Act on Book Entry of Corporate Bonds and Shares(Act No. 75 of 2001)
Last Version: Act No. 53 of 2012
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Act on Book Entry of Corporate Bonds and Shares
Act No. 75 of June 27, 2001
Chapter I General Provisions(Article 1 and Article 2)
Chapter II Book-Entry Transfer Institution, etc.
Section 1 General Rules(Article 3 - Article 7)
Section 2 Operations(Article 8 - Article 14)
Section 3 Supervision(Article 15 - Article 24)
Section 4 Mergers, Company Splits, and Business Transfers(Article 25 - Article 32)
Section 5 Participants' Meetings(Article 33 - Article 39)
Section 6 Dissolution(Article 40 - Article 43)
Section 7 Account Management Institutions(Article 44 - Article 46)
Section 8 Special Provisions Applicable If the Bank of Japan Conducts Book-Entry Transfer Services(Article 47 - Article 50)
Chapter III Participants Protection Trusts
Section 1 Participants Protection Trust Contracts(Article 51 - Article 57)
Section 2 Issuing Payment to Beneficiaries(Article 58 - Article 61-2)
Section 3 Dues(Article 62 - Article 64)
Section 4 Miscellaneous Provisions(Article 65 and Article 65-2)
Chapter IV Book Entry Transfer of Corporate Bonds
Section 1 General Rules(Article 66 and Article 67)
Section 2 Book-Entry Transfer Account Registers(Article 68 - Article 72)
Section 3 Effect of Book Entry Trasfer(Article 73 - Article 82)
Section 4 Special Provisions of the Companies Act(Article 83 - Article 86-3)
Section 5 Miscellaneous Provisions(Article 87)
Chapter V Book Entry Trasfer of Japanese Government Bonds
Section 1 General Rules(Article 88 - Article 90)
Section 2 Book-Entry Transfer Account Registers(Article 91 - Article 97)
Section 3 Effect of Book Entry Trasfer(Article 98 - Article 111)
Section 4 Miscellaneous Provisions(Article 112)
Chapter VI Book Entry Trasfer of Local Government Bonds
Section 1 Book Entry Trasfer of Local Government Bonds(Article 113 and Article 114)
Section 2 Book Entry Trasfer of Investment Corporation Bonds(Article 115 - Article 116-2)
Section 3 Book Entry Trasfer of Bonds Issued by Mutual Companies(Article 117 and Article 117-2)
Section 4 Book Entry Trasfer of Specified Corporate Bonds(Article 118 and Article 119)
Section 5 Book Entry Trasfer of Special Corporation Bonds(Article 120)
Section 6 Book Entry Trasfer of Beneficial Interest in Domestic and Foreign Investment Trusts(Article 121 - Article 121-3)
Section 7 Book Entry Trasfer of Beneficial Interest in Loan Trusts(Article 122 - Article 123-2)
Section 8 Book Entry Trasfer of Beneficial Interest in Specific Purpose Trusts(Article 124 - Article 126)
Section 9 Book Entry Trasfer of Foreign Bonds(Article 127)
Chapter VI-2 Book Entry Trasfer of Beneficial Interest in Trusts Issuing Beneficiary Certificates
Section 1 General Rules(Article 127-2 and Article 127-3)
Section 2 Book-Entry Transfer Account Registers(Article 127-4 - Article 127-15)
Section 3 Effect of Book Entry Trasfer(Article 127-16 - Article 127-25)
Section 4 Special Provisions of the Trust Act(Article 127-26 - Article 127-31)
Section 5 Miscellaneous Provisions(Article 127-32)
Chapter VII Book Entry Trasfer of Shares
Section 1 General Rules(Article 128)
Section 2 Book-Entry Transfer Account Registers(Article 129 - Article 139)
Section 3 Effect of Book Entry Trasfer(Article 140 - Article 149)
Section 4 Special Provisions of the Companies Act(Article 150 - Article 161)
Section 5 Miscellaneous Provisions(Article 162)
Chapter VIII Book Entry Transfer of Share Options
Section 1 General Rules(Article 163 and Article 164)
Section 2 Book-Entry Transfer Account Register(Article 165 - Article 173)
Section 3 Effect of Book Entry Trasfer(Article 174 - Article 182)
Section 4 Special Provisions of the Companies Act(Article 183 - Article 190)
Section 5 Miscellaneous Provisions(Article 191)
Chapter IX Book Entry Trasfer of Corporate Bonds with Share Options
Section 1 General Rules(Article 192 and Article 193)
Section 2 Book-Entry Transfer Account Registers(Article 194 - Article 204)
Section 3 Effect of Book Entry Trasfer(Article 205 - Article 214)
Section 4 Special Provisions of the Companies Act(Article 215 - Article 224)
Section 5 Miscellaneous Provisions(Article 225)
Chapter X Book Entry Trasfer of Investment Equity
Section 1 Book Entry Trasfer of Investment Equity(Article 226 - Article 233)
Section 2 Book Entry Trasfer of Preferred Equity Investments by Cooperative Financial Institutions(Article 234 - Article 236)
Section 3 Book Entry Trasfer of Preferred Equity Investments in a Special Purpose Company(Article 237 - Article 247)
Section 4 Book Entry Trasfer of Subscription Rights for New Preferred Equity Investments in a Special Purpose Company(Article 248 and Article 249)
Section 5 Book Entry Trasfer of Convertible Specified Corporate Bonds Issued by Special Purpose Companies(Article 250 - Article 252)
Section 6 Book Entry Trasfer of Specified Bonds with Subscription Rights for New Preferred Equity Investment in Special Purpose Companies(Article 253 - Article 255)
Chapter XI Effecting Book Entries for Entity Conversions
Section 1 Effecting Book Entries for Entity Conversions under the Act on Mergers and Conversions of Financial Institutions(Article 256 - Article 262)
Section 2 Effecting Book Entries for Entity Conversions under the Insurance Business Act(Article 263 - Article 269)
Section 3 Effecting Book Entries for Mergers under the Financial Instruments and Exchange Act(Article 270 - Article 275)
Chapter XII Book Entry Trasfer of Other Rights Required to Be Indicated on Securities(Article 276)
Chapter XIII Miscellaneous Provisions(Article 277 - Article 287)
Chapter XIV Penal Provisions(Article 288 - Article 297)
Supplementary Provisions
Chapter I General Provisions
(Purpose)
Article 1The purpose of this Act is to facilitate the distribution of the rights that are required to be indicated on corporate bonds, shares, and other securities by providing for Book-Entry Transfer Transefer Institutions and Account Management Institutions to make book entries for those rights; prescribing a process for making book entries with regard to those rights; providing for Participants Protection Trusts to protect the persons holding those rights; and prescribing other necessary particulars.
(Definitions)
Article 2(1)The phrase "Bond or Other Security" as used in this Act means any of the following:
(i)a corporate bond (other than one as set forth in item (xiv); the same applies hereinafter);
(ii)a Japanese government bond;
(iii)a local government bond;
(iv)an investment corporation bond as prescribed in the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951);
(v)a bond issued by a mutual company as prescribed in the Insurance Business Act (Act No. 105 of 1995);
(vi)a specified corporate bond as prescribed in the Act on Securitization of Assets (Act No. 105 of 1998) (other than one as set forth in item (xix) and item (xx); the same applies hereinafter);
(vii)a right required to be indicated on a bond certificate issued by a corporation pursuant to a special Act (other than one as set forth in item (i) and item (iv) through (vi); the same applies hereinafter);
(viii)a beneficial interest in a domestic or foreign investment trust as prescribed in the Act on Investment Trusts and Investment Corporations;
(ix)a beneficial interest in a loan trust as prescribed in the Loan Trust Act (Act No. 195 of 1952);
(x)a beneficial interest in a specific purpose trusts as prescribed in the Act on Securitization of Assets;
(x)-2a beneficial interest in a trust issuing beneficiary certificates as prescribed in the Trust Act (Act No. 108 of 2006);
(xi)a right required to be indicated on a bond certificate issued by a foreign country or foreign corporation (other than one in the nature of a certificate representing a corporate bond with a share option; the same applies hereinafter);
(xii)a share;
(xiii)a share option;
(xiv)a corporate bond with a share option;
(xv)investment equity as prescribed in the Act on Investment Trusts and Investment Corporations;
(xvi)a preferred equity investment as prescribed in the Act on Preferred Equity Investment by Cooperative Financial Institutions (Act No. 44 of 1993);
(xvii)a preferred equity investment as prescribed in the Act on Securitization of Assets;
(xviii)a subscription right for new preferred equity investment as prescribed in the Act on Securitization of Assets;
(xix)a convertible specified corporate bond as prescribed in the Act on Securitization of Assets;
(xx)a specified corporate bond with subscription rights for new preferred equity investment prescribed in the Act on Securitization of Assets;
(xxi)a right required to be indicated on a security or certificate specified by Cabinet Order as set forth in Article 2, paragraph (1), item (xxi) of the Financial Instruments and Exchange Act (Act No. 25 of 1948), which Cabinet Order prescribes as one whose ownership it is appropriate to determine based on an entry or record in a book-entry transfer account register.
(2)The phrase "Book-Entry Transfer Institutions, etc." as used in this Act means a stock company designated by the competent minister pursuant to the provisions of paragraph (1) of the following Article.
(3)The phrase "Participant" as used in this Act means a person for which a Book-Entry Transfer Transfer Institution, etc. has opened an account in which book entries can be made for Bonds and Other Securities, pursuant to the provisions of Article 12, paragraph (1) or Article 44, paragraph (1) or (2).
(4)The phrase "Account Management Institution" as used in this Act means a person that has opened an account under the provisions of Article 44, paragraph (1) or a Book-Entry Transfer Institution as prescribed in paragraph (2) of that Article.
(5)The phrase "Book-Entry Transfer Transfer Institution, etc." as used in this Act means a Book-Entry Transfer Institution or an Account Management Institution.
(6)The phrase "Immediately Superior Institution" as used in this Act means, with respect to a Participant, the Book-Entry Transfer Transefer Institution, etc. at which an account has been opened for the Participant.
(7)The phrase "Superior Institution" as used in this Act means one of the following:
(i)the Immediately Superior Institution;
(ii)the Immediately Superior Institution of the Immediately Superior Institution;
(iii)the Immediately Superior Institution of a person that, pursuant to the provisions of the preceding item or this item, falls under the category of a Superior Institution.
(8)The phrase "Immediately Subordinate Institution" as used in this Act means the Account Management Institution for which a Book-Entry Transfer Transefer Institution, etc. has opened an account pursuant to the provisions of Article 12, paragraph (1) or Article 44, paragraph (1) or (2).
(9)The phrase "Subordinate Institution" as used in this Act means one of the following:
(i)the Immediately Subordinate Institution;
(ii)the Immediately Subordinate Institution of the Immediately Subordinate Institution;
(iii)the Immediately Subordinate Institution of a person that, pursuant to the provisions of the preceding item or this item, falls under the category of a Subordinate Institution.
(10)The phrase "Common Immediately Superior Institution" as used in this Act means the Superior Institution that multiple Participants have in common, if none of its Subordinate Institutions constitute a Superior Institution that all of those Participants have in common.
(11)The phrase "Participants Protection Trust" as used in this Act means a trust established pursuant to the provisions of this Act for the purpose of protecting Participants by issuing payments pursuant to the provisions of Article 60 and thus maintaining confidence in the book-entry transfer of Bonds and Other Securities.
Chapter II Book-Entry Transfer Transfer Institution, etc.
Section 1 General Rules
(Designation of Person Engaging in Book-Entry Transfer Services)
Article 3(1)The competent minister may designate a person meeting the following requirements to engage in the services prescribed in Article 8 in accordance with this Act (hereinafter referred to as the "Book-Entry Transfer Services"), at the application thereof:
(i)the applicant is a stock company with the following bodies:
(a)a board of directors;
(b)a board of company auditors or committees (meaning committees as prescribed in Article 2, item (xii) of the Companies Act (Act No. 86 of 2005));
(c)an accounting auditor.
