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Cabinet Office Ordinance on Prepaid Payment Instruments


Published: 2015

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Cabinet Office Ordinance on Prepaid Payment Instruments (Tentative translation)
The Prime Minister hereby issues the Cabinet Office Ordinance on Central Counter-party Institution for Interbank Funds Transfer based on the provisions of and for the purpose of enforcing the Act on Fund Settlement (Act No. 59 of 2009) and the Order for Enforcement of the Act on Fund Settlement (Cabinet Order No. 19 of 2010).
Chapter 1 General Provisions (Article 1 – Article 4)
Chapter 2 Business (Article 5 – Article 9)
Chapter 3 Supervision (Article 10 – Article 13)
Chapter 4 Miscellaneous Provisions (Article 14 – Article 16)
Supplementary Provisions
Chapter 1 General Provisions
(Definition)
Article 1 The terms "Central Counter-party Clearing Services for Interbank Funds Transfer" and "Central Counter-party Institution for Interbank Funds Transfer" as used in this Cabinet Office Ordinance mean Central Counter-party Clearing Services for Interbank Funds Transfer and Central Counter-party Institution for Interbank Funds Transfer as prescribed in Article 2 of the Act on Fund Settlement (hereinafter referred to as the "Act"), respectively.
(Government Agency through Which to Submit the Written Application for License)
Article 2 A person intending to obtain a license pursuant to the provisions of Article 65, paragraph (1) of the Act shall submit a written application for license through the Commissioner of the Financial Services Agency.
(Matters to be Stated in Written Application for License)
Article 3 The matters specified by a Cabinet Office Ordinance as prescribed in Article 65, paragraph (1), item (vi) of the Act shall be the name of the accounting auditor.
(Documents to Be Attached to the Written Application for License)
Article 4 Documents specified by a Cabinet Office Ordinance as prescribed in Article 65, paragraph (2), item (vii) of the Act shall be the following documents.
(i) In the case where the applicant is a stock company, the following documents:
(a) a document containing the name or trade name or other name and the address or location of major shareholders (meaning a shareholder who holds voting rights exceeding ten percent of the voting rights held by all the Shareholders (excluding the voting rights of the shares which cannot be exercised for all matters that are subject to a resolution at a general meeting of shareholders and including the voting rights of the shares for which the shareholder shall be deemed to have voting rights under the provisions of Article 879, paragraph (3) of the Companies Act (Act No. 86 of 2005); the same shall apply in Article 13, paragraph (2), item (vii)) and the number of voting rights held by them;
(b) a document containing the description of the parent juridical person (meaning a juridical person or other organization holding the majority of the voting rights (meaning the voting rights prescribed in sub-item (a)) held by all the shareholders of the applicant; the same shall apply in the following item) and subsidiary juridical persons (meaning juridical persons or other organizations the majority of whose voting rights (in the case of a stock company, excluding the voting rights of the shares which cannot be exercised for all matters that are subject to a resolution at a general meeting of shareholders and including the voting rights of the shares for which the shareholder shall be deemed to have voting rights under the provisions of Article 879, paragraph (3) of the Companies Act) held by all the shareholders, members, or equity investors are held by the applicant; the same shall apply in said item);
(c) a curriculum vitae and an extract of the certificate of residence or any substitute thereof of directors and company auditors (in the case of a company with committees, directors and executive officers; the same shall apply in sub-item (c)) and a document with which each of said directors and company auditors pledges to the effect that he/she does not fall under any of Article 66, paragraph (2), item (iv), sub-items (a) through (e) of the Act;
(d) in the case of a company with accounting advisors, a curriculum vitae (in the case of an accounting advisor who is a juridical person, a document containing the history of said accounting advisor) and an extract of the certificate of residence or any substitute thereof of accounting advisors (in the case of an accounting advisor who is a juridical person, the certificate of registered matters of said accounting advisor or any substitute thereof) and a document with which each of said accounting advisors pledges to the effect that he/she does not fall under any of Article 66, paragraph (2), item (iv), sub-items (a) through (e) of the Act; and
(e) a document containing a description of the business of which each of directors (in the case of a company with committees, executive officers) is in charge.
(ii) In the case where the applicant is a general incorporated association, the following documents:
(a) a document containing the name or trade name or other name and address or location of members and the number of voting rights held by them;
(b) a document containing the description of the parent juridical person and subsidiary juridical persons;
(c) a curriculum vitae and an extract of the certificate of residence or any substitute thereof of board members and auditors and a document with which each of said board members and auditors pledges to the effect that he/she does not fall under any of Article 66, paragraph (2), item (iv), sub-items (a) through (e) of the Act;
(d) a document containing a description of the business of which each of the board members is in charge.
(iii) A document stating the status of securing employees who have the knowledge and experience pertaining to the Central Counter-party Clearing Services for Interbank Funds Transfer and the status of the assignment of such employees.
