraph, this only applies if the Financial Services Provider, etc. receives confirmation from the Prime Minister in advance that the loss to be covered was incurred due to problematic conduct, or in a case that is otherwise specified by Cabinet Office Ordinance.

(4) The provisions of paragraph (2) do not apply if the promise referred to in item (i) or (ii) of that paragraph is a promise to cover the whole or part of a loss incurred due to problematic conduct, or if the economic benefit referred to in item (iii) of that paragraph is provided in order to cover the whole or part of a loss incurred due to problematic conduct.

(5) A person seeking to receive the confirmation referred to in the proviso to paragraph (3) must submit a written application stating the fact regarding which confirmation is sought and other particulars specified by Cabinet Office Ordinance to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance, accompanied by a document specified by Cabinet Office Ordinance as being necessary for proving the relevant fact.

(The Principle of Suitability)

Article 40 A Financial Services Provider, etc. shall conduct its business in such a manner that the state of its business operations does not fall under one of the following items:

(i) its issuance of a solicitation in connection with an act that constitutes a Financial Instruments transaction which is found to be inappropriate in light of customer knowledge, customer experience, the state of customer assets, or the purpose for which a Financial Instruments Transaction Contract is concluded, results in or is likely to result in insufficient investor protection; and

(ii) beyond what is set forth in the preceding item, the state of business operations is such that the Financial Services Provider, etc. is found not to have taken measures to ensure the appropriate handling of customer information it has obtained in the course of the business, or business operations are otherwise in a state specified by Cabinet Office Ordinance as one that is contrary to the public interest or that is likely to compromise the protection of investors.

(Best Execution Policy)

Article 40-2 (1) A Financial Services Provider, etc., pursuant to the provisions of Cabinet Order, must establish a policy and method for executing orders from customers for the purchase and sale of Securities and Derivatives Transactions (excluding those specified by Cabinet Order; hereinafter referred to as "Transactions of Securities, etc." in this Article) under the best terms and conditions (hereinafter referred to as the "Best Execution Policy, etc." in this Article).

(2) A Financial Services Provider, etc. must disclose its Best Execution Policy, etc. pursuant to the provisions of Cabinet Office Ordinance.

(3) A Financial Services Provider, etc. must execute orders for Transactions of Securities, etc. in accordance with its Best Execution Policy, etc.

(4) Before accepting an order from a customer for a purchase and sale of Securities listed on a Financial Instruments Exchange, purchase and sale of Over-the-Counter Traded Securities, or other transaction specified by Cabinet Order, a Financial Services Provider, etc., pursuant to the provisions of Cabinet Office Ordinance, must deliver a document to the customer stating its Best Execution Policy, etc. for the relevant transaction; provided, however, that this does not apply if it has already delivered such a document (or a document stating the revised policy, if its Best Execution Policy, etc. has been revised).

(5) If a Financial Services Provider, etc. is so requested by a customer within a period specified by Cabinet Office Ordinance after executing the customer's order for a Transaction of Securities, etc., it must deliver a document to the customer, pursuant to the provisions of Cabinet Office Ordinance, which explains, pursuant to the provisions of Cabinet Office Ordinance, that the order has been executed in accordance with its Best Execution Policy, etc.

(6) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of a document under the preceding two paragraphs.

(Prohibition of Purchase and Sale, etc. If Separate Management Is Not Ensured)

Article 40-3 With regard to the rights set forth in Article 2, paragraph (2), item (v) or (vi) or the Securities set forth in Article 2, paragraph (1), item (xxi) (limited to those specified by Cabinet Order) or the rights set forth in Article 2, paragraph (2), item (vii) (limited to those specified by Cabinet Order), a Financial Services Provider, etc. must not perform any of the acts set forth in Article 2, paragraph (8), item (i), (ii), or (vii) to (ix) inclusive unless the relevant right or Securities are specified by Cabinet Office Ordinance as those for which a contract or other juridical act involving the right or Securities ensures that the money invested or contributed for the right or Securities (including anything specified by Cabinet Order as being similar to money; hereinafter the same applies in this Article) is managed separately from the assets that belong to the person conducting the relevant business conducts by allocating such money, and is managed separately from any other assets connected with other business conducted by that person.

(Restrictions on the Sale and Purchase, etc. of Securities for Professional Investors)

Article 40-4 A Financial Services Provider, etc. must not perform any of the acts set forth in Article 2, paragraph (8), items (i) to (iv) inclusive and (x) in connection with the Securities for Professional Investors with a general investor (meaning a person other than a Professional Investor, etc. or Issuer of Securities for Professional Investors, or any other person specified by Cabinet Office Ordinance; hereinafter the same applies in this Article); provided, however, that this does not apply in a Case In Which Disclosure Has Been Made (meaning a Case In Which Disclosure Has Been Made as prescribed in Article 4, paragraph (7); the same applies in Article 40-5, paragraph (1) and Article 66-14-2) with regard to the relevant Securities for Professional Investors, nor does it apply in a case in which the Financial Services Provider, etc. intermediates a sale for the general investor without having solicited the general investors, nor does it in any case specified by Cabinet Office Ordinance as one in which there is little likelihood of this resulting in insufficient investor protection.

(Obligation to Notify in Connection with Securities for Professional Investors)

Article 40-5 (1) If a Financial Services Provider, etc. sells Securities for Professional Investors in a case not falling under the category of a Case In Which Disclosure Has Been Made, or performs any other act specified by Cabinet Order in connection with such Securities, without issuing a Solicitation of Offers to Acquire or an Offer to Sell, etc., it must notify the other party to the sale or other act, pursuant to the provisions of Cabinet Office Ordinance and with regard to the Securities for Professional Investors, that the case does not fall under the category of a Case In Which Disclosure Has Been Made, as well as notifying the other party of any other matters that are specified by Cabinet Office Ordinance.

(2) The first time that a Financial Services Provider, etc. receives an offer from a Professional Investor, etc. (excluding a person set forth in Article 2, paragraph (31), items (i) to (iii) inclusive) for a contract for transactions in Securities for Professional Investors (meaning a contract for performing an act set forth in Article 2, paragraph (8), item (i) to (iv) inclusive, or item (x) in connection with Securities for Professional Investors (excluding a contract for effecting a sale and purchase of Securities for Professional Investors through an act set forth in item (x) of that paragraph (this is limited to a sale and purchase effected through the intermediation, brokerage, or agency of the Financial Services Provider that effects the relevant act) or any other contract that is specified by Cabinet Office Ordinance in consideration of the contents of the contract and the characteristics of the counterparty); hereinafter the same applies in this paragraph), it must notify the Professional Investor, etc. of the following matters and deliver a document to the Professional Investor, etc. that states those matters, before it concludes the contract for transactions in Securities for Professional Investors to which the offer pertains:

(i) the contents of the information provided in connection with the Securities for Professional Investors, the nature of the transaction, and any other matters specified by Cabinet Office Ordinance as material matters of which an investor must be made aware in connection with Securities for Professional Investors; and

(ii) an indication of the risk of insufficient protection involved, if a transaction of Securities for Professional Investors will be conducted by a person whose knowledge or experience, or the state of whose assets, makes it inappropriate for the person to do so;

(3) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of the documents set forth in the preceding paragraph.

Subsection 2 Special Provisions on Investment Advisory Services

(Duty to Customers)

Article 41 (1) A Financial Services Provider, etc. must work faithfully on behalf of its customers in providing its Investment Advisory Services.

(2) A Financial Services Provider, etc. must provide its Investment Advisory Services with the due care of a prudent manager toward its customers.

(Prohibited Acts)

Article 41-2 A Financial Services Provider, etc. must not perform any of the following acts in connection with the Investment Advisory Services it conducts:

(i) advising customers to conduct a transaction between or among themselves that would be detrimental to a particular customer's interests in the interest of another customer;

(ii) giving advice regarding a particular Financial Instrument, Financial Indicator, or Option for which there is no justifiable basis, with the aim of using fluctuations in the price, indicator, figure, or amount receivable based on a customer's transaction, to benefit itself or a third party other than that customer;

(iii) advising a customer to conduct a transaction under terms and conditions that are different from the ordinary terms and conditions and detrimental to the customer's interests (other than as is specified in item (i) above);

(iv) making a purchase and sale or other transaction of Securities, or a Derivatives Transaction (hereinafter referred to as "Purchase and Sale or Other Transaction of Securities, etc."), on its own account, using information from a transaction conducted by a customer that has received its advice;

(v) providing an economic benefit to a customer or a third party or having a third party provide an economic benefit to a customer, in order to cover the whole or part of a loss incurred by the customer due to a transaction about which the customer has received its advice, or in order to add to the profit that a customer has accrued in connection with a transaction about which the customer has received its advice (unless this is to cover the whole or part of a loss incurred due to problematic conduct); and

(vi) beyond what is set forth in the preceding items, any act specified by Cabinet Office Ordinance as resulting in insufficient investor protection, harming the fairness of transactions, or causing a loss of confidence in the Financial Instruments Business.

(Prohibition on the Purchase and Sale of Securities, etc.)

Article 41-3 A Financial Services Provider, etc. must not perform any of the acts set forth in Article 2, paragraph (8), items (i) to (iv) inclusive, in connection with the Investment Advisory Services it conducts, with a customer as the counterparty or on behalf of a customer; provided, however, that this does not apply if it does so as Type I Financial Instruments Business, or if it does so in a case that is specified by Cabinet Order.

(Prohibition on Receiving Deposits of Money or Securities)

Article 41-4 A Financial Services Provider, etc. must not, for any reason, receive a deposit of money or Securities from a customer, or have a person specified by Cabinet Order as being closely related to the Financial Services Provider, etc. deposit a customer's money or Securities, in connection with the Investment Advisory Services it conducts, unless it does so as Securities, etc. Management, or unless it does so in a case that is specified by Cabinet Order.

(Prohibition on the Lending, etc. of Money or Securities)

Article 41-5 A Financial Services Provider, etc. must not lend money or Securities to a customer or perform intermediation, brokerage, or agency for a third party's lending of money or Securities to a customer in connection with the Investment Advisory Services it conducts; provided, however, that this does not apply if a Financial Services Provider lends money or Securities to a customer in the course of a margin transaction prescribed in Article 156-24, paragraph (1), or if it performs one of such acts in a case that is specified by Cabinet Order.

Subsection 3 Special Provisions on Investment Management

(Duty to Rights Holders)

Article 42 (1) A Financial Services Provider, etc. must work faithfully on behalf of rights holders (meaning persons prescribed in the relevant of the following items for the category of business set forth in each item; hereinafter the same applies in this Subsection) in providing Investment Management:

(i) the business of performing the act specified in Article 2, paragraph (8), item (xii): the other party to the contract set forth in sub-item (a) or (b) of that item;

(ii) the business of performing the act specified in Article 2, paragraph (8), item (xiv): the person that holds the rights indicated on the Securities provided for in that item or other rights specified by Cabinet Order; and

(iii) the business of performing the act specified in Article 2, paragraph (8), item (xv): the person that holds rights set forth in sub-items (a) to (c) inclusive of that item or other rights specified by Cabinet Order as prescribed in that item.

(2) A Financial Services Provider, etc. must provide Investment Management with the due care of a prudent manager toward rights holders.

(Prohibited Acts)

Article 42-2 A Financial Services Provider, etc. must not perform any of the following acts in connection with the Investment Advisory Services it conducts; provided, however, that this excludes acts set forth in items (i) and (ii) below that are specified by Cabinet Office Ordinance as being unlikely to result in insufficient investor protection, harm the fairness of transactions, or cause a loss of confidence in the Financial Instruments Business:

(i) making an investment that involves a transaction being conducted with the Financial Services Provider, etc. or a director or executive officer thereof;

(ii) making an investment that involves a transaction being conducted between or among invested assets;

(iii) making an investment in a particular Financial Instrument, Financial Indicator, or Option, which involves a transaction being conducted for which there is no justifiable basis, with the aim of using fluctuations in the price, indicator, figure, or amount receivable based on the transaction, to benefit itself or a third party other than the rights holder;

(iv) making an investment that involves a transaction being conducted under terms and conditions that are different from the ordinary terms and conditions, and that are detrimental to the rights holder's interests;

(v) making a Purchase and Sale or Other Transaction of Securities, etc. on its own account using information about a transaction that it has conducted as an investment;

(vi) providing an economic benefit to a rights holder or a third party or having a third party provide an economic benefit to a rights holder or third party, in order to cover the whole or part of a loss that a rights holder has incurred due to a transaction conducted as an investment of invested assets, or in order to add to the profit that a rights holder has accrued from a transaction conducted as an investment of invested assets (unless this is done to cover the whole or part of a loss incurred due to problematic conduct); and

(vii) beyond what is set forth in the preceding items, any act specified by Cabinet Office Ordinance as resulting in insufficient investor protection, harming the fairness of transactions, or causing a loss of confidence in the Financial Instruments Business.

(Entrustment of Authority to Invest)

Article 42-3 (1) A Financial Services Provider, etc. may entrust the whole or part of the authority to make investments on behalf of a rights holder to another Financial Services Provider, etc. (limited to one does Investment Management) or other person specified by Cabinet Order, but only if the matters specified by Cabinet Office Ordinance are stipulated in a contract or other juridical act set forth in one of the following items:

(i) the contract set forth in Article 2, paragraph (8), item (xii), sub-item (a) or (b);

(ii) a contract concerning the rights indicated on Securities or other rights specified by Cabinet Order as prescribed in Article 2, paragraph (8), item (xiv); and

(iii) a contract or other juridical act concerning the rights set forth in Article 2, paragraph (8), item (xv), sub-items (a) to (c) inclusive or other rights specified by Cabinet Order as prescribed in that item.

(2) Notwithstanding the provisions of the preceding paragraph, a Financial Services Provider, etc. must not entrust the whole of the authority to invest all invested assets to the person specified by Cabinet Order that is referred to in that paragraph.

(3) With regard to the application of the provisions of Article 42, paragraph (1) if a Financial Services Provider, etc. effected an entrustment pursuant to paragraph (1), in Article 42, paragraph (1), the phrase "Financial Services Provider, etc." is deemed to be replaced with "Financial Services Provider, etc. (including a person specified by Cabinet Order that is referred to in Article 42-3, paragraph (1) and that has been entrusted by the relevant Financial Services Provider, etc. pursuant to that paragraph; the same applies in the following paragraph and the following Article)".

(Separate Management)

Article 42-4 A Financial Services Provider, etc. must manage invested assets separately from its own assets and other invested assets, pursuant to the provisions of Cabinet Office Ordinance, in connection with the Investment Management (limited to the business of performing the act specified in Article 2, paragraph (8), item (xv)) it conducts.

(Prohibition on Receiving Deposits of Money or Securities)

Article 42-5 A Financial Services Provider, etc. must not, for any reason, receive a deposit of money or Securities from a customer, or have a person specified by Cabinet Order as being closely related to the Financial Services Provider, etc. deposit a customer's money or Securities, in connection with the Investment Management it conducts (limited to the business of performing the acts specified in Article 2, paragraph (8), item (xii); hereinafter the same applies in this and the following Articles), unless it does so as Securities, etc. Management, or unless it does so in a case that is specified by Cabinet Order; provided, however, that this does not apply if the Financial Services Provider, etc. performs one of the acts set forth in Article 2, paragraph (8), items (i) to (iv) inclusive in connection with its Investment Management on behalf of a customer, and such a deposit is necessary for the settlement of the transaction conducted through such an act.

(Prohibition on the Lending of Money or Securities)

Article 42-6 A Financial Services Provider, etc. must not lend money or Securities to a customer or perform intermediation, brokerage, or agency for a third party's lending of money or Securities to a customer in connection with the Investment Management it conducts; provided, however, that this does not apply if a Financial Services Provider lends money or Securities to a customer in the course of a margin transaction prescribed in Article 156-24, paragraph (1), or if it performs one of these acts in a case that is specified by Cabinet Order.

(Delivery of an Investment Report)

Article 42-7 (1) A Financial Services Provider, etc., pursuant to the provisions of Cabinet Office Ordinance, must periodically prepare an investment report for invested assets and deliver it to any known rights holders affiliated with those invested assets; provided, however, that this does not apply in the cases specified by Cabinet Office Ordinance as those in which, even if no investment report is delivered to such rights holders, this will not compromise the protection of the rights holders.

(2) The provisions of Article 34-2, paragraph (4) apply mutatis mutandis to the delivery of an investment report under the preceding paragraph.

(3) When a Financial Services Provider, etc. has prepared an investment report set forth in paragraph (1) in connection with the Investment Management it conducts (limited to the business of performing the act specified in Article 2, paragraph (8), item (xv)), it shall notify the Prime Minister of this without delay; provided, however, that this does not apply if the number of rights holders to a set of invested assets is below the number specified by Cabinet Order, nor does it apply in the cases specified by Cabinet Office Ordinance as those in which its not doing so does not compromise the protection of investors.

(Exclusion from Application of the Trust Business Act)

Article 42-8 The provisions of Chapter IV of the Trust Business Act do not apply if a Financial Services Provider, etc. engages in Investment Management.

Subsection 4 Special Provisions on Securities, etc. Management

(Duty of Due Care of a Prudent Manager)

Article 43 A Financial Services Provider, etc. must engage in Securities, etc. Management with the due care of a prudent manager toward its customers.

(Separate Management)

Article 43-2 (1) A Financial Services Provider, etc. must manage the following Securities (excluding the Securities to be managed under the following paragraph) in the way specified by Cabinet Office Ordinance as a reliable and orderly way of managing property, and must do so separately from its own property:

(i) the Securities that a customer deposits with the Financial Services Provider, etc. pursuant Article 119 (limited to those deposited in connection with Transactions of Securities-Related Derivatives) or Securities that a customer deposits with the Financial Services Provider, etc. pursuant to Article 161-2; and

(ii) the Securities in the possession of the Financial Services Provider, etc. on the account of a customer or Securities that a customer has deposited with the Financial Services Provider, etc. (excluding Securities set forth in the preceding item, Securities that a Financial Services Provider, etc. may use pursuant to a contract, and Securities specified by Cabinet Order), in connection with transactions involved in Securities Services or other services specified by Cabinet Office Ordinance as being incidental to Securities Services (excluding Over-the-Counter Derivatives Transactions (limited to transactions to be made with a Financial Services Provider that is engaged in Securities Services and is registered as referred to in Article 29 to engage in Type I Financial Instruments Business as the counterparty, and other transactions that are specified by Cabinet Office Ordinance in consideration of the characteristics of the counterparty to the transaction) and other transactions specified by Cabinet Order; hereinafter referred to as "Transactions Related to Subject Securities" in item (ii) of the following paragraph and Article 79-20).

(2) As regards the money or Securities set forth in the following items, a Financial Services Provider, etc. must manage the amount of money calculated pursuant to the provisions of Cabinet Office Ordinance as the amount to be refunded to the customer in the event that said Financial Services Provider, etc. discontinues its Financial Instruments Business (including Services of a Registered Financial Institution; hereinafter the same applies in this paragraph) or otherwise ceases to operate in the Financial Instruments Business, separately from its own assets, and must establish a trust with a Trust Company, etc. in Japan, pursuant to the provisions of Cabinet Office Ordinance, for the purpose of managing the amount of money to be refunded to the customer in the event that said Financial Services Provider, etc. discontinues its Financial Instruments Business or otherwise ceases to operate in the Financial Instruments Business:

(i) money that a customer deposits with the Financial Services Provider, etc. (limited to money deposited in connection with Transactions of Securities-Related Derivatives) pursuant to Article 119, or money that a customer deposits with the Financial Services Provider, etc. pursuant to Article 161-2;

(ii) money on the account of a customer or money that a customer deposits with the Financial Services Provider, etc. (excluding the money set forth in the preceding item) in connection with a Transaction Related to Subject Securities; and

(iii) Securities set forth in the items of the preceding paragraph that have been furnished as security pursuant to Article 43-4, paragraph (1).

(3) A Financial Services Provider, etc. must periodically undergo an audit by a certified public accountant (this includes a foreign certified public accountant as prescribed in Article 16-2, paragraph (5) of the Certified Public Accountants Act (Act No. 103 of 1948); the same applies in Article 193-2 and Article 193-3) or audit by an auditing firm, pursuant to the provisions of Cabinet Office Ordinance, as regards the management conditions under the preceding two paragraphs.

Article 43-3 (1) A Financial Services Provider, etc. must manage the money or Securities that a customer deposits pursuant to Article 119 and other security deposits and Securities in connection with the Derivatives Transactions, etc. it conducts (excluding those that fall under the category of Transactions of Securities-Related Derivatives, etc.; the same applies in the following paragraph), separately from its own property, pursuant to the provisions of Cabinet Office Ordinance.

(2) A Financial Services Provider, etc. must manage the money and other assets that are equivalent to the amount of Financial Instruments that are part of the customer's account in connection with the Derivatives Transactions, etc. it conducts, pursuant to the provisions of Cabinet Office Ordinance.

(Restriction on the Act of Furnishing a Customer's Securities as Collateral)

Article 43-4 (1) If a Financial Services Provider, etc. furnishes the Securities in its possession on a customer's account or Securities deposited with it by a customer as collateral, or lends such Securities to another person, it must obtain written consent from said customer pursuant to the provisions of Cabinet Office Ordinance.

(2) The provisions of Article 34-2, paragraph (12) apply mutatis mutandis to the written consent prescribed in the preceding paragraph.

Subsection 5 Preventive Measures against Adverse Effects

(Prohibited Acts When Doing Business in Two or More Business Categories)

Article 44 If a Financial Services Provider, etc. or its officer or employee does business in two or more business categories (meaning business categories provided for in Article 29-2, paragraph (1), item (v)), the operator, etc., officer, or employee must not perform any of the following acts:

(i) soliciting a customer to entrust, etc. it (meaning to request it to provide intermediation, brokerage, or agency; the same applies hereinafter) with a Purchase and Sale or Other Transaction of Securities, etc., using information about a Purchase and Sale or Other Transaction of Securities, etc. conducted by a customer that has received advice in connection with Investment Advisory Services or using information about a Purchase and Sale or Other Transaction of Securities, etc. conducted by such a customer as an investment in connection with Investment Management;

(ii) giving advice in connection with the Investment Advisory Services it conducts, that would involve a transaction being conducted that is unnecessary in light of the transaction policy, the amount of the transaction, or the market conditions, or making an investment in connection with the Investment Management it conducts, that involves a transaction being conducted that is unnecessary in light of the investment policy, the amount of invested assets, or the market conditions, with the aim of benefitting from business other than Investment Advisory Services and Investment Management; and

(iii) any act other than what is set forth in the preceding two items, which is specified by Cabinet Office Ordinance as resulting in insufficient investor protection, harming the fairness of transactions, or causing a loss of confidence in the Financial Instruments Business.

(Prohibited Acts Involving Other Business)

Article 44-2 (1) If a Financial Services Provider, etc. or the officer or employee thereof does business other than in the Financial Instruments Business and services incidental thereto (hereinafter referred to as "Business Activities Other Than Those of a Financial Services Provider" in item (ii) and item (iii) below), the operator, etc., officer, or employee must not perform any of the following acts:

(i) making its becoming entrusted, etc. with a purchase and sale of Securities (meaning causing a person to entrust, etc. it with such purchase and sale; hereinafter the same applies) conditional upon it lending money or otherwise granting credit to a person through a means other than a margin transaction prescribed in Article 156-24, paragraph (1) (excluding acts specified by Cabinet Office Ordinance as acts that are found to have little likelihood of resulting in insufficient investor protection);

(ii) giving advice in connection with the Investment Advisory Services it conducts, that would involve a transaction being conducted that is unnecessary in light of the transaction policy, the amount of the transaction, or the market conditions, or making an investment in connection with the Investment Management it conducts, that involves a transaction being conducted that is unnecessary in light of the investment policy, the amount of invested assets, or the market conditions, with the aim of benefitting from Business Activities Other Than Those of a Financial Services Provider; and

(iii) any act other than what is set forth in the preceding two items, which is set forth in the items of Article 2, paragraph (8), which is performed in connection with Business Activities Other Than Those of a Financial Services Provider, and which is specified by Cabinet Office Ordinance as resulting in insufficient investor protection, harming the fairness of transactions, or causing a loss of confidence in the Financial Instruments Transaction Business.

(2) If a registered financial institution or its officer or employee does business other than engaging in the services of a registered financial institution (referred to as "Business Activities Other Than Those of a Registered Financial Institution" in item (ii) and item (iii) below), the institution, officer, or employee must not perform any of the following acts:

(i) making its becoming entrusted, etc. with a purchase and sale of Securities, conditional on it lending money or otherwise granting credit to a person (excluding acts specified by Cabinet Office Ordinance as acts that are found to have little likelihood of resulting in insufficient investor protection);

(ii) giving advice in connection with the Investment Advisory Services it conducts, that would involve a transaction being conducted that is unnecessary in light of the transaction policy, the amount of the transaction, or the market conditions, or making an investment in connection with the Investment Management it conducts, that involves a transaction being conducted that is unnecessary in light of the investment policy, the amount of invested assets, or the market conditions, with the aim of benefitting from Business Activities Other Than Those of a Registered Financial Institution; and

(iii) any act other than what is set forth in the preceding two items, which is performed in connection with Business Activities Other Than Those of a Registered Financial Institution and which is specified by Cabinet Office Ordinance as resulting in insufficient investor protection, harming the fairness of transactions, or causing a loss of confidence in the Financial Instruments Business.

(Restriction on Acts Involving Parent Corporations, etc. or Subsidiary Corporations, etc.)

Article 44-3 (1) It is prohibited for a Financial Services Provider, etc. or its officer or employee to perform any of the following acts; provided, however, that this does not apply if the approval of the Prime Minister is obtained for the relevant act as one that is found not to compromise the public interest or the protection of investors:

(i) conducting a purchase and sale or other transaction of Securities or an Over-the-Counter Derivatives Transaction with the Parent Corporation, etc. or Subsidiary Corporation, etc. of the Financial Services Provider, etc., under terms and conditions that are different from ordinary terms and conditions and that are likely to be detrimental to the fairness of transactions;

(ii) concluding a contract with a customer for any of the acts set forth in the items of Article 2, paragraph (8), knowing that the Parent Corporation, etc. or Subsidiary Corporation, etc. of the Financial Services Provider, etc. has granted credit to the customer on the condition that said contract be concluded with the Financial Services Provider, etc.;

(iii) giving advice in connection with the Investment Advisory Services it conducts, that would involve a transaction being conducted that is unnecessary in light of the transaction policy, the amount of the transaction, or the market conditions, or making an investment in connection with the Investment Management it conducts, that involves a transaction being conducted that is unnecessary in light of the investment policy, the amount of invested assets, or the market conditions, with the aim of benefitting the Parent Corporation, etc. or Subsidiary Corporation, etc. of the Financial Services Provider, etc.; and

(iv) any act other than what is set forth in the preceding three items, which involves the Parent Corporation, etc. or Subsidiary Corporation, etc. of the Financial Services Provider, etc. and which is specified by Cabinet Office Ordinance as being likely to compromise the protection of investors, harm the fairness of transactions, or cause a loss of confidence in the Financial Instruments Business.

(2) It is prohibited for a registered financial institution or its officer or employee to perform any of the following acts; provided, however, that this does not apply if the approval of the Prime Minster is obtained for the relevant act as one that is found not to compromise the public interest or the protection of investors:

(i) conducting a purchase and sale or other transaction of Securities or an Over-the-Counter Derivatives Transaction with the Parent Corporation, etc. or Subsidiary Corporation, etc. of the registered financial institution, under terms and conditions that are different from ordinary terms and conditions and that are likely to be detrimental to the fairness of transactions;

(ii) performing the act specified in Article 33, paragraph (2), item (iv), sub-item (b) with a customer, while granting credit to the customer on the condition that a contract for any of the acts set forth in the items of Article 2, paragraph (8) be concluded with the Parent Corporation, etc. or Subsidiary Corporation, etc. of the registered financial institution;

(iii) giving advice in connection with the Investment Advisory Services it conducts, that would involve a transaction being conducted that is unnecessary in light of the transaction policy, the amount of the transaction, or the market conditions, or making an investment in connection with the Investment Management it conducts, that involves a transaction being conducted that is unnecessary in light of the investment policy, the amount of invested assets, or the market conditions, with the aim of benefitting the Parent Corporation, etc. or Subsidiary Corporation, etc. of the registered financial institution; and

(iv) any act other than what is set forth in the preceding three items, which involves the Parent Corporation, etc. or Subsidiary Corporation, etc. of the registered financial institution and which is specified by Cabinet Office Ordinance as being likely to compromise the protection of investors, harm the fairness of transactions, or cause a loss of confidence in the business of the registered financial institution.

(Restriction on Credit Granting by the Underwriter)

Article 44-4 If a Financial Services Provider that has become an Underwriter of Securities sells said Securities, it must not lend money or otherwise grant credit for the purchase price to the purchaser of the Securities until six months have elapsed since the day on which the Financial Services Provider became an Underwriter.

Subsection 6 Miscellaneous Provisions

Article 45 The provisions set forth in each of the following items do not apply if the person specified in the relevant item is a Professional Investor; provided, however, that this does not apply to the cases specified by Cabinet Office Ordinance as those in which the public interest or the protection of Professional Investors could be compromised:

(i) Article 37; Article 38, items (iv) to (vi) inclusive; and Article 40, item (i): the other party that the Financial Services Provider, etc. solicits to conclude a Financial Instruments Transaction Contract;

(ii) Articles 37-2 to 37-6 inclusive; Article 40-2, paragraph (4); and Article 43-4: the other party to a Financial Instruments Transaction Contract for which a Financial Services Provider, etc. has received an offer or which a Financial Services Provider, etc. has concluded;

(iii) Article 41-4 and Article 41-5: the other party to an Investment Advisory Contract concluded by a Financial Services Provider, etc.; and

(iv) Articles 42-5 to 42-7 inclusive: the other party to a Discretionary Investment Contract concluded by a Financial Services Provider, etc.

Section 3 Accounting

Subsection 1 Financial Services Providers Engaged in Type I Financial Instruments Business

(The Business Year)

Article 46 The business year of a Financial Services Provider (limited to one that is engaged in Type I Financial Instruments Business; hereinafter the same applies in this Subsection) is from April 1 to March 31 of the following year.

(Business Books and Documents)

Article 46-2 A Financial Services Provider shall prepare and archive its business books and documents pursuant to the provisions of Cabinet Office Ordinance.

(Submission, etc. of Business Reports)

Article 46-3 (1) Each business year, pursuant to the provisions of Cabinet Office Ordinance, a Financial Services Provider shall prepare a business report and submit it to the Prime Minister within three months after the end of the business year.

(2) In addition to submitting a business report pursuant to the provisions of the preceding paragraph, a Financial Services Provider shall report the state of its business and assets to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(3) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister, pursuant to the provisions of Cabinet Order, may order a Financial Services Provider to issue public notice of all or part of the business report referred to in paragraph (1).

(Public Inspection of Explanatory Documents)

Article 46-4 Each business year, a Financial Services Provider shall prepare explanatory documents stating the particulars specified by Cabinet Office Ordinance as pertinent to the state of its business and assets, and shall keep those explanatory documents at all of its business offices and offices and make them available for public inspection during the one–year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

(Financial Instruments Transaction Liability Reserves)

Article 46-5 (1) A Financial Services Provider shall lay aside financial instruments transaction liability reserves, pursuant to the provisions of Cabinet Office Ordinance, in proportion to the transaction volume of the purchases and sales and other transactions of Securities and Derivatives Transactions, etc.

(2) The financial instruments transaction liability reserves referred to in the preceding paragraph must not be used other than when allocated to cover a loss that arises due to problematic conduct in connection with a purchase and sale or other transaction of Securities or a Derivatives Transaction, etc., or in cases otherwise specified by Cabinet Office Ordinance.

(Capital Adequacy Ratio)

Article 46-6 (1) A Financial Services Provider must calculate the ratio of the sum total of its stated capital, reserve funds, and other amounts specified by Cabinet Office Ordinance less the sum total of its fixed assets and any other things specified by Cabinet Office Ordinance, to the sum total of the amount specified by Cabinet Office Ordinance as the amount for covering possible risks which may arise due to fluctuations in the prices of the Securities held or due to other reasons (hereinafter referred to as the "Capital Adequacy Ratio"), and notify the Prime Minister of this ratio at the end of each month and in the cases specified by Cabinet Office Ordinance.

(2) A Financial Services Provider must not allow its Capital Adequacy Ratio to fall below 120 percent.

(3) A Financial Services Provider shall prepare documents stating its Capital Adequacy Ratio as of the last day of March, June, September, and December every year, keep them at all of its business offices and offices, and make them available for public inspection for the three-month period starting from the day on which one month has elapsed since the last day of the relevant month.

Subsection 2 Financial Services Providers Not Engaged in Type I Financial Instruments Business

(Business Books and Documents)

Article 47 A Financial Services Provider (other than one that is engaged in Type I Financial Instruments Business; hereinafter the same applies in this Subsection) shall prepare and archive its business books and documents pursuant to the provisions of Cabinet Office Ordinance.

(Submission of Business Reports)

Article 47-2 Each business year, pursuant to the provisions of Cabinet Office Ordinance, a Financial Services Provider shall prepare a business report and submit it to the Prime Minister within three months after the end of the business year.

(Public Inspection of Explanatory Documents)

Article 47-3 Each business year, pursuant to the provisions of Cabinet Office Ordinance, a Financial Services Provider shall prepare explanatory documents stating those of the particulars stated in the business report referred to in the preceding Article which are specified by Cabinet Office Ordinance as particulars that are found to be necessary in terms of investor protection, and shall keep them at all of its business offices and offices and make them available for public inspection during the one–year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

Subsection 3 Registered Financial Institutions

(Business Books and Documents)

Article 48 A registered financial institution shall prepare and archive its business books and documents pursuant to the provisions of Cabinet Office Ordinance.

(Submission, etc. of Business Reports)

Article 48-2 (1) Each business year, pursuant to the provisions of Cabinet Office Ordinance, a registered financial institution shall prepare a business report and submit it to the Prime Minister within three months after the end of the business year.

(2) In addition to submitting a business report pursuant to the provisions of the preceding paragraph, a registered financial institution shall report the state of its business and assets to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(3) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister, pursuant to the provisions of Cabinet Order, may order a registered financial institution to give public notice of all or part of the business report under paragraph (1).

(Financial Instruments Transaction Liability Reserves)

Article 48-3 (1) A registered financial institution shall lay aside financial instruments transaction liability reserves, pursuant to the provisions of Cabinet Office Ordinance, in proportion to the transaction volume of the purchases and sales and other transactions of Securities and Derivatives Transactions, etc.

(2) The financial instruments transaction liability reserves referred to in the preceding paragraph must not be used other than when allocated to cover a loss that arises due to problematic conduct involving a purchase and sale or other transaction of Securities or a Derivatives Transaction, etc., or in cases otherwise specified by Cabinet Office Ordinance.

Subsection 4 Special Provisions for Foreign Corporations, etc.

(Exclusion from Application)

Article 49 The provisions of Article 46 do not apply if a Financial Services Provider is a foreign corporation.

(Special Provisions on the Submission of Business Reports)

Article 49-2 (1) With regard to the application of Article 46-3, paragraph (1) if a Financial Services Provider is a foreign corporation, in that paragraph, the phrase "Each business year" is deemed to be replaced with "For each period from April 1 to March 31 of the following year" and the phrase "within three months after the end of the business year" is deemed to be replaced with "within the period specified by Cabinet Order after the period from April 1 to March 31 of the following year has elapsed".

(2) With regard to the application of Article 46-4 if a Financial Services Provider is a foreign corporation, the term "Each business year" in that Article is deemed to be replaced with "For each period from April 1 to March 31 of the following year"; and the term "from the end of the business year" in that Article is deemed to be replaced with "after the end of that period."

(3) With regard to the application of Article 46-6, paragraph (1) if a Financial Services Provider is a foreign corporation, in that paragraph, the term "stated capital" is deemed to be replaced with "brought-in capital" the term "reserve funds" is deemed to be replaced with "reserve funds laid aside in its business offices and offices in Japan", and the term "fixed assets" is deemed to be replaced with "fixed assets of its business offices and offices in Japan".

(4) With regard to the application of Article 47-2 if a Financial Services Provider is a foreign corporation or an individual domiciled in a foreign state, and with regard to the application of Article 48-2, paragraph (1) if a registered financial institution is a foreign corporation, in those provisions, the phrase "within three months" is deemed to be replaced with "within the period specified by Cabinet Order".

(Submission of Other Documents)

Article 49-3 (1) Each business year, pursuant to the provisions of Cabinet Office Ordinance, a Financial Services Provider (but only a foreign corporation engaged in Type I Financial Instruments Business; hereinafter the same applies in this Subsection) shall submit a balance sheet, profit and loss statement, and other financial accounting documents prepared in connection with all of its business, as well as documents summarizing business in the relevant business year, to the Prime Minister within the period specified by Cabinet Order after the end of that business year.

(2) In addition to submitting documents pursuant to the provisions of the preceding paragraph, a Financial Services Provider shall report the state of its business and assets to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(Reserves for Loss)

Article 49-4 (1) Until the amount of money specified by Cabinet Order as referred to in Article 29-4, paragraph (1), item (iv) is reached, a Financial Services Provider shall lay aside reserves for loss at its principal business office or office in Japan, pursuant to the provisions of Cabinet Office Ordinance, in at least the amount arrived at by multiplying the amount of profit from the business conducted at all business offices and offices in Japan that it has established for the purpose of engaging in the Financial Instruments Business (hereinafter referred to as "All Business Offices and Offices" in the following paragraph and following Article), by the rate of no more than ten percent that is specified by Cabinet Office Ordinance.

(2) The reserves for loss referred to in the preceding paragraph must not be used other than when allocated to cover a net loss linked to the business of All Business Offices and Offices of the Financial Services Provider, with the approval of the Prime Minister.

(Retention of Assets Within Japan)

Article 49-5 Pursuant to the provisions of Cabinet Office Ordinance, a Financial Services Provider must retain assets equivalent to the sum total of its financial instruments transaction liability reserves, reserves for loss, and the amount of liability on the accounts of All Business Offices and Offices as specified by Cabinet Order, in Japan.

Section 4 Supervision

(Notification of Suspension)

Article 50 (1) If a Financial Services Provider, etc. comes to fall under one of the following items, it must notify the Prime Minister of this without delay:

(i) it suspends its business (limited to Financial Instruments Business or services of a registered financial institution (hereinafter referred to as "Financial Transaction Business, etc." in this Section) or resumes business (with regard to a Financial Services Provider that has obtained the authorization referred to in Article 30, paragraph (1), this includes if it suspends or resumes the business subject to said authorization);

(ii) it discontinues business that was under the authorization referred to in Article 30, paragraph (1);

(iii) the Financial Services Provider is a corporation, and that corporation merges with another corporation (excluding if the Financial Services Provider is a corporation and that corporation disappears in the merger), succeeds to all or part of another corporation's business undertakings (limited to those in the Financial Instruments Business, etc.; hereinafter the same applies in this item and the following Article) in a company split, or acquires all or part of another corporation's business;

(iv) the Financial Services Provider (limited to one engaged in Securities Services; the same applies in the following item) acquires or comes to hold the majority of all shareholders', etc. voting rights in a bank, a Cooperative Financial Institution, or any other financial institution specified by Cabinet Order; in a corporation in a foreign state that engages in the same kind of business as that conducted by such persons; or in a Financial Services Provider (limited to a corporation), a foreign corporation that engages in Financial Instruments Business, or any other corporation specified by Cabinet Office Ordinance (collectively referred to as a "Bank, etc." in the following item and Article 56-2, paragraph (1));

(v) the Financial Services Provider comes to no longer hold the majority of all shareholders', etc. voting rights in a Bank, etc. in which it used to hold the majority of all shareholders', etc. voting rights, or such Bank, etc. merges, is dissolved, or discontinues the whole of its business;

(vi) the majority of all shareholders', etc. voting rights in the Financial Services Provider (limited to one engaged in Type I Financial Instruments Business or Investment Management) has come to be held by another corporation or other organization;

(vii) it files a petition to commence bankruptcy proceedings, rehabilitation proceedings, or reorganization proceedings; or

(viii) it falls under any other case specified by Cabinet Office Ordinance.