(ii)the applicant does not constitute a person for which it has been less than five years since the day on which a designation as referred to in this paragraph was rescinded pursuant to the provisions of Article 22, paragraph (1);
(iii)the applicant does not constitute a person that has been sentenced to a fine (or to an equivalent sentence under a foreign law or regulation) for violating this Act or the provisions of a foreign law or regulation equivalent to this Act, and for which it has been less than five years since the day the person finished serving the sentence or ceased to be subject to the enforcement thereof;
(iv)none of the applicant's directors, accounting advisors, auditors, or executive officers are:
(a)an adult ward, a person under curatorship, or a person treated in the same manner under foreign laws and regulations;
(b)an undischarged bankrupt or a person treated in the same manner under foreign laws and regulations;
(c)a person that has been sentenced to imprisonment or a heavier punishment (or to an equivalent sentence under a foreign law or regulation), if five years have yet to pass since the day the person finished serving the sentence or ceased to be subject to its enforcement;
(d)a person that was the director, accounting advisor, company auditor, or executive officer of a company (or a person treated in the same manner under foreign laws and regulations; the same applies in sub-item (e)) within thirty days of the rescission of a designation as referred to in this paragraph pursuant to the provisions of Article 22, paragraph (1) or within thirty days of the rescission of an administrative disposition equivalent to a designation as referred to in this paragraph which a company has been granted in a foreign state pursuant to the provisions of any law or regulation of that foreign state which is equivalent to this Act, if five years have yet to pass since the day of rescission;
(e)a person falling under the category of a director, accounting advisor, company auditor, or executive officer whose dismissal has been ordered pursuant to the provisions of Article 22, paragraph (1) or the provisions of a foreign law or regulation that is equivalent to this Act, if five years have yet to pass since the day of that disposition;
(f)a person that has been sentenced to a fine (or to an equivalent sentence under a foreign law or regulation) for violating this Act, the Companies Act, or the provisions of any foreign law or regulation equivalent thereto, or for committing a crime as referred to in Article 204, 206, 208, 208-3, 222, or 247 of the Penal Code (Act No. 45 of 1907); a crime referred to in the Act on Punishment of Violence (Act No. 60 of 1926); or a crime as referred to in Article 46 to 49 inclusive or Article 50 (limited to the provisions related to item (i)) or Article 51 of the Act to Prevent Illegal Activities by Members of Organized Crime Groups (Act No. 77 of 1991), if five years have yet to pass since the day the person finished serving the sentence or ceased to be subject to its enforcement.
(v)the applicant's articles of incorporation and rules for implementing Book-Entry Transfer Services (other than in cases in which Article 44, paragraph (2) is applicable; hereinafter referred to as the "operational rules") conform to laws and regulations and are found to be sufficient for allowing it to perform Book-Entry Transfer Services in an appropriate and reliable manner pursuant to the provisions of this Act;
(vi)the applicant has a sufficient financial basis to soundly perform Book-Entry Transfer Services and has good prospects in terms of expected income and expenditures in connection with Book-Entry Transfer Services;
(vii)in light of its personnel structure, the applicant is found to have the knowledge and experience to perform Book-Entry Transfer Services in an appropriate and reliable manner and to have sufficient social credibility.
(2)On making a designation as referred to in the preceding paragraph, the competent minister must issue public notice of the trade name and the locality of the head office of the Book-Entry Transfer Institution designated thereby in the Official Gazette.
(Applying for Designation)
Article 4(1)A person seeking a designation under paragraph (1) of the preceding Article must submit a paper application for designation to the competent minister, giving the following information:
(i)its trade name;
(ii)the amount of stated capital and net assets;
(iii)the names and addresses of the head office and other business offices;
(iv)the names of the directors and auditors (or the directors and executive officers, if the applicant is a company with committees);
(v)the names of the accounting advisors, if the applicant is a company with accounting advisors;
(vi)the details of any business other than Book-Entry Transfer Services in which it engages.
(2)The following paper documents must accompany the paper application for designation:
(i)a document in which the applicant states that it meets the requirements set forth in paragraph (1), items (iii) and (iv) of the preceding Article;
(ii)the articles of incorporation;
(iii)the company's certificate of registered information;
(iv)the operational rules;
(v)a balance sheet and profit and loss statement;
(vi)a document giving the expected income and expenditures;
(vii)documents specified by Ordinance of the Competent Ministry, beyond what is set forth in the preceding items.
(3)In a case as referred to in the preceding paragraph, if the articles of incorporation or the balance sheet have been prepared as an electronic or magnetic record (meaning a record used in computer data processing which is created in electronic form, magnetic form, or any other form that cannot be perceived by the human senses; the same applies hereinafter) or if an electronic or magnetic record has been created for the profit and loss statement in lieu of a paper-based document, an electronic or magnetic record (limited to one as specified by Ordinance of the Competent Ministry) may accompany the application in lieu of a paper document.
(Amount of Stated Capital)
Article 5(1)The stated capital of a Book-Entry Transfer Institution must be at least the amount prescribed by Cabinet Order.
(2)The amount prescribed by Cabinet Order which is referred to in the preceding paragraph must not be less than five hundred million yen.
(3)The net assets of a Book-Entry Transfer Institution must be at least the amount prescribed by Cabinet Order which is referred to in paragraph (1).
(Change in the Amount of Stated Capital)
Article 6(1)Before decreasing its stated capital, a Book-Entry Transfer Institution must receive the authorization of the competent minister pursuant to the provisions of Ordinance of the Competent Ministry.
(2)Before increasing its stated capital, a Book-Entry Transfer Institution must notify the competent minister pursuant to the provisions of Ordinance of the Competent Ministry.
(Exclusion from Application)
Article 6-2The proviso of Article 331, paragraph (2) of the Companies Act (including as applied mutatis mutandis pursuant to Article 335, paragraph (1) of that 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 of Article 402, paragraph (5) do not apply to a Book-Entry Transfer Institution.
(Duty of Confidentiality)
Article 7It is prohibited for the director, accounting advisor (or the employee that performs those duties, if the accounting advisor is a corporation), auditor, executive officer, or employee of a Book-Entry Transfer Institution, or a person that has held one of these positions, to divulge or misappropriate any confidential information learned in connection with Book-Entry Transfer Services.
Section 2 Operations
(Operations of Book-Entry Transfer Institution)
Article 8A Book-Entry Transfer Institution is to conduct operations connected with the book-entry transfer of Bonds and Other Securities in accordance with this Act and its operational rules.
(Restriction on Concurrent Operations)
Article 9(1)A Book-Entry Transfer Institution may not engage in business other than Book-Entry Transfer Services; provided, however that this does not apply if the Book-Entry Transfer Institution obtains the approval of the competent minister pursuant to the provisions of Ordinance of the Competent Ministry, for business that is related to Book-Entry Transfer Services and that is found to carry no risk of preventing the institution from engaging in Book-Entry Transfer Services in an appropriate and reliable manner.
(2)If a Book-Entry Transfer Institution discontinues the for which it has been approved pursuant to the proviso of the preceding paragraph, it must notify the competent minister of this pursuant to the provisions of Ordinance of the Competent Ministry.
(Partial Entrustment of Book-Entry Transfer Services)
Article 10(1)A Book-Entry Transfer Institution may be approved by the competent minister to entrust another person with a part of its Book-Entry Transfer Services, pursuant to the provisions of Ordinance of the Competent Ministry.
(2)In the contract in which a Book-Entry Transfer Institution entrusts a person with a part of its Book-Entry Transfer Services pursuant to the provisions of the preceding paragraph, it must include the condition that the party to which it is entrusting the services will not further entrust another person with those services.
(Operational Rules)
Article 11(1)A Book-Entry Transfer Institution must provide for the following particulars in its operational rules:
(i)the particulars of the Bonds and Other Securities handled;
(ii)the particulars of Participant accounts;
(iii)the particulars of entries or records in the book-entry transfer account register;
(iv)the particulars of the Book-Entry Transfer Institution's performance of obligations, as a function of the Bonds and Other Securities that it handles, in cases as prescribed in Article 78, paragraph (1) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127, and Article 276, item (i)), Article 103, paragraph (1), Article 107, paragraph (1), Article 127-21, paragraph (1), Article 145, paragraph (1) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1), and Article 276, item (ii)), Article 179, paragraph (1) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), or Article 210, paragraph (1) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(v)the following particulars as regards any Participant that is an Account Management Institution:
(a)the particulars of the agreement between an Account Management Institution and its Participants;
(b)the particulars of an Account Management Institution's performance of obligations, as a function of the Bonds and Other Securities that it handles, in cases as prescribed in Article 79, paragraph (1) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127, and Article 276, item (i)), Article 104, paragraph (1), Article 108, paragraph (1), Article 127-22, paragraph (1), Article 146, paragraph (1) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii)), Article 180, paragraph (1) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), or Article 211, paragraph (1) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1), and Article 276, item (iv));
(c)the particulars of the measures to be taken if an Account Management Institution violates a law or regulation, a disposition reached by an administrative agency based on a law or regulation, or the operational rules;
(d)the particulars of reporting in the event that an incident as prescribed in Article 19 occurs in an Account Management Institution.
(vi)the particulars of Participants' Meetings as prescribed in Article 33;
(vii)anything beyond what is set forth in the preceding items which Ordinance of the Competent Ministry prescribes as a particular that is necessary to the implementation of Book-Entry Transfer Services.
(2)The particulars set forth in item (v), sub-item (a) of the preceding paragraph must include an indication that each Account Management Institution (other than a person as set forth in Article 44, paragraph (1), item (xiii)) extends a joint and several surety to its Participants (other than a person as set forth in Article 44, paragraph (1), item (xiii); a qualified institutional investor as prescribed in Article 2, paragraph (3), item (i) of the Financial Instruments and Exchange Act; the national or local government; or any other person prescribed by Cabinet Order; the same applies hereinafter in this paragraph and in Chapter III) against the performance of all obligations that any Superior Institution (other than one prescribed by Ordinance of the Competent Ministry as a person in respect of which it does not undermine the protection of Participants to have no surety extended) has toward a Participant, as a function of the Bonds and Other Securities that it handles, as prescribed in Article 80, paragraph (2) or Article 81, paragraph (2) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127, and Article 276, item (i)), Article 105, paragraph (2), Article 106, paragraph (2), Article 109, paragraph (3), Article 110, paragraph (3), Article 127-23, paragraph (2), Article 127-24, paragraph (2), Article 147, paragraph (2) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii)), Article 148, paragraph (2) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii)), Article 181, paragraph (2) or Article 182, paragraph (2) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)) or Article 212, paragraph (2) or Article 213, paragraph (2) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv)).
(Opening of Accounts and Physical Keeping of a Book-Entry Transfer Account Register)
Article 12(1)A Book-Entry Transfer Institution must open an account for another person in which book entries can be made for Bonds and Other Interests at the request of that person, pursuant to the provisions of its operational rules.
(2)A Book-Entry Transfer Institution may open an account for itself in which book entries can be made for Bonds and Other Securities (hereinafter referred to as an "Institution-Held Account") for the purpose of performing the obligations as referred to in Article 78, paragraphs (1) and (3) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127, and Article 276, item (i)), Article 103, paragraphs (1) and (3), Article 107, paragraphs (1) and (4), Article 127-21, paragraphs (1) and (3), Article 145, paragraphs (1) and (3) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1), and Article 276, item (ii)), Article 179, paragraphs (1) and (3) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), or Article 210, paragraphs (1) and (4) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv)).
(3)A Book-Entry Transfer Institution must prepare and maintain a book-entry transfer account register.
(issuer's Consent)
Article 13(1)A Book-Entry Transfer Institution may not handle a Bond or Other Security unless the issuer has consented in advance to have its Bond or Other Security handled by the institution.
(2)In a case as referred to in the preceding paragraph, once the issuer has given its consent to a Book-Entry Transfer Institution in respect of a particular type of Bond or Other Security, it must not give its consent to another Book-Entry Transfer Institution with regard to that type of Bond or Other Security.
(3)The issuer may not withdraw the consent referred to in paragraph (1).
(Prohibition on Differential Treatment)
Article 14A Book-Entry Transfer Institution must not subject any particular Participant or issuer to unfair differential treatment.
Section 3 Supervision
(Preparation and Filing of Books and Documents)
Article 15A Book-Entry Transfer Institution must prepare and keep on file its business books and documents and other records pursuant to Ordinance of the Competent Ministry.
(Submission of Business and Asset Reports)
Article 16(1)A Book-Entry Transfer Institution must prepare a paper-based report on its business and assets for each business year and submit it to the competent minister.
(2)Ordinance of the Competent Ministry provides for the information required to be given in the report referred to in the preceding paragraph, the submission date, and other necessary matters.
(Amending the Articles of Incorporation or Operational Rules)
Article 17An amendment to the articles of incorporation or operational rules of a Book-Entry Transfer Institution does not take effect without the authorization of the competent minister.
(Notification of a Change in Trade Name)
Article 18(1)If the information set forth in Article 4, paragraph (1), item (i) or item (iii) to item (v) changes, the Book-Entry Transfer Institution must notify the competent minister of this and file the paper documents set forth in paragraph (2), item (i) or item (iii) of that Article with the competent minister pursuant to the provisions of Ordinance of the Competent Ministry.
(2)On being notified of a change in the trade name of a Book-Entry Transfer Institution or the locality of its head office, the competent minister must issue public notice of this in the Official Gazette.