(iv) A document describing the mechanism and the segregation of affairs of the Central Counter-party Institution for Interbank Funds Transfer.
(v) A document stating the expected income and expenditure for the first three years after the commencement of the business.
(vi) In the case where the matters listed in Article 71, paragraph (2), item (viii) are prescribed in the rules and procedures of operation, a document containing the name of the other party to the contract and other matters of reference.
(vii) Other documents containing other relevant matters.
Chapter 2 Business
(Application for Approval of Other Business, etc.)
Article 5 (1) A Central Counter-party Institution for Interbank Funds Transfer intending to obtain the approval under Article 69, paragraph (1) of the Act shall submit a written application for approval containing the following matters to the Commissioner of the Financial Services Agency:
(i) type of the business for which the approval is sought; and
(ii) the scheduled date of commencement of said business.
(2) The following documents shall be attached to the written application for approval set forth in the preceding paragraph:
(i) a document containing the description of the contents and methods of said business;
(ii) A document containing the description of the organization having jurisdiction over said business and the assignment of the personnel in said business;
(iii) Rules concerning the operation of said business; and
(iv) A document stating the expected income and expenditure for the first three years after the commencement of said business.
(3) Upon receipt of the written application for approval set forth in paragraph (1), the Commissioner of the Financial Services Agency shall examine whether the application involves no risk of causing hindrance to the proper and secure provision/conduct of the Central Counter-party Clearing Services for Interbank Funds Transfer by the applicant.
(Notification of Abolition of the Approved Business)
Article 6 A Central Counter-party Institution for Interbank Funds Transfer intending to make a notification under Article 69, paragraph (2) of the Act shall submit a written notice containing the following matters:
(i) type of the business for which approval was obtained pursuant to the provisions of Article 69, paragraph (1) of the Act;
(ii) date of abolition of said business; and
(iii) reason for the abolition of said business.
(Application for Approval of the Entrustment of Part of the Central Counter-party Clearing Services for Interbank Funds Transfer)
Article 7 (1) A Central Counter-party Institution for Interbank Funds Transfer intending to obtain the approval under Article 70, paragraph (1) of the Act shall submit a written application for approval containing the following matters to the Commissioner of the Financial Services Agency:
(i) the trade name or other name and address of the other party to which business is entrusted (hereinafter referred to as "Trustee" in this Article);
(ii) the contents and the scope of the business to be entrusted;
(iii) entrustment period;
(iv) the contents of the conditions attached to the contract for the entrustment of said business as measures to ensure the proper and secure provision/conduct of said business by the Trustee; and
(v) criteria for the selection of the Trustee.
(2) The following documents shall be attached to the written application for approval set forth in the preceding paragraph:
(i) a written statement of reasons;
(ii) a document containing the description of the contents of the contract for the entrustment of said business;
(iii) a document pledging to the effect that the Trustee does not fall under any of the conditions listed in Article 66, paragraph (2), items (ii) and (iii) of the Act;
(iv) a document pledging to the effect that any of the directors or company auditors (including board members, auditors, and other persons equivalent thereto and in the case of a company with committees, directors and executive officers; hereinafter the same shall apply in this Article) of the Trustee does not fall under the conditions listed in Article 66, paragraph (2), item (iv) of the Act;
(v) certificate of registered matters of the Trustee;
(vi) the articles of incorporation of the Trustee;
(vii) a document containing the description of the method for implementing the business to be entrusted;
(viii) business reports, balance sheets and profit and loss statements of the Trustee for each of the last three years or any substitute thereof;
(ix) a document containing the names of the directors and company auditors of the Trustee;
(x) an extract of the certificate of residence of directors and company auditors of the Trustee or any substitute thereof;
(xi) a curriculum vitae of directors and company auditors of the Trustee;
(xii) in the case where the Trustee is a company with accounting advisors, a document containing the names of the accounting advisors of the Trustee, an extract of their certificate of residence or any substitute thereof (in the case an accounting advisor who is a juridical person, the certificate of registered matters of said accounting advisor) and their curriculum vitae (in the case an accounting advisor who is a juridical person, a document describing the history of said accounting advisor), and a document pledging to the effect that any of said accounting advisors does not fall under the conditions listed in Article 66, paragraph (2), item (iv) of the Act (in the case an accounting advisor who is a juridical person, a document pledging to the effect that said accounting advisor does not fall under the conditions listed in item (iii) of said paragraph);
(xiii) a document containing a description of the business of which each of the directors (including board members and other persons equivalent thereto and in the case of a company with committees, executive officers) is in charge; and
(xiv) other documents containing other relevant matters.