(2) Necessary particulars relevant to the determination of whether the majority of all shareholders', etc. voting rights are held as prescribed in item (iv) of the preceding paragraph are specified by Cabinet Office Ordinance in consideration of the manner in which they are held and other circumstances.

(Notification of Business Discontinuance)

Article 50-2 (1) If a Financial Services Provider, etc. comes to fall under one of the following items, the person specified in that item must notify the Prime Minister of this within 30 days from the day in question:

(i) the Financial Services Provider is an individual, and that individual dies: the heir;

(ii) the Financial Services Provider, etc. discontinues Financial Instruments Business, etc.: that corporation or individual;

(iii) the Financial Services Provider, etc. is a corporation, and that corporation disappears in a merger: the officer that represented the corporation;

(iv) the Financial Services Provider, etc. is a corporation, and that corporation is dissolved due to an order to commence bankruptcy proceedings: the bankruptcy trustee;

(v) the Financial Services Provider, etc. is a corporation, and that corporation is dissolved for reasons other than a merger or an order to commence bankruptcy proceedings: the liquidator;

(vi) the Financial Services Provider, etc. is a corporation, and that corporation has the whole or part of its business succeeded to in a company split: that corporation; or

(vii) the Financial Services Provider, etc. transfers the whole or part of its business: that corporation or individual.

(2) If a Financial Services Provider, etc. comes to fall under one of the items of the preceding paragraph (in item (vi) of the preceding paragraph, this is only if a Financial Services Provider, etc. has the whole of its business succeeded to in a company split, and in item (vii) of the preceding paragraph, this is only if a Financial Services Provider, etc. transfers the whole of its business), the Article 29 or Article 33-2 registration of the Financial Services Provider, etc. ceases to be valid.

(3) If a Financial Services Provider is an individual (limited to one engaged in Investment Advisory Services) and that individual dies, the heir may continue to engage in Financial Transaction Business for 60 days after the death of the decedent (if, during that period, a disposition to refuse registration under Article 29-4, paragraph (1) is reached or the discontinuation of Financial Instruments Business (limited to Investment Advisory Services; hereinafter the same applies in this paragraph to paragraph (5) inclusive) is ordered pursuant to Article 52, paragraph (1) as it applies through the replacement of certain terms pursuant to the provisions of the following paragraph, the heir may continue to engage in Financial Instruments Business until the day on which the disposition is reached or the discontinuation is ordered; hereinafter referred to as the "Business Continuation Period" in this paragraph). The same applies until a disposition to make a registration or deny a registration in connection with an application is reached, if the heir files an application for the registration referred to in Article 29 (or, if the heir is a Financial Services Provider and files an application for the registration of a change referred to in Article 31, paragraph (4); hereinafter the same applies in this paragraph) during the Business Continuation Period and the Business Continuation Period elapses.

(4) If it is permissible for an heir to continue engaging in Financial Transaction Business pursuant to the provisions of the preceding paragraph, the heir is deemed to be a Financial Services Provider (limited to one engaged in Investment Advisory Services), and the provisions of Articles 36 to 36-3 inclusive; Article 37; Article 37-3; Article 37-4; Articles 37-6 to 38-2 inclusive; Article 40; Articles 41 to 41-5 inclusive; Articles 44 to 44-3 inclusive; Article 45; Articles 47 to 47-3 inclusive; Article 49-2, paragraph (4); Article 49-4; Article 49-5; Article 51; Article 52, paragraph (1) (limited to the part that involves item (i) and items (vi) to (ix) inclusive); Article 52, paragraph (4) or (5); and Article 56-2 (limited to paragraph (1), (3) or (4)) (including the penal provisions linked with these provisions) apply. In this case, in Article 52, paragraph (1), the term "rescind its Article 29 registration" is deemed to be replaced with "order the discontinuation of Financial Transaction Business".

(5) With regard to the application of the provisions of Article 29-4, paragraph (1) if the discontinuation of Financial Instruments Business is ordered pursuant to Article 52, paragraph (1) as it applies through the replacement of certain terms pursuant to the provisions of the preceding paragraph, the heir that is subject to the order for discontinuation is deemed to be a person that has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 52, paragraph (1), and the day on which the discontinuation is ordered is deemed to be the day on which the registration referred to in Article 29 is rescinded pursuant to the provisions of Article 52, paragraph (1).

(6) If a Financial Services Provider, etc. seeks to discontinue Financial Transaction Business, etc. (excluding Investment Advisory and Agency Services; the same applies in paragraph (8) and Article 56, paragraph (1)), to implement a merger (limited to a merger in which the Financial Services Provider, etc. disappears), to dissolve for reasons other than merger or an order to commence bankruptcy proceedings, to have all or part of its business succeeded to in a company split, or to transfer all or part of its business, it must issue public notice of this and post a notice in a place easily seen by the public at all of its business offices and offices pursuant to the provisions of Cabinet Office Ordinance, by 30 days prior to the day on which it does so.

(7) If a Financial Services Provider, etc. issues a public notice under the preceding paragraph, it must notify the Prime Minister of this immediately.

(8) If a Financial Services Provider, etc. issues a public notice under paragraph (6) (unless it issues that public notice in connection with the succession of the whole or part of its business upon merger or in a company split or in connection with the transfer of the whole or part of its business), the Financial Services Provider, etc. must promptly complete the sales and purchases and other transactions of Securities and Derivatives Transactions, etc. it is conducting (referred to as "Customer Transactions" in Article 56 and Article 57-9) and return the assets that customers have deposited with it in connection with its Financial Instruments Business, etc. and the assets on its customers' accounts that are in its possession without delay.

(9) The provisions of Article 940, paragraph (1) (limited to the part that involves item (i)) and Article 940, paragraph (3) of the Companies Act apply mutatis mutandis if a Financial Services Provider, etc. (limited to one that is a company) issues a public notice under paragraph (6) through an Electronic Public Notice (meaning an Electronic Public Notice as provided for in Article 2, item (xxxiv) of that Act; the same applies hereinafter). The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(10) The provisions of Article 940, paragraph (1) (limited to the part that involves item (i)) of the Companies Act and Article 940, paragraph (3); Article 941; Article 946; Article 947; Article 951; paragraph (2); Article 953; and Article 955 of that Act apply mutatis mutandis if a Financial Services Provider, etc. (limited to one that is a foreign company) issues a public notice under paragraph (6) through an Electronic Public Notice. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Issuing a Business Improvement Order to a Financial Services Provider)

Article 51 If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors as concerns a Financial Services Provider's business operations or the state of its assets, the Prime Minister, within the scope of this necessity, may order the Financial Services Provider to change its business methods or to otherwise take measures that are necessary for improving its business operations or the state of its assets.

(Issuing a Business Improvement Order to a Registered Financial Institution)

Article 51-2 If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors as concerns a registered financial institution's business operations, the Prime Minister, within the scope of this necessity, may order the registered financial institution to change its business methods or to otherwise take measures that are necessary for improving its business operations.

(Supervisory Measures for Financial Services Providers)

Article 52 (1) If a Financial Services Provider falls under one of the following items, the Prime Minister may rescind its Article 29 registration, rescind its Article 30, paragraph (1) authorization, or order the suspension of all or a part of business activities during a fixed period of no longer than six months:

(i) it comes to fall under Article 29-4, paragraph (1), item (i), (ii), or (iii);

(ii) a Financial Services Provider engaged in Type I Financial Instruments Business, Type II Financial Transaction Business, or Investment Management comes to fall under Article 29-4, paragraph (1), item (iv);

(iii) a Financial Services Provider engaged in Type I Financial Transaction Business or Investment Management comes to fall under Article 29-4, paragraph (1), item (v), sub-item (a) or (b);

(iv) a Financial Services Provider engaged in Type I Financial Instruments Business comes to fall under Article 29-4, paragraph (1), item (vi), sub-item (b);

(v) it has received its Article 29 registration by wrongful means;

(vi) it violates a law or regulation (other than Article 46-6, paragraph (2)) or a disposition by a government agency which is based on a law or regulation, in connection with the Financial Transaction Business or services incidental thereto;

(vii) in light of the state of its business or assets, it is likely to become insolvent;

(viii) a fact has occurred in connection with the operation of Investment Advisory and Agency Services or Investment Management, which is detrimental to the investors' interests;

(ix) it commits a wrongful or extremely unjust act in connection with the Financial Instruments Business, and the circumstances surrounding this are particularly serious;

(x) it violates the conditions attached to its Article 30, paragraph (1) authorization; or

(xi) a Financial Services Provider that has obtained Article 30, paragraph (1) authorization becomes unable to satisfy the criteria set forth in Article 30-4, items (i) to (iii) inclusive or (v).

(2) If the officer of a Financial Services Provider (for a foreign corporation, this is limited to an officer stationed at its domestic business office or office and its domestic representative; hereinafter the same applies in this paragraph and paragraph (2) of the following Article) comes to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, is discovered to have fallen under one of the categories in sub-items (a) to (g) inclusive of that item at the time of the Article 29 registration, or comes to fall under one of the categories in item (vi) or items (viii) to (x) inclusive of the preceding paragraph, the Prime Minister may order the Financial Services Provider to dismiss that officer.

(3) If a Financial Services Provider that has obtained Article 30, paragraph (1) authorization comes to fall under Article 50, paragraph (1), item (ii), or if the Article 29 registration of the Financial Services Provider loses its validity pursuant to the provisions of Article 50-2, paragraph (2) or is rescinded pursuant to the provisions of paragraph (1), the following paragraph, Article 53, paragraph (3), Article 54 or Article 57-6, paragraph (3), that authorization ceases to be valid.

(4) If the Prime Minister is unable to ascertain the location of the business offices or offices of a Financial Services Provider or is unable to ascertain the whereabouts of a Financial Services Provider (in the case of a corporation, the whereabouts of the officer representing the corporation), the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, may issue public notice of that fact and rescind the registration of the Financial Services Provider if no filing is made by the Financial Services Provider even after 30 days past the day of the public notice.

(5) The provisions of Chapter III of the Administrative Procedure Act do not apply to a disposition under the preceding paragraph.

(Supervisory Measures for Registered Financial Institutions)

Article 52-2 (1) If a registered financial institution falls one of the following items, the Prime Minister may rescind its registration under Article 33-2, or order the suspension of all or a part of business activities during a fixed period of no longer than six months:

(i) it has come to fall under Article 33-5, paragraph (1), item (i), (ii), or (iii);

(ii) it has received its Article 33-2 registration by wrongful means;

(iii) it violates a law or regulation or a disposition by a government agency which is based on a law or regulation, in connection with the services of a registered financial institution or services incidental thereto;

(iv) a fact has occurred in connection with the operation of its Investment Advisory and Agency Services, which is detrimental to the investors' interests ; or

(v) it has committed a wrongful or unjust act in connection with the services of a registered financial institution, and the circumstances surrounding this are particularly serious.

(2) If the officer of a registered financial institution comes to fall under one of the categories in items (iii) to (v) inclusive of the preceding paragraph, the Prime Minister may order the registered financial institution to dismiss that officer.

(3) If the Prime Minister is unable to ascertain the location of the business offices or offices of a registered financial institution or is unable to ascertain the whereabouts of the officer representing the registered financial institution, the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, may issue public notice of that fact and rescind the registration of the registered financial institution if no filing is made by the registered financial institution even after 30 days past the day of the public notice.

(4) The provisions of Chapter III of the Administrative Procedure Act do not apply to a disposition under the preceding paragraph.

(Orders Involving the Capital Adequacy Ratio)

Article 53 (1) If a Financial Services Provider (limited to one engaged in Type I Financial Instruments Business; hereinafter the same applies in this Article) violates the provisions of Article 46-6, paragraph (2) and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister, within the scope of this necessity, may order a change of business methods, order assets to be deposited, or issue orders with respect to matters that are otherwise necessary from a supervisory perspective.

(2) If a Financial Services Provider violates the provisions of Article 46-6, paragraph (2) (but only if the Capital Adequacy Ratio is less than 100 percent) and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister, within the scope of this necessity, may order the suspension of all or a part of business activities during a fixed period of no longer than three months.

(3) If the Prime Minister orders the suspension of all or a part of business activities pursuant to the provisions of the preceding paragraph, and finds that the Capital Adequacy Ratio of the Financial Services Provider as of the day on which three months have elapsed since the day of the order continues to be less than 100 percent and that the Financial Services Provider's Capital Adequacy Ratio status is not likely to recover, the Prime Minister may rescind the Article 29 registration of that Financial Services Provider.

(Rescission of Registration Due to Non-commencement or Suspension of Business)

Article 54 If, without legitimate grounds for doing so, a Financial Services Provider, etc. does not commence business within three months of the day on which it is permitted to begin engaging in Financial Instruments Business, etc. or suspends business for three months or more continually, the Prime Minister may rescind the Article 29 or Article 33-2 registration of that Financial Services Provider, etc.

(Public Notice of Supervisory Measures)

Article 54-2 In the cases set forth as follows, the Prime Minister shall issue public notice indicating as follows, pursuant to the provisions of Cabinet Office Ordinance:

(i) the Prime Minister rescinds an Article 29 or Article 33-2 registration or an Article 30, paragraph (1) authorization, or orders the suspension of all or a part of business activities pursuant to the provisions of Article 52, paragraph (1) or Article 52-2, paragraph (1);

(ii) the Prime Minister orders the suspension of all or a part of business activities pursuant to the provisions of Article 53, paragraph (2); or

(iii) the Prime Minister rescinds an Article 29 or Article 33-2 registration pursuant to the provisions of Article 52, paragraph (4); Article 52-2, paragraph (3); Article 53, paragraph (3); or the preceding Article.

(Deletion of a Registration)

Article 55 (1) If an Article 29 or Article 33-2 registration loses its validity pursuant to the provisions of Article 50-2, paragraph (2) or if the Prime Minister rescinds an Article 29 or Article 33-2 registration pursuant to the provisions of Article 52, paragraph (1) or (4); Article 52-2, paragraph (1) or (3); Article 53, paragraph (3); or Article 54; the Prime Minister must delete that registration.

(2) If the Prime Minister rescinds an Article 30, paragraph (1) authorization pursuant to the provisions of Article 52, paragraph (1) or an Article 30, paragraph (1) authorization loses its validity pursuant to the provisions of Article 52, paragraph (3), the Prime Minister must delete the supplementary note indicating that the Article 30, paragraph (2) authorization has been given.

(Completion of Remaining Business)

Article 56 (1) The provisions of Article 50-2, paragraph (8) apply mutatis mutandis to a person that was a Financial Services Provider, etc. if that Financial Services Provider, etc. dissolves or discontinues Financial Instruments Business, etc., or has its Article 29 or Article 33-2 registration rescinded pursuant to the provisions of Article 52, paragraph (1); Article 52-2, paragraph (1); Article 53, paragraph (3); or Article 54. In such a case, the person that was the Financial Services Provider, etc. is deemed to still be a Financial Services Provider, etc. inasmuch as the task of completing Customer Transactions is concerned.

(2) Except in a case to which the provisions of the preceding paragraph are applicable, the provisions of Article 50-2, paragraph (8) apply mutatis mutandis to the Customer Transactions involved in the business of a Financial Services Provider if a Financial Services Provider that has obtained Article 30, paragraph (1) authorization discontinues the business to which that authorization pertains or has that authorization rescinded pursuant to the provisions of Article 52, paragraph (1). In such a case, the Financial Services Provider is deemed to still have Article 30, paragraph (1) authorization inasmuch as the task of completing the Customer Transactions involved in that business is concerned.

(Collection of Reports and Inspections)

Article 56-2 (1) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Financial Services Provider, etc., a person that conducts transactions with a Financial Services Provider, etc., a Bank, etc. in which a Financial Services Provider, etc. (excluding a registered financial institution) holds the majority of all shareholders', etc. voting rights (hereinafter such a Bank, etc. is referred to as a "Specified Subsidiary Corporation" in this paragraph), a Holding Company (meaning a holding company as prescribed in Article 9, paragraph (5), item (i) of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade; hereinafter the same applies in this Article) that has a Financial Services Provider, etc. as its Subsidiary Company (meaning a Subsidiary Company as prescribed in Article 29-4, paragraph (3); hereinafter the same applies in this Article), or the person that a Financial Services Provider, etc. has entrusted with its business, to submit reports or materials that should serve as a reference in connection with the business or assets of the Financial Services Provider, etc. (but may only order a Specified Subsidiary Corporation submit reports or materials that should serve as a reference in connection with the assets of the Financial Services Provider, etc. (excluding a registered financial institution)), and may have the relevant officials inspect the state of the business or assets, or the books and documents or any other articles, of a Financial Services Provider, etc., a Specified Subsidiary Corporation, a Holding Company that has a Financial Services Provider, etc. as its Subsidiary Company, or the person that a Financial Services Provider, etc. has entrusted with its business (but may only have the relevant officials inspect a Specified Subsidiary Corporation as is necessary in connection with the assets of the Financial Services Provider, etc. (excluding a registered financial institution), and may only have the relevant officials inspect a Holding Company that has a Financial Services Provider, etc. as its Subsidiary Company, or the person that a Financial Services Provider, etc. has entrusted with its business, as is necessary in connection with the business or assets of the Financial Services Provider, etc.).

(2) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the Major Shareholder (meaning a Major Shareholder as provided for in Article 29-4, paragraph (2); hereinafter the same applies in this paragraph) of a Financial Services Provider (limited to one engaged in Type I Financial Instruments Business or Investment Management, and excluding a foreign corporation; hereinafter the same applies in this paragraph) or the Major Shareholder of a Holding Company that has a Financial Services Provider as its Subsidiary Company to submit a notification or take measures referred to in Articles 32 to 32-3 inclusive (this means Article 32, paragraph (1) or (2); Article 32-2, paragraph (1); or Article 32-3, paragraph (1) as applied mutatis mutandis pursuant to Article 32-4 in the case of the Major Shareholder of a Holding Company that has a Financial Services Provider as its Subsidiary Company; hereinafter the same applies in this paragraph), and to submit reports or materials that should serve as a reference in connection with the business or assets of a Financial Services Provider, and may have the relevant officials inspect documents or other articles of such a Major Shareholder (but only as is necessary in connection with the notification or measures referred to in Articles 32 to 32-3 inclusive or the business or assets of the Financial Services Provider, etc.).

(3) In a case other than what is provided for in paragraph (1), whenever the Prime Minister finds it to be necessary and appropriate for ensuring compliance with the provisions of Article 36, paragraph (2), the Prime Minister may order the Parent Financial Institution, etc. (meaning a Parent Financial Institution, etc. provided for in Article 36, paragraph (4); hereinafter the same applies in this paragraph) or Subsidiary Financial Institution, etc. (meaning a Subsidiary Financial Institution, etc. provided for in Article 36, paragraph (5); hereinafter the same applies in this paragraph) of a Specified Financial Services Provider, etc. (meaning a Specified Financial Services Provider, etc. provided for in Article 36, paragraph (3); hereinafter the same applies in this paragraph) to submit reports or materials that should serve as a reference in connection with the business or assets of the Specified Financial Services Provider, etc., and may have the relevant officials inspect the state of the business or assets, or the books and documents or any other articles, of the Parent Financial Institution, etc. or the Subsidiary Financial Institution, etc. of the relevant Specified Financial Services Provider, etc.

(4) In a case other than what is provided for in paragraph (1), whenever the Prime Minister finds it to be necessary and appropriate for ensuring compliance with Article 44-3, the Prime Minister may order the Parent Bank, etc. (meaning a Parent Bank, etc. provided for in Article 31-4, paragraph (3); hereinafter the same applies in this paragraph) or Subsidiary Bank, etc. (meaning a Subsidiary Bank, etc. provided for in Article 31-4, paragraph (4); hereinafter the same applies in this paragraph) of a Financial Services Provider to submit reports or materials that should serve as a reference in connection with the business or assets of the Financial Services Provider, and may have the relevant officials inspect the state of the business or assets, or the books and documents or any other articles, of the Parent Bank, etc. or Subsidiary Bank, etc. of the relevant Financial Services Provider.

(Retention of Assets Within Japan)

Article 56-3 Beyond what is provided for in Article 49-5, if the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Financial Services Provider to keep the portion of its assets that is specified by Cabinet Order within Japan.

(Supervision of a Financial Services Provider, etc. That Is Not a Member, etc. of a Financial Instruments Exchange, etc.)

Article 56-4 (1) The Prime Minister shall conduct the appropriate supervision as regards the business of a Financial Services Provider, etc. (with regard to Financial Services Providers, limited to those engaged in Type I Financial Instruments Business or Investment Management; hereinafter the same applies in this Article) that has not joined an Association (meaning an Authorized Financial Instruments Business Association or Certified Financial Instruments Business Association prescribed in Article 78, paragraph (2); hereinafter the same applies in this Article) or that is not a member or Trading Participant (referred to as a "Member, etc." in the following paragraph) of a Financial Instruments Exchange, with due consideration for the articles of incorporation and any other rules of such Associations and Financial Instruments Exchanges, so that its business does not damage to the public interest or result in insufficient investor protection.

(2) In order to conduct the supervision prescribed in the preceding paragraph, the Prime Minister may order a Financial Services Provider, etc. that has not joined an Association or that is not a Member, etc. of a Financial Instruments Exchange to prepare or change the rules with which the Financial Services Provider, etc. or the officers or employees are to comply (hereinafter referred to as "Internal Rules" in this Article), with due consideration for the articles of incorporation and any other rules of such Associations and Financial Instruments Exchanges.

(3) A Financial Services Provider, etc. that is ordered to prepare or change the Internal Rules pursuant to the provisions of the preceding paragraph must prepare or change the Internal Rules and obtain the approval of the Prime Minister within 30 days.

(4) A Financial Services Provider, etc. that has obtained the approval referred to in the preceding paragraph must obtain the approval of the Prime Minister if it seeks to change or discontinue the Internal Rules for which it has obtained that approval.

(Hearing)

Article 57 (1) Before seeking to refuse an Article 29 or Article 33-2 registration, an Article 30, paragraph (1) authorization, or an Article 31, paragraph (4) registration of a change, the Prime Minister must notify the applicant for registration or the Financial Services Provider, and have the relevant officials conduct a hearing regarding the applicant for registration or the Financial Services Provider.

(2) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition based on the provisions of Article 51; Article 51-2; Article 52, paragraph (1); Article 52-2, paragraph (1); Article 53; Article 54; or Article 56-3, the Prime Minister must conduct a hearing.

(3) Upon deciding to grant or to refuse an Article 29 or Article 33-2 registration, the an Article 30, paragraph (1) or Article 31, paragraph (6) authorization, an Article 31, paragraph (4) registration of a change, an Article 35, paragraph (4) approval, or the approval referred to in paragraph (3) or (4) of the preceding Article, to attach conditions pursuant to the provisions of Article 30-2, paragraph (1), or to issue a disposition based on the provisions of Article 51; Article 51-2; Article 52, paragraph (1) or (2); Article 52-2, paragraph (1) or (2); Article 53; Article 54; Article 56-3; or paragraph (2) of the preceding Article, the Prime Minister must notify the applicant for registration or the Financial Services Provider of this in writing.

Section 4-2 Special Provisions on Special Financial Services Providers, etc.

Subsection 1 Special Financial Services Providers

(Notifications for Special Financial Services Providers)

Article 57-2 (1) If the total asset value (meaning the total monetary value of assets calculated pursuant to the provisions of Cabinet Office Ordinance; hereinafter the same applies in this Article) of a Financial Services Provider (limited to one engaged in Type I Financial Instruments Business, excluding foreign corporations; hereinafter the same applies in this Subsection) exceeds the amount of money specified by Cabinet Order as representing the scope of all assets required for ensuring the sound and appropriate operation of the business of the group consisting of the Financial Services Provider and its Subsidiary Corporations, etc. (hereinafter referred to as the "Total Asset Value Threshold" in this Article), the Financial Services Provider must notify the Prime Minister of this, of the total asset value, and of the basis for its calculation within two weeks from the day on which that value is exceeded; provided, however, that if the total asset value comes to be equal to or lower than the Total Asset Value Threshold after the Financial Services Provider has made the notification under the main clause of this paragraph, but the total asset value of the Financial Services Provider again comes to exceed the Total Asset Value Threshold by the time that two years have elapsed counting from the day on which the total asset value came to be equal to or lower than the Total Asset Value Threshold, the Financial Services Provider is not required to submit notification of this or of the total asset value and the basis for its calculation.

(2) A Special Financial Services Provider (meaning a Financial Services Provider that has made the notification under the provisions of the preceding paragraph, excluding one that comes to fall under paragraph (6), item (ii) after making that notification; hereinafter the same applies in this Section) shall submit the following documents within the period specified by Cabinet Order counting from the day on which it makes the notification under the provisions of the proceeding paragraph(hereinafter referred to as the "Notification Date" in this Subsection) if that Special Financial Services Provider has a Parent Company as of the Notification Date:

(i) a document in which it states the trade name or name of the Parent Company of the Special Financial Services Provider and other particulars specified by Cabinet Office Ordinance;

(ii) the latest Quarterly Report of the company that, among the Parent Companies of the Special Financial Services Provider, itself has no Parent Company, and other documents in which it describes the state of the business and assets of the Parent Company of the Special Financial Services Provider and its Subsidiary Corporations, etc. pursuant to the provisions of Cabinet Office Ordinance;

(iii) if the group consisting of the Parent Company of the Special Financial Services Provider and its Subsidiary Corporations, etc. is under the supervision of an administrative organization based on other laws and regulations (including if the group is under the supervision of an administrative organization in a foreign state or any other equivalent organization based on foreign laws and regulations) with respect to the state of its business operations and assets, a document explaining this; and

(iv) if the Parent Company of the Special Financial Services Provider does the management and administration of the Special Financial Services Provider or if the Parent Company of the Special Financial Services Provider or its Subsidiary Corporation, etc. provides assistance related to fund procurement to the Special Financial Services Provider, a document in which it states the content and methods of this management and administration or assistance, pursuant to the provisions of Cabinet Office Ordinance.

(3) If a Special Financial Services Provider comes to have a Parent Company on or after the Notification Date, the Special Financial Services Provider must submit the documents set forth in the items of the preceding paragraph to the Prime Minister within the period specified by Cabinet Order, as calculated beginning from the day on which it came to have that Parent Company.

(4) If a particular stated in a document set forth in item (i), (iii) or (iv) of paragraph (2) changes (excluding a document specified by Cabinet Office Ordinance which concerns a Designated Parent Company as prescribed in Article 57-12, paragraph (3) or its Subsidiary Corporation, etc.), the Special Financial Services Provider (limited to one with a Parent Company) that has submitted the document set forth in the relevant item of paragraph (2) pursuant to the provisions of the preceding two paragraphs must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(5) For each quarter (meaning each of the periods categorized into January to March, April to June, July to September, and October to December; hereinafter the same applies in this paragraph, Article 57-5, paragraphs (2) and (3) and Article 57-17, paragraphs (2) and (3)), a Special Financial Services Provider (limited to one with a Parent Company) that submits the documents set forth in the items of paragraph (2) pursuant to the provisions of paragraph (2) or (3), shall submit the Quarterly Report of the company that, among the Parent Companies of that Special Financial Services Provider, itself has no Parent Company, and submit other documents in which it describes the state of the business and assets of the Parent Company of the Special Financial Services Provider and its Subsidiary Corporations, etc. pursuant to the provisions of Cabinet Office Ordinance (excluding documents specified by Cabinet Office Ordinance which concern the highest Designated Parent Company provided for in Article 57-12, paragraph (3) or its Subsidiary Corporations, etc.), to the Prime Minister within the period specified by Cabinet Order after the end of the quarter.

(6) If a Special Financial Services Provider comes to fall under one of the following items, it must notify the Prime Minister of this without delay:

(i) it comes to no longer have a Parent Company; or

(ii) two years have elapsed counting from the day on which the total asset value came to be equal to or lower than the Total Asset Value Threshold, without the total asset value exceeding the Total Asset Value Threshold.

(7) If the Prime Minister accepts a notification under paragraph (1), the Prime Minister must note that the Financial Services Provider that has made such notification is a Special Financial Services Provider in said Financial Services Provider's registration.

(8) The term "Parent Company" as used in paragraphs (2) to (6) inclusive means a first company that has a second company as its Subsidiary Company (meaning a Subsidiary Company as prescribed in Article 29-4, paragraph (3); hereinafter the same applies in the following paragraph).

(9) The term "Subsidiary Corporation, etc." as used in paragraphs (1), (2), (4), and (5) means the Subsidiary Company of another company or any other person that falls under the requirements specified by Cabinet Order as a corporation or other organization that is closely related to that other company.

(Submission of Business Reports)

Article 57-3 (1) In and after the business year that includes the day on which the period specified by Cabinet Order elapses counting from the Notification Date, pursuant to the provisions of Cabinet Office Ordinance, a Special Financial Services Provider (limited to a Special Financial Services Provider with a Subsidiary Corporation, etc. (meaning a Subsidiary Corporation, etc. as prescribed in paragraph (9) of the preceding Article; hereinafter the same applies in this Subsection)) shall prepare a business report on a consolidated basis describing the state of the business and assets of the Special Financial Services Provider and its Subsidiary Corporation, etc., and submit that business report to the Prime Minister within three months after the end of each business year.

(2) In addition to submitting a business report pursuant to the provisions of the preceding paragraph, a Special Financial Services Provider shall report the state of the business and assets of the Special Financial Services Provider and its Subsidiary Corporations, etc. to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(3) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Special Financial Services Provider to make public notice of all or part of the business report referred to in paragraph (1), pursuant to the provisions of Cabinet Order.

(Public Inspection of Explanatory Documents)

Article 57-4 In and after the business year that includes the day on which the period specified by Cabinet Order elapses counting from the Notification Date, a Special Financial Services Provider shall prepare explanatory documents on a consolidated basis for the Special Financial Services Provider and its Subsidiary Corporations, etc., stating the particulars specified by Cabinet Office Ordinance as pertinent to the state of the business and assets of the Special Financial Services Provider and its Subsidiary Corporations, etc., and shall keep those explanatory documents at all of its business offices and offices and make them available for public inspection during the one–year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

(Written Notification Stating the Soundness of Management)

Article 57-5 (1) In order to contribute to the sound and appropriate operation of the business of a Special Financial Services Provider, the Prime Minister shall establish criteria for whether the capital adequacy of the Special Financial Services Provider and its Subsidiary Corporations, etc. is appropriate in light of the assets, etc. held by the Special Financial Services Provider and its Subsidiary Corporations, etc. and other criteria that indicate soundness in the management of the Special Financial Services Provider and its Subsidiary Corporation, etc., as criteria by which the Special Financial Services Provider is to judge the soundness of its management.

(2) For each quarter in and after the quarter that includes the day on which the period specified by Cabinet Order elapses counting from the Notification Date, a Special Financial Services Provider shall submit a document to the Prime Minister in which it describes the soundness of its management as of the last day of the quarter, as indicated by the criteria prescribed in the preceding paragraph (hereinafter simply referred to as the "Soundness of Management" in the following paragraph and the following Article), pursuant to the provisions of Cabinet Office Ordinance.

(3) For each quarter in and after the quarter that includes the day on which the period specified by Cabinet Order elapses counting from the Notification Date and pursuant to the provisions of Cabinet Office Ordinance, a Special Financial Services Provider shall keep a document in which it describes the Soundness of Management at all of its business offices and offices and make this document available for public inspection during the three-month period beginning from the day on which the period specified by Cabinet Order elapses counting from the end of the quarter.

(Supervisory Measures Corresponding with the Soundness of Management)

Article 57-6 (1) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors in light of the Soundness of Management of a Special Financial Services Provider and its Subsidiary Corporations, etc., the Prime Minister, within the scope of this necessity, may order a Special Financial Services Provider to suspend all or a part of business activities during a fixed period of no longer than three months, may order it to change business methods or to deposit assets, and may issue orders to it in respect of matters that are otherwise necessary from a supervisory perspective.

(2) An order under the provisions of the preceding paragraph is to be given so as to correspond with the classification of the Soundness of Management of a Special Financial Services Provider and its Subsidiary Corporations, etc., and the Prime Minister must determine such classifications and the nature of the corresponding orders in advance and issue public notice of the same.

(3) If the Prime Minister orders a Special Financial Services Provider to suspend all or a part of its business activities pursuant to the provisions of paragraph (1), and the Soundness of Management of the Special Financial Services Provider and its Subsidiary Corporation, etc. does not improve and is found to have no prospect of improving as of the day on which three months have elapsed since the day of the order, the Prime Minister may rescind the Article 29 registration of the Special Financial Services Provider.

(Public Notice of Supervisory Measures)

Article 57-7 In the cases set forth as follows, the Prime Minister shall make a public notice indicating as follows, pursuant to the provisions of Cabinet Office Ordinance:

(i) the Prime Minister orders the suspension of all or a part of business activities pursuant to the provisions of paragraph (1) of the preceding Article; or

(ii) the Prime Minister rescinds an Article 29 registration pursuant to the provisions of paragraph (3) of the preceding Article.

(Deletion of Registration)

Article 57-8 (1) If the Prime Minister rescinds an Article 29 registration pursuant to the provisions of Article 57-6, paragraph (3), the Prime Minister must delete that registration.

(2) If the Prime Minister accepts a notification under the provisions of Article 57-2, paragraph (6), item (ii), the Prime Minister must delete the supplementary note indicating that the person is a Special Financial Services Provider as prescribed in paragraph (7) of that Article.

(Completion of Remaining Business)

Article 57-9 The provisions of Article 50-2, paragraph (8) apply mutatis mutandis to a person that was a Special Financial Services Provider if the Special Financial Services Provider has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 57-6, paragraph (3). In such a case, the person that was the Special Financial Services Provider is deemed to still be a Financial Services Provider inasmuch as the task of completing Customer Transactions is concerned.

(Collection of Reports and Inspections)

Article 57-10 (1) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the Subsidiary Company, etc. of a Special Financial Services Provider to submit reports or materials that should serve as a reference in connection with the assets of the Special Financial Services Provider, and may have the relevant officials inspect the state of the business or assets, or the books and documents or any other articles, of such a Subsidiary Company, etc. (but only as is necessary in connection with the property of the Special Financial Services Provider).

(2) The term "Subsidiary Company, etc." as used in the preceding paragraph means a second company, etc. with a parent company, etc. (meaning a company, etc. (meaning a company, partnership, or other equivalent business entity, including anything that is equivalent to these in a foreign state; hereinafter the same applies in this paragraph) specified by Cabinet Office Ordinance as a first company, etc. that controls the mechanism that decides the financial and operational or business policies of a second company, etc. (meaning the shareholders or other equivalent body; hereinafter referred to as the "Decision-Making Body" in this paragraph)) that controls its Decision-Making Body. In such a case, a second company, etc. whose Decision-Making Body is controlled by a parent company, etc. and its Subsidiary Company, etc. or whose Decision-Making Body is controlled by the Subsidiary Company, etc. of such a parent company, etc. is deemed to be a Subsidiary Company, etc. of that parent company, etc.

(Hearings)

Article 57-11 (1) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition based on the provisions of Article 57-6, paragraph (1) or (3), the Prime Minister must conduct a hearing.

(2) If the Prime Minister decides to issue a disposition based on the provisions of Article 57-6, paragraph (1) or (3), the Prime Minister must notify the Special Financial Services Provider of this in writing.

Subsection 2 Designated Parent Company

(Designation)

Article 57-12 (1) If the Parent Company (meaning a Parent Company as prescribed in Article 57-2, paragraph (8); hereinafter the same applies in this Section) of a Special Financial Services Provider or its Subsidiary Corporation, etc. satisfies one of the following requirements, and the Prime Minister finds that ensuring the sound and appropriate operation of the business of the Parent Company and its Subsidiary Corporations, etc. is particularly necessary in the public interest or for the protection of investors, the Prime Minister is to designate the Parent Company as a person that is subject to the application of the provisions of this Subsection:

(i) the Parent Company does the management and administration of the Special Financial Services Provider in the course of trade; or

(ii) the Parent Company or its Subsidiary Corporation, etc. lends funds to, guarantees obligations for, or provides other similar assistance with fund procurement to the Special Financial Services Provider for the purpose of its business operations, and it is found that the suspension of such assistance would be likely to substantially compromise the sound and appropriate operation of the business of the Special Financial Services Provider.

(2) If the group consisting of the Parent Company of a Special Financial Services Provider and its Subsidiary Corporations, etc. is found to be under appropriate supervision by an administrative organization based on other laws and regulations (including if the group is found to be under appropriate supervision by a foreign administrative organization or any other equivalent organization based on foreign laws and regulations) with respect to the state of its business operations and assets, the Prime Minister may choose not to make the designation under the provisions of the preceding paragraph.

(3) Upon effecting a designation under the provisions of paragraph (1), the Prime Minister shall notify the person subject to the designation (hereinafter referred to as "Designated Parent Company") in writing of this, as well as notifying it of the trade name of the Special Financial Services Provider connected with that designation (hereinafter referred to as "Subject Special Financial Services Provider"), and whether or not it, as the Designated Parent Company, is the highest Designated Parent Company (meaning a Designated Parent Company that does not have a Parent Company which is the Designated Parent Company of the same Subject Special Financial Services Provider as itself; hereinafter the same applies in this Subsection). The same applies if these matters change.

(4) Upon making a designation under the provisions of paragraph (1), the Prime Minister shall make public notice of the trade name or name and the location of the head office or principal office of the Designated Parent Company (for a foreign company that has an office in Japan, this includes the location of its principal office in Japan; hereinafter the same applies in paragraph (1), item (iv) of the following Article), and the trade name of the Subject Special Financial Services Provider in the official gazette. The same applies if one of these particulars changes.

(5) If the Prime Minister finds that the grounds for a Designated Parent Company becoming subject to a designation under the provisions of paragraph (1) have ceased to exist, the Prime Minister, in addition to cancelling that designation, must give written notice of this to the Designated Parent Company whose designation is being cancelled.

(6) If the Prime Minister cancels a designation pursuant to the provisions of the preceding paragraph, the Prime Minister shall issue public notice of this in the official gazette.

(Notification by a Designated Parent Company )

Article 57-13 (1) A Designated Parent Company shall submit a document to the Prime Minister in which it states the following particulars, by the day on which the period specified by Cabinet Order has elapsed since the day it became subject to the designation under the provisions of paragraph (1) of the preceding Article; provided, however, that this does not apply if the Designated Parent Company is no longer the Parent Company of the Subject Special Financial Services Provider by such day:

(i) its trade name or name;

(ii) the amount of stated capital or the total amount of contributions;

(iii) the names of its officers;

(iv) the name and location of its head office or principal office;

(v) if applicable, an indication that the group consisting of the Designated Parent Company and its Subsidiary Corporations, etc. is under the supervision of an administrative organization based on other laws and regulations (including if the group is under the supervision of a foreign administrative organization or any other equivalent organization based on foreign laws and regulations) with respect to the state of its business operations and assets;

(vi) the things specified by Cabinet Office Ordinance as constituting the business outline and business methods as regards the management andadministration of the Subject Special Financial Services Provider by the Designated Parent Company or assistance with fund procurement given to the Subject Special Financial Services Provider by the Designated Parent Company or its Subsidiary Corporation, etc.; and

(vii) other particulars specified by Cabinet Office Ordinance. (vii) other particulars specified by Cabinet Office Ordinance.