(Incident Reports)
Article 19In a case as referred to in Article 78, paragraph (1) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127, and Article 276, item (i)), Article 103, paragraph (1), Article 107, paragraph (1), Article 127-21, paragraph (1), Article 145, paragraph (1) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii)), Article 179, paragraph (1) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), or Article 210, paragraph (1) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv)); in the event that an incident as prescribed by Ordinance of the Competent Ministry occurs; in a case as referred to in Article 79, paragraph (1) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127 and Article 276, item (i)), Article 104, paragraph (1), Article 108, paragraph (1), Article 146, paragraph (1) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1), and Article 276, item (ii)), Article 180, paragraph (1) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), or Article 211, paragraph (1) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv)); or in the event that an incident as prescribed by Ordinance of the Competent Ministry occurs in a Subordinate Institution, a Book-Entry Transfer Institution must notify the competent minister of this pursuant to the provisions of Ordinance of the Competent Ministry.
(Reports and Inspections)
Article 20(1)If the competent minister finds it to be necessary for the appropriate and reliable performance of Book-Entry Transfer Services, the minister may order a Book-Entry Transfer Institution to make reports or submit materials relevant to its business or assets; may have the relevant officials enter the business office of the Book-Entry Transfer Institution and inspect the state of its business or assets, books and documents, or other articles; and may have those officials question persons concerned.
(2)An official conducting an on-site inspection pursuant to the provisions of the preceding paragraph must carry identification and present it to persons concerned.
(3)The authority for an on-site inspection under the provisions of paragraph (1) must not be construed as authorizing a criminal investigation.
(Business Improvement Order)
Article 21Upon finding there to be a need do so for the appropriate and reliable performance of Book-Entry Transfer Services, the competent minister, within the scope of this necessity, may order a Book-Entry Transfer Institution to take the necessary measures to improve the state of its business operations or its assets.
(Rescission of Designation)
Article 22(1)If a Book-Entry Transfer Institution falls under one of the following items, the competent minister may rescind an Article 3, paragraph (1) designation or an approval as referred to in the proviso of Article 9, paragraph (1); order the suspension of all or part of its business activities during a fixed period of no longer than six months; or order the dismissal of a director, accounting advisor, company auditor, or executive officer:
(i)it comes to no longer satisfy a requirement set forth in Article 3, paragraph (1), item (iii) or (iv);
(ii)it is discovered not to have fallen under one of the items of Article 3, paragraph (1) at the time of the Article 3, paragraph (1) designation;
(iii)it is discovered to have obtained an Article 3, paragraph (1) designation by wrongful means;
(iv)it violates this Act, a law or regulation based on this Act, or a disposition based on any of these.
(2)On rescinding an Article 3, paragraph (1) designation pursuant to the provisions of the preceding paragraph, the competent minister must issue public notice of this in the Official Gazette.
(Business Transfer Order)
Article 23If a Book-Entry Transfer Institution falls under one of the following items, the competent minister may order the Book-Entry Transfer Institution to transfer Book-Entry Transfer Services to another stock company (except as prescribed in Article 44, paragraph (2); hereinafter the same applies in Article 42):
(i)its Article 3, paragraph (1) designation is rescinded pursuant to the provisions of paragraph (1) of the preceding Article;
(ii)it discontinues Book-Entry Transfer Services;
(iii)it undergoes a dissolution (or a judgment invalidating its incorporation or a merger or incorporation-type company split involving it becomes final and binding);
(iv)it is found to be likely for circumstances to occur in which the institution will be unable to pay a debt that is due without substantially compromising the continuation of Book-Entry Transfer Services, or for a fact to occur that will cause the commencement of bankruptcy proceedings.
(Special Provisions on a Special Resolution at a Shareholders Meeting Incidental to a Business Transfer Order)
Article 24(1)Notwithstanding Article 309, paragraph (2) and Article 324, paragraph (2) of the Companies Act, a resolution as under Article 322, paragraph (1), Article 466, Article 467, paragraph (1), Article 783, paragraph (1), or Article 795, paragraph (1) of that Act (other than a resolution at a shareholders meeting as referred to in Article 309, paragraph (3), item (ii) of that Act, for a resolution as under Article 783, paragraph (1) of that Act) at a Book-Entry Transfer Institution that is subject to an order under the preceding Article (hereinafter referred to as the "specified book-entry transfer institution" in the following paragraph) may be provisionally adopted by at least a two-thirds majority vote of attending shareholders.
(2)Notwithstanding Article 309, paragraph (3) of the Companies Act, a resolution at a shareholders meeting as referred to in Article 309, paragraph (3), item (ii) of that Act at a specified book-entry transfer institution may be provisionally adopted by at least a two-thirds majority vote of attending shareholders, if those votes are cast by the majority of the shareholders in attendance.
(3)If a resolution is provisionally adopted pursuant to the provisions of paragraph (1) (hereinafter this is referred to as a "provisional resolution" in this and the following paragraphs), the Book-Entry Transfer Institution must notify each of the shareholders of the purport of the provisional resolution and call a shareholders meeting again within one month after the date of the provisional resolution.
(4)If a provisional resolution adopted by a majority vote as prescribed in paragraph (1) is approved at a shareholders meeting as referred to in the preceding paragraph, a resolution is deemed to have been adopted with regard to the matter subject to the provisional resolution.
(5)The provisions of the preceding two paragraphs apply mutatis mutandis to a resolution adopted provisionally pursuant to the provisions of paragraph (2). This being the case, the phrase "paragraph (1)" in the preceding paragraph is deemed to be replaced with the phrase "paragraph (2)".
Section 4 Mergers, Company Splits, and Business Transfers
(Approval for Specified Merger)
Article 25(1)A merger to which Book-Entry Transfer Institution constitute all or some of the parties (but only if the stock company surviving the merger or the stock company incorporated in the merger engages in Book-Entry Transfer Services; hereinafter referred to as a "specified merger" in this and the following Article) does not take effect without the authorization of the competent minister.
(2)A Book-Entry Transfer Institution seeking the authorization referred to in the preceding paragraph must submit a paper application for merger authorization to the competent minister, giving the information set forth in the items of Article 4, paragraph (1) with respect to the stock company surviving or incorporated in the specified merger (hereinafter referred to in this Article as the "book-entry transfer institution after specified merger").
(3)Paper-based documents giving the details of the merger agreement or electronic or magnetic records in which such details have been recorded (limited to those as specified by Ordinance of the Competent Ministry; hereinafter the same applies in this paragraph) and the paper-based documents or electronic or magnetic records prescribed by Ordinance of the Competent Ministry must accompany an application for merger authorization.
(4)If an application is filed for the authorization referred to in paragraph (1), the competent minister must examine whether the application conforms to the following criteria:
(i)the book-entry transfer institution after specified merger satisfies the requirements set forth in the items of Article 3, paragraph (1); and
(ii)there is a sound expectation of Book-Entry Transfer Services being succeeded to in a smooth and appropriate manner.
(5)A book-entry transfer institution after specified merger (other than if the Book-Entry Transfer Institution is a stock company surviving the specified merger) is deemed to have obtained an Article 3, paragraph (1) designation at the time of the specified merger.
(6)A book-entry transfer institution after specified merger succeeds to the rights and obligations that any Book-Entry Transfer Institution disappearing in the specified merger holds in connection with its business based on the authorization or other disposition of an administrative agency.
(Participants' Approval for Specified Mergers)
Article 26Before effecting a specified merger, a Book-Entry Transfer Institution must obtain the approval of the Participants, in addition to approval at a shareholders meeting as referred to Article 783, paragraph (1), Article 795, paragraph (1) or Article 804, paragraph (1) of the Companies Act.
(Approval for Incorporation-type Company Split)
Article 27(1)An incorporation-type company split that a Book-Entry Transfer Institution effects in order to have a newly established stock company assume all or some of its Book-Entry Transfer Services (hereinafter referred to by the simplified term "incorporation-type company split" in this and the following Article) does not take effect without the authorization of the competent minister.
(2)A Book-Entry Transfer Institution seeking the authorization referred to in the preceding paragraph must submit a paper application for authorization for an incorporation-type company split to the competent minister, giving the following information about the stock company that will be incorporated in the incorporation-type company split (hereinafter referred to as the "company being incorporated" in this Article):
(i)the information set forth in the items of Article 4, paragraph (1);
(ii)the Book-Entry Transfer Services to which the company being incorporated will succeed.
(3)Paper-based documents giving the details of the incorporation-type company split plan or electronic or magnetic records in which such details have been recorded (limited to those specified by Ordinance of the Competent Ministry hereinafter the same applies in this paragraph) and the paper-based documents or electronic or magnetic records specified by Ordinance of the Competent Ministry must accompany an application for authorization of an incorporation-type company split
(4)If an application is filed for the authorization referred to in paragraph (1), the competent minister must examine whether the application conforms to the following criteria:
(i)the company being incorporated satisfies the requirements set forth in Article 3, paragraph (1), item (i) and items (iv) to (vii); and
(ii)there is a sound expectation of Book-Entry Transfer Services being succeeded to in a smooth and appropriate manner.
(5)The company being incorporated is deemed to have obtained an Article 3, paragraph (1) designation at the time of incorporation-type company split.
(6)The company being incorporated succeeds to the rights and obligations that the Book-Entry Transfer Institution undergoing the incorporation-type company split holds, in connection with the business subject to the succession, based on the authorization or other disposition of an administrative agency.
(Participants' Approval for Incorporation-type Company Splits)
Article 28Before effecting an incorporation-type company split, a Book-Entry Transfer Institution must obtain the approval of the Participants, in addition to approval at a shareholders meeting as referred to in Article 804, paragraph (1) of the Companies Act.
(Approval for Absorption-type Company Splits)
Article 29(1)An absorption-type company split that a Book-Entry Transfer Institution effects in order to have another stock company assume all or some of its Book-Entry Transfer Services (hereinafter referred to by the simplified term "absorption-type company split" in this and the following Article) does not take effect without the authorization of the competent minister.
(2)A Book-Entry Transfer Institution seeking the authorization referred to in the preceding paragraph must submit a paper application for authorization for an absorption-type company split to the competent minister, giving the following information about the stock company that will succeed to all or some of the Book-Entry Transfer Services in the absorption-type company split (hereinafter referred to as the "succeeding company" in this Article):
(i)the information set forth in the items of Article 4, paragraph (1);
(ii)the Book-Entry Transfer Services to which the succeeding company will succeed.
(3)Paper-based documents giving the details of the absorption-type company split agreement or electronic or magnetic records in which such details have been recorded (limited to those as specified by Ordinance of the Competent Ministry; hereinafter the same applies in this paragraph) and the paper-based documents or electronic or magnetic records specified by Ordinance of the Competent Ministry must accompany an application for authorization of an absorption-type company split.
(4)If an application is filed for the authorization referred to in paragraph (1), the competent minister must examine whether the application conforms to the following criteria:
(i)the succeeding company satisfies the requirements set forth in the items of Article 3, paragraph (1); and
(ii)there is a sound expectation of Book-Entry Transfer Services being succeeded to in a smooth and appropriate manner.
(5)A succeeding company is deemed to have obtained an Article 3, paragraph (1) designation at the time of the absorption-type company split (unless a Book-Entry Transfer Institution is the succeeding company).
(6)The succeeding company succeeds to the rights and obligations that the Book-Entry Transfer Institution undergoing the absorption-type company split holds, in connection with the business subject to the succession, based on the authorization or other disposition of an administrative agency.
(Participants' Approval for Absorption-type Company Split)
Article 30Before effecting an absorption-type company split, a Book-Entry Transfer Institution must obtain the approval of the Participants, in addition to approval at a shareholders meeting as referred to in Article 783, paragraph (1) or Article 795, paragraph (1) of the Companies Act.
(Approval for Business Transfer)
Article 31(1)A Book-Entry Transfer Institution's transfer of all or some of the Book-Entry Transfer Services it provides to another stock company (hereinafter referred to as a "business transfer" in this and the following Article) does not take effect without the authorization of the competent minister.
(2)A Book-Entry Transfer Institution seeking the authorization referred to in the preceding paragraph must submit a paper application for authorization for a business transfer to the competent minister, giving the following information about the stock company that will succeed to all or some of the Book-Entry Transfer Services in the business transfer (hereinafter referred to as the "transferee company" in this Article):
(i)the information set forth in the items of Article 4, paragraph (1); and
(ii)the Book-Entry Transfer Services to which the transferee company will succeed.
(3)Paper-based documents giving the details of the business transfer agreement or electronic or magnetic records in which such details have been recorded (limited to those as specified by Ordinance of the Competent Ministry; hereinafter the same applies in this paragraph) and the paper-based documents or electronic or magnetic records specified by Ordinance of the Competent Ministry must accompany an application for authorization of a business transfer.
(4)If an application is filed for the authorization referred to in paragraph (1), the competent minister must examine whether the application conforms to the following criteria:
(i)the transferee company satisfies the requirements set forth in the items of Article 3, paragraph (1); and
(ii)there is a sound expectation of Book-Entry Transfer Services being succeeded to in a smooth and appropriate manner.