(3) Upon receipt of the written application for approval set forth in paragraph (1), the Commissioner of the Financial Services Agency shall examine whether the application satisfies the following criteria:
(i) the entrustment involves no risk of causing hindrance to the proper and secure provision/conduct of the Central Counter-party Clearing Services for Interbank Funds Transfer;
(ii) the Trustee is a juridical person who has social credibility and has an appropriate plan with regard to the business to be entrusted and is able to perform the business in a reliable manner;
(iii) the Trustee does not fall under any of the conditions listed in Article 66, paragraph (2), items (ii) and (iii) of the Act;
(iv) Directors, accounting advisors, and company auditors of the Trustee do not fall under the conditions listed in Article 66, paragraph (2), item (iv) of the Act; and
(v) in the case where the Trustee sub-entrusts to another person the whole or part of the business entrusted to the Trustee, conditions are attached to the contract for entrustment of said business to the effect that the Central Counter-party Institution for Interbank Funds Transfer is able to confirm the business performed by the person who accepts said sub-entrustment and that any other measures shall be taken to ensure the proper and secure provision/conduct of said business by the Trustee.
(Important Matters with Regard to Contract with Foreign National, etc.)
Article 8 Important matters specified by a Cabinet Office Ordinance as prescribed in Article 71, paragraph (2), item (viii) of the Act shall be the following matters:
(i) Matters concerning the provision of the means of communication; and
(ii) Matters concerning the provision of the business pertaining to information processing.
(Matters to be Stated in the Rules and Procedures of Operation)
Article 9 The matters specified by a Cabinet Office Ordinance as prescribed in Article 71, paragraph (2), item (ix) of the Act shall be the method of the netting calculation of the Unsettled Obligations, etc. (meaning the Unsettled Obligations, etc. prescribed in Article 73, paragraph (2) of the Act) , the method of appropriation of security, and other matters pertaining to the payment and settlement method.
Chapter 3 Supervision
(Application for Authorization of Amendment of the Articles of Incorporation or Rules and Procedures of Operation, etc.)
Article 10 (1) A Central Counter-party Institution for Interbank Funds Transfer intending to obtain the authorization under Article 76 of the Act shall submit a written application for authorization containing the following matters to the Commissioner of the Financial Services Agency:
(i) the Contents of and the reason for the amendment; and
(ii) the scheduled date of the amendment.
(2) The following documents shall be attached to the written application for authorization set forth in the preceding paragraph; provided, however, that submission of the document set forth in item (ii) shall not be required in the case of a written application for authorization of amendment of rules and procedures of operation:
(i) a comparison table for the existing and amended articles of incorporation or rules and procedures of operation;
(ii) the minutes of a general meeting of shareholders or members and any other documents proving that the necessary procedure has been completed; and
(iii) other documents containing other relevant matters.
(3) Upon receipt of the written application for authorization set forth in paragraph (1), the Commissioner of the Financial Services Agency shall examine whether the application conforms with laws and regulations and whether it is sufficient to ensure the proper and secure provision/conduct of the Central Counter-party Clearing Services for Interbank Funds Transfer by the applicant.
(Notification of Change of Amount of the Stated Capital, etc.)
Article 11 (1) A Central Counter-party Institution for Interbank Funds Transfer intending to make a notification under Article 77 of the Act shall submit a written notice containing the following matters to the Commissioner of the Financial Services Agency:
(i) the contents of the change
(ii) the date of the change
(2) The documents specified in the following items for the categories respectively prescribed therein shall be attached to the written notice set forth in the preceding paragraph:
(i) in the case of a change in the matters listed in Article 65, paragraph (1), item (ii) of the Act (excluding the amount of net assets) or the matters listed in item (iii) of said paragraph: The documents listed in paragraph (2), item (iii) of said Article;
(ii) in the case of a change in the matters listed in Article 65, paragraph (1), item (iv) of the Act: The documents listed in paragraph (2), item (iii) of said Article and the documents listed in Article 4, item (i), sub-item (c) or item (ii), sub-item (c); and
(iii) in the case of a change in the matters listed in Article 65, paragraph (1), item (v) of the Act: The documents listed in paragraph (2), sub-item (iii) of said Article and the documents listed in Article 4, item (i), sub-item (d).
(Books and Documents)
Article 12 A Central Counter-party Institution for Interbank Funds Transfer shall, pursuant to the provisions of Article 78, prepare transaction records and other books and documents pertaining to the Central Counter-party Clearing Services for Interbank Funds Transfer for the purpose of clarifying the processing and calculation of the Central Counter-party Clearing Services for Interbank Funds Transfer and preserve them for seven years from the date of preparation.
(Reports)
Article 13 (1) A Central Counter-party Institution for Interbank Funds Transfer shall, pursuant to the provisions of Article 79, prepare a written report on the Central Counter-party Clearing Services for Interbank Funds Transfer using the appended form and submit it to the Commissioner of the Financial Services Agency within three months from the end of each business year.