(2) The following documents must accompany the document referred to in the preceding paragraph:

(i) a document pledging that the Designated Parent Company does not fall under the purview of Article 57-20, paragraph (1), item (i) or (iv) (in the case of a foreign company, item (i) of that paragraph); and

(ii) its articles of incorporation, its certificate of registered information, and other documents specified by Cabinet Office Ordinance.

(3) As concerns the documents set forth in item (ii) of the preceding paragraph accompanying the document under paragraph (1), if the articles of incorporation have been prepared as electronic or magnetic records, such electronic or magnetic records (limited to those specified by Cabinet Office Ordinance) may accompany that document in lieu of written documents.

(Notification of a Change)

Article 57-14 If the particulars set forth in one of the items of paragraph (1) of the preceding Article changes, the Designated Parent Company must notify the Prime Minister of this within two weeks from the day of the change, pursuant to the provisions of Cabinet Office Ordinance.

(Submission of Business Reports)

Article 57-15 (1) In and after the business year that includes the day on which the period specified by Cabinet Order elapses counting from the day on which a company becomes the highest Designated Parent Company and pursuant to the provisions of Cabinet Office Ordinance, the highest Designated Parent Company shall prepare a business report on a consolidated basis, in which it describes the state of the business and assets of the highest Designated Parent Company and its Subsidiary Corporations, etc., and submit this business report to the Prime Minister within three months after the end of each business year.

(2) In addition to submitting a business report pursuant to the provisions of the preceding paragraph, the highest Designated Parent Company shall report the state of the business and assets of the highest Designated Parent Company and its Subsidiary Corporations, etc. to the Prime Minister pursuant to the provisions of Cabinet Office Ordinance.

(3) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister, pursuant to the provisions of Cabinet Order, may order the highest Designated Parent Company to make public notice of all or part of the business report referred to in paragraph (1).

(Public Inspection of Explanatory Documents)

Article 57-16 In and after the business year that includes the day on which the period specified by Cabinet Order elapses counting from the day on which a company becomes the highest Designated Parent Company, the highest Designated Parent Company shall prepare explanatory documents on a consolidated basis for the highest Designated Parent Company and its Subsidiary Corporations, etc., stating the particulars specified by Cabinet Office Ordinance as pertinent to the state of the business and assets of the highest Designated Parent Company and its Subsidiary Corporations, etc., and shall keep these explanatory documents at all of the business offices and offices of the Subject Special Financial Services Provider and make them available for public inspection during the one–year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

(Written Notification Stating the Soundness of Management)

Article 57-17 (1) In order to contribute to the sound and appropriate operation of the business of a Subject Special Financial Services Provider, the Prime Minister shall establish criteria for whether the capital adequacy of the highest Designated Parent Company and its Subsidiary Corporations, etc. is appropriate in light of the assets, etc. held by the highest Designated Parent Company and its Subsidiary Corporations, etc. and other criteria that indicate soundness in the management of the highest Designated Parent Company and its Subsidiary Corporations, etc., as criteria by which the highest Designated Parent Company is to judge the soundness in the management of the highest Designated Parent Company and its Subsidiary Corporations, etc.

(2) For each quarter in and after the quarter that includes the day on which the period specified by Cabinet Order elapses counting from the day on which a company becomes the highest Designated Parent Company, the highest Designated Parent Company shall submit a document to the Prime Minister in which it describes the soundness of its management as of the last day of the quarter, as indicated by the criteria prescribed in the preceding paragraph (hereinafter simply referred to as "Soundness of Management" in the following paragraph and Article 57-21, paragraphs (1) to (3) inclusive), pursuant to the provisions of Cabinet Office Ordinance in each quarter

(3) For each quarter in and after the quarter that includes the day on which the period specified by Cabinet Order elapses counting from the day on which a company becomes the highest Designated Parent Company, the highest Designated Parent Company shall keep a document in which it describes the Soundness of Management at all of the business offices or offices of the Subject Special Financial Services Provider and make this document available for public inspection during the three-month period beginning from the day on which the period specified by Cabinet Order elapses counting from the end of the quarter, pursuant to the provisions of Cabinet Office Ordinance.

(Notifications)

Article 57-18 (1) If a Designated Parent Company comes to fall under any of the following items, it must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance:

(i) it merges with another corporation (unless the Designated Parent Company disappears in the merger);

(ii) it files a petition to commence bankruptcy proceedings, rehabilitation proceedings, or reorganization proceedings; or

(iii) it falls under any other case specified by Cabinet Office Ordinance.

(2) If a Designated Parent Company comes to fall under one of the following items, the person specified in that item must notify the Prime Minister of this within 30 days from the day in question:

(i) it comes to no longer be the Parent Company of the Subject Special Financial Services Provider: the company that used to be the Designated Parent Company;

(ii) it disappears in a merger: the officer that represented the Designated Parent Company;

(iii) it dissolves as a result of an order to commence bankruptcy proceedings: the bankruptcy trustee; or

(iv) it dissolves for reasons other than a merger or an order to commence bankruptcy proceedings: the liquidator.

(3) If a Designated Parent Company comes to fall under one of the items of the preceding paragraph, the designation under the provisions of Article 57-12, paragraph (1) ceases to be valid.

(4) If there has been a notification under the provisions of paragraph (2), the Prime Minister shall issue public notice that the designation has lost its validity pursuant to the provisions of the preceding paragraph in the official gazette.

(Issuing a Business Improvement Order to a Designated Parent Company)

Article 57-19 (1) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors in light of the state of the business of a Designated Parent Company or the state of the assets of a Designated Parent Company and its Subsidiary Corporations, etc., the Prime Minister, within the scope of this necessity, may order the Designated Parent Company to take measures that are necessary for improving the state of the business operations or the assets of Subject Special Financial Services Provider.

(2) If the Prime Minister issues an order under the provisions of the preceding paragraph to a Designated Parent Company and finds it to be particularly necessary in light of the execution status of measures under that order, the Prime Minister may order the Subject Special Financial Services Provider to take measures that are necessary for improving its business operations or the state of its assets.

(Order for Measures to Be Taken by a Designated Parent Company)

Article 57-20 (1) If a Designated Parent Company falls under one of the following items, the Prime Minister may order the Designated Parent Company to take measures so that it will cease to be the Parent Company of a Subject Special Financial Instruments Services Provider or to take other necessary measures within a fixed a period of no longer than three months:

(i) it has a person falling under one of sub-items (a) to (g) inclusive of Article 29-4, paragraph (1), item (ii) as an officer;

(ii) its business is found to be contrary to the public interest;

(iii) in light of the personnel structure of the Designated Parent Company, the sound and appropriate operation of the business of the Subject Special Financial Services Provider is likely to be impaired; or

(iv) it is a domestic company, but is not a stock company (meaning a stock company that has in place the following organs):

(a) a board of directors; and

(b) a board of company auditors or committees; and

(2) If a Designated Parent Company falls under one of the following items, the Prime Minister may order the Designated Parent Company to take measures so that it will cease to be the Parent Company of a Subject Special Financial Services Provider or to take other necessary measures within a fixed period of no longer than three months, or may order the Subject Special Financial Services Provider to suspend all or a part of its business activities during a fixed period of no longer than six months:

(i) it violates a law or regulation or a disposition by the Prime Minister based on a law or regulation; or

(ii) in light of the state of its business or assets, it is likely to become insolvent.

(3) If the officer of a Designated Parent Company (for a foreign company, this is limited to an officer stationed at its domestic offices; hereinafter the same applies in this paragraph) comes to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, or comes to fall under item (i) of the preceding paragraph, the Prime Minister may order the Designated Parent Company to dismiss that officer.

(Supervisory Measures Corresponding with the Soundness of Management)

Article 57-21 (1) If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors in light of the Soundness of Management of a highest Designated Parent Company and its Subsidiary Corporations, etc., the Prime Minister, within the scope of this necessity, may issue orders to the highest Designated Parent Company with regard to matters that are necessary from a supervisor perspective.

(2) If the Prime Minister issues an order under the provisions of the preceding paragraph to a highest Designated Parent Company, and the Soundness of Management of the highest Designated Parent Company and its Subsidiary Corporation, etc. does not improve and is found to have no prospect of improving as of the day on which three months have elapsed since the day of the order, the Prime Minister may order the highest Designated Parent Company to take measures so that it will cease to be the Parent Company of the Subject Special Financial Services Provider or to take other necessary measures, within a fixed period of no longer than three months.

(3) An order under the provisions of the preceding two paragraphs is to be given so as to correspond with the classification of the Soundness of Management of the highest Designated Parent Company and its Subsidiary Corporations, etc., and the Prime Minister must determine such classifications and the nature of the corresponding orders in advance and make public notice of the same .

(4) If the Prime Minister issues an order under the provision of paragraph (1) to a highest Designated Parent Company and finds it to be particularly necessary in light of the execution status of measures under that order, the Prime Minister may order the Subject Special Financial Services Provider to take any measures that are necessary from a supervisory perspective.

(Public Notice of Supervisory Measures)

Article 57-22 In the cases set forth as follows, the Prime Minister shall make a public notice indicating as follows, pursuant to the provisions of Cabinet Office Ordinance:

(i) the Prime Minister orders measures to be taken pursuant to the provisions of Article 57-20, paragraph (1);

(ii) the Prime Minister orders measures to be taken pursuant to the provisions of Article 57-20, paragraph (2), or orders the suspension of all or a part of business activities; or

(iii) the Prime Minister orders measures to be taken pursuant to the provisions of paragraph (2) of the preceding Article.

(Collection of Reports and Inspections)

Article 57-23 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Designated Parent Company, a person that conducts transactions with a Designated Parent Company, the Subsidiary Company, etc. of a Designated Parent Company (meaning a Subsidiary Company, etc. provided for in Article 57-10, paragraph (2); hereinafter the same applies in this Article), or the person that a Designated Parent Company has entrusted with its business, to submit reports or materials that should serve as a reference with regard to the business or assets of the Subject Special Financial Services Provider or the Designated Parent Company (but may only order a Subsidiary Company, etc. to submit reports or materials that should serve as a reference in connection with the assets of the Subject Special Financial Services Provider or the Designated Parent Company), and may have the relevant officials inspect the state of the business or assets, documents, and other objects of a Designated Parent Company, a Subsidiary Company, etc., or the person that a Designated Parent Company has entrusted with its business (but may only have the relevant officials inspect a Subsidiary Company, etc. as is necessary in connection with the assets of the Subject Special Financial Services Provider or the Designated Parent Company, and may only have the relevant officials inspect the person that a Designated Parent Company has entrusted with its business as is necessary in connection with the business or assets of the Subject Special Financial Services Provider or the Designated Parent Company).

(Hearings)

Article 57-24 (1) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition based on the provisions of Article 57-19, Article 57-20, paragraph (1) or (2) or Article 57-21, paragraph (1), (2) or (4), the Prime Minister must conduct a hearing.

(2) If the Prime Minister decides to issue a disposition based on the provisions of Article 57-19; Article 57-20; or Article 57-21, paragraph (1), (2), or (4), the Prime Minister must notify the Designated Parent Company or the Subject Special Financial Services Provider of this in writing.

(Exclusion from Application)

Article 57-25 The provisions of Articles 57-3 to 57-7 inclusive; Article 57-8, paragraph (1); Article 57-9; and Article 57-11 do not apply to a Subject Special Financial Services Provider.

Subsection 3 Miscellaneous Provisions

(Measures concerning the Major Shareholders of a Designated Parent Company)

Article 57-26 (1) The provisions of Article 32, paragraphs (1) and (2); Article 32-2, paragraph (1); and Article 32-3, paragraph (1) apply mutatis mutandis to the Shareholders and equity investors of a Designated Parent Company.

(2) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the Major Shareholder of a Designated Parent Company (meaning a Major Shareholder as prescribed in Article 29-4, paragraph (2); hereinafter the same applies in this paragraph) to submit reports or materials that should serve as reference with regard to a notification or measures under Article 32, paragraph (1) or (2); Article 32-2, paragraph (1); or Article 32-3, paragraph (1) as applied mutatis mutandis pursuant to the provisions of the preceding paragraph, or with regard to the business or assets of the Subject Special Financial Services Provider or the Designated Parent Company, or may have the relevant officials inspect documents or other articles of such a Major Shareholder (but only as is necessary in connection with the notification or measures under Article 32, paragraph (1) or (2); Article 32-2, paragraph (1); or Article 32-3, paragraph (1) as applied mutatis mutandis pursuant to the provisions of the preceding paragraph or in connection with the business or assets of the Subject Special Financial Services Provider or the Designated Parent Company).

(Technical Replacement of Terms for the Application of the Provisions of This Act to a Foreign Company)

Article 57-27 The technical replacement of the terms for the application of the provisions of this Act to the Parent Company of a Special Financial Services Provider that is a foreign company and necessary particulars otherwise relevant to the application of the provisions of this Act to such a foreign company are specified by Cabinet Order.

Section 5 Special Provisions for Foreign Persons or Firms

Subsection 1 Foreign Securities Services Provider

(Definitions)

Article 58 The term "Foreign Securities Services Provider" as used in this Section means a person other than a Financial Services Provider, bank, Cooperative Financial Institution, or financial institution specified by Cabinet Order, which is governed by foreign laws and regulations, and which engages in Securities Services in a foreign state.

(Services in Which a Foreign Securities Services Provider May Engage)

Article 58-2 A Foreign Securities Services Provider must not perform any act set forth in the items of Article 28, paragraph (8) with a person in Japan as the counterparty; provided, however, that this does not apply if a Foreign Securities Services Provider performs such an act with a Financial Services Provider engaged in Securities Services as the counterparty, or if it does so in a case that is specified by Cabinet Order.

Subsection 2 Permission for Some Underwriting Activities

(Permission for Some Underwriting Activities)

Article 59 (1) Notwithstanding the provisions of Article 29 and the preceding Article, with the permission of the Prime Minister, a Foreign Securities Services Provider may participate in an Underwriting Contract (meaning an Underwriting Contract as prescribed in Article 21, paragraph (4); hereinafter the same applies in paragraph (1), item (vi), sub-item (f) of the following Article) and perform other acts specified by Cabinet Order in Japan, as a part of the underwriting of Securities that it carries out (hereinafter collectively referred to as the "Underwriting" in this Section).

(2) The Prime Minister may attach conditions to the permission referred to in the preceding paragraph.

(3) The conditions referred to in the preceding paragraph must constitute the minimum level of conditions that are necessary for the public interest and the protection of investors.

(4) If the Prime Minister decides to attach conditions pursuant to the provisions of paragraph (2), the Prime Minister must notify the applicant for permission of this in writing.

(Application for Permission for Some Underwriting Activities)

Article 59-2 (1) A person seeking to obtain the permission referred to in paragraph (1) of the preceding Article must submit a written application for permission to the Prime Minister, in which the person states the following particulars (if the applicant for permission is an individual, the particulars set forth in items (iii) and (iv) are excluded):

(i) its trade name or name;

(ii) the location of its head office or principal office;

(iii) the amount of stated capital or the total amount of contributions;

(iv) the title and the name of the officer that has the authority of representation;

(v) the name, and the address, residence, or other contact address in Japan, of the person that will perform the activities to which the application pertains;

(vi) the following particulars, as scheduled, of the Securities that are connected with the activities to which the application pertains:

(a) the Issuer or holder;

(b) the class;

(c) the volume and amount;

(d) the issuance or sales location;

(e) the date of issuance or sale;

(f) the other Financial Services Provider managing the Underwriting (meaning the Financial Services Provider that holds discussions with the Issuer or holder of the Securities in order to fix the contents of the Underwriting Contract, when an Underwriting Contract is being concluded); and

(vii) the amount that the applicant for permission seeks to underwrite.

(2) The calculation of the amount of stated capital or the total amount of contributions as prescribed in item (iii) of the preceding paragraph is specified by Cabinet Order.

(3) The following documents must accompany the written application for permission referred to in paragraph (1); provided, however, that if a document provided for in item (i) or (iv) has the same content as an accompanying document submitted within the one year prior to the date on which the written application for permission provided for in paragraph (1) is submitted, a document stating the submission date of said document and indicating that reference should be made to said document may be used:

(i) a document giving the business outline;

(ii) a document summarizing Underwriting in the most recent one-year period;

(iii) a document in which the officer that has the authority of representation pledges that the applicant does not fall under the purview of Article 59-4, paragraph (1), item (i) or (ii), and that no officer falls under any of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive (if the applicant for permission is an individual, a document in which the individual pledges that said individual does not fall under the purview of Article 59-4, paragraph (1), item (i) or (ii) or under any of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive); and

(iv) the balance sheet and profit and loss statement for each business year ending in the most recent one-year period.

(Examination Criteria for Permission for Some Underwriting Activities)

Article 59-3 Before seeking to grant the permission referred to in Article 59, paragraph (1), the Prime Minister shall examine whether there is compliance with the following criteria:

(i) the applicant has been continuously engaged in the same type of business in a foreign state as the business for which it seeks to obtain permission, for a period longer than the period specified by Cabinet Order;

(ii) the applicant is a corporation whose stated capital or total contributions are not less than the amount specified by Cabinet Order as the amount necessary and appropriate in the public interest or for the protection of investors in light of the mode of business for which the applicant seeks to obtain permission; and

(iii) the net assets provided for in Article 29-4, paragraph (1), item (v), sub-item (b) are not less than the amount specified by Cabinet Order as provided for in the preceding item.

(Requirement to Refuse Permission for Some Underwriting Activities)

Article 59-4 (1) The Prime Minister must refuse permission if an applicant for permission falls under one of the following items, or if the written application for permission or an accompanying document contains a false statement or omits a statement of material fact:

(i) the applicant is a person that has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 53, paragraph (3); that has had the permission referred to in Article 59, paragraph (1) rescinded pursuant to the provisions of paragraph (1) of the following Article; that has had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1); that has had the registration referred to in Article 66-27 rescinded pursuant to Article 66-42, paragraph (1); or that had obtained a registration of the same kind as the registration referred to in Article 29, Article 66, or Article 66-27 in the state where its head office is located (including permission or any other administrative disposition similar to such a registration), but that has had that registration rescinded pursuant to a foreign law or regulation that is equivalent to this Act; and five years have yet to pass since the day of the rescission;

(ii) the applicant has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of this Act; the Act on Investment Trusts and Investment Corporations; the Commodity Futures Act; the Act Regulating Business Involving Commodity Investment; the Money Lending Business Act; or the Act Regulating the Receipt of Contributions, the Receipt of Deposits, and Interest Rates; or for violating the provisions of a foreign law or regulation that is equivalent to one of these Acts, and five years have yet to pass since the day on which the applicant finished serving the sentence or ceased to be subject to its enforcement; and

(iii) the applicant is a corporation that has a person falling under the category of one of the persons set forth in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, as an officer (including a person that is found to have at least the same amount of authority as an officer over the corporation, irrespective of title; hereinafter the same applies in paragraph (1), item (iii) of the following Article, Article 60-3, paragraph (1) and Article 60-8, paragraph (2)) or domestic representative (meaning the representative in Japan of a Foreign Securities Services Provider prescribed in Article 817, paragraph (1) of the Companies Act; hereinafter the same applies in this Section).

(2) Before seeking to refuse the permission referred to in Article 59, paragraph (1), the Prime Minister must notify the applicant for permission and have the relevant officials conduct a hearing regarding the applicant for permission.

(3) Upon deciding to grant or not to grant the permission referred to in Article 59, paragraph (1), the Prime Minister must notify the applicant for permission of this in writing.

(Rescission of Permission for Some Underwriting Activities)

Article 59-5 (1) If a Foreign Securities Services Provider that obtains the permission referred to in Article 59, paragraph (1) falls under one of the following items, the Prime Minister may rescind its permission:

(i) the Foreign Securities Services Provider comes to fall under paragraph (1), item (i) or (ii) of the preceding Article;

(ii) the Foreign Securities Services Provider violates a law or regulation (including a foreign law or regulation) or a disposition by a government agency which is based on a law or regulation, or violates a condition attached to its permission or to the registration, etc. it has obtained in the state where its head office is located (meaning a registration of the same kind as the registration referred to in Article 29 (including permission or any other administrative disposition similar to such a registration); hereinafter the same applies in Article 60-3, paragraph (1), item (i), sub-items (b) and (g)), and rescinding its permission is found to be necessary and appropriate in the public interest or for the protection of investors; or

(iii) the officer or the domestic representative of the Foreign Securities Services Provider (or, if the Foreign Securities Services Provider is an individual, that individual) comes to fall under one of the categories of persons set forth in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, or has acted as set forth in the preceding item, and it is found to be likely that the activities subject to the permission will not be performed fairly.

(2) Before seeking to rescind the permission referred to in Article 59, paragraph (1) pursuant to the provisions of the preceding paragraph, the Prime Minister must notify the Foreign Securities Services Provider of this in writing.

(3) If the Prime Minister rescinds the permission referred to in Article 59, paragraph (1) pursuant to the provisions of paragraph (1), the Prime Minister must make a public notice of this, pursuant to the provisions of Cabinet Office Ordinance.

(Regulation of Underwriting)

Article 59-6 The provisions of Article 36, paragraph (1); Article 36-3; Article 36-4, paragraph (1); Article 38 (limited to the part that involves items (i) to (iii) inclusive and (vii)); and Article 44-4 apply mutatis mutandis to the Underwriting of the Foreign Securities Services Provider that has obtained the permission referred to in Article 59, paragraph (1).

Subsection 3 Permission for On-Exchange Transaction Services

(Permission for On-Exchange Transaction Services)

Article 60 (1) Notwithstanding the provisions of Article 29 and Article 58-2, with the permission of the Prime Minister, a Foreign Securities Services Provider may engage in the purchase and sale of Securities and Market Transactions of Derivatives on a Financial Instruments Exchange (including if said Foreign Securities Services Provider conducts these transactions on behalf of a person that provides Brokerage for Clearing of Securities, etc. (limited to brokerage to which Article 2, paragraph (27), item (i) pertains; hereinafter the same applies in this paragraph) as an entruster of Brokerage for Clearing of Securities, etc.; such a transaction is hereinafter collectively referred to as an "On-Exchange Transaction") in the course of trade (hereinafter referred to as the "On-Exchange Transaction Services" in this Subsection)

(2) The Prime Minister may attach conditions to the permission referred to in the preceding paragraph.

(3) The conditions referred to in the preceding paragraph must constitute the minimum level of conditions that are necessary in the public interest and for the protection of investors.

(4) If the Prime Minister decides to attach the conditions referred to in the provisions of paragraph (2), the Prime Minister must notify the applicant for permission of this in writing.

(Application for Permission for On-Exchange Transaction Services)

Article 60-2 (1) A person seeking to obtain the permission referred to in paragraph (1) of the preceding Article must designate a domestic representative and submit a written application for permission to the Prime Minister, in which the person states the following particulars:

(i) its trade name and the location of its head office;

(ii) the amount of stated capital;

(iii) the title and name of the officer (including a representative person in the state where the business offices or offices for On-Exchange Transaction Services are located (excluding the state where its head office is located) (hereinafter referred to as the "On-Exchange Transaction Office"; such a representative is hereinafter referred to as the "Representative in the State Where the On-Exchange Transaction Office is Located" in paragraph (1), item (i), sub-item (j) of the following Article));

(iv) the name of the On-Exchange Transaction Office and the state and place where it is located;

(v) if the person engages in other business, the business type;

(vi) the trade name or name of the foreign Financial Instruments trading market operator of which the head office and the On-Exchange Transaction Office are members (meaning the person that operates that foreign Financial Instruments trading market; hereinafter the same applies in paragraph (1), item (i), sub-item (d) and item (iii) of the following Article);

(vii) the location of its domestic offices and other facilities, if any;

(viii) the name and domestic address of the domestic representative;

(ix) the trade name or name of the Financial Instruments Exchange in which the applicant would become a Trading Participant; and

(x) other particulars specified by Cabinet Office Ordinance.

(2) The calculation of the amount of stated capital provided for in item (ii) of the preceding paragraph is specified by Cabinet Order.

(3) The following documents must accompany the written application for permission referred to in paragraph (1):

(i) a document pledging that the applicant does not fall under the purview of paragraph (1), item (i), sub-items (a) to (h) inclusive, or sub-item (j) of the following Article;

(ii) a document stating the things specified by Cabinet Office Ordinance as constituting the business outline and business methods for On-Exchange Transaction Services at the On-Exchange Transaction Office;

(iii) the articles of incorporation and the certificate of registered information of the applicant for permission (including any document equivalent to these), and a document giving its business outline and stating its business methods;

(iv) the certificate of registered information in Japan of the applicant for permission;

(v) the balance sheets and profit and loss statements for each business year ending during the latest three years; and

(vi) other documents specified by Cabinet Office Ordinance.

(Requirement to Refuse Permission for On-Exchange Transaction Services)

Article 60-3 (1) The Prime Minister must refuse permission if the application for permission referred to in the provisions of paragraph (1) of the preceding Article falls under one of the following items:

(i) the applicant for permission falls under one of the following:

(a) it is not a corporation of the same type as a company with board of directors;

(b) it has not obtained registration, etc. in the state where its head office is located or in any state in which its On-Exchange Transaction Offices are located;

(c) it has not continuously conducted business that involves the same type of transactions as the On-Exchange Transaction in any of its On-Exchange Transaction Offices, for at least the period specified by Cabinet Order (unless this falls under a case specified by Cabinet Order);

(d) none of its On-Exchange Transaction Offices is the member of a foreign Financial Instruments trading market operator (limited one that has obtained the same kind of license as the license referred to in Article 80, paragraph (1), or a permission or other administrative disposition similar to this, in the relevant state; hereinafter the same applies in item (iii)) in a state where those On-Exchange Transaction Offices are located;

(e) it is a corporation whose stated capital as provided for in paragraph (1), item (ii) of the preceding Article is less than the amount that is specified by Cabinet Order as being necessary and appropriate in the public interest or for the protection of investors;

(f) it is a corporation whose net assets are less than the amount prescribed in sub-item (e);

(g) it has had the registration referred to in Article 29 or Article 33-2 rescinded pursuant to the provisions of Article 52, paragraph (1) or 52-2, paragraph (1); has had the permission referred to in Article 60, paragraph (1) rescinded pursuant to the provisions of Article 60-8, paragraph (1); has had the registration referred to in Article 66 rescinded pursuant to the provisions of Article 66-20, paragraph (1); has had the registration referred to in Article 66-27 rescinded pursuant to the provisions of Article 66-42, paragraph (1); or it had obtained registration, etc. in the state where its head office or an On-Exchange Transaction Office is located, but has had that registration, etc. rescinded pursuant to a foreign law or regulation that is equivalent to this Act; and five years have yet to pass since the date of rescission;

(h) it has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of one of the Acts prescribed in Article 59-4, paragraph (1), item (ii) or for violating the provisions of a foreign law or regulation that is equivalent to one of such Acts, and five years have yet to pass since the day on which it finished serving the sentence or ceased to be subject to its enforcement;

(i) its other business is found to be contrary to the public interest;

(j) it is a corporation whose officer, Representative in the State Where the On-Exchange Transaction Office is Located, or domestic representative falls under one of the categories set forth in of Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive; or

(k) it does not have the sufficient personnel structure to perform On-Exchange Transaction Services in an appropriate manner.

(ii) the Foreign Regulatory Authority for Financial Instruments provided for in Article 189, paragraph (1), in the state where the head office or one of the On-Exchange Transaction Offices of the applicant for permission is located has not given the assurance prescribed in Article 189, paragraph (2), item (i);

(iii) the foreign Financial Instruments trading market operator of which the On-Exchange Transaction Office of the applicant for permission is a member and the Financial Instruments Exchange in which the applicant for permission would become a Trading Participant have not concluded any agreement concerning the provision of information, and no other measures are in place for the Financial Instruments Exchange to exercise the authority accorded to it under this Act, an order issued based on this Act, or its articles of incorporation or other rules; or

(iv) the application for permission or an accompanying document includes a false statement or omits a statement of material fact.

(2) Before seeking to refuse the permission referred to in Article 60, paragraph (1), the Prime Minister must notify the applicant for permission and have the relevant officials conduct a hearing regarding the applicant for permission.

(3) Upon deciding to grant or not to grant the permission referred to in Article 60, paragraph (1), the Prime Minister must notify the applicant for permission of this in writing.

(Acting Representatives)

Article 60-4 (1) If there is a position vacancy for the domestic representative of a Foreign Securities Services Provider that has obtained the permission referred to in Article 60, paragraph (1) (hereinafter referred to as an "Authorized Operator for On-Exchange Transactions"), and the Prime Minister finds it to be necessary, the Prime Minister may appoint a person to temporarily perform the duties of the domestic representative (referred to as the "Acting Representative" in the following paragraph). In such a case, the Authorized Operator for On-Exchange Transactions must register that person in connection with the domicile of the domestic representative from before the position of domestic representative became vacant.

(2) If the Prime Minister appoints an Acting Representative pursuant to the provisions of the preceding paragraph, the Prime Minister may order the Authorized Operator for On-Exchange Transactions to pay a reasonable amount of remuneration to the Acting Representative.

(Notification of a Change to Basic Particulars)

Article 60-5 (1) If the particulars set forth in one of the items of Article 60-2, paragraph (1) changes, the Authorized Operator for On-Exchange Transactions must notify the Prime Minister of this within two weeks from the day of the change.

(2) If the business outline or business methods for On-Exchange Transaction Services which an Authorized Operator for On-Exchange Transactions has stated in a document set forth in Article 60-2, paragraph (3), item (ii) change, or in any other case specified by Cabinet Office Ordinance, the Authorized Operator for On-Exchange Transactions must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(Business Reports)

Article 60-6 The provisions of Article 46-2, Article 46-3, and Article 49-3 apply mutatis mutandis to the On-Exchange Transaction Services of an Authorized Operator for On-Exchange Transactions. In this case, in Article 46-3, paragraph (1), the phrase "within three months" is deemed to be replaced with "within the period specified by Cabinet Order".

(Validity of Permission If an Authorized Operator for On-Exchange Transactions Is Dissolved)

Article 60-7 If an Authorized Operator for On-Exchange Transactions is dissolved, or if On-Exchange Transaction Services are discontinued, the permission under Article 60, paragraph (1) ceases to be valid. In such a case, the domestic representative or the former domestic representative must notify the Prime Minister of this within 30 days from the day in question .

(Supervisory Measures for Authorized Operators for On-Exchange Transactions)

Article 60-8 (1) If an Authorized Operator for On-Exchange Transactions falls under one of the following items, the Prime Minister may rescind the Article 60, paragraph (1) permission of the Authorized Operator for On-Exchange Transactions, order the suspension of all or a part of On-Exchange Transaction Services during a fixed period of no longer than six months, order a change of business methods for On-Exchange Transaction Services, or issue orders with respect to matters that are otherwise necessary from a supervisory perspective:

(i) it comes to fall under Article 60-3, paragraph (1), item (i) (excluding sub-items (c) and (j)), or item (ii) or (iii);

(ii) it obtains the permission referred to in Article 60, paragraph (1) by wrongful means;

(iii) it violates a law or regulation (including a foreign law or regulation) or a disposition by a government agency which is based on a law or regulation, in connection with its On-Exchange Transaction Services or any services incidental to them (excluding if it violates the provisions of Article 46-6, paragraph (2));

(iv) in light of the state of its business or assets, it is likely to become insolvent; or

(v) it violates the conditions attached to the permission referred to in Article 60, paragraph (1).

(2) If the domestic representative of an Authorized Operator for On-Exchange Transactions (if the Authorized Operator for On-Exchange Transactions has a domestic office or other facilities, this includes any officer stationed there) comes to fall under one of the categories set forth in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, or engages in conduct that falls under item (iii) or (v) of the preceding paragraph, the Prime Minister may order the Authorized Operator for On-Exchange Transactions to dismiss or remove that domestic representative.

(3) If the Prime Minister rescinds the permission referred to in Article 60, paragraph (1) pursuant to the provisions of paragraph (1), or orders the suspension of all or a part of services, the Prime Minister must give public notice of this pursuant to the provisions of Cabinet Office Ordinance.

(4) If the Prime Minister decides to issue a disposition pursuant to the provisions of paragraph (1) or (2), the Prime Minister must notify the Authorized Operator for On-Exchange Transactions of this in writing.

(5) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition pursuant to the provisions of paragraph (1) or (2), the Prime Minister must conduct a hearing.

(Rescission of Permission If On-Exchange Transaction Services Are Suspended)

Article 60-9 (1) If, without legitimate grounds for doing so, an Authorized Operator for On-Exchange Transactions does not commence business within three months of the day on which it is permitted to begin engaging in On-Exchange Transaction Services, or suspends business for three months or more continually, the Prime Minister may rescind the Article 60, paragraph (1) permission of that Authorized Operator for On-Exchange Transactions.

(2) If the Prime Minister decides to issue a disposition based on the provisions of the preceding paragraph, the Prime Minister must notify the Authorized Operator for On-Exchange Transactions of this in writing.

(Completion of Remaining Business)

Article 60-10 If an Authorized Operator for On-Exchange Transactions is dissolved or On-Exchange Transaction Services are discontinued, the Authorized Operator for On-Exchange Transactions is deemed to still have Article 60, paragraph (1) permission, inasmuch as the task of completing On-Exchange Transactions is concerned.

(Orders to Submit Reports and Inspections)

Article 60-11 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order an Authorized Operator for On-Exchange Transactions, a person that conducts transactions with an Authorized Operator for On-Exchange Transactions, or the person that an Authorized Operator for On-Exchange Transactions has entrusted with its business, to submit reports or materials that should serve as a reference with regard to the On-Exchange Transaction Services or assets of that Authorized Operator for On-Exchange Transactions, and may have the relevant officials inspect the state of On-Exchange Transaction Services by an Authorized Operator for On-Exchange Transactions, the state of its assets, or its books and documents or any other articles (but may only have the relevant officials inspect the person that an Authorized Operator for On-Exchange Transactions has entrusted with its business as is necessary in connection with the state of the business or assets of the Authorized Operator for On-Exchange Transactions).

(The Court's Request for an Investigation)

Article 60-12 (1) In liquidation proceedings, bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or recognition and assistance proceedings in Japan for an Authorized Operator for On-Exchange Transactions (including one that is deemed to have been granted the permission referred to in Article 60, paragraph (1), as prescribed in Article 60-10), the court may request the opinion of, or an inspection or investigation by, the Prime Minister.

(2) If the Prime Minister finds it to be necessary, the Prime Minister may state an opinion to the court during the proceedings prescribed in the preceding paragraph.

(3) The provisions of the preceding Article apply mutatis mutandis if the Prime Minister receives an inspection or investigation request from the court pursuant to the provisions of paragraph (1).

(Regulation of On-Exchange Transaction Services)

Article 60-13 The provisions of Article 36, paragraph (1); Article 36-3; Article 38 (limited to the part that involves item (vii)); and Article 40 (limited to the part that involves item (ii)) apply mutatis mutandis to the On-Exchange Transaction Services of an Authorized Operator for On-Exchange Transactions.

Subsection 4 Persons Engaging in Investment Advisory Services or Investment Management in a Foreign State

Article 61 (1) Notwithstanding the provisions of Article 29, a corporation incorporated based on foreign laws and regulations or an individual domiciled in a foreign state and engaged in Investment Advisory Services in a foreign state (other than one with Article 29 registration) may engage in Investment Advisory Services, but only with a Financial Services Provider that is engaged in Investment Management or a person specified by Cabinet Order as the counterparty.

(2) Notwithstanding the provisions of Article 29, a corporation incorporated based on foreign laws and regulations and engaged in Investment Management in a foreign state (limited to the business of performing the act set forth in Article 2, paragraph (8), item (xii) based on a Discretionary Investment Contract; hereinafter the same applies in this paragraph) (excluding persons with Article 29 registration) may engage in Investment Management, but only with a Financial Services Provider that is engaged in Investment Management or a person specified by Cabinet Order as the counterparty.

(3) Notwithstanding the provisions of Article 29, a corporation incorporated based on foreign laws and regulations and engaged in Investment Management in a foreign state (limited to the business of performing the act set forth in Article 2, paragraph (8), item (xv)) (excluding persons with Article 29 registration) may engage in Investment Management (limited to the business specified in Article 2, paragraph (8), item (xv)), but only with a Financial Services Provider that is engaged in Investment Management or a person specified by Cabinet Order as the counterparty. In such a case, the provisions of Article 63, paragraph (2) do not apply.

Subsection 5 Establishment of Facilities for Collecting Information

Article 62 (1) Before seeking to establish a representative office or any other facility in Japan for the purpose of collecting or providing information on the securities market and the market of financial indicators of Securities, or to conduct other services related to Financial Instruments Business, etc. which are specified by Cabinet Office Ordinance (including before seeking to conduct said business in a facility established for other purposes), a Foreign Securities Services Provider (including a person specified by Cabinet Office Ordinance whose business is closely related to Securities Services; hereinafter the same applies in this Article) or a person that engages in Investment Advisory Services or Investment Management in a foreign state (excluding persons with Article 29 or Article 33-2 registration; hereinafter the same applies in this Article) must notify the Prime Minister of its business outline and the location of that facility, and of any other matters specified by Cabinet Office Ordinance.

(2) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Foreign Securities Services Provider or a person that conducts Investment Advisory Services or Investment Management in a foreign state to submit reports or materials concerning the business set forth in the preceding paragraph.

(3) If a Foreign Securities Services Provider or a person that conducts Investment Advisory Services or Investment Management in a foreign state discontinues the facility or the services referred to in paragraph (1), or if it changes a matter of which it has provided notification pursuant to the provisions of that paragraph, it must notify the Prime Minister of this without delay.

Section 6 Special Provisions on Specially Permitted Services for Qualified Institutional Investors, etc.

(Specially Permitted Services for Qualified Institutional Investors, etc.)

Article 63 (1) The provisions of Articles 29 and 33-2 inclusive do not apply to the acts set forth in the following items:

(i) the Private Placement of rights set forth in Article 2, paragraph (2), item (v) or (vi) with qualified institutional investors, etc. (meaning persons that are not qualified institutional investors but that are specified by Cabinet Order (but only if they are they are no greater in number than the number specified by Cabinet Order) and qualified institutional investors; hereinafter the same applies in this Article) that do not fall under one of the following categories, as the counterparties (limited to Private Placements specified by Cabinet Order as having little likelihood of allowing persons that are not qualified institutional investors, etc. (that is, qualified institutional investors, etc. that do not fall under one of the following categories) to acquire the relevant rights):

(a) a Special Purpose Company (meaning a Special Purpose Company as provided in Article 2, paragraph (3) of the Act on Securitization of Assets) that issues Asset Backed Securities (meaning Asset Backed Securities as provided in Article 2, paragraph (11) of that Act) which have been acquired by persons other than qualified institutional investors;

(b) the proprietor of a business or a person seeking to become the proprietor of a business in an Silent Partnership Agreement (meaning an Silent Partnership Agreement as provided in Article 535 of the Commercial Code) that concerns the rights specified in Article 2, paragraph (2), item (v) or (vi) and that has a person other than a qualified institutional investor as a silent partner; and

(c) a person that is specified by Cabinet Office Ordinance as being equivalent to a person set forth in sub-item (a) or (b).