(5)A transferee company is deemed to have obtained an Article 3, paragraph (1) designation at the time of business transfer (unless a Book-Entry Transfer Institution is the transferee company).
(6)The transferee company succeeds to the rights and obligations that the Book-Entry Transfer Institution effecting the business transfer holds, in connection with the business subject to the transfer, based on the authorization or other disposition of an administrative agency, and also succeeds to the rights and obligations connected with the consent of the issuer as referred to in Article 13, paragraph (1).
(7)A Participant account that a Book-Entry Transfer Institution effecting a business transfer has opened is deemed to be a Participant account that the transferee company has opened.
(Participants' Approval for Business Transfer)
Article 32Before effecting a business transfer, a Book-Entry Transfer Institution must obtain the approval of the Participants, in addition to approval at a shareholders meeting as referred to in Article 467, paragraph (1) of the Companies Act.
Section 5 Participants' Meetings
(Matters for Resolution)
Article 33The Participants' approval as referred to in Article 26, 28, 30 or the preceding Article must be based on a resolution passed at a meeting of Participants (hereinafter referred to as a "Participants' Meeting").
(Convener)
Article 34(1)A Book-Entry Transfer Institution convenes a Participants' Meeting.
(2)To convene a Participants' Meeting, a paper-based document must be used to issue notice to convene to each Participant by two weeks prior to the date of the meeting.
(3)In lieu of using a paper-based document to issue notice as prescribed in the preceding paragraph, a Book-Entry Transfer Institution may issue notice by electronic or magnetic means (meaning by using an electronic data processing system or employing other information communications technology in the manner specified by Ordinance of the Competent Ministry; the same applies hereinafter), pursuant to Ordinance of the Competent Ministry, with the approval of the Participants. In doing so, the Book-Entry Transfer Institution is deemed to have issued the notice under that paragraph.
(4)The notice referred to in the preceding two paragraphs must give an indication or include a record of the matter that constitutes the purpose of the meeting and a summary of the proposals.
(Participants' Voting Rights)
Article 35Unless otherwise prescribed in the operational rules, all Participants' voting rights are equal.
(Voting by Electronic or Magnetic Means)
Article 36(1)A Participant not attending a Participants' Meeting may vote by electronic or magnetic means pursuant to the provisions of the operational rules.
(2)At the time of the issuance of the notice prescribed in Article 34, paragraph (2), the Book-Entry Transfer Institution must issue a paper document giving the information specified by Ordinance of the Competent Ministry as information of reference with regard to voting by electronic or magnetic means.
(3)If a Book-Entry Transfer Institution issues a notice under Article 34, paragraph (3) by electronic or magnetic means to Participants that have given the approval referred to in that paragraph, it may provide them with the information that it is required to give in the paper document referred to in the preceding paragraph by electronic or magnetic means, together with that notice; provided, however, that if requested by a Participant, the Book-Entry Transfer Institution must issue that Participant the paper document referred to in that paragraph.
(4)The provisions of Article 302, paragraphs (3) and (4) and Article 312 of the Companies Act apply mutatis mutandis to voting by electronic or magnetic means as referred to in paragraph (1) for a Participants' Meeting. In such a case, the phrase "Article 299, paragraph (3)" is deemed to be replaced with "Article 34, paragraph (3) of the Act on Book-Entry Transfer of Corporate Bonds and Shares"; the phrase "Ordinance of the Ministry of Justice" is deemed to be replaced with "Ordinance of the Competent Ministry"; the phrase "information that is required to be detailed in the voting forms" is deemed to be replaced with "information specified by Ordinance of the Competent Ministry as the necessary information that will allow the Participants to vote"; the phrase "stock company" is deemed to be replaced with "Book-Entry Transfer Institution"; the phrase "In the case provided for in paragraph (1)...the directors" in Article 302, paragraph (3) of said Act is deemed to be replaced with "the Book-Entry Transfer Institution", the phrase "In the case provided for in paragraph (1) [...] the directors" in paragraph (4) of that Article is deemed to be replaced with "[...] a Book-Entry Transfer Institution"; and the phrase "Cabinet Order" in Article 312, paragraph (1) of that Act is deemed to be replaced with "Ordinance of the Competent Ministry".
(Manner in Which Resolutions Are Passed)
Article 37A resolution at a Participants' Meeting is passed by the majority vote of the Participants in attendance.
(Deemed Agreement)
Article 38(1)In the operational rules, a Book-Entry Transfer Institution may provide that a Participant is deemed to consent to a proposal submitted at a Participants' Meeting if that Participant neither attends the Participants' Meeting nor votes.
(2)A Book-Entry Transfer Institution that has made the provisions referred to in the preceding paragraph must mention or include a record of that provisions in the notice under Article 34, paragraph (2).
(3)The votes of Participants that are deemed to consent to a proposal pursuant to the provisions of paragraph (1) are included in the reckoning of the number of votes held by Participants attending a Participants' Meeting.
(Mutatis Mutandis Application of the Companies Act to Participants' Meetings)
Article 39The provisions of Article 310, paragraphs (1) to (4) inclusive, Articles 314, 315 and 317, Article 729, paragraph (2), Articles 731 to 735 inclusive, Article 742, paragraph (1), Article 868, paragraph (3), Article 870, paragraph (1) (limited to the provisions related to item (vii)), Article 871 main clause, Article 872 (limited to the provisions related to item (iv)), Article 873 main clause, Articles 875 and 876, Article 940, paragraph (1) (limited to the part set forth in item (i)) and paragraph (3) of the Companies Act apply mutatis mutandis to a Participants' Meeting. In such a case, the terms "stock company", "bond-issuing company", and "stock company or membership company" in these provisions are deemed to be replaced with "Book-Entry Transfer Institution"; the phrase "Ordinance of the Ministry of Justice" therein is deemed to be replaced with "Ordinance of the Competent Ministry"; the phrase "Cabinet Order" in Article 310, paragraph (3) of that Act is deemed to be replaced with "Ordinance of the Competent Ministry"; the phrase "Article 299, paragraph (3)" in paragraph (4) of that Article is deemed to be replaced with "Article 34, paragraph (3) of the Act on Book-Entry Transfer of Corporate Bonds and Shares"; the phrase "a director, an accounting advisor, a company auditor, or an executive officer" in Article 314 of that Act is deemed to be replaced with "a Book-Entry Transfer Institution"; the phrase "Articles 298 and 299" in Article 317 of that Act is deemed to be replaced with "Article 34, paragraphs (2) to (4) inclusive of the Act on Book-Entry Transfer of Corporate Bonds and Shares"; the phrase "bondholders or conveners" in Article 729, paragraph (2) of that Act is deemed to be replaced with "Participants' Meeting"; the phrase "The bond manager and bondholders" in Article 731, paragraph (3) of that Act is deemed to be replaced with "Participants"; the phrase "the matters stated or recorded in the materials used for explaining the business of the Bond-Issuing Company or other matters regarding the solicitation in Article 676" in Article 733, item (i) of that Act is deemed to be replaced with "operational rules"; the phrase "Bond-Issuing Company" in Article 868, paragraph (3) is deemed to be replaced with "Book-Entry Transfer Institution"; the phrase "this Act" in Article 940, paragraph (1) (limited to what is set forth in item (i)) of that Act is deemed to be replaced with "the Act on Book-Entry Transfer of Corporate Bonds and Shares"; the phrase "the preceding two paragraphs" in paragraph (3) of that Article is deemed to be replaced with "paragraph (1)"; the phrase "these provisions" in that paragraph is deemed to be replaced with "the provisions of that paragraph"; and the phrase "Company" in items (i) and (iii) of that paragraph is deemed to be replaced with "Book-Entry Transfer Institution".
Section 6 Dissolution
(Approval for Dissolution)
Article 40The following actions do not take effect without the authorization of the competent minister.
(i)a resolution at a shareholders meeting for the dissolution of a Book-Entry Transfer Institution.
(ii)a merger to which Book-Entry Transfer Institution constitute all or some of the parties (but only if the stock company surviving the merger or the stock company incorporated in the merger does not conduct Book-Entry Transfer Services).
(Lapse of Designation)
Article 41(1)If a Book-Entry Transfer Institution falls under one of the following items, its Article 3, paragraph (1) designation ceases to be effective:
(i)it discontinues Book-Entry Transfer Services;
(ii)it undergoes a dissolution (or a judgment invalidating its incorporation or a merger or incorporation-type company split involving it becomes final and binding).
(2)If a designation ceases to be effective pursuant to the provisions of the preceding paragraph, the former Book-Entry Transfer Institution or its general successor (but only a person that has succeeded to the rights and obligations of a Book-Entry Transfer Institution disappearing in a merger, but that does not engage in Book-Entry Transfer Services; the same applies in the following Article) must notify the competent minister of this pursuant to the provisions of Ordinance of the Competent Ministry.
(3)On being submitted a notification under the provisions of the preceding paragraph, the competent minister must issue public notice of this in the Official Gazette.
(Deemed Book-Entry Transfer Institution If a Designation Is Rescinded)
Article 42If the Article 3, paragraph (1) designation of a Book-Entry Transfer Institution is rescinded pursuant to the provisions of Article 22, paragraph (1) or ceases to be effective pursuant to the provisions of paragraph (1) of the preceding Article, the former Book-Entry Transfer Institution or its general successor must promptly discontinue the Book-Entry Transfer Services in which the Book-Entry Transfer Institution engaged. In such a case, the former Book-Entry Transfer Institution or its general successor is deemed to be a Book-Entry Transfer Institution inasmuch as the task of completing Book-Entry Transfer Services is concerned.
(Opinion of the Competent Minister in the Liquidation Process)
Article 43(1)In a liquidation, bankruptcy proceedings, a rehabilitation, reorganization, or recognition and assistance proceedings, the court may request the opinion of or an inspection or investigation by the competent minister.
(2)On finding it to be necessary to do so, the competent minister may state an opinion to the court during a process as prescribed in the preceding paragraph.
(3)The provisions of Article 20 apply mutatis mutandis if the competent minister is requested by the court to implement an inspection or investigation pursuant to the provisions of paragraph (1).
Section 7 Account Management Institutions
(Opening of Accounts of an Account Management Institution)
Article 44(1)A person as set forth below may open an account for another person in which book entries can be made for Bonds and Other Securities at the request of that person, in accordance with the provisions of this Act and the operational rules of the Book-Entry Transfer Institution. To do so, the person must have an account opened for it in advance by that Book-Entry Transfer Institution or by another Account Management Institution connected with that Book-Entry Transfer Institution (other than one specified by Ordinance of the Competent Ministry), in which book entries can be made for Bonds and Other Securities:
(i)a finaicial instruments business operator as prescribed in Article 2, paragraph (9) of the Financial Instruments and Exchange Act (limited to a person performing type I financial instruments business as prescribed in Article 28, paragraph (1) of that Act);
(ii)a bank as prescribed in Article 2, paragraph (1) of the Banking Act (Act No. 59 of 1981) (including branches licensed by the prime minister as referred to in Article 4, paragraph (1) of that Act pursuant to the provisions of Article 47, paragraph (1) of that Act);
(iii)a long-term credit bank as prescribed in Article 2 of the Long- Term Credit Bank Act (Act No. 187 of 1952);
(iv)a trust company;
(v)the Shoko Chukin Bank, Ltd.;
(vi)the Norinchukin Bank;
(vii)an agricultural cooperative and federation of agricultural cooperatives engaged in business referred to in Article 10, paragraph (1), item (iii) of the Agricultural Cooperatives Act (Act No. 132 of 1947);
(viii)a fisheries cooperative engaged in business referred to in Article 11, paragraph (1), item (iv) of the Fisheries Cooperatives Act (Act No. 242 of 1948); a federation of fisheries cooperatives engaged in business referred to in Article 87, paragraph (1), item (iv) of that Act; fishery-product processing cooperative engaged in business referred to in Article 93, paragraph (1), item (ii) of that Act; or a federation of fishery-product processing cooperatives engaged in business referred to in Article 97, paragraph (1), item (ii) of that Act;
(ix)a credit cooperative or a federation of cooperatives engaged in business referred to in Article 9-9, paragraph (1), item (i) of the Small and Medium Sized Enterprise Cooperatives Act (Act No. 181 of 1949);
(x)a Shinkin Bank and federation of Shinkin Banks;
(xi)a Labor Bank and federation of Labor Banks;
(xii)a person other than as set forth in the preceding items, that is permitted to manage another person's Bonds or Other Securities in the course of trade pursuant to Japanese laws and regulations, as specified by Ordinance of the Competent Ministry;
(xiii)a person licensed or registered or subject to a similar disposition in a foreign state pursuant to foreign laws and regulations, to manage another person's Bonds or Other Securities or rights similar to Bonds or Other Securities in that foreign state, as designated by the competent minister.