(2) The following documents shall be attached to the written report set forth in the preceding paragraph.
(i) Financial statements, business reports, and supplementary schedules prescribed in Article 435, paragraph (2) of the Companies Act or Article 123, paragraph (2) of the Act on General Incorporated Association and General Incorporated Foundation (Act No. 48 of 2006);
(ii) Audit reports prescribed in Article 381, paragraph (1) of the Companies Act or Article 99, paragraph (1) of the Act on General Incorporated Association and General Incorporated Foundation;
(iii) Accounting audit reports prescribed in Article 396, paragraph (1) of the Companies Act or Article 107, paragraph (1) of the Act on General Incorporated Association and General Incorporated Foundation;
(iv) Schedule of tangible fixed assets;
(v) Schedule of collaterals;
(vi) Schedules of various other accounts;
(vii) A document containing the name or trade name or other name and address or location of major shareholders or members and the number of voting rights held by them; and
(viii) A document containing the trade names or other names of the Clearing Participants (meaning the Clearing Participants prescribed in Article 71, paragraph (2), item (ii) of the Act; hereinafter the same shall apply).
Chapter 4 Miscellaneous Provisions
(Application for Authorization pertaining to Resolutions of Abolition or Dissolution of the Central Counter-party Clearing Services for Interbank Funds Transfer, etc.)
Article 14 (1) A Central Counter-party Institution for Interbank Funds Transfer intending to obtain the authorization under Article 83 of the Act shall submit to the Commissioner of the Financial Services Agency a written application for authorization by attaching the following documents:
(i) a document describing the reasons for abolition or dissolution of the Central Counter-party Clearing Services for Interbank Funds Transfer;
(ii) the minutes of the general meeting of shareholders or members (in the case where a resolution of the general meeting of shareholders or members is deemed to have been passed pursuant to the provisions of Article 319, paragraph (1) of the Companies Act or Article 58, paragraph (1) of the Act on General Incorporated Association and General Incorporated Foundation, a document proving that said provisions apply to the proposed abolition or dissolution);
(iii) the balance sheet (including the related notes) and profit and loss statement (including the related notes) pertaining to the last business year and a document clarifying the contents of the assets and liabilities existing at the time of said resolution; and
(iv) a document describing the method for completing the Central Counter-party Clearing Services for Interbank Funds Transfer; and
(v) other documents containing other relevant matters.
(2) Upon receipt of the written application for authorization set forth in the preceding paragraph, the Commissioner of the Financial Services Agency shall examine whether the application satisfies either of the following criteria:
(i) the proposed abolition or dissolution of the Central Counter-party Clearing Services for Interbank Funds Transfer is unavoidable in light of the status of business and property of said Central Counter-party Institution for Interbank Funds Transfer; or
(ii) the proposed abolition or dissolution of the Central Counter-party Clearing Services for Interbank Funds Transfer involves no risk of causing hindrance to ensuring smooth fund settlement between Banks, etc. (meaning the Banks, etc. prescribed in Article 2 of the Act) and convenience of the Clearing Participants of said Central Counter-party Institution for Interbank Funds Transfer.
(3) In the case where the Commissioner of the Financial Services Agency has received a written application for authorization under paragraph (1) from a Central Counter-party Institution for Interbank Funds Transfer to which he/she has issued an order to suspend the whole or part of the business pursuant to the provisions of Article 81 or Article 82, paragraph (2) of the Act, he/she shall not grant an authorization under paragraph (1); the same shall apply to the case where the Commissioner of the Financial Services Agency has received a written application for authorization under paragraph (1) from a Central Counter-party Institution for Interbank Funds Transfer that has been determined necessary by him/her to be subject to these orders or rescission of the license under Article 64, paragraph (1) of the Act pursuant to the provisions of Article 82, paragraph (1) or (2) of the Act.
(Notification of Rules Based on the Rules and Procedures of Operation)
Article 15 When a Central Counter-party Institution for Interbank Funds Transfer has established, abolished, or changed any rules based on the rules and procedures of operation, it shall notify the Commissioner of the Financial Services Agency to that effect without delay.
(Standard Processing Period)
Article 16 (1) The Prime Minister or the Commissioner of the Financial Services Agency shall endeavor to process any application for approval made pursuant to the provisions of the proviso to Article 69, paragraph (1) of the Act or application for authorization made pursuant to the provisions of Article 76 or Article 83 of the Act within one month from the day on which said application has arrived at his/her office, and any application for license made pursuant to Article 64, paragraph (1) of the Act within two months from the day on which said application has arrived at his/her office.
(2) The period prescribed in the preceding paragraph shall not include the following period:
(i) The period required to amend said application;
(ii) The period required for the applicant to change the contents of said application; and
(iii) The period required for the applicant to add materials that are found to be necessary for the examination pertaining to said application.