(ii) the act set forth in Article 2, paragraph (8), item (xv), of investing money (including anything specified by Cabinet Order as being similar to money) that has been invested or contributed by a qualified institutional investor, etc. that holds a right set forth in Article 2, paragraph (2), item (v) or (vi) (limited to rights in an Invested Business (meaning an Invested Business as provided in Article 2, paragraph (2), item (v)) in which qualified institutional investors, etc. are the only holders of those rights (limited to qualified institutional investors, etc. that do not fall under any of the categories in sub-items (a) to (c) inclusive of the preceding item)).

(2) A person that will engage in specially permitted services for qualified institutional investors, etc. (meaning performing any of the acts set forth in the items of the preceding paragraph in the course of trade; the same applies hereinafter) (excluding Financial Services Providers, etc.) must notify the Prime Minister of the following particulars in advance, pursuant to the provisions of Cabinet Office Ordinance:

(i) the person's trade name or name;

(ii) the amount of stated capital or total amount of contributions, if it is a corporation;

(iii) the names of its officers, if it is a corporation;

(iv) if the person has an employee as specified by Cabinet Order, the name of that employee;

(v) the business category (meaning which of the acts set forth in the items of the preceding paragraph is the business category of which the person is giving notice);

(vi) the name and location of the person's principal business office or principal office;

(vii) if the person engages in other business, the business type; and

(viii) other particulars specified by Cabinet Office Ordinance.

(3) If a particular set forth in one of the items of the preceding paragraph changes, the person providing notification based on the preceding paragraph (hereinafter referred to as a "Notifier of Specially Permitted Services") must notify the Prime Minister of this without delay.

(4) If a Notifier of Specially Permitted Services engages in a specially permitted service for Qualified Institutional Investors, etc. the Notifier of Specially Permitted Services is deemed to be a Financial Services Provider and Articles 38 (limited to the part that involves item (i)) and Article 39, and the provisions of Chapter VIII in connection with these Articles apply.

(5) If a business activity connected with an act set forth in paragraph (1), item (ii) which a Notifier of Specially Permitted Services has commenced as a specially permitted business activity for qualified institutional investors, etc. comes to no longer come under the purview of a specially permitted business activity for qualified institutional investors, etc. (but only if a person that is not a qualified institutional investor, etc. (that is, a qualified institutional investor, etc. that does not fall under one of the categories in paragraph (1), item (i), sub-items (a) to (c) inclusive) comes to hold the right prescribed in paragraph (1), item (ii); the same applies in the following paragraph), the Prime Minister may order the Notifier of Specially Permitted Services to take the necessary measures within a fixed period of no longer than three months.

(6) If a business activity connected with an act set forth in paragraph (1), item (ii) which a Notifier of Specially Permitted Services has commenced as a specially permitted business activity for qualified institutional investors, etc. comes to no longer come under the purview of a specially permitted business activity for qualified institutional investors, etc., the Notifier of Specially Permitted Services must notify the Prime Minister of this without delay.

(7) If the Prime Minister finds it to be particularly necessary for confirming the business activity status of a Notifier of Specially Permitted Services, the Prime Minister, within the scope of this necessity, may order the Notifier of Specially Permitted Services, a person that conducts transactions with the Notifier of Specially Permitted Services, or a person that the Notifier of Specially Permitted Services has entrusted with its business, to submit reports or materials that should serve as a reference with regard to a notification under paragraph (2).

(8) If the Prime Minister finds it to be particularly necessary for confirming the business activity status of a Notifier of Specially Permitted Services in connection with an act set forth in paragraph (1), item (ii), the Prime Minister, within the scope of this necessity, may have the relevant officials enter the business office, office, or other facilities of the Notifier of Specially Permitted Services or of a person that the Notifier of Specially Permitted Services has entrusted with its business, may have those officials inquire about the notification under paragraph (2), and may have those officials inspect documents and other articles of the Notifier of Specially Permitted Services (but only as is necessary in connection with the notification under that paragraph).

(Succession to the Position of a Notifier of Specially Permitted Services)

Article 63-2 (1) If a Notifier of Specially Permitted Services transfers the whole of its business linked with specially permitted services for qualified institutional investors, etc., or is subject to a merger, split (limited to one in which the whole of business is succeeded to), or inheritance, the person to which the whole of business is transferred, the corporation surviving the merger, the corporation incorporated in the merger, or the corporation or heir that succeeds to the whole of business in the split (or, if there are two or more heirs and they reach an agreement in which they decide which of the heirs is to succeed to business, said person) succeeds to the position of a Notifier of Specially Permitted Services, unless that person is a Financial Services Provider, etc.

(2) A person that succeeds to the position of a Notifier of Specially Permitted Services pursuant to the provisions of the preceding paragraph must notify the Prime Minister of this without delay.

(3) If a Notifier of Specially Permitted Services comes to fall under one of the following items, it must notify the Prime Minister of this without delay:

(i) it suspends or resumes specially permitted services for qualified institutional investors, etc.;

(ii) it discontinues specially permitted services for qualified institutional investors, etc.; or

(iii) it falls under any other case specified by Cabinet Office Ordinance.

(4) If a Notifier of Specially Permitted Services is a corporation, and that corporation is dissolved for reasons other than a merger, the liquidator (or, if the dissolution is due to an order to commence bankruptcy proceedings, the bankruptcy trustee) must notify the Prime Minister of this without delay.

(When a Financial Services Provider, etc. Engages in Specially Permitted Businesses for Qualified Institutional Investors, etc.)

Article 63-3 (1) Before a Financial Services Provider, etc. engages in specially permitted services for qualified institutional investors, etc. (excluding one that has Article 29 or Article 33-2 registration for performing an act set forth in the items of Article 63, paragraph (1) in the course of trade), it must notify the Prime Minister of this and of the business category prescribed in Article 63, paragraph (2), item (v), pursuant to the provisions of Cabinet Office Ordinance.

(2) The provisions of Article 63, paragraphs (5) and (6) and paragraph (3) of the preceding Article apply mutatis mutandis to a Financial Services Provider, etc. that makes a notification under the provisions of the preceding paragraph. In this case, in these provisions, the term "Notifier of Specially Permitted Services" is deemed to be replaced with "Financial Services Provider, etc." and any other necessary technical replacement of terms is specified by Cabinet Order.

(3) If a Financial Services Provider, etc. engages in the business set forth in one of the following items, the provisions prescribed in said item do not apply:

(i) the business of performing the act set forth in Article 63, paragraph (1), item (i): the provisions of Section 2, Subsection 1 (excluding Article 38 (limited to the part that involves item (i)) and Article 39); and

(ii) the business of performing the act set forth in Article 63, paragraph (1), item (ii): the provisions of Section 2, Subsection 1 (excluding Article 38 (limited to the part that involves item (i)) and Article 39) and Subsection 3.

(Delegation to Cabinet Order)

Article 63-4 Beyond what is provided for in this Section, procedures for notification in connection with specially permitted services for qualified institutional investors, etc. and necessary particulars otherwise relevant to the application of the provisions of this Section are specified by Cabinet Order.

Section 7 Sales Representatives

(Registration of Sales Representatives)

Article 64 (1) A Financial Services Provider, etc. must have a registration made in a sales representatives register that is kept in a location set forth by Cabinet Office Ordinance (hereinafter referred to as the "Register"), bearing the name, birth date, and any other particular specified by Cabinet Office Ordinance, for any solicitor, sales person, agent, or other person among its officers and employees, irrespective of title, that performs the following acts on its behalf (hereinafter referred to as a "Sales Representative"):

(i) the following acts involving Securities (excluding rights set forth in the items of Article 2, paragraph (2) that are deemed to be Securities pursuant to the provisions of that paragraph):

(a) acts set forth in Article 2, paragraph (8), items (i) to (iii) inclusive, item (v), item (viii), and item (ix); and

(b) the following acts:

1. the solicitation of offers in connection with a purchase and sale or in connection with intermediation, brokerage (excluding Brokerage for the Clearing of Securities, etc.), or agency for a purchase and sale;

2. the solicitation of offers in connection with Market Transactions of Derivatives or Foreign Market Transaction of Derivatives, or in connection with intermediation, brokerage (excluding Brokerage for the Clearing of Securities, etc.), or agency for Market Transaction of Derivatives or Foreign Market Transaction of Derivatives; and

3. the solicitation of entrustment with Market Transaction of Derivatives or Foreign Market Transaction of Derivatives.

(ii) the following acts:

(a) acts set forth in Article 2, paragraph (8), items (iv), (vi), and (x); and

(b) solicitation of offers in connection with Over-the-Counter Derivatives Transactions, etc.

(iii) beyond what is set forth in the preceding two items, acts specified by Cabinet Order.

(2) A Financial Services Provider, etc. must not allow a person other than one for which a registration has been made pursuant to the preceding paragraph to perform the duties of a Sales Representative (meaning acts set forth in the items of that paragraph; the same applies hereinafter).

(3) A Financial Services Provider, etc. seeking to have a registration made pursuant to the provisions of paragraph (1) must submit a written application for registration to the Prime Minister, in which it states the following particulars:

(i) the trade name or name of the applicant for registration;

(ii) the name of its representative, if the applicant for registration is a corporation;

(iii) the following particulars of the Sales Representative to which the application for registration pertains:

(a) the person's name and birth date;

(b) whether the person is an officer or an employee;

(c) whether the person has ever performed the duties of a Sales Representative, and if the person has performed the duties of a Sales Representative before, the trade name or name of the Financial Services Provider, etc. or Financial Instruments Intermediary of which the person was a part and the period during which the person performed those duties;

(d) whether the person has ever engaged in Financial Instruments Intermediation, and if the person has engaged in Financial Instruments Intermediation before, the period during which the person engaged in such services; and

(iv) other particulars specified by Cabinet Office Ordinance.

(4) The resume of the Sales Representative that the applicant seeks to have registered and other documents specified by Cabinet Office Ordinance must accompany the written application for registration referred to in the preceding paragraph.

(5) Whenever an application for registration under paragraph (3) is filed, unless the Prime Minister refuses the registration pursuant to the provisions of paragraph (1) of the following Article, the Prime Minister must immediately register the particulars prescribed in paragraph (1) in the Register.

(6) Upon effecting a registration referred to in paragraph (1), the Prime Minister shall notify the applicant of this in writing.

(Refusal of Registration)

Article 64-2 (1) If the Sales Representative to which an application for registration pertains falls under one of the following items, or if a written application for registration or an accompanying document includes a false statement or omits a statement of material fact, the Prime Minister must refuse that registration:

(i) a person set forth in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive;

(ii) a person that has had a registration as a Sales Representative rescinded pursuant to the provisions of Article 64-5, paragraph (1), if five years have not yet passed since the date of the rescission;

(iii) a person registered as being a Sales Representative affiliated with a Financial Services Provider, etc. or Financial Instruments Intermediary other than the applicant for registration; or

(iv) a person that has been registered pursuant to the provisions of Article 66.

(2) Before seeking to refuse the registration referred to in paragraph (1) of the preceding Article, the Prime Minister must notify the applicant for registration and have the relevant officials conduct a hearing regarding the applicant for registration.

(3) If the Prime Minister decides to refuse the registration referred to in paragraph (1) of the preceding Article, the Prime Minister must notify the applicant for registration of this in writing.

(Authority of a Sales Representative)

Article 64-3 (1) A Sales Representative is deemed to have the authority to perform any extra-judicial act in connection with the acts set forth in the items of Article 64, paragraph (1) on behalf of the Financial Services Provider, etc. to which the Sales Representative is affiliated.

(2) The provisions of the preceding paragraph do not apply if the other party has acted in bad faith.

(Notification of a Change to Registered Information)

Article 64-4 If a fact falling under one of the following items occurs with regard to a Sales Representative that a Financial Services Provider, etc. has had registered pursuant to the provisions of Article 64, paragraph (1), it must notify the Prime Minister of this without delay:

(i) a particular set forth in Article 64, paragraph (3), item (iii), sub-item (a) or (b) changes;

(ii) the person comes to fall under any of Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive; or

(iii) the person stops performing the duties of a Sales Representative due to having left the position or for other reasons.

(Supervisory Measures for Sales Representatives)

Article 64-5 (1) If a registered Sales Representative falls under one of the following items, the Prime Minister may rescind the registration or order a suspension of duties during a fixed period of no longer than two years:

(i) the person comes to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, or is discovered to have fallen under one of the items of Article 64-2, paragraph (1) at the time of registration;

(ii) the person violates a law or regulation in connection with business involving the undertaking of any act set forth in the items of Article 64, paragraph (1) (or in connection with the services of a registered financial institution, if it is a registered financial institution) or services incidental thereto within the Financial Instruments Business, or the person is otherwise found to have committed an extremely inappropriate act in the course of duties as a Sales Representative; or

(iii) the person has had a registration rescinded pursuant to the provisions of item (iii) of the following Article during the last five years, and an act that the person performed during the period while the registration was in effect (limited to acts during the last five years) is discovered to have fallen under the preceding item.

(2) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition pursuant to the provisions of the preceding paragraph, the Prime Minister must conduct a hearing.

(3) If the Prime Minister decides to issue a disposition based on the provisions of paragraph (1), the Prime Minister must notify the applicant for registration of this in writing.

(Deletion of Registrations)

Article 64-6 In the following cases, the Prime Minister deletes the registration of a Sales Representative from the Register:

(i) the Prime Minster rescinds the registration of the Sales Representative pursuant to the provisions of paragraph (1) of the preceding Article;

(ii) the Financial Services Provider, etc. with which the Sales Representative is affiliated is dissolved or discontinues the business of performing the acts set forth in the items of Article 64, paragraph (1) (or discontinues the services of a registered financial institution, if it is a registered financial institution) within the Financial Instruments Business;

(iii) it is confirmed that the person has stopped performing the duties of a Sales Representative due to having left the position or for other reasons; and

(iv) beyond what is set forth in the preceding three items, when so specified by Cabinet Office Ordinance.

(Delegation of Registration Work)

Article 64-7 (1) The Prime Minister may have an association (meaning an Authorized Financial Instruments Business Association or Certified Financial Instruments Business Association as prescribed in Article 78, paragraph (2); hereinafter the same applies in this Section) do the work involved in the registration prescribed in Article 64, Article 64-2, and the preceding three Articles (hereinafter referred to as "Registration Work" in this Article and Article 64-9) in connection with the Sales Representative of a Financial Services Provider, etc. belonging to that association, pursuant to the provisions of Cabinet Office Ordinance.

(2) The Prime Minister may designate one association and have it do the Registration Work (excluding the work to which Article 64-5 pertains) in connection with the Sales Representative of a Financial Services Provider, etc. that does not belong to an association, pursuant to the provisions of Cabinet Office Ordinance.

(3) If the Prime Minister decides to have an association do the Registration Work pursuant to the provisions of the preceding two paragraphs, the Prime Minister is not to conduct that Registration Work.

(4) If an association decides to do the Registration Work pursuant to the provisions of paragraph (1) or (2), it must specify the particulars of its registration of Sales Representatives in its articles of incorporation and obtain the authorization of the Prime Minister.

(5) If an association that does Registration Work pursuant to the provisions of paragraph (1) or (2) makes a registration under Article 64, paragraph (5), makes a change to a registration in connection with a notification under Article 64-4, reaches a disposition under Article 64-5, paragraph (1) (excluding the deletion of a registration), or deletes a registration as under the preceding Article, it must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(6) If there are two or more associations that do the Registration Work under the provisions of paragraph (1) or (2), each association is to promote information exchange between or among related associations and endeavor to provide the necessary cooperation and information to other associations so as to ensure the appropriate implementation of Registration Work.

(7) If the Sales Representative of a Financial Services Provider, etc. which belongs to an association that does Registration Work pursuant to the provisions of paragraph (1) falls under one of the categories in Article 64-5, paragraph (1), items (i) to (iii) inclusive but the association does not take a measure prescribed in that paragraph, and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the association to take a measure prescribed in that paragraph.

(8) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition based on the provisions of the preceding paragraph, the Prime Minister must conduct a hearing.

(Registration Fee)

Article 64-8 (1) A Financial Services Provider, etc. seeking to have a Sales Representative registered must pay a registration fee to the government (if registering with an association pursuant to the provisions of paragraph (1) or (2) of the preceding Article, to the Association) pursuant to the provisions of Cabinet Order.

(2) The fee set forth in the preceding paragraph and paid to an association is the revenue of said association.

(Requests for Review in Connection with Registration Work)

Article 64-9 A Financial Services Provider, etc. that objects to the inaction of an association that does the Registration Work under Article 64-7, paragraph (1) or (2) in connection with an application for registration under Article 64, paragraph (3), that objects to such an association's refusal of a registration under Article 64-2, paragraph (1), or that objects to the Article 64-5, paragraph (1) disposition of an association that does the Registration Work under Article 64-7, paragraph (1), may file a request for review with the Prime Minister, pursuant to the Administrative Appeals Act (Act No. 160 of 1962).

Section 8 Miscellaneous Provisions

(Acting Representatives)

Article 65 (1) If there is a position vacancy for the domestic representative of a Financial Services Provider, etc. (limited to a foreign corporation; hereinafter the same applies in this Article), and the Prime Minister finds it to be necessary, the Prime Minister may appoint a person to temporarily perform the duties of the domestic representative (referred to as an "Acting Representative" in the following paragraph). If this is the case, the Financial Services Provider, etc. must register the appointment in connection with the location of the principal business office or principal office in Japan.

(2) If the Prime Minister appoints an Acting Representative pursuant to the provisions of the preceding paragraph, the Prime Minister may order the Financial Services Provider, etc. to pay the Acting Representative a reasonable amount of remuneration.

(Technical Replacement of Terms in the Application of Provisions of This Act to Foreign Corporations)

Article 65-2 If a Financial Services Provider, etc. is a foreign corporation or an individual domiciled in a foreign state, the technical replacement of the terms in the application of the provisions of this Act and necessary particulars otherwise relevant in the application of the provisions of this Act to the foreign corporation or individual are specified by Cabinet Order.

(The Court's Request for an Investigation)

Article 65-3 (1) In liquidation proceedings, bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or recognition and assistance proceedings for a Financial Services Provider (including those that is deemed as a Financial Services Provider under the provision of Article 56, paragraph (1) or Article 57-9), the court may request the opinion of, or an inspection or investigation by, the Prime Minister.

(2) If the Prime Minister finds it to be necessary, the Prime Minister may state an opinion to the court during the proceedings prescribed in the preceding paragraph.

(3) The provisions of Article 56-2, paragraph (1) apply mutatis mutandis if the Prime Minister receives an inspection or investigation request from the court pursuant to the provisions of paragraph (1).

(Delegation to Cabinet Office Ordinance)

Article 65-4 Beyond what is provided for in Article 34-5 and Article 63-4, procedures for the implementation of the provisions of Article 29 to the preceding Article inclusive and particulars that are otherwise necessary for their implementation are specified by Cabinet Office Ordinance.

(Exclusion from Application)

Article 65-5 (1) Notwithstanding the provisions of Article 29, a trust company (excluding a management-type trust company as prescribed in Article 2, paragraph (4) of the Trust Business Act; the same applies in the following paragraph and paragraph (5)), a foreign trust company (excluding a management-type foreign trust company as prescribed in Article 2, paragraph (7) of that Act; the same applies in the following paragraph and paragraph (5)), or a person registered as referred to in Article 50-2, paragraph (1) of that Act may perform the following acts in the course of its business in connection with the rights set forth in Article 2, paragraph (2), item (i) or (ii) (referred to as the "Purchase and Sale, etc. of a Beneficial Interest in a Trust" in the following paragraph):

(i) a purchase and sale (except one that falls under the category of a Derivatives Transaction), or agency or intermediation for a purchase and sale; and

(ii) the acts set forth in Article 2, paragraph (8), item (viii) or (ix).

(2) If a trust company, a foreign trust company, or a person registered as referred to in Article 50-2, paragraph (1) of the Trust Business Act makes a Purchase and Sale, etc. of a Beneficial Interest in a Trust in the course of its business pursuant to the provisions of the preceding paragraph, it is deemed to be a Financial Services Provider, and the provisions of Articles 34 to 34-5 inclusive; Article 36, paragraph (1); Article 36-2, paragraph (1) (but only if a person registered as referred to Article 50-2, paragraph (1) of the Trust Business Act makes a Purchase and Sale, etc. of a Beneficial Interest in a Trust in the course ofits business); Article 36-3; Article 37 (excluding paragraph (1), item (ii)); Article 37-2; Article 37-3 (excluding paragraph (1), item (ii)); Article 37-4; Article 37-6; Article 38; Article 39; Article 40; Article 40-4; Article 40-5; Article 45, items (i) and (ii); Articles 47 to 47-3 inclusive; Article 51; Article 52, paragraphs (1) and (2); Article 56-2, paragraph (1); Article 190; and Article 194-5, paragraph (2) (including penal provisions connected with these provisions) apply. In this case, in Article 52, paragraph (1), the phrase "any of the following items" is deemed to be replaced with "item (vi) or (ix)" and the phrase "rescind its Article 29 registration, rescind its Article 30, paragraph (1) authorization, or order the suspension of all or part of its business during a fixed period of no longer than six months" is deemed to be replaced with "order the suspension of all or part of its business during a fixed period of no longer than six months"; and in Article 52, paragraph (2), the phrase "is discovered to have fallen under one of the categories in sub-items (a) to (g) inclusive of that item at the time of the Article 29 registration, or comes to fall under one of the categories in item (vi) or items (viii) to (x) inclusive of the preceding paragraph" is deemed to be replaced with "or comes to fall under one of the categories in item (vi) or (ix) of the preceding paragraph".

(3) The provisions of Article 29 do not apply if the Japan Housing Finance Agency, Independent Administrative Agency (referred to as the "Agency" in the following paragraph) is sells rights indicated on the Securities set forth in Article 2, paragraph (1), item (xiv) or the Securities set forth in Article 2, paragraph (1), item (xvii) (limited to ones that have the nature of the Securities set forth in item (xiv) of that paragraph) or sells rights set forth in Article 2, paragraph (2), item (i) or (ii), pursuant to Article 22 of the Act on the Japan Housing Finance Agency, Independent Administrative Agency (Act No. 82 of 2005)(referred to as the "Sells a Beneficial Interest in a Trust" in the following paragraph).

(4) If the Agency Sells a Beneficial Interest in a Trust, the Agency is deemed to be a Financial Services Provider, and the provisions of Articles 34 to 34-5 inclusive; Article 36, paragraph (1); Article 37 (excluding paragraph (1), item (ii)); Article 37-3 (excluding paragraph (1), item (ii)); Article 37-4; Article 37-6; Article 38; Article 39; Article 40; Article 40-4; Article 40-5; and Article 45, items (i) and (ii) (including penal provisions connected with these provisions) apply.

(5) The provisions of this Chapter do not apply if a trust company, foreign trust company, person registered as referred to in Article 50-2, paragraph (1) of the Trust Business Act, person that has made a notification under Article 51, paragraph (2) of that Act, or person registered as referred to in Article 52, paragraph (1) of that Act performs an act set forth in Article 2, paragraph (8), item (xiv) or (xv) (limited to one that it conducts while holding the money or other assets referred to in these provisions as trust property).

(Respect for the Voluntary Efforts of Financial Services Providers, etc.)

Article 65-6 The Prime Minister, in supervising a Financial Services Provider, etc. or Authorized Exchange Transaction Operator, or in supervising a Foreign Securities Services Provider that has received Article 59, paragraph (1) permission, must give due consideration to respecting the voluntary efforts of the Financial Services Provider, etc., Authorized Operator for On-Exchange Transactions, or Foreign Securities Services Provider with Article 59, paragraph (1) permission, to run its business.

Chapter III-2 Financial Instruments Intermediaries

Section 1 General Provisions

(Registration)

Article 66 Notwithstanding the provisions of Article 29, a person other than a bank, a Cooperative Financial Institution, or a financial institution specified by Cabinet Order (but not a person engaged in Type I Financial Instruments Business (meaning Type I Financial Instruments Business as prescribed in Article 28, paragraph (1); hereinafter the same applies in this Chapter) and not the officer or employee of a registered financial institution) may be registered by the Prime Minister and engage in Financial Instruments Intermediation.

(Application for Registration)

Article 66-2 (1) A person seeking to be registered as referred to in the preceding Article must submit a written application for registration to the Prime Minister, in which it state the following particulars:

(i) the trade name or name;

(ii) the names of its officers, if it is a corporation;

(iii) the name and location of the business office or office for engaging in Financial Instruments Intermediation;

(iv) the trade name or name of the Financial Services Provider (limited to one engaged in Type I Financial Instruments Business or Investment Management (meaning Investment Management as prescribed in Article 28, paragraph (4); the same applies in Article 66-14, item (i), sub-item (c)) or registered financial institution entrusting the applicant (hereinafter referred to as the "Entrusting Financial Services Provider, etc." in this Chapter and Chapter IV);

(v) if the person engages in other business, the business type; and

(vi) other particulars specified by Cabinet Office Ordinance.

(2) The following documents must accompany the written application for registration referred to in the preceding paragraph:

(i) a document pledging that the applicant does not fall under the purview of Article 66-4, item (i) or (ii);

(ii) a document stating the things specified by Cabinet Office Ordinance as constituting the business outline and business methods for Financial Instruments Intermediation;

(iii) its articles of incorporation and the certificate of registered information for the company (including documents equivalent to these), if it is a corporation; and

(iv) other documents specified by Cabinet Office Ordinance.

(3) In the case referred to in item (iii) of the preceding paragraph, if the articles of incorporation have been prepared as electronic or magnetic records, electronic or magnetic records (limited to those specified by Cabinet Office Ordinance) may accompany a written application for registration lieu of written documents.

(Registration in a Register)

Article 66-3 (1) Whenever an application is filed for the registration referred to in Article 66, unless the Prime Minister refuses the registration pursuant to the provisions of the following Article, the Prime Minister must register the following particulars in a Financial Instruments Intermediaries register:

(i) the particulars set forth in the items of paragraph (1) of the preceding Article; and

(ii) the date of registration and registration number.

(2) The Prime Minister must make the Financial Instruments Intermediaries register available for public inspection.

(Refusal of Registration)

Article 66-4 The Prime Minister must refuse a registration if the applicant for registration falls under one of the following items, if the written application for registration or a document or electronic or magnetic record that is required to accompany it contains a false statement or record, or if it omits a statement or record of a material fact:

(i) the applicant for registration is an individual that falls under one of the categories in sub-items (a) to (g) inclusive of Article 29-4, paragraph (1), item (ii);

(ii) the applicant for registration is a corporation that falls under one of the following categories:

(a) a person that falls under sub-item (a) or (b) of Article 29-4, paragraph (1), item (i); or

(b) a person that has a person falling under any of sub-items (a) to (g) inclusive of Article 29-4, paragraph (1), item (ii) as an officer.

(iii) a person whose other business is found to be contrary to the public interest;

(iv) a person that is found not to have the knowledge or experience to perform Financial Instruments Intermediation in an appropriate manner;

(v) the applicant for registration has an Entrusting Financial Services Provider, etc. that is not a member of an association (meaning an Authorized Financial Instruments Business Association or a Certified Financial Instruments Business s Association as prescribed in Article 78, paragraph (2)); or

(vi) a Financial Services Provider (but only a person engaged in Type I Financial Instruments Business).

(Notification of a Change)

Article 66-5 (1) If a particular set forth in one of the items of Article 66-2, paragraph (1) changes, the Financial Instruments Intermediary must notify the Prime Minister of this within two weeks from the day of the change.

(2) Upon accepting a notification under the preceding paragraph, the Prime Minister shall register the particulars given in the notification in a Financial Instruments Intermediaries register.

(3) If the business outline or business methods that a Financial Instruments Intermediary has stated in a document set forth in Article 66-2, paragraph (2), item (ii) change, the Financial Instruments Intermediary must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(Restriction on the Use of a Trade Name)

Article 66-6 A person that is not a Financial Instruments Intermediary must not use a trade name or name that refers to it as a Financial Instruments Intermediary, and must not use any trade name or name that is confusingly similar to this.

Section 2 Services

(Duty of Sincerity to Customers)

Article 66-7 A Financial Instruments Intermediary as well as its officers and employees must be sincere and fair to customers in the performance of its services.

(Posting of Signs)

Article 66-8 (1) A Financial Instruments Intermediary must post a sign in the format specified by Cabinet Office Ordinance in a place that is accessible to the public at each of its business offices or other offices.

(2) A person other than a Financial Instruments Intermediary must not post the sign referred to in the preceding paragraph or a sign similar thereto.

(Prohibition on Name Lending)

Article 66-9 A Financial Instruments Intermediary must not allow another person to engage in Financial Instruments Intermediation Services using the name of said Financial Instruments Intermediary.

(Regulation of Advertising)

Article 66-10 (1) When advertising the contents of its Financial Instruments Intermediation or performing any similar act specified by Cabinet Office Ordinance, a Financial Instruments Intermediary shall give the following particulars, pursuant to the provisions of Cabinet Office Ordinance:

(i) the trade name or name of the Financial Instruments Intermediary;

(ii) an indication that the Financial Instruments Intermediary is a Financial Instruments Intermediary, and its registration number; and

(iii) the particulars of the contents of the Financial Instruments Intermediation that the Financial Instruments Intermediary engages in, which is specified by Cabinet Order as material particulars that may have an impact on customers' judgment.

(2) When advertising the contents of its Financial Instruments Intermediation or engaging in any similar act specified by Cabinet Office Ordinance, a Financial Instruments Intermediary must not make a representation that significantly conflicts with the fact of the matter or that could cause a person to have a serious misconception about the prospect of profiting from the performance of an act that constitutes a Financial Instruments transaction, or about any other matter that is specified by Cabinet Office Ordinance.

(Clear Indication of Trade Name)

Article 66-11 If a Financial Instruments Intermediary seeks to perform an act set forth in one of the items of Article 2, paragraph (11) (hereinafter referred to as the "Intermediation for Financial Instruments " in this Chapter), it must clearly indicate the following particulars to customers in advance:

(i) the trade name or the name of the Entrusting Financial Services Provider, etc.;

(ii) that the Financial Instruments Intermediary does not have authority of representation in respect of the Entrusting Financial Services Provider, etc.;

(iii) the import of the provisions of Article 66-13; and

(iv) other matters specified by Cabinet Office Ordinance.

(Limitations on Financial Instruments Intermediaries)

Article 66-12 A Financial Instruments Intermediary (excluding a person that is a Financial Services Provider) must not engage in any act set forth in the items of Article 2, paragraph (8), except for the Intermediation for Financial Instruments to which a customer of its Financial Instruments Intermediation is the other party, as entrusted by the Entrusting Financial Services Provider, etc.

(Prohibition on the Depositing of Money)

Article 66-13 A Financial Instruments Intermediary must not, for any reason, receive a deposit of money or Securities from a customer, or have a person specified by Cabinet Order as being closely related to said Financial Instruments Intermediary deposit a customer's money or Securities, in connection with the Financial Instruments Intermediation it conducts.

(Prohibited Acts)

Article 66-14 It is prohibited for a Financial Instruments Intermediary or its officer or employee to engage in the following acts:

(i) the performance of one of the following acts in connection with Financial Instruments Intermediation:

(a) an act that falls under Article 38, item (i);

(b) an act that falls under one of the categories in Article 38, items (ii) to (vi) inclusive;

(c) if it provides Investment Advisory Services (meaning Investment Advisory Services set forth in Article 28, paragraph (6); the same applies in this sub-item (c)), using information about a Purchase and Sale or Other Transaction of Securities, etc. that a customer makes based on the advice provided through its Investment Advisory Services in order to solicit a customer other than the customer in question; or if it engages in Investment Management, using information about a Purchase and Sale or Other Transaction of Securities, etc. made as an investment in connection with its Investment Management, in order to solicit a customer other than the customer in question;

(d) if it engages in business other than Financial Instruments Intermediation, using information about an Issuer of Securities learned in the course of that other business (limited to undisclosed information about the operations, business, or assets of an Issuer of Securities that would influence customers' investment decisions in connection with Financial Instruments Intermediation) to conduct solicitation; or

(e) conducting a solicitation with the Financial Instruments Intermediary's lending of money or granting of other credit as a condition (excluding acts specified in Cabinet Office Ordinance as acts that are found to have little likelihood of resulting in insufficient investor protection).

(ii) making a Purchase and Sale or Other Transaction of Securities, etc. on the intermediary's, officer's, or employee's own account, using the ordering trends for Purchase and Sales and Other Transactions of Securities, etc. made by customers of its Financial Instruments Intermediation or other special information learned in the course of Financial Instruments Intermediation; and

(iii) acts beyond what is set forth in the preceding two items, which are specified by Cabinet Office Ordinance as acts that result in insufficient investor protection, harm the fairness of transactions, or cause a loss of confidence in Financial Instruments Intermediations.

(Limitation on Intermediation for the Purchase and Sale of Securities for Professional Investors)

Article 66-14-2 A Financial Instruments Intermediary must not conduct one of the acts specified in Article 2, paragraph (11), item (i) or (ii) in connection with Securities for Professional Investors with a general investor (meaning a person other than a Professional Investor, etc., the Issuer of the Securities for Professional Investors, or any other person specified by Cabinet Office Ordinance; hereinafter the same applies in this Article) as the other party; provided, however, that this does not apply in a Case In Which Disclosure Has Been Made with regard to the Securities for Professional Investors, a case in which the Financial Instruments Intermediary intermediates, a purchase for an Entrusting Financial Services Provider, etc. which is not based on a solicitation of general investors, or any other case specified by Cabinet Office Ordinance as having little likelihood of resulting in insufficient investor protection.

(Applications Mutatis Mutandis of Provisions on Financial Services Providers, etc. in Relation to the Prohibition on Loss Compensation)

Article 66-15 The provisions of Article 38-2, Article 39, paragraphs (1), (3), and (5) and Article 40 apply mutatis mutandis to a Financial Instruments Intermediary, and Article 39, paragraphs (2) and (4) apply mutatis mutandis to the customer of a Financial Instruments Intermediary. In this case, in Article 39, paragraph (3), the phrase "if the Financial Services Provider, etc. receives" is deemed to be replaced with "if the Entrusting Financial Services Provider, etc. of the Financial Instruments Intermediary receives", and any other necessary technical replacement of terms is specified by Cabinet Order.

Section 3 Accounting

(Business Books and Documents)

Article 66-16 A Financial Instruments Intermediary shall prepare and archive books and documents for its Financial Instruments Intermediation pursuant to the provisions of Cabinet Office Ordinance.

(Submission of Business Reports)

Article 66-17 (1) Each business year, a Financial Instruments Intermediary shall prepare a report on its Financial Instruments Intermediation and submit it to the Prime Minister within three months after the end of the business year, pursuant to the provisions of Cabinet Office Ordinance.

(2) Each business year, pursuant to the provisions of Cabinet Office Ordinance, a Financial Instruments Intermediary shall prepare documents stating those of the particulars stated in the business report referred to in the preceding Article which are specified by Cabinet Office Ordinance as particulars that are found to be necessary in terms of investor protection, and shall keep those documents at all of the business offices and offices at which it conducts Financial Instruments Intermediation and make them available for public inspection.

(Public Inspection of Explanatory Documents)

Article 66-18 For each business year of an Entrusting Financial Services Provider, etc. and pursuant to the provisions of Cabinet Office Ordinance, a Financial Instruments Intermediary shall keep the explanatory documents that the Entrusting Financial Services Provider, etc. prepares pursuant to the provisions of Article 46-4 or Article 47-3 (if the Entrusting Financial Services Provider, etc., is a registered financial institution, the documents that it prepares pursuant to the provisions of Article 21, paragraphs (1) and (2) of the Banking Act (Act No. 59 of 1981) or other provisions specified by Cabinet Order) at all of the business offices and offices at which it conducts Financial Instruments Intermediation, and shall make them available for public inspection.

Section 4 Supervision

(Notification of Business Discontinuance)

Article 66-19 (1) If a Financial Instruments Intermediary comes to fall under one of the following items, the person specified in the relevant item must notify the Prime Minister of this within 30 days from the day in question:

(i) the Financial Instruments Intermediary discontinues Financial Instruments Intermediation (including if the Financial Instruments Intermediary has the whole of its business (limited to business involved in Financial Instruments Intermediation; hereinafter the same applies in this item) succeeded to in a company split or transfers the whole of business)): the individual or the corporation that discontinues or transfers the Financial Instruments Intermediation Services, or has the Financial Instruments Intermediation Services succeeded to;

(ii) the Financial Instruments Intermediary is an individual, and that individual dies: the heir thereof;

(iii) the Financial Instruments Intermediary is a corporation, and that corporation disappears in a merger: the officer that represented the corporation;

(iv) the Financial Instruments Intermediary is a corporation, and that corporation becomes subject to an order to commence bankruptcy proceedings: the bankruptcy trustee; and

(v) the Financial Instruments Intermediary is a corporation, and that corporation is dissolved for reasons other than a merger or an order to commence bankruptcy proceedings: the liquidator.

(2) If a Financial Instruments Intermediary comes to fall under one of the items of the preceding paragraph, if it no longer has an Entrusting Financial Services Provider, etc., or if it becomes registered as referred to in Article 29 (but only if the registered Financial Service Provider engages in Type I Financial Instruments Business), its Article 66 registration ceases to be valid.

(Supervisory Measures)

Article 66-20 (1) If a Financial Instruments Intermediary falls under one of the following items, the Prime Minister may rescind its Article 66 registration, order the suspension of all or a part of business activities during a fixed period of no longer than six months, order a change of business methods, or issue orders with respect to matters that are otherwise necessary from a supervisory perspective:

(i) the Financial Instruments Intermediary comes to fall under one of the categories in items (i) to (v) inclusive of Article 66-4 (excluding item (ii), sub-item (b));

(ii) the Financial Instruments Intermediary receives its Article 66 registration by wrongful means; or

(iii) the Financial Instruments Intermediary violates a law or regulation or a disposition made by a government agency which is based on a law or regulation, in connection with Financial Instruments Intermediation Services.

(2) If the officer of a Financial Instruments Intermediary comes to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, or engages in an act that falls under item (iii) of the preceding paragraph, the Prime Minister may order the Financial Instruments Intermediary to dismiss that officer.

(Deletion of Registrations)

Article 66-21 If an Article 66 registration loses its validity pursuant to the provisions of Article 66-19, paragraph (2) or if the Prime Minister rescinds an Article 66 registration pursuant to the provisions of paragraph (1) of the preceding Article, the Prime Minister must delete that registration.

(Collection of Reports and Inspections)

Article 66-22 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Financial Instruments Intermediary or a person that conducts transactions with a Financial Instruments Intermediary to submit reports or materials that should serve as a reference with regard to the Financial Instruments Intermediation of the Financial Instruments Intermediary, or may have the relevant officials inspect the state of the Financial Instruments Intermediation of the Financial Instruments Intermediary or inspect its documents or other articles.

(Mutatis Mutandis Application)

Article 66-23 The provisions of Article 57, paragraphs (1) and (3) apply mutatis mutandis to the registration referred to in Article 66, and the provisions of Article 57, paragraphs (2) and (3) and Article 65-6 apply mutatis mutandis to a Financial Instruments Intermediary. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

Section 5 Miscellaneous Provisions

(Compensatory Liability of an Entrusting Financial Services Provider, etc.)

Article 66-24 The Entrusting Financial Services Provider, etc., of a Financial Instruments Intermediary is liable for damages that that the Financial Instruments Intermediary it entrusts causes to a customer in connection with Financial Instruments Intermediation Services; provided, however, that this does not apply if the Entrusting Financial Services Provider, etc. exercises due care in entrusting the Financial Instruments Intermediary, and endeavors to prevent the damage that the person causes to a customer in connection with the Intermediation for Financial Instruments that the person performs.