(2)If a first Book-Entry Transfer Institution opens an account for another person in which book entries can be made for Bonds and Other Securities at the request of that person pursuant to the provisions of the operational rules of a second Book-Entry Transfer Institution, the first Book-Entry Transfer Institution must have the second Book-Entry Transfer Institution or an Account Management Institution connected with it (other than one as specified by Ordinance of the Competent Ministry) open an account for it in advance in which book entries can be made for Bonds and Other Securities.
(Services of Account Management Institutions)
Article 45(1)An Account Management Institution is to engage in Book-Entry Transfer Services as an Account Management Institution pursuant to the provisions of this Act and the operational rules of the Book-Entry Transfer Institutions that constitute its Superior Institutions.
(2)An Account Management Institution must prepare and maintain a book-entry transfer account register.
(Mutatis Mutandis Application)
Article 46The provisions of Article 14 apply mutatis mutandis to an Account Management Institution and the provisions of Article 42 apply if an Account Management Institution ceases to be a person as set forth in any item of Article 44, paragraph (1).
Section 8 Special Provisions Applicable If the Bank of Japan Engages in Book-Entry Transfer Services
(Special Provisions Applicable If the Bank of Japan Engages in Book-Entry Transfer Services for Book Entry Trasfer of Japanese Government Bonds)
Article 47(1)Notwithstanding the provisions of Article 3, paragraph (1), if the Bank of Japan meets the following requirements, the competent minister may designate it to engage in Book-Entry Transfer Services (but only Book-Entry Transfer Services for Japanese government bonds; hereinafter the same applies in this paragraph to Article 50 inclusive) upon its application and pursuant to the provisions of this Act:
(i)if it has had its designation under this paragraph rescinded pursuant to the provisions of Article 22, paragraph (1) as applied following a deemed replacement of terms pursuant to the following Article, it has been at least five years since the day of the rescission;
(ii)if it has been sentenced to a fine for violating this Act and has finished serving the sentence or ceased to be subject to the enforcement thereof, it has gone five years since the day on which it finished serving the sentence or ceased to be subject to its enforcement;
(iii)the provisions of its operational rules conform to laws and regulations and are found to be sufficient for allowing it to perform Book-Entry Transfer Services in an appropriate and reliable manner pursuant to the provisions of this Act;
(iv)in light of its personnel structure, it is found to have the knowledge and experience to perform Book-Entry Transfer Services in an appropriate and reliable manner.
(2)On making a designation as referred to in the preceding paragraph, the competent minister must issue public notice of this in the Official Gazette.
(3)The provisions of Article 4, paragraph (1) (excluding items (ii) and (iv) to (vi) inclusive) and paragraph (2) (excluding items (ii), (v) and (vi)) apply mutatis mutandis to the Bank of Japan if it seeks the designation referred to in paragraph (1). In such a case, the phrase "trade name" in paragraph (1), item (i) of that Article is deemed to be replaced with "name", the phrase "paragraph (1), items (iii) and (iv) of the preceding Article" in paragraph (2), item (i) of that Article is deemed to be replaced with "Article 47, paragraph (1), item (ii)" and the phrase "the company's certificate of registered information" in item (iii) of that paragraph is deemed to be replaced with "its certificate of registered information".
Article 48If the Bank of Japan is designated as referred to in paragraph (1) of the preceding Article, it is deemed to be a Book-Entry Transfer Institution and the provisions of this Act (excluding Articles 5 to 7 inclusive, Article 9, Article 20, paragraphs (2) and (3), Article 23, items (iii) and (iv), Articles 24 to 30 inclusive, Article 40, Article 41, paragraph (1), item (ii), Article 43, the following Article, Article 50, Chapter IV and Chapters VI to XII inclusive and Articles 1 to 10 inclusive, Articles 12 to 18 inclusive and Articles 27 to 42 inclusive of the Supplementary Provisions and the punishments concerning these provisions) apply. In such a case, the words set forth in the right-hand column of the following table are deemed to stand in place of the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 8
business
business (but only that which involves Japanese government bonds)
Article 12, paragraph (2)
for itself in which book entries can be made for Bonds and Other Securities (hereinafter referred to as an "Institution-Held Account") for the purpose of performing the obligations as referred to in Article 78, paragraphs (1) and (3) (including as applied mutatis mutandis pursuant to Articles 113, 115, 117, 118, 120, 121, 122, 124, 127, and Article 276, item (i)), Article 103, paragraphs (1) and (3), Article 107, paragraphs (1) and (4), Article 127-21, paragraphs (1) and (3), Article 145, paragraphs (1) and (3) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1), and Article 276, item (ii)), Article 179, paragraphs (1) and (3) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), or Article 210, paragraphs (1) and (4) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv))
for itself
Article 16, paragraph (1)
business and assets
business
Article 17
the articles of incorporation or operational rules
operational rules
Article 18, paragraph (1)
Article 4, paragraph (1), item (i) or items (iii) to (v) inclusive
Article 4, paragraph (1), item (i) or item (iii) as applied mutatis mutandis pursuant to Article 47, paragraph (3)
paragraph (2), item (i) or item (iii) of the same Article
Article 4, paragraph (2), item (iii) as applied mutatis mutandis pursuant to Article 47, paragraph (3)
Article 18, paragraph (2)
trade name
name
Article 20, paragraph (1)
order a Book-Entry Transfer Institution to make reports or submit materials relevant to its business or assets; may have the relevant officials enter the business office of the Book-Entry Transfer Institution and inspect the state of its business or assets, books and documents, or other articles; and may have those officials question persons concerned
order a Book-Entry Transfer Institution to make reports or submit materials relevant to its business
Article 21
the state of its business operations or its assets
its business operations
Article 22, paragraph (1)
rescind an Article 3, paragraph (1) designation or an approval as referred to in the proviso of Article 9, paragraph (1); order the suspension of all or part of its business activities during a fixed period of no longer than six months; or order the dismissal of a director, accounting advisor, company auditor, or executive officer
rescind an Article 47, paragraph (1) designation or order the suspension of all or part of its business activities during a fixed period of no longer than six months
Article 22, paragraph (1), item (i)
Article 3, paragraph (1), item (iii) or (iv)
Article 47, paragraph (1), item (ii)
Article 22, paragraph (1), items (ii) and (iii), and paragraph (2), and Article 23, item (i)
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 32
the approval of the Participants, in addition to approval at a shareholders meeting as referred to in Article 467, paragraph (1) of the Companies Act
the approval of the Participants
Article 41, paragraph (1)
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 41, paragraph (2)
the former Book-Entry Institution or its general successor (but only a person that has succeeded to the rights and obligations of a Book-Entry Transfer Institution disappearing in a merger, but that does not engage in Book-Entry Services; the same applies in the following Article)
the former Book-Entry Transfer Institution
Article 42
Article 3, paragraph (1)
Article 47, paragraph (1)
the former Book-Entry Transfer Institution or its general successor
the former Book-Entry Transfer Institution
Article 51, paragraph (1)
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 58
Article 69, paragraph (2)
Article 95, paragraphs (9) and (10) (including as applied mutatis mutandis pursuant to paragraph (11) of the same Article) as after the deemed replacement of terms under Article 48, Article 69, paragraph (2)
Article 89, paragraph (2)
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 90, paragraph (1)
a person may apply
a person may apply or decide
Article 91, paragraph (5)
(ii) the amount of Book-Entry Transfer JGBs, by issue;
(ii) the amount of Book-Entry Transfer JGBs, by issue(other than as set forth in the following item);
(ii)-2 that the Book-Entry Transfer Institution in question is a pledgee, if this is the case; and the amount of Book-Entry Transfer JGBs that have been pledged thereto, by issue;
Article 92, paragraph (1)
Participant
Participant and Book-Entry Transfer Institution
Article 92, paragraph (2)
(i) create an entry or record showing an increase equal to the amount referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph, if the Book-Entry Transfer Institution is the one that opened the account referred to item (iii) of the preceding paragraph, in the column of the account where the information set forth in paragraph (3), item (iii) of the preceding Article is entered or recorded (hereinafter referred to as the "holdings column" in this Chapter);
(i) create an entry or record showing an increase equal to the amount referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph, if the Book-Entry Transfer Institution is the one that opened the account referred to item (iii) of the preceding paragraph, in the column of the account (this excludes the Institution-Held Account) where the information set forth in paragraph (3), item (iii) of the preceding Article is entered or recorded (hereinafter referred to as the "holdings column" in this Chapter);
(i)-2 create an entry or record showing an increase equal to the amount referred to in item (iv) of the preceding paragraph in the column where the information set forth in paragraph (5), item (ii) of the preceding Article, as after the deemed replacement of terms under Article 48, is entered or recorded in the Institution-Held Account, if the Book-Entry Transfer Institution is the one that acquired those Book-Entry Transfer JGBs;
Article 92, paragraph (3)
provisions of the preceding paragraph
provisions of the preceding paragraph (excluding the provisions of item (i)-2)
Article 93, paragraph (1)
of a particular issue,
of a particular issue, or on deciding to Strip a Bond pursuant to the provisions of Article 93, paragraph (8), as after the deemed replacement of terms under Article 48,
and as indicated in the application pursuant to the provisions of paragraph (4)
and as indicated in the application pursuant to the provisions of paragraph (4); or pursuant to the provisions of Article 93, paragraph (8) as applied after a replacement of terms pursuant to the provisions of Article 48 and as indicated in the decision
Article 93, paragraph (7)
(7) The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7) The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(8) On reaching a decision to Strip a specific amount of strippable book-entry transfer JGBs of a particular issue which have been entered or recorded in the column of the Institution-Held Account in which the information set forth in Article 91, paragraph (5), item (ii), as after the deemed replacement of terms under Article 48, is entered or recorded, a Book-Entry Transfer Institution must immediately create an entry or record showing a reduction equal to the specific amount of the strippable book-entry transfer JGBs of that particular issue which have been entered or recorded in the column where the information set forth in that item is entered or recorded; create an entry or record showing an increase equal to the amount of the Book-Entry JGBs that constitute the principal portion of those strippable book-entry JGBs; and create an entry or record showing an increase equal to each of the amounts of strippable book-entry transfer JGB interest from the Book-Entry Transfer JGBs that constitute the interest portion of those strippable book-entry JGBs.
Article 94, paragraph (1)
of a particular issue,
of a particular issue, or on deciding to reconstitute a bond pursuant to the provisions of Article 94, paragraph (8), as after the deemed replacement of terms under Article 48,
and as indicated in the application pursuant to the provisions of paragraph (4)
and as indicated in the application pursuant to the provisions of paragraph (4); or pursuant to the provisions of Article 94, paragraph (8) as after the deemed replacement of terms under 48 and as indicated in the decision
Article 94, paragraph (7)
(7) The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7) The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(8) On reaching a decision to reconstitute a specific amount of strippable book-entry JGBs and interest-only book-entry transfer JGBs which have been entered or recorded in the column of the Institution-Held Account in which the information set forth in Article 91, paragraph (5), item (ii), as after the deemed replacement of terms under Article 48, is entered or recorded, a Book-Entry Transfer Institution must immediately create an entry or record showing a reduction equal to the amount of the strippable book-entry transfer JGBs and each of the interest-only book-entry transfer JGBs of that issue which have been entered or recorded in the column where the information set forth in that item is entered or recorded and create an entry or record showing an increase equal to the amount of the reduction in the principal-only book-entry transfer JGBs, for a strippable book-entry transfer JGB of the same name and code as those principal-only book-entry JGBs. In such a case, the interest payment dates and the amounts of each of the interest-only book-entry transfer JGBs subject to the decision must be the same as the interest payment dates and amounts of each of the interest portions of the strippable book-entry transfer JGBs with the same name and code, and of the same amount, as the principal-only book-entry transfer JGBs subject to the decision.
Article 95, paragraph (1)
of a particular issue,
of a particular issue, or on deciding to effect a book entry transfer pursuant to the provisions of Article 95, paragraph (9), as after the deemed replacement of terms under Article 48,
and as indicated in the application pursuant to the provisions of paragraph (3),
and as indicated in the application pursuant to the provisions of paragraph (3); or pursuant to the provisions of Article 95, paragraphs (9) to (11) as after the deemed replacement of terms under Article 48 and as indicated in the decision
Article 95, paragraph (3), item (iv)
the transferee account (this excludes the Institution-Held Account)
the transferee account
holdings column
holdings column (or in the column where entries or records are created for the information set forth in Article 91, paragraph (5), item (ii) as after the deemed replacement of terms under Article 48, for the Institution-Held Account; hereinafter referred to as the "institutional holdings column" in this Chapter)
pledge column
pledge column (or in the column where entries or records are created for the information set forth in Article 91, paragraph (5), item (ii)-2 as after the deemed replacement of terms under Article 48, for the Institution-Held Account; hereinafter referred to as the "institutional pledges column" in this Chapter)
Article 95, paragraph (8)
(8) If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(8) If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(9) On deciding to make a book entry transfer in the account of a Participant for a specific amount of Book-Entry Transfer JGBs of a particular issue that have been entered or recorded in the institutional pledges column of the Institution-Held Account, a Book-Entry Transfer Institution must immediately take the following measures:
(i) create an entry or record showing a reduction equal to the amount of the Book-Entry Transfer JGBs of that particular issue, in the holdings column of the account subject to the decision;
(ii) create an entry or record showing an increase equal to the amount referred to in the preceding item, in either the holdings column or the pledge column of the transferee account, if the Book-Entry Transfer Institution is the one that opened the transferee account subject to the decision.
(iii) create an entry or record showing an increase equal to the amount referred to in item (i), in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is; notify the Immediately Subordinate Institution of the issue, amount, and transferee account for the Book-Entry Transfer JGBs for which an entry or record showing an increase must be created when the book entry is effected; and notify the Immediately Subordinate Institution of whether to create the entry or record showing the increase in the holdings column or in the pledge column of that account, if the Book-Entry Transfer Institution is not the one that opened the transferee account subject to the decision.
(10) Upon being notified as referred to in item (iii) of the preceding paragraph, the Account Management Institution that has been so notified must immediately take the following measures:
(i) create an entry or record showing an increase equal to the amount referred to in item (i) of the preceding paragraph in the transferee account, in the column of which it has been notified, if the Account Management Institution is the one that opened the transferee account;
(ii) create an entry or record showing an increase equal to the amount referred to in item (i) of the preceding paragraph, in the customer account subdivision under the account of whichever of the Account Management Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution pursuant to the provisions of item (iii) of the preceding paragraph, if the Account Management Institution is not the one that opened the transferee account.
(11) If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
Article 96, paragraph (1)
of a particular issue,
of a particular issue, or on deciding to make a deletion pursuant to the provisions of Article 96, paragraph (8), as after the deemed replacement of terms under Article 48,
and as indicated in the application pursuant to the provisions of paragraph (3),
and as indicated in the application pursuant to the provisions of paragraph (3); or pursuant to the provisions of Article 96, paragraphs (8) as after the deemed replacement of terms under Article 48 and as indicated in the decision
Article 96, paragraph (7)
(7) The national government may demand that, in exchange for the government redeeming Book-Entry Transfer JGBs (or paying interest, if the bonds are interest-only book-entry JGBs), the bondholder or pledgee thereof file an application with its Immediately Superior Institution to enter a deletion for the Book-Entry JGBs of that issue which appear on its account, deleting the same amount from the account as the amount of the Book-Entry Transfer JGBs that are being redeemed.
(7) The national government may demand that, in exchange for the government redeeming Book-Entry Transfer JGBs (or paying interest, if the bonds are interest-only book-entry transfer JGBs), the bondholder or pledgee thereof file an application with its Immediately Superior Institution to enter a deletion for the Book-Entry Transfer JGBs of that issue which appear on its account, deleting the same amount from the account as the amount of the Book-Entry Transfer JGBs that are being redeemed.
(8) On reaching a decision to delete a specific amount of book-entry JGBs of a particular issue which have been entered or recorded in the institutional holdings column or institutional pledges column of the Institution-Held Account, a Book-Entry Transfer Institution must immediately create an entry or record showing a reduction equal to the amount of the issue subject to the decision, in the column that is subject to that decision.
Article 98
based on an application for book entry transfer,
based on an application for book entry transfer or a decision as referred to in Article 95, paragraph (9), as after the deemed replacement of terms under Article 48,
(or in the column where the information set forth in Article 91, paragraph (5), item (ii) is entered or recorded, for
or in the institutional holdings column of
Article 99
based on an application for book entry transfer,
based on an application for book entry transfer or a decision as referred to in Article 95, paragraph (9), as after the deemed replacement of terms under Article 48,
pledge column of its account
pledge column of its account (or in the institutional pledges column of the Institution Held Account)
Article 101
Participant
Participant and Book-Entry Transfer Institution
Article 102
based on an application for book entry transfer,
based on an application for book entry transfer or a decision as referred to in Article 95, paragraph (9), as after the deemed replacement of terms under Article 48,
Article 103, paragraph (1), item (i) and Article 107, paragraph (1), item (i)
the accounts of the Participants of the Book-Entry Transfer Institution
the accounts of the Participants of the Book-Entry Transfer Institution and the Institution-Held Account
Article 278, paragraph (1)
Article 95, paragraph (1)
Article 95, paragraph (1) or issue a decision as referred to in Article 95, paragraph (9), as after the deemed replacement of terms under Article 48,
Article 281
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 282, paragraph (1), item (i)
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 25, paragraph (5), Article 27, paragraph (5), Article 29, paragraph (5) or Article 31, paragraph (5)
Article 31, paragraph (5) applied mutatis mutandis pursuant to Article 50
Article 282, paragraph (1), item (ii)
Article 3, paragraph (1)
Article 47, paragraph (1)
Article 22, paragraph (7) of Supplementary Provisions
(7) On being notified as referred to in paragraph (5), item (i), the national government must immediately retire the registration to which the request for retirement prescribed in paragraph (3) pertains.
(7) On being notified as referred to in paragraph (5), item (i), the national government must immediately retire the registration to which the request for retirement prescribed in paragraph (3) pertains.
(8) On reaching a decision to enter or record the special deficit-financing bonds it holds in the book entry transfer receipts register, a Book-Entry Transfer Institution must immediately create entries or records in the book entry transfer receipts register showing the information set forth in the items of Article 20, paragraph (1) of the Supplementary Provisions for the special deficit-financing bonds subject to that decision.
(9) After creating entries or records in the book entry transfer receipts register pursuant to the preceding paragraph, a Book-Entry Transfer Institution must immediately take the following measures for the special deficit-financing bonds under those entries or records:
(i) notify the national government that it has created entries or records in the book entry transfer receipts register;
(ii) create an entry or record showing an increase equal to the amount of those special deficit-financing bonds in the column of the Institution-Held Account where entries or records are created for the information set forth in Article 91, paragraph (5), item (ii), as after the deemed replacement of terms under Article 48.
(Special Provisions on Business Transfer Orders)
Article 49If a Book-Entry Transfer Institution falls under one of the items of Article 23, the competent minister may order it to transfer Book-Entry Transfer Services to the Bank of Japan under the designation referred to in Article 47, paragraph (1).
(Mutatis Mutandis Application of Approval for Business Transfer)
Article 50The provisions of Article 31 apply mutatis mutandis to a Book-Entry Transfer Institution's transfer of all or some of the Book-Entry Transfer Services it provides to the Bank of Japan. In such a case, the phrase "items of Article 4, paragraph (1)" in Article 31, paragraph (2), item (i) is deemed to be replaced with "Article 4, paragraph (1), item (i) and (iii) as applied mutatis mutandis pursuant to Article 47, paragraph (3)"; the phrase "items of Article 3, paragraph (1)" in paragraph (4), item (i) of that Article is deemed to be replaced with "items of Article 47, paragraph (1)"; the phrase "a Book-Entry Transfer Institution is the transferee company" in paragraph (5) of that Article is deemed to be replaced with "the Bank of Japan has been designated as referred to in Article 47, paragraph (1)"; and the phrase "Article 3, paragraph (1)" in that paragraph is deemed to be replaced with "Article 47, paragraph (1)".
Chapter III Participants Protection Trusts
Section 1 Participants Protection Trust Contracts
(Conclusion of Participants Protection Trust Contracts)
Article 51(1)After being designated as referred to in Article 3, paragraph (1), an Book-Entry Transfer Institution must conclude a participants protection trust contract as the settlor without delay; provided, however, that this does not apply if another Book-Entry Transfer Institution has already concluded a participants protection trust contract when the aforementioned Book-Entry Transfer Institution is so designated.
(2)A Book-Entry Transfer Institution that is released from the requirement to conclude a participants protection trust contract pursuant to the proviso of the preceding paragraph is deemed to have concluded a participants protection trust contract as a settlor.
(3)Once a Book-Entry Transfer Institution concludes a participants protection trust contract pursuant to the main clause of paragraph (1) (including if it is deemed to have concluded a participants protection trust contract pursuant to the provisions of the preceding paragraph), it must provide for the particulars of the Participants Protection Trust in its operational rules.
(Trustees)
Article 52A participants protection trust contract must not be concluded unless the trustee is a trust company or similar institution (meaning a trust company (but only one licensed as referred to in Article 3 or Article 53, paragraph (1) of the Trust Business Act (Act No. 154 of 2004)) or a financial institution engaged in trust business (meaning a financial institution licensed as referred to in Article 1, paragraph (1) of the Act on Engagement in Trust Business by Financial Institutions (Act No. 43 of 1943); the same applies hereinafter); the same applies hereinafter).
(Beneficiaries)
Article 53The beneficiaries of a Participants Protection Trust are Participants with compensable claims as prescribed in Article 60, paragraph (1).
(Designation of Trust Administrator)
Article 54A trust administrator and the beneficiaries' agent must be designated in a participants protection trust contract.
(Establishment of Management Committee)
Article 55(1)A participants protection trust contract must provide for the establishment of a management committee.
(2)With the authorization of the competent minister, the trustee appoints and dismisses members of a management committee from among persons with the necessary business or academic experience to allow for the appropriate management of the Participants Protection Trust.
(Participants Protection Trust Contracts)
Article 56The following particulars must be prescribed in a participants protection trust contract:
(i)that it is for a Participants Protection Trust;
(ii)the particulars of the trust administrator and beneficiaries' agent;
(iii)the particulars of the management committee
(iv)the particulars of the administration and management of the trust property;
(v)the particulars of how trust fees are calculated, as well as how they are paid and the timing of their payment;
(vi)the particulars of the disposal of trust property;
(vii)the means of public notice;
(viii)other particulars prescribed by Ordinance of the Competent Ministry.
(Authorization)
Article 57A Book-Entry Transfer Institution must receive the advance authorization of the competent minister pursuant to the provisions of Ordinance of the Competent Ministry before concluding a participants protection trust contract.