(Mutatis Mutandis Application)

Article 66-25 The provisions of Articles 64 to 64-9 inclusive (excluding Article 64-7, paragraph (2)) apply mutatis mutandis to a Financial Instruments Intermediary. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Delegation to Cabinet Office Ordinance)

Article 66-26 Procedures for the implementation of the provisions of Article 66 to the preceding Article inclusive and particulars that are otherwise necessary for their implementation are specified by Cabinet Office Ordinance.

Chapter III-3 Credit Rating Agencies

Section 1 General Provisions

(Registration)

Article 66-27 A corporation engaged in Credit Rating Services (including an organization without legal personality whose representative or administrator has been designated; hereinafter the same applies in this Chapter, except in paragraph (1), item (ii) of the following Article and Article 66-47) may be registered by the Prime Minister.

(Application for Registration)

Article 66-28 (1) A person seeking to be registered as referred to in the preceding Article must submit a written application for registration to the Prime Minister, in which it states the following particulars. In such a case, a foreign corporation must designate a domestic representative (limited to one responsible for business at all business offices or offices that the foreign corporation operates in Japan so as to engage in Credit Rating Services) or a person specified by Cabinet Office Ordinance as equivalent to this, before submitting such a written application for registration:

(i) its trade name or name;

(ii) the names of its officers (including the representative or administrator of an organization without legal personality for which a representative or administrator has been designated; hereinafter the same applies in this Chapter);

(iii) the name and location of the business offices or offices for Credit Rating Services (or the head office, principal business office or office, or any other business office or office in Japan, for a foreign corporation);

(iv) if it engages in other business, the business type; and

(v) other particulars specified by Cabinet Office Ordinance.

(2) The following documents must accompany the written application for registration referred to in the preceding paragraph:

(i) a document pledging that the applicant does not fall under the purview of Article 66-30, paragraph (1), item (ii) or (iii);

(ii) a document stating the things specified by Cabinet Office Ordinance as constituting the business outline and business methods for Credit Rating Services;

(iii) the articles of incorporation and the certificate of registered information for the company (including documents equivalent to these); and

(iv) other documents specified by Cabinet Office Ordinance.

(3) In the case referred to in item (iii) of the preceding paragraph, if the articles of incorporation have been prepared as electronic or magnetic records, electronic or magnetic records (limited to that specified by Cabinet Office Ordinance) may accompany a written application for registration in lieu of documents.

(Registration in a Register)

Article 66-29 (1) Whenever an application is filed for the registration referred to in Article 66-27, unless the Prime Minister refuses the registration pursuant to the provisions of the following Article, the Prime Minister shall register the following particulars in a Credit Rating Agencies register:

(i) the particulars set forth in the items of paragraph (1) of the preceding Article; and

(ii) the date of registration and registration number.

(2) The Prime Minister must make the Credit Rating Agencies register available to the public.

(Refusal of Registration)

Article 66-30 (1) The Prime Minister must refuse to effect a registration if an applicant for registration falls under one of the following items, if the written application for registration or a document or electronic or magnetic record that is required to accompany it contains a false statement or record, or if it omits a statement or record of a material fact:

(i) a person other than a corporation;

(ii) a corporation that falls under Article 29-4, paragraph (1), sub-item (a) or (b);

(iii) a corporation that has a person falling under any of sub-items (a) to (g) inclusive of Article 29-4, paragraph (2), item (ii) as an officer;

(iv) a corporation whose other business is found to be contrary to the public interest; or

(v) a corporation that is found not to have in place the necessary system for fairly and appropriately performing Credit Rating Services.

(2) In addition to what is provided for in the preceding paragraph, the Prime Minister must refuse a registration if the applicant for registration is a foreign corporation and has no business office or office in Japan; provided, however, that this does not apply in cases specified by Cabinet Office Ordinance as those in which the applicant for registration is found to be under appropriate supervision by a foreign administrative organization that supervises persons conducting business that is found to be equivalent to Credit Rating Services, or by any other organization equivalent to such an organization, and does not apply to a case in which refusal to effect a registration pursuant to the main clause of this paragraph would preclude the sincere implementation of a treaty or other international agreement.

(Notification of a Change)

Article 66-31 (1) If a particular set forth in one of the items of Article 66-28, paragraph (1) changes, the Credit Rating Agency must notify the Prime Minister of this within two weeks from the day of the change.

(2) Upon accepting a notification under the preceding paragraph, the Prime Minister shall register the particulars given in the notification in a Credit Rating Agencies register.

(3) If a particular stated in a document set forth in Article 66-28, paragraph (2), item (ii) changes, the Credit Rating Agency must notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

Section 2 Services

(Duty of Sincerity)

Article 66-32 A Credit Rating Agency as well as its officers and employees must be sincere and fair in the performance of its services, from an independent standpoint.

(Establishment of an Operational Control System)

Article 66-33 (1) A Credit Rating Agency must establish an operational control system for the fair and appropriate performance of its Credit Rating Services, pursuant to the provisions of Cabinet Office Ordinance.

(2) The operational control system referred to in the preceding paragraph must include measures for assigning persons with expert knowledge and skills and for otherwise managing the quality of business, measures for preventing the investors' interests from being harmed with the aim of benefiting the Credit Rating Agency itself or a person associated with a rating (meaning a person specified by Cabinet Office Ordinance as having an interest in the thing on which a Credit Rating is based; the same applies in Article 66-35) and other measures for ensuring the proper execution of business.

(Prohibition on Name Lending)

Article 66-34 A Credit Rating Agency must not allow another person to engage in Credit Rating Services using the name of said Credit Rating Agency.

(Prohibited Acts)

Article 66-35 It is prohibited for a Credit Rating Agency or its officer or employee to engage in the following acts with regard to its Credit Rating Services:

(i) providing or making available for inspection a Credit Rating that is based on anything specified by Cabinet Office Ordinance as those in which a person associated with a rating has an interest, if the Credit Rating Agency or its officer or employee is closely related as specified by Cabinet Office Ordinance to the person associated with that rating;

(ii) providing a Credit Rating or making it available for inspection, if the Credit Rating Agency or its officer or employee has given advice to the person associated with the rating about a matter specified by Cabinet Office Ordinance as those that may have a material influence on the Credit Rating of the person associated with that rating (this excludes the Credit Rating Agency or its officer or employee informing the person associated with a rating of the details of the Rating Policy as defined in paragraph (1) of the following Article at that person's request, and also excludes cases specified by Cabinet Office Ordinance as those in which such advice is found to have little likelihood of resulting in insufficient investor protection, in light of the form of that advice); and

(iii) any act beyond what is set forth in the preceding two items, which is specified by Cabinet Office Ordinance as resulting in insufficient investor protection or as causing a loss of confidence in Credit Rating Services.

(Rating Policy)

Article 66-36 (1) A Credit Rating Agency, pursuant to the provisions of Cabinet Office Ordinance, must set a policy and methodology for determining Credit Ratings and for providing them or making them available for inspection (such a policy is referred to as a "Rating Policy" in the following paragraph) and must disclose the same. The same applies if the Credit Rating Agency changes its Rating Policy.

(2) A Credit Rating Agency must carry out its Credit Rating Services in accordance with the Rating Policy.

Section 3 Accounting

(Business Books and Documents)

Article 66-37 A Credit Rating Agency shall prepare and archive books and documents related to its Credit Rating Services pursuant to the provisions of Cabinet Office Ordinance.

(Submission of Business Reports)

Article 66-38 Each business year, pursuant to the provisions of Cabinet Office Ordinance, a Credit Rating Agency shall prepare a business report and submit it to the Prime Minister within the period specified by Cabinet Order after the end of the business year.

(Public Inspection of Explanatory Documents)

Article 66-39 Each business year, a Credit Rating Agency shall prepare explanatory documents stating the particulars specified by Cabinet Office Ordinance as pertinent to the state of its business, and during the one–year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year, in addition to keeping these explanatory documents at all of its business offices and offices and making them available for public inspection, it shall disclose them over the Internet or by any other means, pursuant to the provisions of Cabinet Office Ordinance.

Section 4 Supervision

(Notification of Business Discontinuance)

Article 66-40 (1) If a Credit Rating Agency comes to fall under one of the following items, the person specified in the relevant item must notify the Prime Minister of this within 30 days from the day in question:

(i) the Credit Rating Agency discontinues Credit Rating Services (including if the Credit Rating Agency has the whole of its business (limited to business involved in Credit Rating Services; hereinafter the same applies in this Article) succeeded to in a company split or transfers the whole of business): the corporation that discontinues or transfers the Credit Rating Services or that has the Credit Rating Services succeeded to;

(ii) the Credit Rating Agency is a corporation, and that corporation disappears in a merger: the officer that represented the corporation;

(iii) the Credit Rating Agency is a corporation, and that corporation is dissolved due to an order to commence bankruptcy proceedings: the bankruptcy trustee; and

(iv) the Credit Rating Agency is a corporation, and that corporation is dissolved for reasons other than a merger or an order to commence bankruptcy proceedings: the liquidator.

(2) If a Credit Rating Agency comes to fall under one of the items of the preceding paragraph, the Article 66-27 registration of the Credit Rating Agency ceases to be valid.

(3) If a Credit Rating Agency seeks to apply for the deletion of its Article 66-27 registration, to discontinue its Credit Rating Services, to implement a merger (limited to one in which the Credit Rating Agency disappears due to merger), to dissolve for reasons other than a merger or an order to commence bankruptcy proceedings, to have the whole of its business succeeded to in a company split, or to transfer the whole of its business, it shall issue public notice of this, pursuant to the provisions of Cabinet Office Ordinance, by 30 days prior to that day on which it seeks to do so.

(4) If a Credit Rating Agency issues a public notice under the preceding paragraph, it must immediately notify the Prime Minister of this.

(5) The provisions of Article 940, paragraph (1) (limited to the part that involves item (i)) and paragraph (3) of the Companies Act apply mutatis mutandis if a Credit Rating Agency (limited to one that is a company) issues a public notice under paragraph (3) through an Electronic Public Notice. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(6) The provisions of Article 940, paragraph (1) (limited to the part that involves item (i)) and paragraph (3) of the Companies Act and Article 941; Article 946; Article 947; Article 951; paragraph (2); Article 953; and Article 955 of that Act apply mutatis mutandis if a Credit Rating Agency (limited to one that is a foreign company) issues a public notice under paragraph (3) through an Electronic Public Notice. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Business Improvement Orders)

Article 66-41 If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors as concerns the state of a Credit Rating Agency's business operations, the Prime Minister, within the scope of this necessity, may order the Credit Rating Agency to change its business methods or may otherwise order it to take measures that are necessary for improving the state of its business operations.

(Supervisory Measures)

Article 66-42 (1) If a Credit Rating Agency falls under one of the following items, the Prime Minister may rescind its Article 66-27 registration, or may order the suspension of all or a part of business activities during a fixed period of no longer than six months:

(i) the Credit Rating Agency comes to fall under one of the items (excluding item (iii)) of Article 66-30, paragraph (1);

(ii) the Credit Rating Agency comes to fall under the purview of grounds upon which the Prime Minister is required to refuse registration pursuant to Article 66-30, paragraph (2),

(iii) the Credit Rating Agency has received its Article 66-27 registration by wrongful means;

(iv) the Credit Rating Agency violates a law or regulation or a disposition by a government agency which is based on a law or regulation, in connection with its Credit Rating Services;

(v) a fact has occurred in connection with the operation of its Credit Rating Services, which is detrimental to investors' interests; or

(vi) the Credit Rating Agency commits a wrongful or extremely unjust act in connection with Credit Rating Services, and the circumstances surrounding this are especially serious.

(2) If the officer of a Credit Rating Agency (for a foreign corporation, this is limited to an officer stationed at its domestic business office or office and its domestic representative; hereinafter the same applies in this paragraph) comes to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive, is discovered to have fallen under one of the categories in sub-items (a) to (g) inclusive of that item at the time of the Article 66-27 registration, or comes to fall under one of the categories in items (iv) to (vi) inclusive of the preceding paragraph, the Prime Minister may order the Credit Rating Agency to dismiss that officer.

(3) If the Prime Minister is unable to ascertain the location of the business offices or offices of a Credit Rating Agency or is unable to ascertain the whereabouts of the officer representing the Credit Rating Agency, the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, may issue public notice of that fact and rescind the registration of the Credit Rating Agency if no filing is made by the Credit Rating Agency even after 30 days past the day of the public notice.

(4) The provisions of Chapter III of the Administrative Procedure Act do not apply to a disposition under the preceding paragraph.

(Public Notice of Supervisory Measures)

Article 66-43 If the Prime Minister rescinds an Article 66-27 registration pursuant to the provisions of paragraph (1) or (3) of the preceding Article or orders the suspension of all or a part of business activities pursuant to paragraph (1) of the preceding Article, the Prime Minister must issue public notice of this pursuant to the provisions of Cabinet Office Ordinance.

(Deletion of Registrations)

Article 66-44 Whenever an application is filed by a Credit Rating Agency for the deletion of an Article 66-27 registration, or if an Article 66-27 registration loses its validity pursuant to the provisions of Article 66-40, paragraph (2) or the Prime Minister rescinds an Article 66-27 registration pursuant to the provisions of Article 66-42, paragraph (1) or (3), the Prime Minister must delete that registration.

(Collection of Reports and Inspection)

Article 66-45 (1) Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Credit Rating Agency, a person that conducts transactions with a Credit Rating Agency, the person that a Credit Rating Agency has entrusted with its business, or the affiliated corporation of a Credit Rating Agency (meaning the Subsidiary Corporation of a Credit Rating Agency, a corporation that has a Credit Rating Agency as its Subsidiary Corporation, or the Subsidiary Corporation of a corporation that has a Credit Rating Agency as its Subsidiary Corporation (other than the relevant Credit Rating Agency itself), which performs the act of determining Credit Ratings and providing them or making them available for inspection in the course of business; hereinafter the same applies in this paragraph) to submit reports or materials that should serve as a reference with regard to the business of the Credit Rating Agency, or may have the relevant officials inspect the state of business, documents, or other articles of a Credit Rating Agency, the person that a Credit Rating Agency has entrusted with its business, or the affiliated corporation of a Credit Rating Agency (but may only have the relevant officials inspect the person that a Credit Rating Agency has entrusted with its business or the affiliated corporation of a Credit Rating Agency as is necessary in connection with the business of the Credit Rating Agency).

(2) The term "Subsidiary Corporation" as used in the preceding paragraph means a second corporation in which a first corporation holds the majority of all shareholders', etc. voting rights In such a case, a second corporation in which a first corporation and one or more of its Subsidiary Corporations hold the majority all shareholders', etc. voting rights, or in which one or more of a first corporation's Subsidiary Corporations hold the majority all shareholders', etc. voting rights, is deemed to be the Subsidiary Corporation of that first corporation.

Section 5 Miscellaneous Provisions

(Acting Representative)

Article 66-46 (1) If there is a position vacancy for the domestic representative of a Credit Rating Agency (limited to a foreign corporation; hereinafter the same applies in this Article), and the Prime Minister finds it to be necessary, the Prime Minister may appoint a person to temporarily perform the duties of the domestic representative (referred to as the "Acting Representative" in the following paragraph). In such a case, the Credit Rating Agency must register the appointment in connection with the location of the principal business office or office in Japan.

(2) If the Prime Minister appoints an Acting Representative pursuant to the provisions of the preceding paragraph, the Prime Minister may order the Credit Rating Agency to pay the Acting Representative a reasonable amount of remuneration.

(Technical Replacement of Terms in the Application of Provisions of This Act to Foreign Corporations)

Article 66-47 If a Credit Rating Agency is a foreign corporation or an organization without legal personality for which a representative or administrator has been designated, the technical replacement of terms in the application of the provisions of this Act and necessary particulars otherwise relevant in the application of the provisions of this Act to the foreign corporation or to the organization without legal personality for which a representative or administrator has been designated are specified by Cabinet Order.

(Mutatis Mutandis Application)

Article 66-48 The provisions of Article 57, paragraphs (1) and (3) apply mutatis mutandis to the registration referred to in Article 66-27, and the provisions of Article 57, paragraphs (2) and (3) and Article 65-6 apply mutatis mutandis to a Credit Rating Agency. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Delegation to Cabinet Office Ordinance)

Article 66-49 Procedures for the implementation of the provisions of Article 66-27 to the preceding Article inclusive and particulars that are otherwise necessary for their implementation are specified by Cabinet Office Ordinance.

Chapter IV Financial Instruments Business Associations

Section 1 Authorized Financial Instruments Business Associations

Subsection 1 Incorporation and Services

(Purpose of an Authorized Association)

Article 67 (1) An Authorized Financial Instruments Business Association (hereinafter referred to as an "Authorized Association" in this Chapter) aims to ensure fair and smooth purchase and sales and other transactions of Securities and to ensure fair and smooth Derivatives Transactions, etc., as well as to contribute to the sound development of the Financial Instruments Business and to the protection of investors.

(2) An Authorized Association may operate a market in which Over-the-Counter Traded Securities are traded (but only if the association members (meaning the members of an Authorized Association; hereinafter the same applies in this Section) make such transactions on their own accounts, and if association members provide intermediation, brokerage, or agency; the same applies in Article 67-11, paragraph (1)) (hereinafter referred to as an "Over-the-Counter Securities Market"), in order to facilitate the distribution of Securities (limited to Securities not listed on a Financial Instruments Exchange; the same applies in Article 67-11, paragraph (1)), to ensure fairness in purchase and sales and other transactions of Securities, and to contribute to the protection of investors.

(3) For each Over-the-Counter Securities Market it operates, an Authorized Association may prohibit association members from making a purchase of Securities as requested by a person other than a Professional Investor, etc. (excluding the Issuer of the Securities or any other person specified by Cabinet Office Ordinance) (such a purchase is referred to as a "Purchase for a General Investor" in Article 67-12, item (v)), as prescribed in its articles of incorporation.

(4) An Authorized Association is as a juridical person.

(5) A person that is not an Authorized Association must not use a term in its name which could give rise to the misconception that it is an Authorized Financial Instruments Business Association.

(Authorization for Incorporation)

Article 67-2 (1) An Authorized Association may be incorporated only by a Financial Services Provider.

(2) A Financial Services Provider must obtain the authorization of the Prime Minister if it seeks to incorporate as an Authorized Association.

(3) A registered financial institution is deemed to be a Financial Services Provider with regard to the application of the provisions of the preceding two paragraphs; Article 68, paragraphs (1) and (2); Article 78, paragraph (1); Article 79-7, paragraph (1); and Article 79-11, within the scope of the performance of the services of a registered financial institution.

(Submission of a Written Application for Authorization)

Article 67-3 (1) A person seeking the authorization referred to in paragraph (2) of the preceding Article must submit a written application for authorization to the Prime Minister, in which it states the following particulars:

(i) its name;

(ii) the location of its office; and

(iii) the names of its officers and names of its association members.

(2) The articles of incorporation and other rules as well as other documents specified by Cabinet Office Ordinance must accompany the written application for authorization referred to in the preceding paragraph.

(Examination of Applications for Authorization)

Article 67-4 (1) Whenever an application for authorization under paragraph (1) of the preceding Article is filed, the Prime Minister shall examine whether the application conforms to the following criteria:

(i) the provisions of the articles of incorporation and other rules conform to laws and regulations, and are sufficient for ensuring fair and smooth purchase and sales and other transactions of Securities and for ensuring fair and smooth Derivatives Transactions, etc., as well as contributing to the sound development of the Financial Instruments Business and the protection of investors; and

(ii) the Authorized Association to which the application pertains will be organized in a manner that conforms to the provisions of this Act.

(2) If, as a result of having conducted an examination pursuant to the provisions of the preceding paragraph, the Prime Minister finds that an application for authorization conforms to the criteria in that paragraph, the Prime Minister must authorize incorporation, except in a case that falls under one of the following items:

(i) the applicant for authorization is a person that has been sentenced to a fine pursuant to the provisions of this Act, and five years have yet to pass since the day on which the person finished serving that sentence or ceased to be subject to its enforcement;

(ii) the applicant has a person falling under one of sub-items (a) to (g) inclusive of Article 29-4, paragraph (1), item (ii) as an officer; or

(iii) the written application for authorization or an accompanying document contains a false statement about a material particular.

(Hearing and Notification of an Applicant for Authorization)

Article 67-5 (1) If an application for authorization under Article 67-3, paragraph (1) is filed and the Prime Minister finds it inappropriate to grant that authorization, the Prime Minister shall notify the applicant for authorization and have the relevant officials conduct a hearing.

(2) Upon deciding to grant or to refuse to grant the authorization under Article 67-2, paragraph (2), the Prime Minister shall notify the applicant for authorization of this in writing without delay.

(Rescission of Authorization)

Article 67-6 If an Authorized Association is discovered to have fallen under one of the categories in the items of Article 67-4, paragraph (2) at the time it obtained its authorization for incorporation, the Prime Minister may rescind its authorization.

(Prohibition of Profit-Seeking)

Article 67-7 An Authorized Association must not engage in any business for profit.

(Particulars Required to Be Included in the Articles of Incorporation)

Article 67-8 (1) The articles of incorporation of an Authorized Association must include the following particulars (limited to an Authorized Association that operates an Over-the-Counter Securities Market, with regard to the particulars set forth in item (xiii)):

(i) the purpose of the Authorized Association;

(ii) its name;

(iii) the location of its offices;

(iv) the particulars of its association members;

(v) the particulars of its general meetings;

(vi) the particulars of its officers;

(vii) the particulars of its board meetings and other meetings;

(viii) the particulars of its execution of business operations;

(ix) the particulars of its improvement in the quality of officers and employees of the association members, and qualities of Financial Instruments Intermediaries (limited to Financial Instruments Intermediaries whose Entrusting Financial Services Providers, etc. are association members; hereinafter the same applies in this Section) and their officers and employees;

(x) the particulars involved in the preparation of rules;

(xi) the particulars involved in complaints from investors concerning the operations of the association members or Financial Instruments Intermediaries, and dispute resolution;

(xii) the particulars of purchase and sales and other transactions of Securities solicited by association members or Financial Instruments Intermediaries;

(xiii) the particulars of its Over-the-Counter Securities Market;

(xiv) the particulars of investigations into association members' and Financial Instruments Intermediaries' compliance with laws and regulations, dispositions by government agencies which are based on laws and regulations, the articles of incorporation and other rules, and the principle of good faith in their transactions;

(xv) the particulars of membership fees;

(xvi) the particulars of its accounting and assets; and

(xvii) its method of public notice.

(2) An Authorized Association must obtain the authorization of the Prime Minister if it seeks to change its articles of incorporation.

(3) If a particular set forth in Article 67-3, paragraph (1), item (ii) or (iii) changes, the Authorized Association must notify the Prime Minister of this without delay. The same applies when the rules of an Authorized Association (excluding the articles of incorporation; and with regard to an Authorized Association that operates an Over-the-Counter Securities Market, excluding the rules set forth in Article 67-12) are prepared, if they change, or if they are discontinued.

(Representatives' Capacity in Respect of Tortious Acts)

Article 67-9 An Authorized Association is liable for the damages that its president or board members cause another person in the performance of their duties.

(Address of an Authorized Association)

Article 67-10 The address of an Authorized Association is the address at which its principal office is located.

(Registration in the Over-the-Counter Traded Securities Register)

Article 67-11 (1) An Authorized Association that operates an Over-the-Counter Securities Market shall register the class and issues of Securities to be sold and purchased on that Over-the-Counter Securities Market in an Over-the-Counter Traded Securities register that is kept at the Authorized Association.

(2) The Authorized Association set forth in the preceding paragraph shall keep a copy of the Over-the-Counter Traded Securities register at its office and make the copy available for public inspection, pursuant to the provisions of Cabinet Office Ordinance.

(Authorization for Regulations)

Article 67-12 If an Authorized Association seeks to establish an Over-the-Counter Securities Market, it must provide for the following matters in its rules, in connection with the registration under paragraph (1) of the preceding Article and Over-the-Counter Traded Securities, and obtain the authorization of the Prime Minister. The same applies if the Authorized Association seeks to change or discontinue those rules:

(i) the criteria and process for registration, and for rescission of registrations;

(ii) the particulars involved in the reporting and announcement of trading prices;

(iii) the process for concluding a contract for a purchase and sale or other transaction;

(iv) delivery and other means of settlement;

(v) if the Authorized Association prohibits Purchases for General Investors pursuant to the provisions of Article 67, paragraph (3), the following matters, in addition to those set forth in the preceding items:

(a) the particulars of limitations imposed on association members' acceptance of requests to entrust them with the purchase and sale of Securities on the Over-the-Counter Securities Market; and

(b) the content and the means of provision or timing for the disclosure of the Specified Information on Securities and Information on the Issuer that the Issuer of Securities for Professional Investors that are traded on that Over-the-Counter Securities Market (hereinafter referred to as "Over-the-Counter Traded Securities for Professional Investors" in this item) is required to provide or disclose, and necessary particulars otherwise relevant to the provision or disclosure of information on Over-the-Counter Traded Securities for Professional Investors.

(vi) necessary particulars relevant to purchase and sales and other transactions of Over-the-Counter Traded Securities, other than the particulars set forth in the preceding items.

(Notification of Registration)

Article 67-13 If an Authorized Association seeks to make a registration under Article 67-11, paragraph (1) or to rescind such registration, it must notify the Prime Minister of this.

(Order to Register Share Certificates)

Article 67-14 If the Issuer of Over-the-Counter Traded Securities that an Authorized Association registers (limited to share certificates or the securities or certificates set forth in Article 2, paragraph (1), item (xx) that indicate a right connected with share certificates (hereinafter referred to as "Share Certificates, etc." in this Article and in Article 125)) issues Share Certificates, etc. that the Authorized Association does not register as under the provisions of Article 67-11, paragraph (1), and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors for the Authorized Association to register those Share Certificates, etc. pursuant to that paragraph, the Prime Minister may order the Authorized Association to register those Share Certificates, etc. pursuant to the provisions of that paragraph.

(Order to Rescind a Registration)

Article 67-15 (1) If an Authorized Association violates the rules provided for in Article 67-12 as they pertain to item (i) of that Article in seeking to make or having made a registration of Securities under the provisions of Article 67-11, paragraph (1), or in seeking to rescind or having rescinded such a registration, the Prime Minister may order the Authorized Association to rescind the registration of those Securities or to re-register Securities whose registration has been rescinded, or to otherwise take the necessary measures to rectify the violation. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) With regard to the application of the provisions of Chapter III, Section 2 of the Administrative Procedure Act if the notice referred to in Article 15, paragraph (1) of that Act is given at the hearing for a disposition under the provisions of the preceding paragraph, the Issuer of the relevant Securities is deemed to be the person that receives the notice referred to in Article 15, paragraph (1) of that Act.

(Notification of Suspension of Purchase and Sales)

Article 67-16 If an Authorized Association suspends or cancels the suspension of purchase and sales on the Over-the-Counter Securities Market of Over-the-Counter Traded Securities that it has registered, it must notify the Prime Minister of this without delay.

(Order to Suspend Purchase and Sales)

Article 67-17 (1) If an Issuer of Over-the-Counter Traded Securities violates this Act, an order given based on this Act, or the rules of the Authorized Association that has registered the relevant Over-the-Counter Traded Securities, and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the Authorized Association to suspend purchase and sales of, or to rescind the registration of, the Over-the-Counter Traded Securities on the Over-the-Counter Securities Market that it operates. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(2) With regard to the application of the provisions of Chapter III, Section 2 of the Administrative Procedure Act if the notice referred to in Article 15, paragraph (1) of that Act is given at the hearing for a disposition under the provisions of the preceding paragraph, the Issuer referred to in the preceding paragraph is deemed to be the person that receives the notice referred to in Article 15, paragraph (1) of that Act.

(Reporting to an Authorized Association)

Article 67-18 In a case set forth in one of the following items, an association member (in a case set forth in items (i) to (iii) inclusive, this is limited to the association member of an Authorized Association that operates an Over-the-Counter Securities Market) must report the particulars specified in that item to the Authorized Association to which it belongs, pursuant to the provisions of Cabinet Office Ordinance:

(i) if a purchase and sale of Over-the-Counter Traded Securities is made on the association member's own account, or a purchase and sale of Over-the-Counter Traded Securities is made and the association member provides intermediation, brokerage, or agency for it: the class, issue, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the purchase and sale;

(ii) if the association member makes an offer to sell or purchase Over-the-Counter Traded Securities on its own account: the class, issue, price, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the offer to sell or purchase;

(iii) if the association member is entrusted, etc. with a purchase and sale of Over-the-Counter Traded Securities: the class, issues, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the entrustment, etc.;

(iv) if a purchase and sale of tradable Securities (meaning Share Certificates, corporate bond certificates with share options, or any other Securities specified by Cabinet Office Ordinance, with regard to which the Authorized Association does not prohibit solicitation for purchase and sales and other transactions in its rules (excluding Securities listed on a Financial Instruments Exchange and Over-the-Counter Traded Securities); the same applies hereinafter) is made on the association member's own account, or a purchase and sale of tradable Securities is made and the association member provides intermediation, brokerage, or agency for it: the class, issue, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the purchase and sale;

(v) if the association member makes an offer to sell or purchase tradable Securities on its own account: the class, issue, price, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the offer to sell or purchase;

(vi) if the association member is entrusted, etc. with the purchase and sale of tradable Securities: the class, issue, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the entrustment, etc.;

(vii) if a purchase and sale of Listed Share Certificates, etc. (meaning share certificates, corporate bond certificates with share options, or any other Securities specified by Cabinet Office Ordinance, which are listed on a Financial Instruments Exchange; hereinafter the same applies in this Article to Article 78-5 inclusive) is made outside of a Financial Instruments Exchange Market and on the association member's own account; or a purchase and sale of Listed Share Certificates, etc. is made outside of a Financial Instruments Exchange Market, and the association member provides intermediation, brokerage, or agency for it: the class, issue, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Listed Share Certificates, etc. subject to the purchase and sale; or

(viii) if the association member makes an offer to sell or purchase Listed Share Certificates, etc. to a large number of persons simultaneously outside of a Financial Instruments Exchange Market, or in any other case specified by Cabinet Office Ordinance: the class, issue, price, and other particulars specified by Cabinet Office Ordinance, with regard to the Securities subject to the offer to sell or purchase.

(Notice of Trading Volume, Price, etc.)

Article 67-19 Pursuant to the provisions of Cabinet Office Ordinance and based on the reports under the provisions of the preceding Article, an Authorized Association shall notify its association members of, and disclose to the public, the daily trading volume and the highest price, lowest price, closing price, and other particulars, for each day and for each issue, in respect of purchase and sales of Over-the-Counter Traded Securities, purchase and sales of tradable Securities, and purchase and sales of Listed Share Certificates, etc. outside a Financial Instruments Exchange Market, on the Over-the-Counter Securities Market that it operates (limited to those which the association members make on their own accounts and those for which the association members provide intermediation, brokerage, or agency; hereinafter the same applies in the following Article).

(Reporting of Trading Volume, Price, etc.)

Article 67-20 Pursuant to the provisions of Cabinet Office Ordinance, an Authorized Association shall report the daily trading volume and the highest price, lowest price, closing price, and other particulars, for each day and for each issue, in respect of purchase and sales of Over-the-Counter Traded Securities, purchase and sales of tradable Securities, and purchase and sales of Listed Share Certificates, etc. outside of a Financial Instruments Exchange Market, on the Over-the-Counter Securities Market that it operates, to the Prime Minister.

Subsection 2 Association Members

(Eligibility for Association Membership and Restrictions on Joining an Authorized Association)

Article 68 (1) Membership in an Authorized Association is limited to Financial Services Providers.

(2) Except in a case set forth in paragraph (5), an Authorized Association must stipulate in its articles of incorporation that any Financial Services Provider may join as an association member; provided, however, that this does not apply if membership is restricted by reason of a condition as to the geographic location or business type of the Financial Services Provider.

(3) An Authorized Association must stipulate in its articles of incorporation that it will endeavor to prevent fraudulent acts, market manipulation, the collection of unreasonable fees and costs, and profiteering by association members and Financial Instruments Intermediaries, as well as to promote the principle of good faith in their transactions.

(4) An Authorized Association must stipulate in its articles of incorporation that it will endeavor to prevent acts that are in violation of laws and regulations or the Authorized Association's articles of incorporation and other rules, and to ensure confidence of investors, by having internal rules and control systems established so that its association members and the Financial Instruments Intermediaries that have those association members as Entrusting Financial Services Providers, etc. comply with laws and regulations and with the Authorized Association's articles of incorporation and other rules.

(5) An Authorized Association may stipulate in its articles of incorporation that it may refuse admission as an association member if an applicant has been ordered to suspend purchase and sales and other transactions of Securities or to suspend Derivatives Transactions, etc.; or has been expelled from the membership of, or had its trading license rescinded by, an Authorized Association or a Financial Instruments Exchange, on account of having violated a law or regulation, a disposition by a government agency which is based on a law or regulation, or the articles of incorporation or other rules of the Authorized Association or Financial Instrument Exchange, or on account of having engaged in an act that is contrary to the principle of good faith in transactions.

(6) An Authorized Association must make a list of association members available for public inspection.

(Dispositions against Association Members)

Article 68-2 An Authorized Association must stipulate in its articles of incorporation that, if an association member or a Financial Instruments Intermediary whose Entrusting Financial Services Provider, etc. is an association member violates a law or regulation, a disposition by a government agency which is based on a law or regulation, or the Authorized Association's articles of incorporation or other rules, or if it violates the principle of good faith in transactions, the Authorized Association will impose an administrative surcharge on the association member, order the suspension or restriction of its rights as an association member as provided in the articles of incorporation, or expel it from the Authorized Association.

Subsection 3 Management

(Appointment of Officers and Their Official Authority)

Article 69 (1) An Authorized Association has one president, two or more board members, and two or more inspectors as its officers.

(2) A president represents an Authorized Association and presides over its affairs.

(3) A board member, pursuant to the provisions of the articles of incorporation, represents an Authorized Association, assists the president in administering the affairs of the Authorized Association, acts as a proxy in handling the duties of the president if the president is unable to attend to them, and performs the duties of the president if the position is vacant.

(4) An inspector examines the affairs of an Authorized Association.

(5) An officer loses the position of officer upon coming to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive.

(Order to Dismiss an Officer)

Article 70 If the Prime Minister discovers that a person has become the officer of an Authorized Association by wrongful means, or if the officer of an Authorized Association violates a law or regulation, a disposition by a government agency which is based on a law or regulation, or the articles of incorporation, the Prime Minister may order the Authorized Association to dismiss that officer.

(Provisional Board Members and Provisional Inspectors)

Article 71 If there is no one to perform the duties of a board member or inspector and the Prime Minister finds it to be necessary, the Prime Minister may appoint a provisional board member or provisional inspector.

(Duty of Confidentiality of the Officers and Employees)

Article 72 (1) It is prohibited for the officer or employee of an Authorized Association, or for a person that that has held one of these positions, to divulge or misappropriate any secret learned in the course of duty.

(2) It is prohibited for the officer or employee of an Authorized Association, or for a person that has held one of these positions, to use information learned in the course of duty for a purpose other than the business uses of the Authorized Association for which the information is provided.

Subsection 4 Supervision

(Order to Change the Articles of Incorporation, Operational Rules, etc.)

Article 73 If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors in connection with an Authorized Association's articles of incorporation or other rules, its trade practices, or its business operations or the state of its assets, the Prime Minister, within the scope of this necessity, may order the Authorized Association to change its articles of incorporation or other rules, to change its trade practices, or to otherwise take measures that are necessary from a supervisory perspective. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister must conduct a hearing.

(Rescission of Authorization, Suspension of Business, and Dismissal of Officers, Due to Violation of Laws and Regulations)

Article 74 (1) If an Authorized Association violates a law or regulation, a disposition by a government agency which is based on a law or regulation, or its articles of incorporation or other rules (hereinafter referred to as a "Law or Regulation, etc." in this Article); or, even though an association member, a Financial Instruments Intermediary, or an Issuer of Over-the-Counter Traded Securities or tradable Securities has violated a Law or Regulation, etc. or engaged in an act that is contrary to the principle of good faith in transactions as specified in the articles of incorporation or other rules, the Authorized Association fails to exercise the powers accorded it under this Act, an order based on this Act, or its articles of incorporation or other rules, or to take other necessary measures to cause the person to observe Laws and Regulations, etc. or the principle of good faith in transactions; and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may rescind its authorization for incorporation, order the suspension of all or a part of its business activities during a fixed period of no longer than one year, order a change to its business methods, issue an order prohibiting a part of its business activities, order the dismissal of its officers, or order it to take any necessary measures that are specified in the articles of incorporation or other rules.

(2) Irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to order the suspension of all or a part of business activities, to order a change of business methods, to issue an order prohibiting a part of business activities, or to issue an order to take any necessary measures that are specified in the articles of incorporation or other rules pursuant to the provisions of the preceding paragraph, the Prime Minister must conduct a hearing.

(Collection of Reports and Inspections)

Article 75 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order an Authorized Association, an Issuer of Over-the-Counter Traded Securities or tradable Securities, or the person that an Authorized Association has entrusted with its business, to submit reports or materials that should serve as a reference with regard to the business or assets of the Authorized Association, and may have the relevant officials inspect the state of the business or assets, or the books and documents or any other articles, of an Authorized Association or the person that an Authorized Association has entrusted with its business (but may only have the relevant officials inspect the person that an Authorized Association has entrusted with its business as is necessary in connection with the business or assets of the Authorized Association).

(Documents to Be Submitted to the Prime Minister)

Article 76 An Authorized Association shall submit the following documents to the Prime Minister within three months from the day on which each business year begins:

(i) the business summary report for the previous business year and the business plan for the current business year;

(ii) the inventory of assets as of the end of the previous business year; and

(iii) the statement of accounts for the previous business year and the budget statements for the current business year.

Subsection 5 Miscellaneous Provisions

(Responding to Complaints from Investors)

Article 77 (1) If an investor files for the resolution of a complaint involving business carried out by an association member or a Financial Instruments Intermediary, in addition to providing the claimant with the necessary advice and investigating the circumstances to which the complaint pertains based on its consultation with the claimant, the Authorized Association must notify the association member or Financial Instruments Intermediary of the substance and content of the complaint and request that it process the complaint expeditiously.

(2) If an Authorized Association finds that it is necessary in connection with the resolution of a complaint under a filing referred to in the preceding paragraph, it may request the relevant association member or Financial Instruments Intermediary to provide a written or oral explanation or submit materials.

(3) If an association member or Financial Instruments Intermediary has had a request under the preceding paragraph from an Authorized Association, it must not refuse this request without just cause for doing so.

(4) An Authorized Association must fully inform its association members and Financial Instruments Intermediaries about any filing as referred to in paragraph (1), the circumstances to which the complaint pertains, and the outcome of its resolution.

(5) The provisions of paragraph (1) do not apply if an Authorized Association has obtained a designation under Article 156-39, paragraph (1) and the filing referred to in paragraph (1) is for a complaint in the Category of Dispute Resolution Services (meaning a Category of Dispute Resolution Services as prescribed in Article 156-38, paragraph (12); the same applies in paragraph (9) of the following Article (including as applied mutatis mutandis pursuant to Article 79-13) to which that designation pertains).

(Mediation by Authorized Associations)

Article 77-2 (1) If there is a dispute about a purchase and sale or other transaction of Securities or about a Derivatives Transaction, etc. conducted by an association member or a Financial Instruments Intermediary, any of the parties to the transaction may file for mediation with an Authorized Association, for the purpose of attempting to resolve that dispute.