Section 2 Issuing Payment to Beneficiaries
(Issuing Notice to Beneficiaries)
Article 58If the current or former Immediately Superior Institution of a Participant is liable for damage that a Book-Entry Transfer Institution, etc. has done to the Participant by causing an entry or record to be omitted from the book-entry transfer account register or by causing an erroneous entry or record to be made therein, in violation of the following provisions (referred to as "erroneous entry or recording" in Article 60, paragraph (1)), and it is subject to an order commencing bankruptcy proceedings, order commencing rehabilitation, order commencing reorganization, order commencing special liquidation, or order recognizing foreign insolvency proceedings (hereinafter referred to as an "order commencing bankruptcy or similar proceedings" in this Article) (hereinafter such an institution is referred to as a "bankrupt current or former immediately superior institution" in this Section and Section 4), in addition to immediately notifying the trustee that it is subject to an order commencing bankruptcy or similar proceedings and of the particulars specified by Ordinance of the Competent Ministry, the bankrupt current or former immediately superior institution must immediately report this to the competent minister:
(i)Article 69, paragraph (2) (including as applied mutatis mutandis pursuant to Article 69, paragraph (3) (including as applied mutatis mutandis pursuant to Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i)), Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i));
(ii)Article 70, paragraph (1) (including as applied mutatis mutandis pursuant to Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i));
(iii)Article 71, paragraph (1) (including as applied mutatis mutandis pursuant to Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i));
(iv)Article 72 (including as applied mutatis mutandis pursuant to Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i));
(v)Article 78, paragraph (5) (including as applied mutatis mutandis pursuant to Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i));
(vi)Article 79, paragraph (5) (including as applied mutatis mutandis pursuant to Article 113, Article 115, Article 117, Article 118, Article 120, Article 121, Article 122, Article 124, Article 127 and Article 276, item (i));
(vii)Article 92, paragraph (2) (including as applied mutatis mutandis pursuant to Article 92, paragraph (3));
(viii)Article 93, paragraph (1), Article 94, paragraph (1), Article 95, paragraph (1), Article 96, paragraph (1), Article 97, Article 103, paragraph (5), Article 104, paragraph (5), Article 107, paragraph (6), Article 108, paragraph (5), Article 121-2, paragraphs (4) or (5), Article 122-2, paragraphs (4) or (5) or Article 124-2, paragraphs (4) or (5);
(viii)-2Article 127-5, paragraph (2) (including as applied mutatis mutandis pursuant to Article 127-5, paragraph (3)), Article 127-7, paragraph (1), Article 127-9, paragraph (1), Article 127-10, paragraph (3) (including as applied mutatis mutandis pursuant to Article 127-10, paragraph (4)), Article 127-11, paragraph (3) (including as applied mutatis mutandis pursuant to Article 127-11, paragraphs (4)) and (5), Article 127-12, paragraph (3) (including as applied mutatis mutandis pursuant to Article 127-12, paragraphs (4)) and (5), Article 127-13, paragraph (3) (including as applied mutatis mutandis pursuant to Article 127-13, paragraphs (4)) and (5), Article 127-15, Article 127-21, paragraph (5) and Article 127-22, paragraph (5);
(ix)Article 130, paragraph (2) (including as applied mutatis mutandis pursuant to Article 130, paragraph (3) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii)), Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(x)Article 132, paragraph (1) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(xi)Article 134, paragraph (1) (including as applied mutatis mutandis pursuant to Article 235, paragraph (1) and Article 276, item (ii));
(xii)Article 135, paragraph (3) (including as applied mutatis mutandis pursuant to Article 135, paragraph (4), (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1) and Article 276, item (ii)), Article 228, paragraph (1), Article 235, paragraph (1) and Article 276, item (ii));
(xiii)Article 136, paragraph (3) (including as applied mutatis mutandis pursuant to Article 136, paragraph (4) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii)), Article 228, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(xiv)Article 136, paragraph (5) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(xv)Article 137, paragraph (3) (including as applied mutatis mutandis pursuant to Article 137, paragraph (4), (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1) and Article 276, item (ii)), Article 228, paragraph (1), Article 235, paragraph (1) and Article 276, item (ii));
(xvi)Article 137, paragraph (5) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1) and Article 276, item (ii));
(xvii)Article 138, paragraph (3) (including as applied mutatis mutandis pursuant to Article 138, paragraph (4) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 256, Article 262, paragraphs (1) and (3), Article 263, Article 270 and Article 276, item (ii)), Article 228, paragraph (1), Article 235, paragraph (1), Article 256, Article 262, paragraphs (1) and (3), Article 263, Article 270 and Article 276, item (ii));
(xviii)Article 138, paragraph (5) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 256, Article 262, paragraphs (1) and (3), Article 263, Article 270 and Article 276, item (ii));
(xix)Article 139 (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(xx)Article 145, paragraph (5) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(xxi)Article 146, paragraph (5) (including as applied mutatis mutandis pursuant to Article 228, paragraph (1), Article 235, paragraph (1), Article 239, paragraph (1) and Article 276, item (ii));
(xxii)Article 166, paragraph (2) (including as applied mutatis mutandis pursuant to Article 166, paragraph (3) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii)), Article 249, paragraph (1) and Article 276, item (iii));
(xxiii)Article 168, paragraph (1) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii));
(xxiv)Article 170, paragraph (1) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii));
(xxv)Article 171, paragraph (3) (including as applied mutatis mutandis pursuant to Article 171, paragraph (4) (including as applied mutatis mutandis pursuant to Article 276, item (iii)) and Article 276, item (iii));
(xxvi)Article 172 (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii));
(xxvii)Article 173 (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii));
(xxviii)Article 179, paragraph (5) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii));
(xxix)Article 180, paragraph (5) (including as applied mutatis mutandis pursuant to Article 249, paragraph (1) and Article 276, item (iii));
(xxx)Article 195, paragraph (2) (including as applied mutatis mutandis pursuant to Article 195, paragraph (3) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv)), Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(xxxi)Article 197, paragraph (1) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(xxxii)Article 199, paragraph (1) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(xxxiii)Article 200, paragraph (3) (including as applied mutatis mutandis pursuant to Article 200, paragraph (4) (including as applied mutatis mutandis pursuant to Article 276, item (iv)) and Article 276, item (iv));
(xxxiv)Article 201 (including as applied mutatis mutandis pursuant to Article 254, paragraph (1) and Article 276, item (iv));
(xxxv)Article 202, paragraph (2) (including as applied mutatis mutandis pursuant to Article 254, paragraph (1) and Article 276, item (iv));
(xxxvi)Article 203, paragraph (2) (including as applied mutatis mutandis pursuant to Article 254, paragraph (1) and Article 276, item (iv));
(xxxvii)Article 204 (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(xxxviii)Article 210, paragraph (6) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(xxxix)Article 211, paragraph (5) (including as applied mutatis mutandis pursuant to Article 251, paragraph (1), Article 254, paragraph (1) and Article 276, item (iv));
(xl)Article 230, paragraph (2) or Article 240, paragraph (2);
(xli)Article 241, paragraph (3) (including as applied mutatis mutandis pursuant to Article 241, paragraph (4));
(xlii)Article 242, paragraph (3) (including as applied mutatis mutandis pursuant to Article 242, paragraph (4));
(xliii)Article 242, paragraph (5).
(Public Notice)
Article 59(1)Having been notified as referred to in the preceding Article, the trustee must hear the opinion of the management committee, establish the period and location for persons to file notification of compensable claims as prescribed in paragraph (1) of the following Article, provide for the particulars prescribed by Cabinet Order, and issue public notice thereof.
(2)The trustee may change the period for filing a notification that has been announced in the public notice issued pursuant to the provisions of the preceding paragraph, if, after public notice has been issued pursuant to the preceding paragraph, a public notice under the provisions of Article 197, paragraph (1) of the Bankruptcy Act (Act No. 75 of 2004) is issued (including as applied mutatis mutandis pursuant to Article 209, paragraph (3) of that Act), the relevant person is notified as under the provisions of Article 65-2, or any other circumstance specified by Cabinet Order arises with respect to the bankrupt current or former immediately superior institution.
(3)If a trustee changes the period for filing a notification pursuant to the provisions of the preceding paragraph, it must issue public notice of the particulars of the change without delay.
(4)Once a trustee establishes the things prescribed in paragraph (1) or if the trustee changes the period for filing a notification pursuant to paragraph (2), it must immediately report this to the competent minister.
(Issuing Payment to Beneficiaries)
Article 60(1)At the request of a Participant, the trustee issues a payment, pursuant to Ordinance of the Competent Ministry, in an amount equivalent to the claim for damage that the Participant has incurred due to the Book-Entry Transfer Institution, etc.'s erroneous entry or recording (hereinafter referred to as a "claim due to erroneous entry or recording") and which the participant holds against the bankrupt current or former immediately superior institution at the commencement of bankruptcy or other proceedings (referred to as a "compensable claim" in paragraph (6), the following Article and Article 61-2).
(2)A request as referred to in the preceding paragraph may only be made within the period for filing a notification announced in a public notice issued pursuant to the provisions of paragraph (1) or (3) of the preceding Article; provided, however, that this does not apply if the trustee finds a natural disaster or other compelling circumstance to have hindered a person from making a request within the period for filing a notification.
(3)Before finding a natural disaster or other compelling circumstance to have hindered a person pursuant to the preceding paragraph, the trustee must hear the opinion of the management committee.
(4)Notwithstanding paragraph (1), if the amount payable pursuant to that paragraph exceeds the amount specified by Cabinet Order, the trustee is to pay the amount specified by Cabinet Order.
(5)Notwithstanding paragraph (1) or the preceding paragraph, if the total of the amounts payable to all Participants pursuant to the provisions of paragraph (1) and the preceding paragraph exceeds the amount of trust property in the Participants Protection Trust, payment is to be issued in proportion to the part of the amount that is payable to each Participant pursuant to the provisions of paragraph (1) and the preceding paragraph.
(6)Once a trustee issues a payment pursuant to the provisions of paragraph (1) or the preceding two paragraphs, it acquires the compensable claim subject to the payment (or acquires a claim due to erroneous entry or recording against the principal obligor of the guarantee obligation, if the compensable claim subject to the payment is a claim that involves a guarantee obligation of the bankrupt current or former immediately superior institution) in proportion to the amount paid.
(Management Committee Instructions)
Article 61Before issuing a payment against a compensable claim pursuant to the provisions of paragraph (1), (4) or (5) of the preceding Article, the trustee must ask for payment instructions from the management committee. In such a case, the management committee must promptly verify the compensable claim and issue instructions.
(Application of the Income Tax Act)
Article 61-2(1)If a Participant is paid as referred to in Article 60, paragraph (1) based on a compensable claim, the Bond or Other Security underlying the paid compensable claim (but only the part of the compensable claim that the trustee has acquired based on that payment) is deemed to transfer from the Participant to the trustee that issues the payment, at the time the Participant is paid and for the amount of money paid thereto, and the provisions of the Income Tax Act (Act No. 33 of 1965) and other laws and regulations on income taxes apply.
(2)Cabinet Order prescribes the necessary particulars concerning the application of the special provisions of Article 4-2 and Article 4-3 of the Act on Special Measures on Taxation (Act No. 26 of 1957) when the provisions of the preceding paragraph apply.
Section 3 Dues
(Book-Entry Transfer and Account Management Institutions' Payment of Dues to a Participants Protection Trust)
Article 62(1)A Book-Entry Transfer Institution, etc. (other than one as set forth in Article 44, paragraph (1), item (xiii); the same applies in Article 64, paragraph (1)) must pay monies to a trustee to add to the trust property of a Participants Protection Trust (hereinafter referred to as a "dues" in this Section), pursuant to the provisions of Ordinance of the Competent Ministry.
(2)Monies that a Book-Entry Transfer Institution places in trust and which become part of the trust property of a Participants Protection Trust at the time it concludes a participants protection trust contract pursuant to the provisions of the main clause of Article 51, paragraph (1) are deemed to be dues.
(Amount of Dues)
Article 63(1)The amount of dues is calculated using the calculation method prescribed in the operational rules of the Book-Entry Transfer Institution in accordance with the standards prescribed by Ordinance of the Competent Ministry.
(2)The competent minister must exercise the appropriate supervision so that dues are imposed fairly and sufficient trust property is secured for the Participants Protection Trust.
(Late Payment Charges)
Article 64(1)If a Book-Entry Transfer Institution, etc. fails to pay dues by the due date prescribed in its operational rules, it must pay a late payment charge to the trustee which becomes part of the trust property of the Participants Protection Trust.
(2)The late payment charge referred to in the preceding paragraph is calculated by multiplying the unpaid dues by an annual rate of 14.5%, based on the number of days in the period running from the day after the due date to the date of payment.
Section 4 Miscellaneous Provisions
(Mutatis Mutandis Application of the Act on Charitable Trusts)
Article 65The provisions of Article 4, paragraph (2) and Articles 5 to 9 inclusive of the Act on Charitable Trusts (Act No. 62 of 1922) apply mutatis mutandis to a Participants Protection Trust.
(Notifying the Trustee of a Distribution Notice concerning the Bankrupt Current or Former Immediately Superior Institution)
Article 65-2If a bankruptcy trustee issues a notice under Article 197, paragraph (1) (including as applied mutatis mutandis pursuant to Article 209, paragraph (3)) or Article 204, paragraph (2) of the Bankruptcy Act or receives approval under Article 208, paragraph (1) of that Act in the course of the bankruptcy proceedings of a bankrupt current or former immediately superior institution, the bankruptcy trustee must notify the trustee of the Participants Protection Trust of this.
Chapter IV Book Entry Trasfer of Corporate Bonds
Section 1 General Rules
(Ownership of Rights)
Article 66The ownership of rights (other than a claim for interest prescribed in Article 73) under a corporate bond as set forth below which is handled by a Book-Entry Transfer Institution (hereinafter referred to as a "book-entry transfer corporate bond" in this Chapter) is established by the entries or records in a book-entry transfer account register as under the provisions of this Chapter:
(i)a corporate bond that satisfies all of the following requirements (referred to as a "short-term corporate bond" in Article 83):
(a)the amount of each corporate bond is no less than one hundred million yen;
(b)provisions have been made establishing a fixed due date for the redemption of the principal that is within one year from the day on which the total amount for the corporate bonds is paid in, and no provisions have been made for payment by installment;
(c)provisions have been made establishing that the due date for the payment of interest is the same day as the due date for the redemption of the principal as referred to in (b);
(d)the bond is not secured by collateral pursuant to the provisions of the Secured Bonds Trust Act (Act No. 52 of 1905).
(ii)a corporate bond that is provided for in a decision to issue corporate bonds establishing that all corporate bonds issued based on that decision will be subject to the application of this Act.
(Non-issuance of Corporate Bond Certificates)
Article 67(1)Corporate bond certificates may not be issued for book-entry transfer corporate bonds.
(2)Notwithstanding the preceding paragraph, if a Book-Entry Transfer Institution that handles book-entry transfer corporate bonds has its Article 3, paragraph (1) designation rescinded pursuant to the provisions of Article 22, paragraph (1) or its designation ceases to be effective pursuant to the provisions of Article 41, paragraph (1) and there is no person to succeed to the Book-Entry Transfer Services thereof; or if a Book-Entry Transfer Institution that handles book-entry transfer corporate bonds ceases to handle those book-entry transfer corporate bonds; the holder of such a book-entry transfer corporate bond may ask the issuer to issue a corporate bond certificate.