(2) If an Authorized Association receives a filing under the preceding paragraph, it must appoint a mediator that has the relevant knowledge and experience and that has no special interest in the parties to the dispute subject to that filing (hereinafter referred to as the "Case" in this Article), and must refer the Case to mediation by that mediator; provided, however, that a mediator must not mediate if the mediator finds that the Case is not suited for mediation due to its nature, or that the party has filed for mediation for unjust purposes and without due cause.

(3) A mediator may hear the opinions of the parties and witnesses, request them to submit reports, and request the parties to submit books and documents or other articles that should serve as reference; and may prepare the mediation proposal that is needed to resolve the Case and recommend that the parties accept it, as the mediator finds appropriate.

(4) In the cases referred to in the preceding three paragraphs, if a Financial Instruments Intermediary is a party, its Entrusting Financial Services Provider, etc. is also deemed to be a party.

(5) If an association member or a Financial Instruments Intermediary has had a request under the provisions of paragraph (3), it must not refuse this request without just cause.

(6) An Authorized Association may collect from the parties all or part of the expenses incurred in relation to mediation.

(7) It is prohibited for a mediator or former mediator to divulge or misappropriate any secret learned in the course of duty.

(8) It is prohibited for a mediator or former mediator to use information learned in the course of duty for a purpose other than the business use of the Authorized Association for which the information is provided.

(9) The provisions of paragraph (1) do not apply if an Authorized Association has obtained a designation under Article 156-39, paragraph (1) and the dispute referred to in paragraph (1) is in the Category of Dispute Resolution Services to which that designation pertains.

(Entrustment of Mediation Services to Third Parties)

Article 77-3 (1) An Authorized Association may entrust the complaint resolution services prescribed in Article 77, paragraph (1) and the mediation services prescribed in paragraph (1) of the preceding Article to a person that has a sufficient financial basis and personnel structure for performing these services in an appropriate manner.

(2) Notwithstanding the provisions of the preceding paragraph, an Authorized Association may not entrust the complaint resolution services and mediation services referred to in that paragraph to a person that falls under one of the following items:

(i) a person that has been sentenced pursuant to any provision of this Act, if two years have not yet passed since the day on which the person finished serving that sentence or ceased to be subject to its enforcement;

(ii) a person whose authorization has been rescinded pursuant to Article 74, paragraph (1), if two years have not yet passed since the date of rescission; or

(iii) a person that has a person falling under one of the following as an officer conducting its business:

(a) a person that has been sentenced to imprisonment or a heavier punishment or that has been sentenced pursuant to any provision of this Act, if two years have not yet passed since the day on which the person finished serving that sentence or ceased to be subject to its enforcement; or

(b) a person that, during the 30 days before the date of rescission, was the officer of an Authorized Association whose authorization has been rescinded pursuant to Article 74, paragraph (1), if two years have not yet passed since the date of rescission.

(3) A person entrusted with services pursuant to the provisions of paragraph (1) may not further entrust the services under that entrustment.

(4) The provisions of the preceding two Articles apply mutatis mutandis to the services entrusted by an Authorized Association pursuant to the provisions of paragraph (1).

(Educational Activities by Authorized Associations)

Article 77-4 An Authorized Association must endeavor to facilitate the sound development of the Financial Instruments Business and the protection of investors through the dissemination of financial knowledge and through educational and publicity campaigns.

(Registration of Associations)

Article 77-5 (1) An Authorized Association must register pursuant to the provisions of Cabinet Order.

(2) An Authorized Association is established by a registration of its incorporation being recorded in connection with the location of its principal office.

(3) The particulars that must be registered pursuant to the provisions of paragraph (1) may not be duly asserted against a third party until after their registration.

(Grounds for the Dissolution of an Association)

Article 77-6 (1) An Authorized Association is dissolved for the following reasons:

(i) the occurrence of a cause specified by the articles of incorporation;

(ii) a general meeting resolution;

(iii) the number of association members falls to five or below;

(iv) an order to commence bankruptcy proceedings; or

(v) the rescission of the authorization for incorporation of the Authorized Association.

(2) A general meeting resolution concerning the dissolution of an Authorized Association does not become effective without the authorization of the Prime Minister.

(3) If an Authorized Association has been dissolved pursuant to the provisions of item (i) or (iii) of paragraph (1), the former representative must notify the Prime Minister of this without delay.

(4) , If an order to commence bankruptcy proceedings or an order to terminate bankruptcy proceedings is issued with regard to an Authorized Association, or if the rescission of an order to commence bankruptcy proceedings, or an order to discontinue bankruptcy proceedings, becomes final and binding with regard to an Authorized Association, the court clerk must notify the Prime Minister of this.

(5) Beyond what is provided for in the preceding paragraphs, necessary particulars relevant to the dissolution of an Authorized Association are specified by Cabinet Order.

(Delegation to Cabinet Office Ordinance)

Article 77-7 Procedures for the implementation of the provisions of Article 67 to the preceding Article inclusive and particulars that are otherwise necessary for their enforcement are specified by Cabinet Office Ordinance.

Section 2 Certified Financial Instruments Business Associations

Subsection 1 Certification and Services

(Certification of Certified Financial Instruments Business Associations)

Article 78 (1) The Prime Minister, pursuant to the provisions of Cabinet Order, may certify a general incorporated association that has been incorporated by a Financial Services Provider and that is found to satisfy the following requirements, to conduct the services set forth in the following paragraph, at the application of such a general incorporated association:

(i) its aim is to ensure fair and smooth purchase and sales and other transactions of Securities and to ensure fair and smooth Derivatives Transactions, etc., as well as contributing to the sound development of the Financial Instruments Business and to the protection of investors;

(ii) its articles of incorporation stipulate that its members be Financial Services Providers;

(iii) it has established the necessary methods of business implementation for it to perform the services prescribed in the following paragraph properly and reliably; and

(iv) it has the necessary knowledge, ability, and financial basis for performing the services prescribed in the following paragraph properly and reliably.

(2) A general incorporated association certified pursuant to the preceding paragraph (hereinafter referred to as a "Certified Financial Instruments Business Association" in this paragraph and the following Article) is to conduct the following services:

(i) providing its members and Financial Instruments Intermediaries (limited to those whose Entrusting Financial Services Providers, etc. are its members; hereinafter the same applies in this Section) with guidance, recommendations, and other services in order to have them comply the provisions of this Act and other laws and regulations while operating in Financial Instruments Business:

(ii) conducting the necessary investigations and providing the necessary guidance, recommendations, and other services for ensuring the propriety of contracts and of asset management, and for otherwise protecting investors with regard to the Financial Instruments Business in which its members and Financial Instruments Intermediaries operate;

(iii) investigating members' and Financial Instruments Intermediaries' compliance with this Act, orders that are based on this Act, dispositions that are based on this Act or on such orders, the articles of incorporation and other rules, and the principle of good faith in transactions;

(iv) resolving complaints filed by investors with regard to the Financial Instruments Business in which its members and Financial Instruments Intermediaries operate;

(v) resolving disputes arisen from the Financial Instruments Business in which its members and Financial Instruments Intermediaries operate;

(vi) carrying out the Registration Work that is done pursuant to Article 64-7, paragraph (1) (including as applied mutatis mutandis pursuant to Article 66-25) or Article 64-7, paragraph (2);

(vii) establishing the necessary rules and providing other services for ensuring propriety in its members' and Financial Instruments Intermediaries' solicitation in respect of purchase and sales and other transactions of Securities;

(viii) conducting public relations aimed at investors and providing other services that are necessary for the Certified Financial Instruments Business Association to achieve its purpose; and

(ix) services beyond what is set forth in the preceding items, which contribute to the sound development of the Financial Instruments Transaction Business and to the protection of investors.

(Furtherance of Investors Protection)

Article 78-2 (1) A Certified Financial Instruments Business Association (hereinafter referred to as a "Certified Association" in this Chapter) must endeavor to further the sound development of the Financial Instruments Business and the protection of investors through the dissemination of financial knowledge, and through educational and publicity campaigns, in addition to what is set forth in the items of paragraph (2) of the preceding Article.

(2) A Certified Association must make the membership list available for public inspection.

(3) A person that is not a Certified Association must not use a term in its name which could give rise to the misconception that it is a Certified Financial Instruments Business Association.

(Reporting to Certified Associations)

Article 78-3 In a case set forth in one of the following items, the member of a Certified Association must report the particulars prescribed in that item to the Certified Association, pursuant to the provisions of Cabinet Office Ordinance:

(i) a purchase and sale of Listed Share Certificates, etc. is made outside of a Financial Instruments Exchange Market and on the member's own account, or a purchase and sale of Listed Share Certificates, etc. is made outside of a Financial Instruments Exchange Market and the member provides intermediation, brokerage, or agency for it: the class, issue, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Listed Share Certificates, etc. that are subject to the purchase and sale; and

(ii) the member makes an offer to sell or purchase Listed Share Certificates, etc. to a large number of persons simultaneously outside of a Financial Instruments Exchange Market, or in any other case specified by Cabinet Office Ordinance: the class, issue, price, volume, and other particulars specified by Cabinet Office Ordinance, with regard to the Listed Share Certificates, etc. subject to the offer to sell or purchase.

(Notice of Trading Volume, Price, etc.)

Article 78-4 Pursuant to the provisions of Cabinet Office Ordinance and based on the reports under the provisions of the preceding Article, a Certified Association shall notify its members of, and disclose to the public, the daily trading volume and the highest price, lowest price, closing price, and other particulars, for each day and for each issue, in respect of purchase and sales of Listed Share Certificates, etc. outside a Financial Instruments Exchange Market (limited to those made by its member on their own accounts, and those for which its members provide intermediation, brokerage, or agency; the same applies in the following Article).

(Reporting of Trading Volume, Price, etc.)

Article 78-5 Pursuant to the provisions of Cabinet Office Ordinance, a Certified Association shall report the daily trading volume and the highest price, lowest price, closing price, and other particulars, for each day and for each issue, in respect of purchase and sales of Listed Share Certificates, etc. outside of a Financial Instruments Exchange Market, to the Prime Minister.

(Responding to Complaints from Investors)

Article 78-6 The provisions of Article 77 apply mutatis mutandis to the resolution of investors' complaints by a Certified Association. In this case, in that Article, the term "association member" is deemed to be replaced with "member".

(Mediation by Certified Associations)

Article 78-7 The provisions of Article 77-2 apply mutatis mutandis to mediation conducted by a Certified Association. In this case, in paragraphs (1) and (5) of that Article, the term "association member" is deemed to be replaced with "member".

(Entrustment of Mediation Services to a Third Party)

Article 78-8 (1) A Certified Association may entrust the complaint resolution services prescribed in Article 77, paragraph (1) as applied mutatis mutandis pursuant to Article 78-6 and the mediation services prescribed in Article 77-2, paragraph (1) as applied mutatis mutandis pursuant to the preceding Article to a person that has the financial basis and personnel structure to perform these services in an appropriate manner.

(2) Notwithstanding the provisions of the preceding paragraph, the complaint resolution services and mediation services referred to in that paragraph may not be entrusted to a person that falls under one of the following items:

(i) a person that has been sentenced pursuant to any provision of this Act, if two years have not yet passed since the day on which the person finished serving that sentence or ceased to be subject to its enforcement;

(ii) a person whose recognition has been rescinded pursuant to Article 79-6, paragraph (2), if two years have not yet passed since the date of the rescission; or

(iii) a person that has a person falling under one of the following as an officer conducting its business:

(a) a person that has been sentenced to imprisonment or a heavier punishment or has been sentenced pursuant to any provision of this Act, if two years have not yet passed since the day on which the person finished serving that sentence or ceased to be subject to its enforcement; or

(b) a person that, during the 30 days prior to the date of rescission, was the officer of a corporation whose recognition has been rescinded pursuant to Article 79-6, paragraph (2), if two years have not yet passed since the date of the rescission.

(3) A person entrusted with services pursuant to paragraph (1) may not further entrust the services under that entrustment.

(4) The provisions of Article 77 as applied mutatis mutandis pursuant to Article 78-6, and Article 77-2 as applied mutatis mutandis pursuant to the preceding Article, apply to the services performed by the person that a Certified Association entrusts with its services pursuant to paragraph (1).

(Duty of Confidentiality of the Officers and Employees)

Article 79 The provisions of Article 72 apply to the officers and employees of a Certified Association, and to any person that has held one of these positions.

Subsection 2 Supervision

(Particulars Required to Be Included in the Articles of Incorporation)

Article 79-2 In addition to the matters set forth in the items of Article 11, paragraph (1) of the Act on General Incorporated Associations and General Incorporated Foundations (Act No. 48 of 2006) and the provisions of the articles of incorporation as set forth in Article 78, paragraph (1), item (ii), a Certified Association must stipulate in its articles of incorporation that if a member violates this Act, an order that is based on this Act, a disposition that is based on this Act or on such an order, or the articles of incorporation or other rules of the Certified Association, or if a member engages in an act that is contrary to the principle of good faith in transactions, the Certified Association will impose an surcharge on the member, order the suspension or restriction of its rights as a member as provided in the articles of incorporation, or expel it from the Certified Association.

(Operational Rules)

Article 79-3 (1) A Certified Association must establish rules concerning the following particulars and must obtain the authorization of the Prime Minister for the same. The same applies if the Certified Association seeks to change the rules:

(i) the particulars of the services prescribed in Article 78, paragraph (2); and

(ii) the particulars of the classes of share certificates, corporate bond certificates with share options, or Securities specified by Cabinet Office Ordinance (excluding Securities listed on a Financial Instruments Exchange and Over-the-Counter Traded Securities) with no prohibition on solicitation being carried out in respect of purchase and sales and other transactions.

(2) A Certified Association must notify the Prime Minister of any change in its officers or members without delay.

(Submission of Reports and On-Site Inspections)

Article 79-4 Whenever the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order a Certified Association or the person that a Certified Association has entrusted with its business, to submit reports or materials that should serve as a reference with regard to the business or assets of the Certified Association or person, and may have the relevant officials enter the office of a Certified Association or the person that a Certified Association has entrusted with its business to inspect the state of its business or assets or its books and documents or any other articles (but may only have the relevant officials inspect the person that a Certified Association has entrusted with its business as is necessary in connection with the business or assets of the Certified Association) or to question the relevant persons (but may only have the relevant officials question the person that a Certified Association has entrusted with its business as is necessary in connection with the business or assets of the Certified Association).

(Cooperation with the Prime Minister)

Article 79-5 For the purpose of promoting the smooth implementation of the provisions of this Section, the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance, may have a Certified Association submit materials or make notifications as prescribed in the relevant provisions of this Section, or provide cooperation with regard to particulars that are otherwise necessary.

(Issuance of Supervision Orders against Certified Associations)

Article 79-6 (1) If the Prime Minister finds that improvement is needed in connection with the business operations of a Certified Association, the Prime Minister, within the scope that is necessary for the implementation of the provisions of this Section, may order the Certified Association to take measures that are necessary for this improvement.

(2) If the Prime Minister finds a Certified Association's business operations to be in violation of this Act, an order that is based on this Act, or a disposition that is based on this Act or on such an order, the Prime Minister may rescind its recognition or order the suspension of all or part of its business activities during a fixed period of no longer than six months.

Section 3 Certified Investor Protection Organizations

(Purpose and Services of Certified Investor Protection Organizations)

Article 79-7 (1) A corporation (including an organization without legal personality for which a representative or administrator has been designated, and excluding an Authorized Association or a Certified Association; hereinafter the same applies in item (iii), sub-item (b) of the following Article) that seeks to provide the services set forth in each of the following items with the aim of ensuring fair and smooth purchase and sales and other transactions of Securities and of ensuring fair and smooth Derivatives Transactions, etc. as well as contributing to the sound development of the Financial Instruments Business and to the protection of investors, may obtain the certification of the Prime Minister:

(i) resolution of complaints about Financial Instruments Business that a Financial Services Provider or a Financial Instruments Intermediary engages in;

(ii) mediation in the event of a dispute about Financial Instruments Business that a Financial Services Provider or a Financial Instruments Intermediary engages in; and

(iii) services beyond what is set forth in the preceding two items, which contribute to the sound development of the Financial Instruments Business and to the protection of investors.

(2) A person seeking to obtain the certification referred to in the preceding paragraph must file an application with the Prime Minister pursuant to the provisions of Cabinet Order.

(3) Upon granting the certification referred to in paragraph (1), the Prime Minister shall issue public notice of this.

(Ineligibility)

Article 79-8 A person that falls under one of the following items may not obtain the certification referred to in paragraph (1) of the preceding Article:

(i) a person that has been sentenced pursuant to any provision of this Act, if two years have not yet passed since the day on which the person finished serving that sentence or ceased to be subject to its enforcement;

(ii) a person whose certification has been rescinded pursuant to Article 79-19, paragraph (1), if two years have not yet passed since the date of the rescission; or

(iii) a person that has a person falling under one of the following as an officer conducting its business (including the representative or administrator of an organization without legal personality for which a representative or administrator has been designated; hereinafter the same applies in this Article):

(a) a person that has been sentenced to imprisonment or a heavier punishment or that has been sentenced pursuant to any provision of this Act, if two years have not yet passed since the day on which the person finished serving that sentence or ceased to be subject to its enforcement; or

(b) a person that, during the 30 days prior to the date of rescission, was the officer of a corporation whose certification has been rescinded pursuant to Article 79-19, paragraph (1), if two years have not yet passed since the date of the rescission.

(Criteria for Certification)

Article 79-9 The Prime Minister must not grant a certification unless the Prime Minister finds that an application under Article 79-7, paragraph (2) conforms to all of the following items:

(i) the applicant has established the necessary methods of business implementation for it to perform the services set forth in the items of Article 79-7, paragraph (1) properly and reliably;

(ii) the applicant has the necessary knowledge, ability, and financial basis for it to perform the services set forth in the items of Article 79-7, paragraph (1) properly and reliably; and

(iii) if a person provides services other than what is set forth in one of the items of Article 79-7, paragraph (1), its provision of those services is unlikely to cause any unfairness in the services set forth in that item.

(Notification of the Discontinuation of Services)

Article 79-10 (1) If a person that has received the certification referred to in Article 79-7, paragraph (1) (hereinafter referred to as the "Certified Investor Protection Organization" in paragraph (1) of the following Article) seeks to discontinue the services to which that certification pertains (hereinafter referred to as "Certified Services" in this Section), that person must notify the Prime Minister of this in advance, pursuant to the provisions of Cabinet Order.

(2) If a notification under the provisions of the preceding paragraph is filed, the Prime Minister shall issue public notice of this.

(Covered Operators)

Article 79-11 (1) A Certified Investor Protection Organization (hereinafter referred to as a "Certified Organization" in this Section) must have the Financial Services Providers and Financial Instruments Intermediaries that are its constituent members, as well as Financial Services Providers and Financial Instruments Intermediaries that agree to be covered by its Certified Services and any other person specified by Cabinet Office Ordinance, as its covered operators (meaning Financial Services Providers, Financial Instruments Intermediaries, and any other person specified by Cabinet Office Ordinance, that are covered by the services of the Certified Organization; hereinafter the same applies in this Section).

(2) A Certified Organization must make a list of the covered operators available for public inspection.

(Complaint Processing by Certified Organizations)

Article 79-12 The provisions of Article 77 apply mutatis mutandis when a Certified Organization works to resolve complaints from investors (limited complaints involving covered operators). In this case, in that Article, the term "association member or Financial Instruments Intermediary" is deemed to be replaced with "covered operators prescribed in Article 79-11, paragraph (1)".

(Mediation by Certified Organizations)

Article 79-13 The provisions of Article 77-2, paragraphs (1) to (3) inclusive and paragraphs (5) to (9) inclusive apply mutatis when a Certified Organization engages in mediation (limited to mediation involving covered operators). In this case, in paragraph (1) of that Article, the phrase "association member or Financial Instruments Intermediary" is deemed to be replaced with "covered operator as prescribed in Article 79-11, paragraph (1)" and the term "Derivatives Transactions, etc." is deemed to be replaced with "Derivatives Transactions, etc. (including transactions incidental to these and any other transactions specified by Cabinet Office Ordinance)"; and in paragraph (5) of that Article, the phrase "association member or Financial Instruments Intermediary" is deemed to be replaced with "covered operator as prescribed in Article 79-11, paragraph (1)".

(Mutatis Mutandis Application of the Duty of Confidentiality of the Officers and Employees)

Article 79-14 The provisions of Article 72 apply mutatis mutandis to the officers and employees of a Certified Organization, and to any person that has held one of these positions.

(Restriction on the Use of Names)

Article 79-15 A person that is not a Certified Organization must not use a name that refers to it as a Certified Investor Protection Organization, and must not use any other name that is confusingly similar to this.

(Collection of Reports)

Article 79-16 The Prime Minister may have a Certified Organization submit a report about its Certified Services, within the scope that this is necessary for implementing the provisions in this Section.

(Investor Protection Guidelines)

Article 79-17 (1) A Certified Organization must endeavor to prepare and publish guidelines that are in line with the purport of the provisions of this Act, with regard to the content of contracts for Financial Instruments Transactions by covered operators, the nature of asset management by covered operators, and particulars that are otherwise necessary for ensuring the protection of investors (hereinafter referred to as "Investor Protection Guidelines"), in order to ensure the sound development of the Financial Instruments Business and the protection of investors.

(2) Once a Certified Organization publishes Investor Protection Guidelines pursuant to the preceding paragraph, it must endeavor to provide the covered operators with the necessary guidance and recommendations, and take other measures for having the covered operators comply with the Investor Protection Guidelines.

(3) A Certified Organization must endeavor to further the sound development of the Financial Instruments Business and the protection of investors through the dissemination of financial knowledge and through educational and publicity campaigns.

(Orders)

Article 79-18 The Prime Minister may order a Certified Organization to improve the implementation methods of its Certified Services, to change the Investor Protection Guidelines, and to take any other necessary measures, within the scope that this is necessary for implementing the provisions in this Section.

(Rescission of Certification)

Article 79-19 (1) If a Certified Organization falls under one of the following items, the Prime Minister may rescind its certification:

(i) it comes to fall under Article 79-8, item (i) or (iii);

(ii) it no longer conforms to one of the items of Article 79-9;

(iii) it fails to comply with an order under the provisions of the preceding Article; or

(iv) it has obtained Article 79-7, paragraph (1) certification by wrongful means.

(2) Upon rescinding a certification pursuant to the provisions of the preceding paragraph, the Prime Minister must issue public notice of this.

Chapter IV-2 Investor Protection Funds

Section 1 General Provisions

(General Customers)

Article 79-20 (1) The term "General Customer" as used in this Chapter means a customer of a Financial Services Provider's (limited to a Financial Services Provider that conducts Securities Services prescribed in Article 28, paragraph (8); hereinafter the same applies in this Chapter) head office or other domestic business office or office (with regard to a Financial Services Provider that is a foreign judicial person, its business office or office in Japan) which conducts a Transaction Related to Subject Securities with that Financial Services Provider (excluding the qualified institutional investors, states, local governments, and other persons specified by Cabinet Order).

(2) Notwithstanding the provisions of the preceding paragraph, if a first Financial Services Provider conducts a Transaction Related to Subject Securities with a second Financial Services Provider on the account of the first Financial Services Provider's General Customer, the first Financial Services Provider is deemed to be the General Customer of the second Financial Services Provider, and the provisions of this Chapter apply.

(3) The term "Customer Assets" as used in this Chapter means the following:

(i) the money and Securities that a General Customer deposits with a Financial Services Provider pursuant to the provisions of Article 119 (limited those deposited in connection with Transactions of Securities-Related Derivatives) and money and Securities that a General Customer deposits with a Financial Services Provider pursuant to the provisions of Article 161-2;

(ii) money on the account of a General Customer and money that a General Customer deposits with a Financial Services Provider (other than money prescribed in the preceding item) in connection with a transaction linked to the Financial Instruments Business (limited to Securities Services prescribed in Article 28, paragraph (8); hereinafter the same applies in this Chapter) (excluding Over-the-Counter Derivatives Transactions or other transactions specified by Cabinet Order; the same applies in the following item);

(iii) Securities on the account of a General Customer or Securities that a General Customer deposits with a Financial Services Provider (other than Securities prescribed in item (i), Securities that a Financial Services Provider may expend pursuant to a contract, and Securities specified by Cabinet Order), in connection with a transaction linked to the Financial Instruments Business; and

(iv) anything other than what is set forth in the preceding three items, which is specified by Cabinet Order.

(Purpose)

Article 79-21 The purpose of an Investor Protection Fund (hereinafter referred to as a "Fund" in this Chapter and the Supplementary Provisions) is to ensure the protection of investors through payments to General Customers pursuant to the provisions of Article 79-56, paragraph (1) and through other services, thereby maintaining the credibility of securities transactions.

(Legal Personality and Address)

Article 79-22 (1) Funds is a juridical person.

(2) The address of a Fund is the address at which its principal office is located.

(Name)

Article 79-23 (1) A Fund must use the characters " toushisha hogo kikin" (meaning "investor protection fund") in its name.

(2) A person that is not a Fund must not use the characters " toushisha hogo kikin" in its name.

(Registration)

Article 79-24 (1) A Fund must register pursuant to the provisions of Cabinet Order.

(2) Particulars that must be registered pursuant to the provisions of the preceding paragraph may not be asserted against a third party until after their registration.

(Capacity in Respect of Tortious Acts)

Article 79-25 A Fund is liable for the damages that its president or board members cause another person in the performance of their duties.

Section 2 Members

(Eligibility for Membership)

Article 79-26 (1) The scope of persons eligible for membership in a Fund is limited to Financial Services Providers.

(2) If a Financial Services Provider seeks to join a Fund, the Fund must not refuse it and must not attach unreasonable conditions to its joining the Fund, unless entry into the Fund is restricted for a special reason related to business type or for any other legitimate reason.

(Obligation to Join)

Article 79-27 (1) A Financial Services Provider (excluding one that is specified by Cabinet Order) must join any single Fund, as a member.

(2) A person seeking to engage in Financial Instruments Business after obtaining Article 29 registration or an Article 31, paragraph (4) registration of a change (excluding a person specified by Cabinet Order) must go through the process for joining any single Fund at the same time as applying for the registration or the registration of the change.

(3) A person that has gone through the process for joining a Fund pursuant to the provisions of the preceding paragraph becomes a member of that Fund at the time that the person becomes registered or has the change registered as referred to in that paragraph.

(4) When a Financial Services Provider joins a Fund or if it changes the Fund to which it belongs, it must notify the Prime Minister of this without delay.

(Withdrawal)

Article 79-28 (1) A Financial Services Provider that is a member of a Fund is withdrawn from the Fund to which it belongs by operation of law for the following reasons:

(i) discontinuation of a Financial Services Provider's Financial Instruments Business (this includes an Article 31, paragraph (4) registration of a change indicating that the Financial Services Provider no longer provides Securities Services, and also includes a foreign corporation's discontinuation of Financial Instruments Business at all of the business offices and offices it has established in Japan) or the dissolution of the Financial Services Provider (with regard to a Financial Services Provider which is a foreign corporation, this includes the commencement of liquidation at a business office or office it has established in Japan); or

(ii) the Article 52, paragraph (1) or (4); Article 53, paragraph (3); Article 54; or Article 57-6, paragraph (3) rescission of an Article 29 registration.

(2) A person that is withdrawn from a Fund pursuant to the provisions of the preceding paragraph is deemed to continue to be a Financial Services Provider and a member of that Fund for the purpose of the application of Articles 79-52 to 79-61 inclusive.

(3) A Financial Services Provider may not withdraw from the Fund to which it belongs unless the withdrawal is for a cause set forth in one of the items of paragraph (1) or unless it becomes the member of another Fund with the approval of the Prime Minister and the Minister of Finance.

(4) Even if a Financial Services Provider withdraws from the Fund to which it belongs (excluding a case of withdrawal pursuant to the provisions of paragraph (1)), it incurs the obligation to pay the amount calculated by the Fund pursuant to the provisions of its operational rules in dues, for the amount of costs that the withdrawn Financial Services Provider is required to bear out of the amount of the costs required for the services the Fund provides for the Financial Services Provider in connection with any notice under the provisions of Article 79-53, paragraph (1) or paragraphs (3) to (5) inclusive, that said Fund receives up until the Operator's withdrawal from the Fund.

(5) Whenever an application is filed for the approval referred to in paragraph (3), the Prime Minister and the Minister of Finance must not grant that approval unless the following requirements are satisfied:

(i) the Financial Services Provider has repaid in full the obligation it bears as a member, to the Fund from which it seeks to withdraw, by the time of filing the application for approval, and its performance of the obligation prescribed in the preceding paragraph is expected to be reliable; and

(ii) the Financial Services Provider gone through the process for joining another Fund as a member.

Section 3 Incorporation

(Requirements for Incorporation)

Article 79-29 (1) In order to incorporate a Fund, 20 or more Financial Services Providers that seek to become its members must become the founders.

(2) After preparing the articles of incorporation and operational rules, the founders must invite persons seeking to become members, and hold an organizational meeting, issuing public notice of the articles of incorporation and operational rules as well as the date, time, and place of the meeting by two weeks prior to the day of the meeting.

(3) Approval of the articles of incorporation and operational rules and decisions about matters that are otherwise necessary for the incorporation of a Fund must be effected by organizational meeting resolution.

(4) The articles of incorporation and operational rules may be revised at an organizational meeting.

(5) The items of organizational meeting business that are referred to in paragraph (3) are decided with at least a two-thirds majority of the votes of attendees, at a meeting where at least half of the Financial Services Providers that have proposed themselves as members to the founders before the opening of the meeting (hereinafter, each such Financial Services Provider is referred to as an "Expected Member" in this Article) and the founders, are present.

(6) Notwithstanding the provisions of Article 79-42, paragraph (1), matters that are necessary for business operations in the business year that includes the day of establishment of a Fund (including the budget and financial plan) may be decided by organizational meeting resolution.

(7) The provisions of Article 79-43 apply mutatis mutandis to the items of business at an organizational meeting that are referred to in the preceding paragraph. In this case, in that Article, the term "all members" is deemed to be replaced with "the Financial Services Providers that have proposed themselves as members to the founders before the opening of the meeting, and the founders".

(8) Each of the Expected Members holds an equal voting right for organizational meetings.

(9) An Expected Member not attending an organizational meeting may vote in writing or by proxy.

(10) The provisions of the preceding two paragraphs do not apply if it is otherwise provided for in the articles of incorporation.

(11) If an organizational meeting resolution concerns the relationship between a Fund and a specific Expected Member, that Expected Member has no voting right.

(Application for Authorization)

Article 79-30 (1) Founders must obtain authorization for incorporation by submitting a written application for authorization to the Prime Minister and the Minister of Finance, in which the founders give the following particulars, without delay after the completion of the organizational meetings:

(i) the name;

(ii) the location of the office; and

(iii) the names of officers and members.

(2) The articles of incorporation, operational rules, and other documents specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance must accompany the written application for authorization referred to in the preceding paragraph.

(Examination Criteria for Authorization)

Article 79-31 (1) Whenever an application is filed for the authorization under the provisions of paragraph (1) of the preceding Article, the Prime Minister and the Minister of Finance shall examine whether the application conforms to the following criteria:

(i) procedures for incorporation and the content of the articles of incorporation and operational rules conform to laws and regulations;

(ii) there is no false statement in the written application for authorization, the articles of incorporation, or the operational rules;

(iii) a person falling under any of sub-items (a) to (g) inclusive of Article 29-4, paragraph (1), item (ii) is not an officer;

(iv) the Fund to which the application pertains is found to have the necessary assets for it to conduct its business or it is found to be possible to rely upon the Fund having such assets;

(v) it is found to be possible to rely upon business operations being conducted properly; and

(vi) the organization of the Fund to which the application pertains conforms to the provisions of this Act.

(2) If, as a result of having conducted an examination pursuant to the provisions of the preceding paragraph, the Prime Minister and the Minister of Finance find that an application conforms to the criteria in that paragraph, they shall authorize incorporation.

(3) If an application is filed for the authorization under the provisions of paragraph (1) of the preceding Article and the Prime Minister and the Minister of Finance find it inappropriate to grant that authorization, they shall notify the applicant for authorization and have the relevant officials conduct a hearing.

(4) Upon deciding to grant or not to grant authorization for incorporation, the Prime Minister and the Minister of Finance shall notify the applicant for authorization of this in writing without delay.

(The Handing Over of Administrative Affairs to the President)

Article 79-32 Upon having authorization for incorporation, the founders must hand over administrative affairs to the person that is to become the president, without delay.

(Registration)

Article 79-33 (1) A Fund is established by a registration of incorporation being recorded in connection with the location of its principal office.

(2) Once the registration of incorporation referred to in the preceding paragraph has been made, the Fund must notify the Prime Minister and the Minister of Finance of this without delay.

Section 4 Management

(Particulars Required to Be Included in the Articles of Incorporation)

Article 79-34 (1) The articles of incorporation of a Fund must include the following particulars:

(i) its purposes;

(ii) its name;

(iii) the location of its offices;

(iv) the particulars of its members (if it restricts membership based on a special cause, etc. involving business type, this includes the special cause, etc.);

(v) the particulars of its general meetings;

(vi) the particulars of its officers;

(vii) the particulars of its governing board;

(viii) the particulars of its business and business execution;

(ix) the particulars of dues;

(x) the particulars of its finance and accounting;

(xi) the particulars involved in changing the articles of incorporation;

(xii) the particulars of dissolution; and

(xiii) the means of public notice.

(2) A change to the articles of incorporation does not become effective without the authorization of the Prime Minister and the Minister of Finance.

(3) If a particular set forth in Article 79-30, paragraph (1), item (ii) or (iii) changes, the Fund must notify the Prime Minister and the Minister of Finance of this without delay.

(Officers)

Article 79-35 (1) A Fund has one president, two or more board members, and one or more inspectors as its officers.

(2) The business of a Fund is decided by majority among the president and board members, unless otherwise provided for in laws and regulations or the articles of incorporation.

(Authority of an Officer)

Article 79-36 (1) The president represents the Fund and presides over its business.

(2) A board member, pursuant to the provisions of the articles of incorporation, represents the Fund, assists the president in administering the business of the Fund, acts as a proxy in handling the duties of the president if the president is unable to attend to them, and performs the duties of the president if the position is vacant.

(3) An inspector examines the business of the Fund.

(4) An inspector may submit an opinion to the president or to the Prime Minister and the Minister of Finance based on the results of an examination if the auditor finds this to be necessary.

(5) An officer loses the position of officer upon coming to fall under one of the categories in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive.

(Appointment, Term of Office, and Dismissal of Officers)

Article 79-37 (1) Officers are appointed and dismissed at a general meeting pursuant to the provisions of the articles of incorporation; provided, however, that the officers at the time of incorporation are appointed at an organizational meeting.

(2) The appointment (excluding the appointment of the officers at the time of incorporation) or dismissal of the officer of a Fund under the provisions of the preceding paragraph does not become effective without the authorization of the Prime Minister and the Minister of Finance.

(3) The term of office of an officer is a period specified by the articles of incorporation not exceeding two years.

(4) Officers may be reappointed.

(5) If an officer is discovered to have become an officer by wrongful means or if an officer violates a law or regulation, a disposition by a government agency which is based on a law or regulation, or the articles of incorporation, the Prime Minister and the Minister of Finance may order the Fund to dismiss that officer.

(Prohibition on the Concurrent Holding of Positions by Auditors)

Article 79-38 An inspector must not concurrently hold the position of president, board member, member of the governing board, or employee of the Fund.

(Restrictions on the Authority of Representation)

Article 79-39 The president and board members have no authority of representation with regard to a matter that constitutes a conflict of interests between the president or a board member and the Fund. In such a case, an auditor represents the Fund.

(Provisional Board Members and Provisional Auditors)

Article 79-40 If there is no one to perform the duties of a board member or an inspector and the Prime Minister and the Minister of Finance find it to be necessary, they may appoint a provisional board member or provisionalinspector .

(General Meetings)

Article 79-41 (1) The president must call an ordinary general meeting once every business year, pursuant to the provisions of the articles of incorporation.

(2) The president may call an extraordinary general meeting whenever the president finds this to be necessary.

(3) A Fund shall report general meeting resolutions to the Prime Minister and the Minister of Finance.

(4) The Prime Minister and the Minister of Finance may have the relevant officials attend a general meeting and state their opinions.

(Matters for General Meeting Resolution)

Article 79-42 (1) The following matters, beyond those that are otherwise prescribed in this Chapter, require a general meeting resolution:

(i) a change in the articles of incorporation;

(ii) a decision on or change in the budget or financial plan;

(iii) a change in the operational rules;

(iv) the settlement of accounts;

(v) dissolution; and

(vi) material matters beyond those that are otherwise set forth in the preceding items, which are specified by the articles of incorporation.

(2) The members, at a general meeting, may request an inspector to examine the business of the Fund and report the results of theexamination.

(General Meeting Decisions)

Article 79-43 A general meeting decision is effected with over half of the votes of the attendees, at a meeting where at least half of all members are present, and by the chairperson in the case of a tie; provided, however, that a decision on a matter set forth in paragraph (1), item (i), (iii), or (v) of the preceding Article is decided with at least a two-thirds majority of the votes of the attendees.

(Extraordinary General Meetings)

Article 79-44 If at least one-fifth of the members specify the purpose of a general meeting and demand that one be called, the board members must call an extraordinary general meeting; provided, however, that a proportion different from one-fifth of the members may be specified in the articles of incorporation.

(The Calling of a General Meeting)

Article 79-44-2 A convocation notice for a general meeting must specify the purpose of the general meeting, and must be issued as specified by the articles of incorporation by at least five days prior to the day of the meeting.

(Matters for General Meeting Resolution)

Article 79-44-3 Only the matters for which advance notice has been given pursuant to the provisions of the preceding Article may be resolved at a general meeting; provided, however, that, this does not apply if it is otherwise provided for in the articles of incorporation.

(Voting Rights of Members)

Article 79-44-4 (1) Each of the members holds an equal voting right.

(2) A member not attending a general meeting may vote in writing or by proxy.

(3) The provisions of the preceding two paragraphs do not apply if it is otherwise provided for in the articles of incorporation.

(When a Member Has No Voting Right)

Article 79-44-5 If a resolution concerns the relationship between a Fund and a specific member, that member has no voting right.

(Governing Council)

Article 79-45 (1) A Fund sets in place a governing council (hereinafter referred to as the "Council") in order to further the appropriate operation of the business of the Fund.

(2) In the following cases, the president must hear the opinions of the Council in advance:

(i) before granting a recognition pursuant to the provisions of Article 79-54;

(ii) before specifying the matters that are required to be specified pursuant to the provisions of Article 79-55, paragraph (1);

(iii) before making a decision on whether to provide a loan under the provisions of Article 79-59; and

(iv) other cases specified by the articles of incorporation as cases in which material matters concerning the Fund's business operation are decided.

(3) A Council comprises of no more than eight members.

(4) The members are appointed by the president from among persons that have the necessary knowledge and experience to appropriately operate the business of the Fund, with the authorization of the Prime Minister and the Minister of Finance.

(5) The provisions of Article 79-41, paragraph (4) apply mutatis mutandis to the Council.

(Appointment of Employees)

Article 79-46 The employees of a Fund are appointed by the president.

(Duty of Confidentiality of the Officers and Employees)

Article 79-47 (1) It is prohibited for the officer or employee of a Fund, a member of the Council, or a person that has held one of these positions, to divulge or misappropriate any secret learned in the course of duty.

(2) It is prohibited for the officer or employee of a Fund, a member of the Council, or a person that has held one of these positions, to utilize information learned in the course of duty for a purpose other than the business use of the Fund for which the information is provided.

(Position of Officers and Employees)

Article 79-48 With regard to the application of the Penal Code and other penal provisions, the officers and employees of a Fund and the members of a Council are deemed to be officials who are engaged in public service pursuant to laws and regulations.

Section 5 Services

(Scope of Services)

Article 79-49 A Fund provides the following services in order to achieve the purpose prescribed in Article 79-21:

(i) the payment of General Customers under the provisions of Article 79-56, paragraph (1);

(ii) the lending of funds under the provision of Article 79-59, paragraph (1);

(iii) judicial or non-judicial act prescribed in Article 79-60, paragraph (1);

(iv) services for contributing to the expeditious refunding of Customer Assets prescribed in Article 79-61;

(v) collection and management of dues (meaning the dues prescribed in Article 79-28, paragraph (4) and Article 79-64, paragraph (1); the same applies in Article 79-51, paragraph (1));

(vi) the submission of the customer lists under the provisions of Chapter IV, Section 5, Chapter V, Section 3 and Chapter VI, Section 3 of the Act on Special Treatment of Corporate Reorganization Proceedings and Other Insolvency Proceedings of Financial Institutions (Act No. 95 of 1996) and other services under those provisions; and

(vii) services incidental to the services set forth in the preceding items.

(Entrustment of Services)

Article 79-50 (1) A Fund may entrust part of its services to a Financial Instruments Business Association (meaning an Authorized Financial Instruments Business Association or Certified Financial Instruments Business Association prescribed in Article 78, paragraph (2); the same applies in the following paragraph) or a Financial Services Provider with the advance authorization of the Prime Minister and the Minister of Finance.

(2) Notwithstanding the provisions of this Act or other laws and regulations, if the authorization prescribed in the preceding paragraph is granted, the Financial Instruments Business Association or Financial Services Provider may be entrusted with the services to which that authorization pertains and perform those services.

(Operational Rules)

Article 79-51 (1) The operational rules of a Fund must state the particulars of the payments to General Customers under the provisions of Article 79-56, paragraph (1), the particulars of the method of calculation of dues and their payment, and other matters specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

(2) A Fund must obtain the authorization of the Prime Minister and the Minister of Finance if it seeks to change its operational rules.

(Submission of Reports and Materials)

Article 79-52 (1) Whenever it is necessary in order for a Fund to perform its services, that Fund may request a Financial Services Provider that is its member to submit reports or materials that should serve as a reference with regard to the state of the business or assets of that Financial Services Provider.

(2) A Financial Services Provider that has been requested to submit reports or materials that should serve as a reference with regard to the state of its business or assets pursuant to the provisions of the preceding paragraph, must submit the reports or materials without delay.

(3) The Prime Minister may issue materials to a Fund or allow a Fund to inspect the same, if the Fund has so requested and the Prime Minister finds this to be particularly necessary in order for the Fund to perform its services.

(Notifying the Fund)

Article 79-53 (1) If a Financial Services Provider that is a member of a Fund falls under one of the following items, it must immediately notify the Fund to which it belongs of this:

(i) its Article 29 registration is rescinded pursuant to the provisions of Article 52, paragraph (1); Article 53, paragraph (3); Article 54; or Article 57-6, paragraph (3);

(ii) it files a petition to commence bankruptcy proceedings, rehabilitation proceedings, Reorganization proceedings, or special liquidation proceedings (or it makes an Article 31, paragraph (4) registration of a change indicating that it no longer provides Securities Services; or if the Financial Services Provider is a foreign corporation, it files a petition to commence bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or special liquidation proceedings in Japan, or a petition of the same kind in the state where its head office is located based on the laws and regulations of that state);

(iii) it discontinues its Financial Instruments Business (with regard to a Financial Services Provider that is a foreign corporation, this includes the discontinuation of Financial Instruments Business at all business offices and offices it has established in Japan; hereinafter the same applies in this item) or is dissolved (with regard to a Financial Services Provider that is a foreign corporation, this includes the commencement of liquidation of the business offices and offices it has established in Japan) or it issues a public notice of its discontinuation of Financial Instruments Business, etc. under the provisions of Article 50-2, paragraph (6) or of its dissolution; or

(iv) it becomes subject to an order for the suspension of all or a part of business activities under the provisions of Article 52, paragraph (1) (limited to a case falling under item (vii) of that paragraph).

(2) If a Fund receives a notice under the provisions of the preceding paragraph, it must immediately report this to the Prime Minister and the Minister of Finance.

(3) If the Prime Minister issues one of the following dispositions with regard to a Financial Services Provider that is a member of a Fund, the Prime Minister must immediately notify the Minister of Finance and the Fund to which that Financial Services Provider belongs of this:

(i) the Article 52, paragraph (1) or (4); Article 53, paragraph (3); Article 54; or Article 57-6, paragraph (3) rescission of an Article 29 registration; or

(ii) an order for the suspension of all or a part of business activities under the provisions of Article 52, paragraph (1) (limited to a case falling under item (vii) of that paragraph).

(4) Upon filing with the court a petition to commence bankruptcy proceedings under the provisions of Article 490, paragraph (1) of the Act on Special Treatment of Corporate reorganization Proceedings and Other Insolvency Proceedings of Financial Institutions against a Financial Services Provider that is a member of a Fund, the Prime Minister must immediately notify the Minister of Finance and the Fund to which the Financial Services Provider belongs of this.

(5) If the Prime Minister receives a notice under the provisions of Article 379, paragraph (2); Article 448, paragraph (2); or Article 492 of the Act on Special Treatment of Corporate Reorganization Proceedings and Other Insolvency Proceedings of Financial Institutions or any other notice concerning special liquidation proceedings with regard to a Financial Services Provider that is a member of a Fund, the Prime Minister must immediately notify the Minister of Finance and the Fund to which the Financial Services Provider belongs of this.

(Finding of Difficulty in Payment)

Article 79-54 If a Fund receives a notice under the provisions of paragraph (1) or paragraphs (3) to (5) inclusive of the preceding Article, it must, without delay, reach a finding as to whether it is difficult for the Financial Services Provider to which the notice pertains (hereinafter referred to as a "Financial Services Provider That Is the Subject of a Notice") to smoothly perform its obligations in connection with the refunding of Customer Assets, unless it is found to be clearly unlikely that not reaching such a finding would result in insufficient investor protection.

(Public Notice of Finding)

Article 79-55 (1) If a Fund, pursuant to the provisions of the preceding Article, reaches the finding that it is difficult for a Financial Services Provider That Is the Subject of a Notice to smoothly perform its obligations in connection with the refunding of Customer Assets, it must promptly specify the period and place of notification set forth in paragraph (1) of the following Article and other matters specified by Cabinet Order and issue public notice of the same.

(2) If a public notice under the provisions of Article 197, paragraph (1) of the Bankruptcy Act (Act No. 75 of 2004) (including as applied mutatis mutandis pursuant to Article 209, paragraph (3) of that Act) or a notice under the provisions of paragraph (5) is issued or if any other cause specified by Cabinet Order occurs with regard to a Financial Services Provider that is subject to the finding referred to in the preceding paragraph (hereinafter referred to as a "Distressed Financial Services Provider") after the Fund has issued public notice pursuant to the provisions of the preceding paragraph, the Fund may change the period of notification with regard to which it has issued the public notice pursuant to the provisions of that paragraph.

(3) If a Fund changes the period of notification pursuant to the provisions of the preceding paragraph, it must issue public notice of the particulars of the change without delay.

(4) When a Fund specifies the matters prescribed in paragraph (1) or if it changes the period of notification pursuant to the provisions of paragraph (2), it must immediately report this to the Prime Minister and the Minister of Finance.

(5) The bankruptcy trustee must notify the Fund upon providing the notice under the provisions of Article 197, paragraph (1) (including as applied mutatis mutandis pursuant to Article 209, paragraph (3) of the Bankruptcy Act) or Article 204, paragraph (2) of the Bankruptcy Act or upon receipt of permission under the provisions of Article 208, paragraph (1) of that Act in connection with the bankruptcy proceedings of the Financial Services Provider That Is Subject to the Finding.

(Payment of Claims to Be Compensated)

Article 79-56 (1) At the request of the General Customer of a Distressed Financial Services Provider, the Fund is to pay the amount calculated pursuant to the provisions of Cabinet Office Ordinance and Ordinance of the Ministry of Finance on any claim that the General Customer has against the Financial Services Provider That Is Subject to the Finding as of the day that the Fund issues public notice pursuant to the provisions of paragraph (1) of the preceding Article (limited to a claim for the Customer Assets of said General Customer), and which the Fund, pursuant to the provisions of Cabinet Order, finds would be difficult for the Financial Services Provider That Is Subject to the Finding to smoothly pay (hereinafter referred to as "Claims to Be Compensated").

(2) Notwithstanding the provisions of the preceding paragraph, a Fund is not to make the payment referred to in that paragraph to the officer of a Distressed Financial Services Provider or to any other person specified by Cabinet Order.

(3) A request set forth in paragraph (1) may only be made within the period of notification for which public notice is issued pursuant to the provisions of paragraph (1) or (3) of the preceding Article; provided, however, that this does not apply if there has been a natural disaster or if the Fund otherwise finds there to be a compelling reason for the failure to make a request within the period of notification.

(Amount of Payment)

Article 79-57 (1) Notwithstanding the provisions of paragraph (1) of the preceding Article, if the General Customer of a Distressed Financial Services Provider which makes the request set forth in that paragraph falls under one of the following items, the amount that must be paid by the Fund pursuant to the provisions of that paragraph is equivalent to the amount under the provisions of that paragraph less the amount provided for in the relevant item:

(i) if the General Customer has provided the whole or a part of the Customer Assets that are under the Claim to Be Compensated as the subject matter of a security interest: the amount of the relevant whole or part of the Customer Assets provided as the subject matter of the security interest, as valued pursuant to the provisions of Cabinet Office Ordinance and Ordinance of the Ministry of Finance (or, if that amount exceeds the amount of the secured claim connected with the security interest, the amount of the secured claim connected with that security interest);

(ii) if the General Customer has incurred an obligation to the Financial Services Provider That Is Subject to the Finding: the amount of the obligation (or, if the General Customer falls under the preceding item in connection with that obligation, the amount of the obligation less the amount provided for in that item); or

(iii) if the Customer Assets that are subject to the Claim to Be Compensated include a Claim to Be Compensated prescribed in Article 60, paragraph (1) of the Act on the Book-Entry of Corporate Bonds: the amount of Customer Assets equivalent to the Claims to Be Compensated set forth in that paragraph, as valued pursuant to the provisions of Cabinet Office Ordinance and Ordinance of the Ministry of Finance (or, if the provisions of paragraph (5) of that Article apply to those Customer Assets, that amount less the amount of payment reduced pursuant to the provisions of that paragraph).

(2) With regard to the application of paragraph (1) of the preceding Article and the provisions of the preceding paragraph if a Financial Services Provider is deemed to be a General Customer pursuant to the provisions of Article 79-20, paragraph (2), each General Customer of the Financial Services Provider which causes the Financial Services Provider to be deemed a General Customer has the position of a General Customer.

(3) If the amount that must be paid pursuant to the provisions of paragraph (1) of the preceding Article and paragraph (1) exceeds the amount specified by Cabinet Order, the amount specified by Cabinet Order is the amount that must be paid.

(4) If a Fund makes the payment referred to in paragraph (1) of the preceding Article, it acquires a Claim to Be Compensated in connection with that payment and in line with the amount it pays, pursuant to the provisions of Cabinet Order.

(Application of the Income Tax Act)

Article 79-58 (1) If a General Customer is an individual and that individual receives a payment set forth in Article 79-56, paragraph (1) on a Claim to Be Compensated that the individual holds against a Distressed Financial Services Provider (limited to a claim involving Securities; hereinafter the same applies in this paragraph), the Securities under the Claim to Be Compensated that is connected with that payment (limited to the part of the Claim to Be Compensated that the Fund acquires based on that payment) are deemed to transfer from the individual to the Fund that makes the payment, based on the amount of payment that the individual receives and at the time the individual receives that payment, and the provisions of the Income Tax Act (Act No. 33 of 1965) and other laws and regulations concerning income tax apply.

(2) Necessary particulars relevant to the application of the special provisions of Article 4-2 and Article 4-3 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957) in a case to which the provisions of the preceding paragraph are applicable are specified by Cabinet Order.

(Loans of Funds for Refunds)

Article 79-59 (1) At the application of a Financial Services Provider That Is the Subject of a Notice (excluding a Distressed Financial Services Provider g) or the agent of the beneficiary of a trust prescribed in Article 43-2, paragraph (2) that is connected to a Financial Services Provider That Is the Subject of a Notice, a Fund may loan the necessary funds for the expeditious performance of obligations connected with the refunding of Customer Assets (hereinafter referred to as a "Loan of Funds for Refunds") to such a person, within the limits of the amount that is found to be necessary.

(2) A person that files an application for a Loan of Funds for Refunds must be recognized by the Prime Minister to satisfy all of the following requirements with regard to the relevant Loan of Funds for Refunds (hereinafter such a recognition is referred to as "Recognition of Eligibility" in this Article), by the time it files that application:

(i) providing a Loan of Funds for Refund is found to be necessary for the expeditious performance of obligations connected with the refund of Customer Assets; and

(ii) it is found to be possible to rely upon the proceeds of a Loan of Funds for Refund being used for the expeditious performance of obligations connected with the refund of Customer Assets.

(3) Upon granting a Recognition of Eligibility, the Prime Minister shall notify the Minister of Finance and the Fund to which the Financial Services Provider that has obtained the Recognition of Eligibility belongs (or, if the agent of the beneficiary of a trust prescribed in Article 43-2, paragraph (2) that involves a Financial Services Provider has obtained that recognition, the Financial Services Provider) of this.

(4) Upon receiving an application for a Loan of Funds for Refunds, a Fund must decide whether to provide the Loan of Funds for Refunds to which that application pertains.

(5) When a Fund has made the decision referred to in the preceding paragraph, it shall immediately report the particulars of the decision to the Prime Minister and the Minister of Finance.

(Preservation of the Claims of General Customers)

Article 79-60 (1) In addition to the performance of acts under the provisions of the Act on Special Treatment of Corporate Reorganization Proceedings and Other Insolvency Proceedings of Financial Institutions, if a Fund finds it to be necessary in order to preserve the fulfillment of a claim that a General Customer has against a Financial Services Provider That Is the Subject of a Notice (limited to a claim involving the Customer Assets of that General Customer), the Fund, within the scope of this necessity, has the authority to perform any and all judicial and non-judicial acts that are necessary for preserving the fulfillment of that claim on behalf of that General Customer.

(2) A Fund must be sincere and fair in its performance of the acts referred to in the preceding paragraph on behalf of a General Customer.

(3) A Fund shall perform the acts set forth in paragraph (1) for General Customers with the due care of a prudent manager.

(4) Before performing a judicial pursuant to the provisions of paragraph (1), a Fund must notify the General Customer that the Fund represents in that act, of the content of the act.

(5) A General Customer that has received the notice under the provisions of the preceding paragraph may independently perform any judicial act to which that notice pertains by extinguishing the authority of representation of the Fund by notifying the Fund that the General Customer extinguishes the authority of representation.

(Services for Contributing to Expeditious Payment)

Article 79-61 A Fund may be entrusted by a Financial Services Provider that is its member, to perform services as the agent of the beneficiary of a trust prescribed in Article 43-2, paragraph (2) which is connected to the Financial Services Provider or other services for contributing to the expeditious refunding of Customer Assets.

(Delegation to Cabinet Office Ordinance)

Article 79-62 Procedures for the implementation of the provisions of this Section and particulars that are otherwise necessary for their implementation are specified by Cabinet Office Ordinance or Ordinance of the Cabinet Office and the Ministry of Finance.

Section 6 Dues

(Funds for Investor Protection)

Article 79-63 (1) A Fund is to set aside funds that it allocates to cover the costs that are required for the services set forth in the items of Article 79-49 (hereinafter referred to as "Funds for Investor Protection").

(2) Funds for Investor Protection must not be used other than when they are allocated to cover the costs that are required for the services set forth in the items of Article 79-49.

(Dues)

Article 79-64 (1) A Financial Services Provider shall pay dues to a Fund to which it belongs pursuant to the provisions of the operational rules, so that these can be allocated to Funds for Investor Protection.

(2) Notwithstanding the provisions of the preceding paragraph, a Fund may waive the dues of a Financial Services Provider That Is the Subject of a Notice, pursuant to the provisions of the articles of incorporation.

(Method of Calculation of the Amount of Dues)

Article 79-65 (1) The amount of the dues referred to in paragraph (1) of the preceding Article is the amount calculated using the calculation method stipulated in the operational rules.

(2) The method of calculating dues which is referred to in the preceding paragraph must be specified so as to conform to the following criteria:

(i) the finances of a Fund will be balanced in the long term in light of the estimated amount of payments set forth in Article 79-56, paragraph (1) and the costs that are required for services linked to Funds for Investor Protection; and

(ii) no particular Financial Services Provider is subject to differential treatment.

(3) The provisions of the preceding paragraph must not be construed as precluding the temporary specification of a method of calculating dues that does not conform to the criterion specified in item (i) of that paragraph, if the payment of dues so calculated would make it impossible for a Financial Services Provider that is a member to maintain its sound management.

(Delinquency Charges)

Article 79-66 (1) If a Financial Services Provider fails to pay its dues by the due date for payment specified by the operational rules, it must pay a delinquency charge to the Fund to which it belongs.

(2) The amount of a delinquency charge is calculated by multiplying the amount of unpaid dues by an annual rate of 14.5 percent, based on the number of days from the day following the due date for payment until the day of payment.

(Delegation to Cabinet Office Ordinance and Ordinance of the Ministry of Finance)

Article 79-67 Procedures for the implementation of the provisions of this Section and particulars that are otherwise necessary for their implementation are specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

Section 7 Finance and Accounting

(The Business Year)

Article 79-68 The business year of a Fund is from April 1 to March 31 of the following year; provided, however, that the business year in that includes the day of establishment of a Fund is from the day of establishment to the following March 31.

(Submission of a Budget and Financial Plan)

Article 79-69 A Fund shall prepare a budget and a financial plan for every business year and submit them to the Prime Minister and the Minister of Finance before the commencement of the relevant business year (with regard to a business year that includes the day of establishment of a Fund, this means without delay after the establishment of the Fund). The same applies if a Fund changes the budget or financial plan.

(Submission of Financial Statements)

Article 79-70 (1) Within three months from the first day of the business year (excluding the business year that includes the day of establishment of a Fund), a Fund must submit a balance sheet and profit and loss statement, an inventory of assets and business report, and a statement of accounts based on their budget classification (hereinafter collectively referred to as "Financial Statements, etc." in this Article) for the previous business year to the Prime Minister and the Minister of Finance, and obtain their approval.

(2) When a Fund submits Financial Statements, etc. to the Prime Minister and the Minister of Finance pursuant to the provisions of the preceding paragraph, an inspector's written opinion about the Financial Statements, etc. must accompany them.

(3) A Fund must keep the Financial Statements, etc. that have been approved by the Prime Minister and the Minister of Finance as under the provisions of paragraph (1) at its office and make them available for public inspection.

(Reserve Funds)

Article 79-71 (1) A Fund must lay aside all of the surplus in every business year as reserve funds.

(2) The reserve funds referred to in the preceding paragraph may be allocated to cover any deficit carried over from the previous business year, and may be transferred to Funds for Investor Protection.

(3) The reserve funds referred to in paragraph (1) must not be broken into other than as referred to in the preceding paragraph.

(Borrowing of Funds)

Article 79-72 If a Fund finds it to be necessary in order for it to perform the services set forth in Article 79-49, items (i) to (iv) inclusive and item (vi), it may borrow funds (this includes refinancing) from a financial institution, etc. (meaning a bank, a Financial Services Provider, or any other person specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance) with the authorization of the Prime Minister and the Minister of Finance, within the limits of the amount specified by Cabinet Order.

(Restrictions on the Investment of Funds)

Article 79-73 A Fund must not invest any surplus funds that arise in the course of business or Funds for Investor Protection except in the following manners:

(i) by holding national government bonds or other Securities designated by the Prime Minister and the Minister of Finance;

(ii) by depositing them in a financial institution designated by the Prime Minister and the Minister of Finance; or

(iii) in other ways specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

(Delegation to Cabinet Office Ordinance and Ordinance of the Ministry of Finance)

Article 79-74 Beyond what is provided for in this Act, necessary particulars relevant to the finance and accounting of a Fund are specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

Section 8 Supervision

(Business Improvement Orders)

Article 79-75 If the Prime Minister and the Minister of Finance find it to be necessary and appropriate in the public interest or for the protection of investors, they may order a Fund to change its articles of incorporation or operational rules, or may otherwise issue it orders that are necessary from a supervisory perspective, in connection with its business. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister and the Minister of Finance must conduct a hearing.

(Rescission of Authorization)

Article 79-76 If a Fund violates a law or regulation, a disposition by a government agency which is based on a law or regulation, or its articles of incorporation or operational rules, or if the Prime Minister and the Minister of Finance find that it will be difficult for a Fund's services to continue due to the state of its services or assets, and the Prime Minister and the Minister of Finance find it to be necessary and appropriate in the public interest or for the protection of investors, they may rescind the authorization for the incorporation of the Fund. In such a case, irrespective of the category of proceeding for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, the Prime Minister and the Minister of Finance must conduct a hearing.

(Collection of Reports and On-Site Inspections)

Article 79-77 Whenever the Prime Minister and the Minister of Finance find that it is necessary and appropriate in the public interest or for the protection of investors, they may order a Fund or a person that a Fund has entrusted with its business to submit reports or materials that should serve as a reference with regard to the business or assets of the Fund, and may have the relevant officials enter the office of a Fund or of the person that a Fund has entrusted with its business to inspect its books and documents or any other articles (but may only have the relevant officials inspect the person that a Fund has entrusted with its business as is necessary in connection with the business or assets of the Fund).

Section 9 Dissolution

(Grounds for Dissolution)

Article 79-78 (1) A Fund is dissolved for the following reasons:

(i) general meeting resolution; or

(ii) the rescission of authorization for incorporation.

(2) Dissolution on the grounds specified in item (i) of the preceding paragraph does not become effective without the authorization of the Prime Minister and the Minister of Finance.

(Appointment of a Liquidator)

Article 79-79 In the case of a dissolution under the provisions of paragraph (1), item (i) of the preceding Article, a liquidator is appointed at a general meeting. In the case of a dissolution under the provisions of item (ii) of that paragraph, a liquidator is appointed by the Prime Minister and the Minister of Finance.

(Disposal of Residual Assets)

Article 79-80 (1) If there are residual assets after the payment of the obligations of a Fund, the liquidator, pursuant to the provisions of Cabinet Office Ordinance and Ordinance of the Ministry of Finance, must cause the residual assets to vest in each of the other Funds that the members join.

(2) Beyond what is provided for in the preceding paragraph, required measures in connection with the dissolution of a Fund may be specified by Cabinet Order within the scope that is reasonably determined to be necessary.

Chapter V Financial Instruments Exchange

Section 1 General Provisions

(Licensing)

Article 80 (1) With the exception of an Authorized Financial Instruments Business Association, a person must not operate a Financial Instruments Market unless it is licensed by the Prime Minister.

(2) The provisions of the preceding paragraph do not apply if a Financial Services Provider, etc. or a Financial Instruments Intermediary conducts a purchase and sale of Securities or a Market Transaction of Derivatives (other than a transaction conducted outside a Financial Instruments Exchange Market), or intermediation, brokerage, or agency for such a transaction pursuant to the provisions of this Act.

(Application for License)

Article 81 (1) A person seeking the license referred to paragraph (1) of the preceding Article must submit a written license application to the Prime Minister, in which the person states the following particulars:

(i) its name or trade name;

(ii) the location of its office, head office, branch office, or any other business office; and

(iii) the names of its officers, and the trade names or names of members or Trading Participants (hereinafter each such member or Trading Participant is referred to as a "Member, etc.").

(2) The articles of incorporation, the operational rules, the brokerage contract rules, and other documents specified by Cabinet Office Ordinance must accompany the written license application referred to in the preceding paragraph.

(3) In a case referred to in the preceding paragraph, if the articles of incorporation have been prepared as electronic or magnetic records, such electronic or magnetic records (limited to those specified by Cabinet Office Ordinance) may accompany the written license application in lieu of written documents.

(Licensing Examination Criteria)

Article 82 (1) Whenever a license application under paragraph (1) of the preceding Article is filed, the Prime Minister shall examine whether the application conforms to the following criteria:

(i) the provisions of the articles of incorporation, the operational rules, and the brokerage contract rules conform to laws and regulations, and are sufficient for ensuring fair and smooth purchase and sales of Securities and Market Transactions of Derivatives on a Financial Instruments Exchange Market, as well as for protecting investors;

(ii) the license applicant has a sufficient personnel structure to run a Financial Instruments Exchange Market in an appropriate manner; or

(iii) the license applicant will be organized as a Financial Instruments Exchange in a manner that conforms to the provisions of this Act.

(2) If, as a result of having conducted an examination pursuant to the provisions of the preceding paragraph, the Prime Minister finds that an application conforms to the criteria in that paragraph, the Prime Minister shall grant the license, except in a case that falls under one of the following items:

(i) the license applicant is a person that has been sentenced to a fine (including an equivalent sentence under foreign laws and regulations) for violating the provisions of this Act or for violating the provisions of a foreign law or regulation that is equivalent to this Act, and five years have yet to pass since the day on which that person finished serving the sentence or ceased to be subject to its enforcement;

(ii) the license applicant is a person that has had its license rescinded pursuant to the provisions of Article 148; Article 152, paragraph (1); Article 156-17, paragraph (1) or (2); Article 148 as applied mutatis mutandis pursuant to Article 156-26; or Article 156-32, paragraph (1); has had its registration rescinded pursuant to the provisions of Article 52, paragraph (1); Article 53, paragraph (3); Article 57-6, paragraph (3); Article 66-20, paragraph (1); or Article 66-42, paragraph (1); has had its authorization rescinded pursuant to the provisions of Article 106-7, paragraph (1); Article 106-21, paragraph (1); Article 106-28, paragraph (1); or Article 156-5-9, paragraph (1); or a person that had obtained a license or registration of the same kind in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including permission or any other administrative disposition similar to such a license or registration), but that has had that license or registration rescinded; and five years have yet to pass since the date of the rescission;

(iii) the license applicant has a person falling under one of the following sub-items (a) to (f) inclusive as an officer:

(a) a person set forth in one of Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive;

(b) a person that, during the 30 days prior to the date of rescission, was the officer (for a Foreign Financial Instruments Exchange or a Foreign Financial Instruments Clearing Organization, this includes the domestic representative; hereinafter the same applies in sub-item(e)) of a Financial Instruments Exchange that has had its license rescinded pursuant to the provisions of Article 148 or Article 152, paragraph (1); the officer of a Financial Instruments Clearing Organization that has had its license rescinded pursuant to the provisions of Article 156-17, paragraph (1) or (2); the officer of a Securities Finance Company that has had its license rescinded pursuant to the provisions of Article 156-32, paragraph (1); the officer of a Foreign Financial Instruments Exchange that has had its authorization rescinded pursuant to the provisions of Article 155-6 or Article 155-10, paragraph (1); the officer a Foreign Financial Instruments Clearing Organization that has had its license rescinded pursuant to the provisions of Article 156-20-14, paragraph (1) or (2); or the officer of a person that had obtained a license or authorization of the same kind in a foreign state pursuant to the provisions of a foreign law or regulation that is equivalent to this Act (including permission or any other administrative disposition similar to such a license or authorization), but that has had that license or authorization rescinded; if five years have yet to pass since the date of the rescission;

(c) a person that, during the 30 days prior to the date of rescission, was a Major Shareholder (meaning a Major Shareholder as prescribed in Article 106-6, paragraph (1); Article 106-20, paragraph (1); or Article 156-5-8; hereinafter the same applies in this item) that has had its authorization rescinded pursuant to the provisions of Article 106-7, paragraph (1); Article 106-21, paragraph (1); or Article 156-5-9, paragraph (1); or was the officer of a Financial Instruments Exchange Holding Company that has had its authorization rescinded pursuant to the provisions of Article 106-28, paragraph (1); if five years have yet to pass since the date of rescission;

(d) a person with a Major Shareholder that has had its authorization rescinded pursuant to the provisions of Article 106-7, paragraph (1); Article 106-21, paragraph (1); or Article 156-5-9, paragraph (1), if five years have yet to pass since the date of the rescission;

(e) an officer whose dismissal has been ordered pursuant to the provisions of Article 150; Article 152, paragraph (1); Article 155-10, paragraph (2); Article 156-14, paragraph (3); Article 156-17, paragraph (2); Article 156-20-14, paragraph (2); or Article 156-31, paragraph (3), if five years have yet to pass since the day of that disposition; or

(f) an officer whose dismissal has been ordered pursuant to the provisions of Article 106-28, paragraph (2), if five years have yet to pass since the day of that disposition.

(iv) the license application or a document or electronic or magnetic record that is required to accompany it contains a false statement or false record about a material particular.

(Refusal of a License)

Article 83 (1) If a license application under the provisions of Article 81, paragraph (1) is filed and the Prime Minister finds it inappropriate to grant that license, the Prime Minister shall notify the license applicant and have the relevant officials conduct a hearing.

(2) Upon deciding to grant or not to grant the license under the provisions of Article 80, paragraph (1), the Prime Minister shall notify the license applicant of this in writing without delay.

(Corporations Eligible to Become Financial Instruments Exchanges)

Article 83-2 A Financial Instruments Exchange must be a Financial Instruments Incorporated Association or a stock company with a stated capital of not less than the amount specified by Cabinet Order, and have in place the followingorgans:

(i) a board of directors;

(ii) a board of company auditors or committees; and

(iii) an accounting auditor.

(Self-Regulatory Services)

Article 84 (1) A Financial Instruments Exchange must perform Self-Regulatory Services in an appropriate manner, in accordance with this Act and with its articles of incorporation and other rules, in order to ensure the fair purchase and sale of Securities and Market Transactions of Derivatives on the Financial Instruments Exchange Market, as well as to protect investors.

(2) The term "Self-Regulatory Services" as used in the preceding paragraph means the following services conducted in respect of a Financial Instruments Exchange:

(i) services related to the listing and delisting of Financial Instruments, Financial Indicators, and Options (hereinafter referred to as "Financial Instruments, etc." in this Chapter) (excluding those specified by Cabinet Office Ordinance);

(ii) the investigation of Members', etc. compliance with laws and regulations, dispositions by government agencies which are based on laws and regulations, with the articles of incorporation and other rules, and with the principle of good faith in transactions; and

(iii) other services specified by Cabinet Office Ordinance as necessary for ensuring fairness in transactions on a Financial Instruments Exchange Market.

(Entrustment of Self-Regulatory Services)

Article 85 (1) With the authorization of the Prime Minister, a Financial Instruments Exchange may entrust the whole or part of the Self-Regulatory Services of the Financial Instruments Exchange to a self-regulatory organization (meaning a corporation incorporated pursuant to the provisions of Subsection 1-2 of the following Section for the purpose of performing Self-Regulatory Services (meaning Self-Regulatory Services as prescribed in paragraph (2) of the preceding Article; hereinafter the same applies in this Chapter); hereinafter the same applies in this Chapter).

(2) The Prime Minister may attach conditions to the authorization under the preceding paragraph.

(3) The conditions referred to in the preceding paragraph must constitute the minimum necessary conditions in light of the purpose of the authorization, or for securing the reliable implementation of the things related to the authorization.

(4) In addition to entrustment in a case under paragraph (1), a Financial Instruments Exchange may entrust another person with conducting a part of the Self-Regulatory Services of the Financial Instruments Exchange (limited to services connected with a Specified Financial Instruments Exchange Market that are specified by Cabinet Office Ordinance as services which, in consideration of the contents thereof and other related factors, address matters other than those that affect the foundation of investor protection; hereinafter referred to as "Specified Services" in this Article and Article 102-19).

(5) If a Financial Instruments Exchange seeks to entrust Specified Services pursuant to provisions of the preceding paragraph, it must take measures to ensure the proper implementation of such Specified Services, pursuant to the provisions of Cabinet Office Ordinance.

(6) If, pursuant to the provisions of paragraph (4), a Specified Stock Company-Operated Financial Instruments Exchange (meaning a Specified Company-Operated Financial Instruments Exchange as prescribed in Article 105-4, paragraph (2); hereinafter the same applies in this paragraph) entrusts another person with its Specified Services, this must be based on the decision of the self-regulatory committee of the Specified Stock Company-Operated Financial Instruments Exchange with regard to that entrustment.

(Submission of a Written Application for Authorization)

Article 85-2 (1) A Financial Instrument Exchange seeking the authorization referred to in paragraph (1) of the preceding Article must submit a written application for authorization to the Prime Minister in which it states the following particulars:

(i) its name;

(ii) the name of the self-regulatory organization it will entrust (hereinafter referred to as an "Entrusted Self-Regulatory Organization" in this Chapter);

(iii) a business outline of the Self-Regulatory Services it will entrust; and

(iv) other matters specified by Cabinet Office Ordinance.

(2) Documents giving the details of the entrustment agreement and other documents specified by Cabinet Office Ordinance must accompany the written application for authorization referred to in the preceding paragraph.

(3) The provisions of Article 81, paragraph (3) apply mutatis mutandis in the case of the application for authorization referred to in paragraph (1). In this case, the phrase "the articles of incorporation" is deemed to be replaced with "documents giving the details of the entrustment agreement".

(Criteria for Authorization)

Article 85-3 Whenever an application for authorization under the provisions of paragraph (1) of the preceding Article is filed, the Prime Minister shall examine whether the application conforms to the following criteria:

(i) the Entrusted Self-Regulatory Organization has obtained Article 102-14 authorization;

(ii) the entrustment agreement appropriately and clearly specifies the cost calculation method under entrustment in a way that allows a self-regulatory organization to conduct the Self-Regulatory Services with which it is entrusted;

(iii) the entrustment agreement stipulates that the Entrusted Self-Regulatory Organization will not utilize information learned in connection with the Self-Regulatory Services under entrustment for a purpose other than use in the Self-Regulatory Services for which the information is provided; and

(iv) beyond what is provided for in the preceding three items, the content of the entrustment agreement is sufficient to ensure the proper implementation of the Self-Regulatory Services at the Entrusted Self-Regulatory Organization.

(Hearing When Authorization Is Not Granted)

Article 85-4 (1) If an application for authorization under the provisions of Article 85-2, paragraph (1) is filed and the Prime Minister finds it inappropriate to grant that authorization, the Prime Minister shall notify the applicant for authorization and have the relevant officials conduct a hearing.

(2) Upon deciding to grant or not to grant the authorization under the provisions of Article 85, paragraph (1), the Prime Minister shall notify the applicant for authorization of this in writing without delay.

(Trade Name or Name)

Article 86 (1) A Financial Instruments Exchange must use the characters ""torihikijo" (meaning "exchange") in its name or trade name.

(2) A person that is not a Financial Instruments Exchange must not use a term in its name or trade name which could give rise to the misconception that it is a Financial Instruments Exchange.

(Dispositions against Members, etc.)

Article 87 A Financial Instruments Exchange must stipulate in its articles of incorporation that the Members, etc. are to observe laws and regulations, dispositions by government agencies which are based on laws and regulations, and the Financial Instruments Exchange's articles of incorporation, operational rules, brokerage contract rules, and other rules (hereinafter simply referred to as the "Rules" in this Article) as well as the principle of good faith in transactions, and that if a Member, etc. violates a law or regulation, a disposition by a government agency which is based on a law or regulation, or the Rules, or if it engages in an act that is contrary to the principle of good faith in transactions, the Financial Instruments Exchange will impose an surcharge on that Member, etc., order the suspension or restriction of its purchase and sales of Securities or Market Transactions of Derivatives on the Financial Instruments Exchange Market or its entrustment with Brokerage for the Clearing of Securities, etc. for such transactions, or expel it from the Financial Instruments Exchange (or rescind its trading license, if it is a Trading Participant).

(Scope of Business)

Article 87-2 (1) A Financial Instruments Exchange may not engage in business other than the operation of Financial Instruments Exchange Markets and business incidental thereto; provided, however, that if it obtains the authorization of the Prime Minister pursuant to the provisions of Cabinet Office Ordinance, it may engage in the business of operating a market for carrying out transactions involving Carbon Dioxide Equivalent Quotas (meaning carbon dioxide equivalent quotas as defined in Article 2, paragraph (6) of the Act on Promotion of Global Warming Countermeasures (Act No. 117 of 1998)), the business of operating the necessary market for effecting Commodity Futures Transactions (but only if this is done by a Stock Company-Operated Financial Instruments Exchange), the business of operating a market for carrying out any other transactions specified by Cabinet Office Ordinance as being similar to Financial Instruments Transactions, or business incidental thereto.

(2) If an application is filed for the authorization referred to in the proviso to the preceding paragraph, and the Prime Minister finds that the business to which the application pertains may impair confidence in the public nature of the business of the Financial Instruments Exchange or may obstruct the operation of the Financial Instruments Exchange Markets and the sound and appropriate operation of business incidental thereto, the Prime Minister must not to grant that authorization.

(3) The provisions of Article 30-2 apply mutatis mutandis to the authorization referred to in the proviso to paragraph (1).

(Mutatis Mutandis Application of Provisions on Hearing)

Article 87-2-2 The provisions of Article 85-4 apply mutatis mutandis to the authorization referred to in the proviso to paragraph (1) of the preceding Article.

(Scope of Subsidiary Companies)

Article 87-3 (1) A Financial Instruments Exchange must not have a company other than one that operates a Financial Instruments Exchange Market or engages in business incidental thereto as its Subsidiary Company; provided, however, that with the authorization of the Prime Minister, it may have a company that engages business that is linked to the operation of a Financial Instruments Exchange Market, a company that is in the business of operating the necessary market for effecting Commodity Futures Transactions (including business incidental thereto; hereinafter referred to as the "Operation of a Commodity Market"), or a company that engages in business that is linked to the operation of the necessary market for effecting Commodity Futures Transactions, as its Subsidiary Company.

(2) Notwithstanding the provisions of the preceding paragraph, a Financial Instruments Exchange Engaged in the Operation of a Commodity Market may have a company engaged in the Operation of a Commodity Market as its Subsidiary Company.

(3) The term "Subsidiary Company" as used in the preceding two paragraphs means a company in which a corporation holds the majority of all shareholders', etc. voting rights. In such a case, a company in which a corporation and one or more of its Subsidiary Companies hold the majority of all shareholders', etc. voting rights, or in which one or more of a corporation's Subsidiary Companies hold the majority of all shareholders', etc. voting rights, is deemed to be the Subsidiary Company of that corporation.

(4) Notwithstanding the provisions of paragraph (1), a Financial Instruments Exchange may incorporate a self-regulatory organization, with the authorization of the Prime Minister.

(5) The provisions of Article 30-2 apply mutatis mutandis to the authorization referred to in the proviso to paragraph (1).

(Mutatis Mutandis Application of Provisions onHearings)

Article 87-4 The provisions of Article 85-4 apply mutatis mutandis to the authorizations referred to in the proviso to paragraph (1) and paragraph (4) of the preceding Article.

(Officers)

Article 87-5 The officer of a Financial Instruments Exchange must not hold the position of officer at more than one Financial Instruments Exchange.

(Provisional Board Members and Provisional Directors)

Article 87-6 (1) If there is no one to perform the duties of board member or auditor at a Financial Instruments Incorporated Association that operates a Financial Instruments Exchange Market (hereinafter referred to as a " Incorporated Association-Operated Financial InstrumentsExchange") and the Prime Minister finds it to be necessary, the Prime Minister may appoint a provisional board member or a provisional auditor.

(2) If there is no one to perform the duties of a director, accounting advisor, company auditor, representative director, executive officer, or representative executive officer of a Stock Company-Operated Financial Instruments Exchange and the Prime Minister finds it to be necessary, the Prime Minister may appoint a provisional director, provisional accounting advisor, provisional company auditor, provisional representative director, provisional executive officer, or provisional representative executive officer.

(3) The provisions of Article 346, paragraph (2); Article 351, paragraph (2); and Article 401, paragraph (3) of the Companies Act (including as applied mutatis mutandis pursuant to Article 403, paragraph (3) and Article 420, paragraph (3) of that Act) do not apply to a Stock Company-Operated Financial Instruments Exchange.

(Registration by Request of the Prime Minister)

Article 87-7 (1) If the Prime Minister appoints a provisional director, provisional accounting advisor, provisional company auditor, provisional representative director, provisional executive officer, or provisional representative executive officer pursuant to the provisions of paragraph (2) of the preceding Article, the Prime Minister must request the registry office for the location of the head office of the Stock Company-Operated Financial Instruments Exchange, to make this registration.

(2) If the Prime Minister requests a registration pursuant to the provisions of the preceding paragraph, the request form must be accompanied by a document evidencing that the Prime Minister has reached a disposition in connection with the circumstances causing the registration.

(Duty of Confidentiality)

Article 87-8 It is prohibited for the officer (or, if the officer is a corporation, a person that performs those duties) or employee of a Financial Instruments Exchange, the board member, auditor, or employee of a self-regulatory organization, or a person that has held one of these positions, to divulge or misappropriate any secret learned in the course of duty.

(Prohibition on Differential Treatment)

Article 87-9 A Financial Instruments Exchange must not subject any particular Member, etc. or any particular Issuer of Securities to unfairly differential treatment.

Section 2 Financial Instruments Incorporated Associations , Self-Regulatory Organizations, and Stock Companies That Operate Financial Instruments Exchange Markets

Subsection 1 Financial Instruments Incorporated Association

Division 1 Incorporation

(Legal Personality)

Article 88 (1) Financial Instruments Incorporated Association is a juridical person.

(2) A Financial Instruments Incorporated Association must use the characters "kaiinsei hojn" (meaning " corporation consisting of its members") in its name.

(3) A person that is not a Financial Instruments Incorporated Association must not use a term in its name which could give rise to the misconception that it is a Financial Instruments Incorporated Association .

(Founders)

Article 88-2 (1) It is prohibited for a person other than a Financial Services Provider, etc. to incorporate a Financial Instruments Incorporated Association.

(2) For a Financial Instruments Incorporated Association to be incorporated, the Financial Services Providers, etc. that seek to become its members must become the founders.

(Articles of Incorporation)

Article 88-3 (1) In order for a Financial Instruments Incorporated Association to be incorporated, the founders must prepare articles of incorporation, and all founders must sign or have their names and seals affixed thereto.

(2) The following particulars must be stated or recorded in the articles of incorporation of a Financial Instruments Incorporated Association:

(i) its purpose;

(ii) its name;

(iii) the location of its offices;

(iv) the particulars of funds and contribution;

(v) the particulars of its Members, etc.;

(vi) the particulars of investigations into Members', etc. compliance with laws and regulations, dispositions by government agencies which are based on laws and regulations, the articles of incorporation and other rules, and the principle of good faith in their transactions;

(vii) the particulars of its guarantee funds;

(viii) the particulars of its allocation of costs;

(ix) the particulars of its officers;

(x) the particulars of its meetings;

(xi) the particulars of the execution of business;

(xii) the particulars of the preparation of rules;

(xiii) the particulars of the Financial Instruments Exchange Markets;

(xiv) the particulars of its accounting; and

(xv) the means of public notice (meaning the means by which the Financial Instruments Incorporated Association makes its public notices (excluding public notices that, pursuant to the provisions of this Act, must be made by means of publication in the Official Gazette); the same applies in Article 89-2, paragraph (2), item (ix)).

(3) The provisions of Article 30, paragraph (1) of the Companies Act apply mutatis mutandis to the articles of incorporation provided for in paragraph (1).

(Organizational Meetings)

Article 88-4 (1) After preparing the articles of incorporation, the founders shall solicit persons seeking to become members, and hold an organizational meeting, giving public notice of those articles of incorporation, together with the date, time, and place of the meeting, by two weeks prior to the day of the meeting.

(2) A person planning to become a member of a Financial Instruments Incorporated Association whose incorporation is planned (hereinafter referred to as the "Expected Member" in this Article, the following Article and Article 88-6) must pay the full amount of the contribution before the opening of the organizational meeting.

(3) Approval of the articles of incorporation and decisions about matters that are otherwise necessary for incorporation must be effected by organizational meeting resolution.

(4) The articles of incorporation may be revised at an organizational meeting.

(5) The items of organizational meeting business that are referred to in paragraph (3) are decided with at least a two-thirds majority of the votes of the attendees, at a meeting where at least half of the Expected Members that have paid the full amount of the contribution by the opening of said meeting, are present.

(6) An Expected Member that does not pay the full amount of the contribution by the time of the establishment of a Financial Instruments Incorporated Association is deemed to have rescinded its application for membership at the time of the establishment of the Financial Instruments Incorporated Association.

(Voting Rights of Expected Members)

Article 88-5 (1) At an organizational meeting, each of the Expected Members holds an equal voting right.

(2) An Expected Member that is not present at an organizational meeting may vote in writing or by proxy.

(3) The provisions of the preceding two paragraphs do not apply if it is otherwise provided for in the articles of incorporation.

(When an Expected Member Has No Voting Right)

Article 88-6 If an organizational meeting resolution concerns the relationship between a Financial Instruments Incorporated Association and a specific Expected Member, that Expected Member has no voting right.

(The Handing Over of Administrative Affairs to the President)

Article 88-7 The founders must hand over administrative affairs to the person becoming the president without delay after completion of its organizational meetings.

(Changing the Articles of Incorporation)

Article 88-8 The articles of incorporation may be changed only with the consent of at least three-fourths of all members; provided, however, that this does not apply if it is otherwise provided for in the articles of incorporation.

(Capacity in Respect of Tortious Acts)

Article 88-9 A Financial Instruments Incorporated Association is liable to compensate for any damage that its president or board members cause another person in the performance of their duties.

(Address)

Article 88-10 The address of a Financial Instruments Incorporated Association is the address at which its principal office is located.

(Inventory of Assets and Directory of Members)

Article 88-11 (1) A Financial Instruments Incorporated Association shall prepare an inventory of assets at the time of incorporation and at any time between January and March of every year, and shall keep this at its principal office at all times; provided, however, that a Financial Instruments Incorporated Association that has adopted any specific business year shall prepare the inventory of assets at the time of its incorporation and at the end of every business year.

(2) A Financial Instruments Incorporated Association shall keep a directory of members and make the necessary changes whenever there is a change in the members.

(Restrictions on Board Members' Authority of Representation)

Article 88-12 Restrictions on the president's or a board member's authority of representation may not be asserted against a third party without knowledge of such limitations.

(Acts in Conflict of Interest)

Article 88-13 The president and board members have no authority of representation with regard to a matter that constitutes a conflict of interest between the Financial Instruments Incorporated Association and the president or board member. In such a case, the court must appoint a special agent, at the request of an interested party or the public prosecutor.

(Ordinary General Meetings)

Article 88-14 The board members of a Financial Instruments Incorporated Association must hold an ordinary general meeting of members at least once a year.

(Extraordinary General Meetings)

Article 88-15 (1) The board members of a Financial Instruments Incorporated Association may call an extraordinary general meeting whenever they find this to be necessary.

(2) If at least one-fifth of all members specify the purpose of a general meeting and demand that one be called, the board members must call an extraordinary general meeting; provided, however, that a proportion other than one-fifth of the members may be stipulated in the articles of incorporation.

(The Calling of a General Meeting)

Article 88-16 A convocation notice for a general meeting must specify the purpose of the general meeting, and must be issued as specified by the articles of incorporation at least five days prior to the day of the meeting.

(Execution of Administrative Functions)

Article 88-17 All administrative functions of a Financial Instruments Incorporated Association are carried out based on general meeting resolutions, except those delegated to the board members or other officers by the articles of incorporation.

(Matters for a General Meeting Resolution)

Article 88-18 At a general meeting, only matters of which advance notice is given pursuant to the provisions of Article 88-16 may be put to a resolution; provided, however, that, this does not apply if it is otherwise provided for in the articles of incorporation.

(Voting Rights of Members)

Article 88-19 (1) Each of the members holds an equal voting right.

(2) A member that is not present at a general meeting may vote in writing or by proxy.

(3) The provisions of the preceding two paragraphs do not apply if it is otherwise provided for in the articles of incorporation.

(When a Member Has No Voting Right)

Article 88-20 If a resolution concerns the relationship between a Financial Instruments Incorporated Association and a specific member, that member has no voting right.

(Jurisdiction over the Appointment of a Special Agent)

Article 88-21 The appointment of a special agent falls under the jurisdiction of the district court for the relevant Financial Instruments Incorporated Association's principal office location.

(Mutatis Mutandis Application of the Companies Act)

Article 88-22 The provisions of Article 828, paragraph (1) of the Companies Act (limited to the part that involves item (i)) and of Article 828, paragraph (2) (limited to the part that involves item (i)); Article 834 (limited to the part that involves item (i)); Article 835, paragraph (1); Article 836, paragraphs (1) and (3); Articles 837 to 839 inclusive; and Article 846 of that Act apply mutatis mutandis to an action to invalidate the incorporation of a Financial Instruments Incorporated Association. In this case, in Article 828, paragraph (2), item (i) of that Act, the phrase "a Shareholder, etc. (meaning a shareholder, director or liquidator (or, for a Company with Company Auditors, it means a shareholder, director, company auditor or liquidator; and for a Company with Committees, it means a shareholder, director, executive officer, or liquidator); hereinafter the same applies in this Section) of the incorporated Stock Company or a Partner, etc. (meaning a partner or liquidator; hereinafter the same applies in this paragraph) of the incorporated membership Company" is deemed to be replaced with "the members, the president and board members, the auditors, or the liquidators", and any other necessary technical replacement of terms is specified by Cabinet Order.

Division 2 Registration

(Establishment)

Article 89 (1) A Financial Instruments Incorporated Association is established by a registration of incorporation being recorded in connection with the location of its principal office.

(2) Except in a case prescribed in the preceding paragraph, the particulars that are required to be registered pursuant to the provisions of this Act may not be asserted against a third party until after their registration.

(Registration)

Article 89-2 (1) A registration of incorporation must be recorded for a Financial Instruments Incorporated Association in connection with the location of its principal office and within two weeks from the final day of its organizational meetings.

(2) The following particulars must be stated in the registration referred to in the preceding paragraph:

(i) purposes;

(ii) name;

(iii) office address;

(iv) duration of operation and grounds for dissolution, if specified;

(v) funds and amount of contributions paid in;

(vi) unit amount of contributions and method of payment;

(vii) name, address, and qualifications of the person with the authority of representation;

(viii) provisions on the scope and limitation of the authority of representation, if any; and

(ix) means of public notice.

(Registration in Connection with a Secondary Office Location)

Article 89-3 (1) In a case set forth in one of the following items (unless the secondary office set forth in the relevant item is located within the jurisdictional district of the registry office that has jurisdiction over the principal office location), a registration connected with the location of the secondary office location must be recorded in connection with the location of that secondary office within the period prescribed in said item:

(i) if the secondary office is established upon the incorporation of the Financial Instruments Incorporated Association: within two weeks from the day on which the registration of incorporation was made for the principal office; and

(ii) if the secondary office is established after the incorporation of the Financial Instruments Incorporated Association: within three weeks from the day on which the secondary office is established.

(2) The following particulars must be recorded for a registration connected with a secondary office location; provided, however, that if a secondary office is being newly established within the jurisdictional district of a registry office that has jurisdiction over an existing secondary office location, it is sufficient for the particulars specified in item (iii) to be registered:

(i) name;

(ii) address of the principal office; and

(iii) addresses of secondary offices (limited to secondary offices located in the jurisdictional district of the registry office that has jurisdiction over the secondary office location in question).

(3) If there is a change in a particular set forth in one of the items of the preceding paragraph, the Financial Instruments Incorporated Association must make a change to the registration in connection with the secondary office location within three weeks.

(Registration of the Relocation of an Office)

Article 89-4 (1) If a Financial Instruments Incorporated Association relocates its principal office to the jurisdictional district of any other registry office, it must register the relocation in connection with its former location, and register the particulars set forth in the items of Article 89-2, paragraph (2) in connection with its new location, within two weeks.

(2) If a Financial Instruments Incorporated Association relocates a secondary office to the jurisdictional district of any other registry office, it must register the relocation in connection with its former location (unless this is within the jurisdictional district of the registry office with jurisdiction over the principal office location) within three weeks, and must register the particulars set forth in the items of paragraph (2) of the preceding Article in connection with its new location (unless this is within the jurisdictional district of the registry office with jurisdiction over the principal office location; hereinafter the same applies in this Article) within four weeks; provided, however, that if the Financial Instruments Incorporated Association newly relocates a secondary office into the jurisdiction of a registry office that has jurisdiction over an existing secondary office location, it is sufficient that it register the particulars specified in item (iii) of that paragraph, in connection with its new location.

(Registration of a Change)

Article 89-5 (1) If there is a change in the particulars set forth in one of the items of Article 89-2, paragraph (2), a Financial Instruments Incorporated Association must register the change in connection with its principal office location within two weeks.

(2) A document certifying a change in a particular set forth in the items of Article 89-2, paragraph (2) must accompany a written application to register a change in that particular.

(Registration of a Provisional Disposition Suspending Persons from Discharging Their Duties)

Article 89-6 If an order for a provisional disposition is issued suspending the president of a Financial Instruments Incorporated Association or a board member that represents it from discharging their duties or appointing a person to act in their stead in the performance of those duties, or if a decision is reached that changes or rescinds such an order of provisional disposition, the Financial Instruments Incorporated Association must register this in the in connection with the principal office location.

(Jurisdiction for Registrations)

Article 89-7 (1) The legal affairs bureau or district legal affairs bureau or the branch office or sub-branch office of that bureau (hereinafter simply referred to as the "Registry Office") that has jurisdiction over the office location of a Financial Instruments Incorporated Association is the competent Registry Office for the registration of the Financial Instruments Incorporated Association.

(2) A Financial Instruments Incorporated Associations register is kept at the Registry Office.

(Application for a Registration of Incorporation)

Article 89-8 (1) A registration of incorporation is made for a Financial Instruments Incorporated Association at the application of the person that is to represent the Financial Instruments Incorporated Association.

(2) The articles of incorporation and documents evidencing the payment of the contribution and qualifications of the person with the authority of representation must accompany the Financial Instruments Incorporated Association's written application for a registration of incorporation.

(Mutatis Mutandis Application of the Commercial Registration Act)

Article 90 The provisions of Articles 2 to 5 inclusive of the Commercial Registration Act (Act No. 125 of 1963) and Articles 7 to 15 inclusive; Articles 17 to 23-2 inclusive; Article 24 (excluding items (xv) and (xvi)); Articles 25 to 27 inclusive; Article 47, paragraph (1); Articles 48 to 53 inclusive; and Articles 132 to 148 inclusive of that Act apply mutatis mutandis to a registration involving a Financial Instruments Incorporated Association. In this case, in Article 17, paragraph (2), item (i) of that Act, the phrase "trade name and the head office" is deemed to be replaced with "name and the principal office"; in Article 48, Article 49, paragraph (1), Article 50, paragraphs (2) and (4), and Article 138, paragraphs (1) and (2) of that Act, the term "branch office" is deemed to be replaced with "secondary office"; in Article 17, paragraph (3) and Article 20, paragraph (3) of that Act, the phrase "the branch office of the company" is deemed to be replaced with "the secondary office of the Financial Instruments Incorporated Association"; in Article 25, paragraph (3), Article 48, paragraph (1), Article 49, paragraphs (1) and (3), Article 50, paragraphs (1) to (3) inclusive, Article 51, paragraph (1), Article 53, and Article 138, paragraph (1) of that Act, the term "head office" is deemed to be replaced with "principal office"; in Article 48, paragraph (2) of that Act, the phrase "the respective item of Article 930, paragraph (2) of the Companies Act" is deemed to be replaced with "the relevant item of Article 89-2, paragraph (2) of the Financial Instruments and Exchange Act"; and any other necessary technical replacement of terms is specified by Cabinet Order.

Division 3 Members

(Eligibility for Membership)

Article 91 Membership in a Financial Instruments Incorporated Association is limited to Financial Services Providers, etc.

(Contribution and Liability)

Article 92 (1) A member must make a contribution pursuant to the provisions of the articles of incorporation.

(2) In addition to a member's liability to a Financial Instruments Incorporated Association being limited to the expenses prescribed in its articles of incorporation and the burden of any damage that member has caused the Financial Instruments Incorporated Association, a member's liability to a Financial Instruments Incorporated Association is limited to the amount of its contribution.

(Transfer of Equity)

Article 93 A member may transfer its equity only if, pursuant to the provisions of the articles of incorporation, that member seeks to withdraw its membership with the approval of the Financial Instruments Incorporated Association.

(Voluntary Withdrawal)

Article 94 A member may withdraw its membership with the approval of the Financial Instruments Incorporated Association, pursuant to the provisions of the articles of incorporation.

(Statutory Withdrawal)

Article 95 In addition to withdrawal in the case referred to in the preceding Article, the membership of a member is withdrawn for the following reasons:

(i) the member comes to no longer fall under the category of a Financial Services Provider, etc.;

(ii) dissolution; or

(iii) expulsion.

(Refund of Equity)

Article 96 If a member withdraws its membership, the Financial Instruments Incorporated Association must refund the member's equity, pursuant to the provisions of the articles of corporation.

Division 4 Administration

(Restriction on Business)

Article 97 A Financial Instruments Incorporated Association must not conduct business for a profit.

(Appointment of Officers)

Article 98 (1) A Financial Instruments Incorporated Association has one president, two or more board members, and two or more inspectors as its officers.

(2) The members elect the board members and inspectors, with the exception of the board members appointed pursuant to the following paragraph, pursuant to the provisions of the articles of incorporation, and the board members (other than board members appointed pursuant to that paragraph) elect the president pursuant to the provisions of the articles of incorporation.

(3) If there are special provisions in the articles of incorporation, the president appoints the number of board members specified by the articles of incorporation, with the consent of a majority of the board members.

(4) A person that falls under one of the categories of persons prescribed in Article 29-4, paragraph (1), item (ii), sub-items (a) to (g) inclusive of this Act or Article 331, paragraph (1), item (iii) of the Companies Act may not become an officer.

(5) An officer loses the position of officer upon coming to fall under the category of a person provided for in the preceding paragraph.

(Duties of the Officers)

Article 99 (1) A president represents a Financial Instruments Incorporated Association and presides over its affairs.

(2) A board member, pursuant to the provisions of the articles of incorporation, represents a Financial Instruments Incorporated Association, assists the president in administering the affairs of the Financial Instruments Incorporated Association, acts as a proxy in handling the duties of the president if the president is unable to attend to them, and performs the duties of the president if the position is vacant.

(3) An inspector examines the affairs of a Financial Instruments Incorporated Association.

Division 5 Dissolution

(Grounds for Dissolution)

Article 100 (1) A Financial Instruments Incorporated Association is dissolved for the following reasons:

(i) the occurrence of a cause for dissolution provided for in the articles of incorporation;

(ii) a general meeting resolution;

(iii) a merger (but only if the Financial Instruments Incorporated Association disappears as the result of the merger);

(iv) the number of members falls to five or below;

(v) an order to commence bankruptcy proceedings;

(vi) failure to file a license application under the provisions of Article 81, paragraph (1) within six months from the day of establishment;

(vii) the decision of the Prime Minister not to grant the license referred to in Article 80, paragraph (1); or

(viii) the rescission or expiration of the license referred to in Article 80, paragraph (1).

(2) A Financial Instruments Incorporated Association may not adopt a resolution to dissolve without the affirmative votes of three-fourths or more of all members; provided, however, that this does not apply if it is otherwise provided for in the articles of incorporation.

(Distribution of Residual Assets)

Article 100-2 The residual assets in the case of the dissolution of a Financial Instruments Incorporated Association must be distributed equally among its members, unless otherwise stipulated by the articles of incorporation or general meeting resolution.

(Period for the Registration of a Dissolution)

Article 100-3 If a Financial Instruments Incorporated Association is dissolved pursuant to the provisions of Article 100, paragraph (1) (excluding items (iii) and (v)), the dissolution must be registered in connection with its principal office location within two weeks.

(Registration of the Completion of Liquidation)

Article 100-4 Once the liquidation of a Financial Instruments Incorporated Association is complete, the completion of liquidation must be registered in connection with the principal office location within two weeks, and in connection with secondary office locations within three weeks, from the time at which the approval under Article 507, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to Article 100-17, paragraph (1) is obtained.

(Accompanying Documents for a Written Application for the Registration of a Dissolution)

Article 100-5 (1) A document evidencing the reason for dissolution must accompany an application to register the dissolution of a Mutually Owned Financial Instruments Corporation, and if the president or the board member representing the Financial Instruments Incorporated Association is not the liquidator, a document evidencing that the liquidator is the one representing the Financial Instruments Incorporated Association must accompany that application, as well.

(2) If a Financial Instruments Incorporated Association is dissolved due to a disposition rescinding the license referred to in Article 80, paragraph (1), the registration of the dissolution is made at the request of the Prime Minister.

(Accompanying Documents for a Written Application for the Registration of the Completion of Liquidation)

Article 100-6 A document evidencing that the liquidator has obtained the approval referred to in Article 507, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to Article 100-17, paragraph (1) must accompany the written application for the registration under the provisions of Article 100-4.

(Commencement of Bankruptcy Proceedings)

Article 100-7 (1) If a Financial Instruments Incorporated Association is unable to pay its debts in full out of its assets, the court, at the petition of the president and the board members or of the creditors, or by its own authority, issues an order to commence bankruptcy proceedings.

(2) In a case provided for in the preceding paragraph, the president and the board members must immediately file a petition to commence bankruptcy proceedings.

(Financial Instruments Incorporated Associations in Liquidation)

Article 100-8 A dissolved Financial Instruments Incorporated Association is deemed to still exist inasmuch as the task of liquidation is concerned, until the completion of liquidation.

(Appointment of a Liquidator by the Court)

Article 100-9 If there is no person that becomes the liquidator pursuant to the provisions of Article 647, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 100-17, paragraph (1), or if any damage is likely to occur due to the position of liquidator being vacant, the court may appoint a liquidator at the request of any interested person or the public prosecutor, or by its own authority.

(Dismissal of Liquidators)

Article 100-10 At the request of an interested person or the public prosecutor or by its own authority, the court may dismiss the liquidator if there are material grounds for it to do so.

(Duties and Authority of a Liquidator)

Article 100-11 (1) The duties of a liquidator are as follows:

(i) conclusion of current business;

(ii) collection of debts and performance of obligations; and

(iii) delivery of residual assets.

(2) A liquidator may undertake any and all acts that are necessary for performing the duties prescribed in the items of the preceding paragraph.

(Demanding the Filing of Claims)

Article 100-12 (1) Within two months from the day on which a liquidator begins to act as liquidator, the liquidator must issue a demand for the creditors to file their claims within a specified period, issuing public notice of this on at least three occasions. In this, the period may not be less than two months.

(2) The public notice referred to in the preceding paragraph must include a supplementary note indicating that if a creditor does not submit a claim within the relevant period, its claim will be excluded from the liquidation process; provided, however, that the liquidator may not exclude any known creditor.

(3) The liquidator must issue an individual demand to each known creditor requiring that creditor to file its claim.

(4) The public notice under paragraph (1) is made through publication in the Official Gazette.

(Filing of a Claim After a Lapse of Period)

Article 100-13 A creditor that submits its claim after the lapse of the period referred to in paragraph (1) of the preceding Article may only make a claim against assets which, after all debts of the Financial Instruments Incorporated Association have been fully paid, have not yet been delivered to the person with vested rights.

(Commencement of Bankruptcy Proceedings for a Financial Instruments Incorporated Associations in Liquidation)

Article 100-14 (1) If it becomes apparent during the liquidation process that the assets of a Financial Instruments Incorporated Association are not sufficient to fully pay its debts, the liquidator must immediately file a petition to commence bankruptcy proceedings, and make public notice indicating this.

(2) If a Financial Instruments Incorporated Association in liquidation becomes subject to an order to commence bankruptcy proceedings, once the administration of the relevant procedures is transferred to the bankruptcy trustee the liquidator's duties are complete.

(3) In the case provided for in the preceding paragraph, if a Financial Instruments Incorporated Association in liquidation has already paid money to a creditor or delivered an asset to the person with vested rights, the bankruptcy trustee may retrieve such money or asset.

(4) The public notice under the provisions of paragraph (1) is made through publication in the Official Gazette.

(Supervision by the Court)

Article 100-15 (1) The dissolution and liquidation of a Financial Instruments Incorporated Association is subject to the supervision of the court.

(2) The court, by its own authority, may conduct any examination that is necessary for the supervision referred to in the preceding paragraph, at any time.

(Notification of the Completion of Liquidation)

Article 100-16 When the liquidation process has been completed, the liquidator must notify the Prime Minister of this.

(Mutatis Mutandis Application of the Companies Act)

Article 100-17 (1) The provisions of Article 492, paragraphs (1) and (3) of the Companies Act and Article 507 (excluding paragraph (2)); Article 644 (excluding item (iii)); Article 647, paragraphs (1) and (4); Article 650, paragraph (2); Article 655, paragraphs (1) to (5) inclusive; and Articles 662 to 664 inclusive of that Act apply mutatis mutandis to the dissolution and liquidation of a Financial Instruments Incorporated Association. In this case, in Article 492, paragraph (1) of that Act, the phrase "Liquidators (or, for Companies with Board of liquidators, liquidators set forth in each item of paragraph (7) of Article 489)" is deemed to be replaced with "A liquidator"; in that paragraph and Article 507, paragraph (1) of that Act, the term "Ordinance of the Ministry of Justice" is deemed to be replaced with "Cabinet Office Ordinance"; in Article 492, paragraph (3) and Article 507, paragraph (3) of that Act, the term "shareholders meeting" is deemed to be replaced with "general meeting"; in Article 644, item (i) of that Act, the phrase "item (v) of Article 641" is deemed to be replaced with "Article 100, paragraph (1), item (iii) of the Financial Instruments and Exchange Act"; in Article 647, paragraph (1), item (i) of that Act, the phrase "A partner that executes the operations" is deemed to be replaced with "A president and a board member"; in item (iii) of that paragraph, the phrase "prescribed by the consent of a majority of partners (or, if partners that execute the operations are provided for in the articles of incorporation, those partners)" is deemed to be replaced with "appointed by general meeting resolution"; in Article 655, paragraph (3) of that Act, the phrase "from among themselves" is deemed to be replaced with "from among themselves or based on a general meeting resolution"; in paragraph (4) of that Article, the phrase "partners that execute the operations" is deemed to be replaced with "president or board members", the phrase "if the partners that represent the Membership Company are already prescribed" is deemed to be replaced with "if the president or the board members that represent the Mutually Owned Company are already prescribed in the articles of incorporation", and the phrase "such partners that represent" is deemed to be replaced with "such president or board member (excluding president or board member whose authority of representation is limited by the articles of incorporation) that represent"; and any other necessary technical replacement of terms is specified by Cabinet Order.

(2) The provisions of Article 868, paragraph (1) of the Companies Act; Article 871; Article 874 (limited to the part that involves item (i)); Article 875; and Article 876 of that Act apply mutatis mutandis to the liquidation of a Financial Instruments Incorporated Association. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Jurisdiction Over a Case Involving a Liquidator)

Article 100-18 The district court for the principal office location of a Financial Instruments Incorporated Association has jurisdiction over a case that involves the liquidator of that Financial Instruments Incorporated Association.

(Appeal on Judicial Decision for Appointment of Liquidators)

Article 100-19 A judicial decision appointing the liquidator of a Financial Instruments Incorporated Association may not be appealed.

(Remuneration of Liquidators)

Article 100-20 If the court appoints a liquidator for a Financial Instruments Incorporated Association pursuant to the provisions of Article 100-9, it may order the Financial Instruments Incorporated Association to pay the liquidator remuneration. The amount of remuneration paid to a liquidator is determined by the court, after hearing the statement of that liquidator and of an auditor.

(Dismissal of the Liquidator)

Article 100-21 An immediate appeal may be filed against a judicial decision dismissing the liquidator of a Financial Instruments Incorporated Association and against a judicial decision under the provisions of the preceding Article.

(Appointment of an Examinar)

Article 100-22 (1) The court may appoint an examiner to conduct the examinations that are necessary for supervising the dissolution and liquidation of a Financial Instruments Incorporated Association.

(2) The provisions of the preceding three Articles apply mutatis mutandis if the court appoints an examiner pursuant to the provisions of the preceding paragraph.

(Court Request for Investigation)

Article 100-23 (1) The court supervising the dissolution and liquidation of a Financial Instruments Incorporated Association may seek the opinion of, or commission an investigation by, the Prime Minister.

(2) The Prime Minister may state an opinion to the court prescribed in the preceding paragraph.

(Liquidators' Capacity in Respect of Tortious Acts)

Article 100-24 The provisions of Article 88-9 and Articles 88-12 to 88-15 inclusive apply mutatis mutandis when a liquidator performs liquidation duties.

(Mutatis Mutandis Application of the Commercial Registration Act)

Article 100-25 The provisions of Article 71, paragraph (1) of the Commercial Registration Act apply mutatis mutandis to registration of the dissolution of a Financial Instruments Incorporated Association under this Act.

Division 6 Organizational Conversion

(Organizational Conversion from an Incorporated Association-Operated Financial Instruments Exchange to a Stock Company-Operated Financial Instruments Exchange)

Article 101 An Incorporated Association-Operated Financial Instruments Exchange may become a Stock Company-Operated Financial Instruments Exchange through an organizational conversion.

(Organizational Conversion Plan)

Article 101-2 (1) In order to implement the organizational conversion referred to in the preceding Article (hereinafter referred to as an "Organizational Conversion" in this Division), an Incorporated Association-Operated Financial Instruments Exchange must prepare an Organizational Conversion plan and have it approved by general meeting resolution.

(2) An Incorporated Association-OperatedFinancial Instruments Exchange may not adopt a resolution for an Organizational Conversion without the affirmative votes of three-fourths or more of all the members; provided, however, that this does not apply if otherwise provided for in the articles of incorporation.

(3) To call the general meeting referred to in paragraph (1), an outline of the Organizational Conversion plan and the articles of incorporation of the stock company after the Organizational Conversion (hereinafter referred to as the "Stock Company-Operated Financial Instruments Exchange after Organizational Conversion" in this Division), must be presented by at least five days prior to the day of the meeting, in addition to the purpose of the meeting.

(4) If an Incorporated Association-Operated Financial Instruments Exchange implements an Organizational Conversion, that Incorporated Association-Operated Financial Instruments Exchange must provide for the following matters in the Organizational Conversion plan:

(i) the purpose, trade name, location of the head office, and total number of authorized shares in the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion;

(ii) matters beyond those set forth in the preceding item, which are specified by the articles of incorporation of the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion;

(iii) the names of directors and name of the accounting auditor of the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion;

(iv) the particulars specified in the relevant of the following sub-items (a) and (b) for the category of cases set forth in that sub-item:

(a) if the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion will be a company with accounting advisors: the names of the accounting advisors of the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion; or

(b) if the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion will be a company with company auditors: the names of the company auditors of the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion.

(v) the number of shares in the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion which the members of the Incorporated Association-Operated Financial Instruments Exchange implementing the Organizational Conversion will acquire upon Organizational Conversion (if the Stock Company-Operated Financial Instruments Exchange after the Organizational Conversion will be a company with class shares, the classes of shares and the number of shares in each class) or the method of calculating it;

(vi) the particulars of the allotment of the shares referred to in the preceding item to members of the Incorporated Association-Operated Financial Instruments Exchange implementing the Organizational Conversion;

(vii) if the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion, upon implementation of the Organizational Conversion, will deliver money to the members of then Incorporated Association-Operated Financial Instruments Exchange implementing the Organizational Conversion, the amount of money or the method of calculating it;

(viii) in the case prescribed in the preceding item, the particulars of the allotment of the money referred to in that item to the members of the Incorporated Association-Operated Financial Instruments Exchange implementing the Organizational Conversion;

(ix) the particulars of the amount of stated capital and reserve funds of the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion; and

(x) the day on which the Organizational Conversion will become effective (hereinafter referred to as the "Effective Date" in this Division), and other matters specified by Cabinet Office Ordinance.

(The Keeping and Inspection of Organizational Conversion Plan Documents)

Article 101-3 (1) During the period from five days prior to the day of the general meeting set referred to in paragraph (1) of the preceding Article until the day immediately before the Effective Date, a Incorporated Association-Operated Financial Instruments Exchange implementing an Organizational Conversion shall keep the documents or electronic or magnetic records that state or contain a record of the particulars of the Organizational Conversion plan and other particulars specified by Cabinet Office Ordinance, at its principal office.

(2) The member or creditor of a Incorporated Association-Operated Financial Instruments Exchange implementing an Organizational Conversion may make the following requests of the Incorporated Association-Operated Financial Instruments Exchange at any time during its business hours; provided, however, that in making the request set forth in item (ii) or (iv), the member or creditor must pay the cost determined by the Incorporated Association-OperatedFinancial Instruments Exchange:

(i) a request to inspect a document referred to in the preceding paragraph;

(ii) a request to be issued a certified copy or extract of a document set forth in the preceding paragraph;

(iii) a request to inspect something that shows the particulars that have been recorded in the electronic or magnetic records referred to in the preceding paragraph, through a means specified by Cabinet Office Ordinance; and

(iv) a request to be provided with the particulars that have been recorded in the electronic or magnetic records referred to in the preceding paragraph by an electronic or magnetic means specified by Cabinet Office Ordinance, or a request to be issued a document that states those particulars.

(Objection by the Creditors)

Article 101-4 (1) The creditor of a Incorporated Association-Operated Financial Instruments Exchange implementing an Organizational Conversion may state an objection to the Incorporated Association-Operated Financial Instruments Exchange with regard to the Organizational Conversion.

(2) A Incorporated Association-Operated Financial Instruments Exchange implementing an Organizational Conversion shall issue public notice of the following particulars in the Official Gazette, and shall issue a notice of those particulars to its known creditors individually; provided, however, that the period set forth in item (ii) may not be less than one month:

(i) that an Organizational Conversion will be implemented; and

(ii) that a creditor may state an objection within a specified period.

(3) If a creditor does not state an objection within the period set forth in item (ii) of the preceding paragraph, the creditor is deemed to accept the Organizational Conversion.

(4) If a creditor states an objection within the period referred to in paragraph (2), item (ii), the Incorporated Association-Operated Financial Instruments Exchange implementing the Organizational Conversion shall pay its debt or provide commensurate collateral to the creditor, or shall deposit commensurate property with a trust company, etc. for the purpose of allowing that creditor to receive payment for the debt; provided, however, that this does not apply if the Organizational Conversion is unlikely to be detrimental to the creditor.

(The Keeping and Inspection of Documents on the Progress of the Organizational Conversion Process)

Article 101-5 (1) During the six-month period beginning from the Effective Date, a Post-Organizational-Conversion Financial Instruments Exchange shall keep the documents or electronic or magnetic records set forth in Article 101-3, paragraph (1), and the documents or electronic or magnetic records that state or contain a record of the progress of the process under the preceding Article and other particulars specified by Cabinet Office Ordinance as pertinent to the Organizational Conversion, at its head office.

(2) The shareholder of creditor of a Stock Company-Operated Financial Instruments Exchange after an Organizational Conversion may make the following requests of the Stock Company-Operated Financial Instruments Exchange after the Organizational Conversion at any time during its business hours; provided, however, that in making the request set forth in item (ii) or (iv), the shareholder or creditor must pay the cost determined by the a Incorporated Association-Operated Financial Instruments Exchange after the Organizational Conversion:

(i) a request to inspect the documents referred to in the preceding paragraph;

(ii) a request to be issued a certified copy or extract of the documents referred to in the preceding paragraph;

(iii) a request to inspect something that shows the particulars recorded in the electronic or magnetic records referred to in the preceding paragraph, through a means specified by Cabinet Office Ordinance; and

(iv) a request to be provided with the particulars that have been recorded in the electronic or magnetic records referred to in the preceding paragraph by an electronic or magnetic means specified by Cabinet Office Ordinance, or a request to be issued a document that states those particulars.

(Allotment of Shares to the Members)

Article 101-6 (1) The member of a Incorporated Association-Operated Financial Instruments Exchange is to be allotted shares in the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion or is to be allotted money, in accordance with the Organizational Conversion plan.

(2) The provisions of Article 234, paragraph (1) of the Companies Act (excluding the items) and paragraphs (2) to (5) inclusive of that Article; Article 868, paragraph (1), Article 869; Article 871; Article 874 (limited to the part that involves item (iv)); Article 875; and Article 876 of that Act apply mutatis mutandis if shares or money are allotted to a member pursuant to the provisions of the preceding paragraph. The necessary technical replacement of terms for such a case is specified by Cabinet Order.

(Amount Required to Be Reported as Stated Capital)

Article 101-7 The amount that is required to be reported as the stated capital of a Stock Company-Operated Financial Instruments Exchange after Organizational Conversion is specified by Cabinet Office Ordinance.

(Amount Required to Be Reported as Capital Reserves)

Article 101-8 The amount that is required to be reported as capital reserves at the time of Organizational Conversion and necessary particulars otherwise relevant to accounting in connection with Organizational Conversion are specified by Cabinet Office Ordinance.

(Issuance of Shares upon Organizational Conversion)

Article 101-9 At the time of an Organizational Conversion, a Incorporated Association-Operated Financial Instruments Exchange Operated may issue shares in the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion, in addition to allotting shares under Article 101-6, paragraph (1). In doing this, it must specify the following particulars in the Organizational Conversion plan:

(i) the number of shares that will be issued pursuant to the provisions of this Article (hereinafter referred to as the "Shares Issued upon Organizational Conversion" in this Division) (if a Stock Company-Operated Financial Instruments Exchange after Organizational Conversion is a company with class shares, the classes and the number of Shares Issued upon Organizational Conversion);

(ii) the amount to be paid in for the Shares Issued upon Organizational Conversion (meaning the amount of money to be paid in or property other than money to be delivered, in exchange for one Share Issued upon Organizational Conversion) or the method of calculating it;

(iii) if property other than money will be the subject of contribution, an indication of this, as well as a description and the value of that property;

(iv) the date for the payment of money or the delivery of the property referred to in the preceding item, in exchange for the Shares Issued upon Organizational Conversion; and

(v) the particulars of the increased stated capital or capital reserves.

(Offers Involving Shares Issued upon Organizational Conversion)

Article 101-10 (1) A Incorporated Association-Operated Financial Instruments Exchange must notify a person that seeks to make an offer to subscribe for Shares Issued upon Organizational Conversion, of the following particulars:

(i) the trade name of the Stock Company-Operated Financial Instruments Exchange after Organizational Conversion;

(ii) the particulars set forth in the items of the preceding Article;

(iii) if money is to be paid in, the place accepting payments; and

(iv) particulars beyond what is set forth in the preceding three items, which are specified by Cabinet Office Ordinance.

(2) A person making an offer to subscribe for Shares Issued upon Organizational Conversion must deliver a document to the Incorporated Association-Operated Financial Instruments Exchange, in which the person states