(3)A corporate bond certificate as referred to in the preceding paragraph is to be in bearer form.
Section 2 Book-Entry Transfer Account Registers
(Information Required to Be Entered or Recorded in a Book-Entry Transfer Account Register)
Article 68(1)A book-entry transfer account register is subdivided, with an account for each Participant.
(2)The account of an Account Management Institution in a book-entry transfer account register is subdivided as follows:
(i)an account in which entries or records are created for book-entry transfer corporate bonds under which the Account Management Institution holds rights (hereinafter referred to as the institution's "own account" in this Chapter);
(ii)an account in which entries or records are created for book-entry transfer corporate bonds under which the Participants of the Account Management Institution or of its Subordinate Institution hold rights (hereinafter referred to as a "customer account" in this Chapter).
(3)Entries or records giving the following information are made for each account (other than customer accounts) in a book-entry transfer account register:
(i)the name and address of the Participant;
(ii)the issuer's trade name and the type of book-entry transfer corporate bond (hereinafter referred to as the "issue" in this Chapter);
(iii)the amount of book-entry transfer corporate bonds, by issue (other than as set forth in the following item);
(iv)that the Participant in question is a pledgee, if this is the case; and the amount of book-entry transfer corporate bonds that have been pledged thereto, by issue;
(v)that the Participant in question is the trustee of a trust, if this is the case; and the amount of the book-entry transfer corporate bonds as referred to in the preceding two items which constitute trust property;
(vi)other information specified by Cabinet Order.
(4)Entries or records giving the following information are made for each customer account in a book-entry transfer account register:
(i)the information set forth in items (i) and (ii) of the preceding paragraph;
(ii)the amount of book-entry transfer corporate bonds, by issue;
(iii)other information specified by Cabinet Order.
(5)If a Book-Entry Transfer Institution opens an Institution-Held Account, it must create a subdivision for that account in the book-entry transfer account register and enter or record the following information:
(i)the issue;
(ii)the amount of book-entry transfer corporate bonds, by issue;
(iii)other information specified by Cabinet Order.
(6)A book-entry transfer account register may be created as an electronic or magnetic record (limited to one as specified by Ordinance of the Competent Ministry).
(Creating New Entries or Records upon Issuance of Book-Entry Transfer Corporate Bonds)
Article 69(1)The issuer of book-entry transfer corporate bonds of a particular issue must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information without delay after the date on which it issues those book-entry transfer corporate bonds:
(i)the issue of book-entry transfer corporate bonds that it has issued;
(ii)the names of the Participants that constitute the holders and pledgees of book-entry transfer corporate bonds as referred to in the preceding item;
(iii)the accounts opened for the Participants referred to in the preceding item, in which book entries can be made for book-entry transfer corporate bonds as referred to in item (i);
(iv)the amount of book-entry transfer corporate bonds as referred to in item (i) for each Participant (other than as set forth in the following item);
(v)that a Participant is a pledgee, if this is the case; and the amount of book-entry transfer corporate bonds as referred to in item (i) that have been pledged thereto;
(vi)that a Participant is the trustee of a trust, if this is the case; and the amount of book-entry transfer corporate bonds as referred to in item (iv) and the preceding item which constitute trust property;
(vii)the total amount of book-entry transfer corporate bonds as referred to in item (i) and other information specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately take the following measures for the book-entry transfer corporate bonds of the issue about which it has been notified:
(i)create the following entries or records, if the Book-Entry Transfer Institution is the one that opened the account referred to item (iii) of the preceding paragraph:
(a)an entry or record showing an increase equal to the amount referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph (but only one that is a bondholder as referred to in that item), in the column of the account where the information set forth in paragraph (3), item (iii) of the preceding Article is entered or recorded (hereinafter referred to as the "holdings column" in this Chapter);
(b)an entry or record showing an increase equal to the amount referred to in item (v) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph (but only one that is a pledgee as referred to in that item), in the column of the account where the information set forth in paragraph (3), item (iv) of the preceding Article is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
(c)an entry or record in the account showing an increase equal to the amount of the book-entry transfer corporate bonds that constitute trust property as referred to in item (vi) of the preceding paragraph.
(ii)create an entry or record showing an increase equal to the total of the amounts referred to in items (iv) and (v) of the preceding paragraph, for a Participant as referred to in item (ii) of that paragraph, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution's Immediately Subordinate Institutions is the Superior Institution of that Participant, and notify the Immediately Subordinate Institution of the information set forth in items (i) to (vi) inclusive of that paragraph, if the Book-Entry Transfer Institution is not the one that opened the account referred to item (iii) of the preceding paragraph.
(3)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Procedures If a Company Cannot Find the Account of a Bondholder)
Article 69-2(1)If a company seeks to deliver book-entry transfer corporate bonds of a particular issue but is unable to find an account that has been opened for the holder or pledgee of those bonds in which book entries can be made for book-entry transfer corporate bonds, the company (or the person specified by Ordinance of the Competent Ministry as being equivalent to such a company, if it is delivering book-entry transfer corporate bonds at the time of a consolidation-type merger or in any other case specified by Ordinance of the Competent Ministry; hereinafter referred to as the "notifier" in this Article) must notify the person that Ordinance of the Competent Ministry prescribes as the one that will become the holder or pledgee of those book-entry transfer corporate bonds of the following information, by one month prior to the fixed date referred to in item (i):
(i)that the company will notify the relevant party as referred to in paragraph (1) of the preceding Article or apply for a book-entry transfer to be made for the holder (other than the holder of corporate bonds underlying a pledge, if there is a pledgee) or pledgee of the book-entry transfer corporate bonds on a fixed date;
(ii)that the notifier must be notified of the account opened for the bondholder or pledgee referred to in the preceding item (other than an account opened by a Book-Entry Transfer Institution, etc. based on a request as referred to in the main clause of paragraph (3)) in which book entries can be made for the book-entry transfer corporate bonds, by the fixed date referred to in that item;
(iii)the name and address of the Book-Entry Transfer Institution, etc. that opens accounts based on requests as referred to in the main clause of paragraph (3);
(iv)other information specified by Ordinance of the Competent Ministry.
(2)If the notifier referred to in the preceding paragraph is a person other than a company as referred to in that paragraph, the notifier must notify that company, on the fixed date referred to in item (i) of that paragraph, of the account referred to in item (ii) of that paragraph of which the bondholder or pledgee referred to in that item has notified it.
(3)If a bondholder or pledgee as referred to paragraph (1), item (i) does not notify the notifier of an account as referred to in item (ii) of that paragraph by the fixed date referred to in item (i) of that paragraph, the company must request the Book-Entry Transfer Institution, etc. referred to in item (iii) of that paragraph to open an account for the bondholder or pledgee in which book entries can be made for book-entry transfer corporate bonds (hereinafter referred to as a "special account"); provided, however, that this does not apply if there is a special account open that the company has requested be opened for the bondholder or pledgee.
(4)If a company is the issuer of corporate bonds that constitute book-entry transfer corporate bonds as referred to paragraph (1) but has not given the consent referred to in Article 13, paragraph (1) by the fixed date referred to in paragraph (1), item (i), it must promptly give the consent referred to in Article 13, paragraph (1) to the Book-Entry Transfer Institution with respect to those corporate bonds.
(5)In the case prescribed in paragraph (1), when the company notifies the relevant party as referred to in paragraph (1) of the preceding Article, it must use the account referred to in paragraph (1), item (ii) of which it is notified by the bondholder or pledgee referred to in paragraph (1), item (i) (or the special account that the company has requested be opened, if it has not been so notified) as the account referred to in paragraph (1), item (iii) of the preceding Article.
(Making Book-Entries)
Article 70(1)On receiving an application for a book-entry transfer involving book-entry transfer corporate bonds of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (8) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction or increase in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)Unless otherwise prescribed in this Act, the application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the book-entry transfer will create an entry or record of a reduction is to file with its Immediately Superior Institution.
(3)A person filing an application as referred to in paragraph (1) must indicate the following information in that application:
(i)the issue and the amount of book-entry transfer corporate bonds for which entries or records showing a reduction and increase will need to be created when the book-entry transfer is effected;
(ii)whether the reduction will be entered or recorded in the holdings column or the pledge column of the account of the Participant referred to in the preceding paragraph;
(iii)the account in which the entry or record showing the increase will need to be created (this excludes a customer account; hereinafter referred to as the "transferee account" in this Article);
(iv)whether the increase will be entered or recorded in the holdings column or the pledge column of the transferee account (this excludes the Institution-Held Account).
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction, in the amount referred to in item (i) of the preceding paragraph (hereinafter referred to as the "amount subject to book-entry transfer" in this Article), in either the holdings column or the pledge column of the account of the Participant referred to in paragraph (2), as indicated pursuant to the provisions of item (ii) of the preceding paragraph;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of items (i), (iii) and (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution involved in the book-entry transfer;
(iii)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in either the holdings column or the pledge column of the transferee account, as indicated pursuant to the provisions of item (iv) of the preceding paragraph (or in the column where the information set forth in Article 68, paragraph (5), item (ii) is entered or recorded, for an Institution-Held Account; hereinafter referred to as the "transferee column"), if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information indicated pursuant to the provisions of items (i), (iii) and (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the transferee column of the transferee account, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the person that has opened the transferee account.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)Upon being notified as referred to in paragraph (4), item (iv) or paragraph (5), item (iv) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph), the Account Management Institution that has been so notified must immediately take the following measures:
(i)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the transferee column of the transferee account, if the Account Management Institution is the one that opened the transferee account;
(ii)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Account Management Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of paragraph (4), item (iv) or paragraph (5), item (iv), if the Account Management Institution is not the one that opened the transferee account.
(8)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Special Provisions on Making Book-Entries for Book-Entry Transfer Corporate Bonds That Have Been Entered or Recorded in a Special Account)
Article 70-2(1)A Participant may not apply for a book-entry transfer involving a book-entry transfer corporate bond that has been entered or recorded in a special account if the transferee account is other than that of the Participant or that of the issuer of the book-entry transfer corporate bond.
(2)If, after the notice referred to in Article 69, paragraph (1) or an application for a book-entry transfer involving book-entry transfer corporate bonds of a particular issue is made, a person that, before that notice or application, acquired shares in a company disappearing in a merger but that cannot be delivered the book-entry transfer corporate bonds that replace those shares at the time of the merger because no entry or record has been made for the person in the shareholder register, or any other person specified by Ordinance of the Competent Ministry (hereinafter referred to as the "acquirer or other such person" in this paragraph) files a joint request together with the Participant in whose special account the book-entry transfer corporate bonds have been entered or recorded, the issuer must take the following actions. The same applies if the acquirer or other such person files a request accompanied by an authenticated copy or certified copy of an enforceable judgment that orders the Participant to file such a request or accompanied by any other paper document specified by Ordinance of the Competent Ministry as being equivalent thereto, and the same also applies in cases prescribed by Ordinance of the Competent Ministry as those in which the interests of the Participant and other interested persons are unlikely to be prejudiced even if the issuer takes the following actions as requested by the acquirer or other such person:
(i)filing a request as referred to in the main clause of Article 69-2, paragraph (3) for the acquirer or other such person;
(ii)filing an application for the book-entry transfer of those book-entry transfer corporate bonds in the transferee account that has been opened as per the request referred to in the preceding item.
(3)A Participant other than the issuer that has requested for a special account to be opened may not apply for a book-entry transfer with the special account as the transferee account.
(Making Deletions)
Article 71(1)On receiving an application for the deletion of a book-entry transfer corporate bond of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (6) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the reduction resulting from the deletion will be entered or recorded is to file with its Immediately Superior Institution.
(3)A Participant filing an application as referred to in paragraph (1) (hereinafter referred to as the "applicant" in this Article) must indicate the following information in that application:
(i)the issue and the amount of book-entry transfer corporate bonds for which an entry or record showing the occurrence of a reduction will need to be created when the deletion is effected;
(ii)whether the reduction will be entered or recorded in the holdings column or the pledge column of the applicant's account.
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the amount referred to in item (i) of the preceding paragraph, in either the holdings column or pledge column of the applicant's account, as indicated pursuant to the provisions of item (ii) of the preceding paragraph;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of item (i) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the amount referred to in paragraph (3), item (i), in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)Unless an issuer goes through a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act (referred to as a "bond manager or similar person" in the following paragraph) to redeem book-entry transfer corporate bonds for a bondholder or pledgee, the issuer may demand that, in exchange for the issuer redeeming book-entry transfer corporate bonds, the bondholder or pledgee file an application with its Immediately Superior Institution to enter a deletion for the book-entry transfer corporate bonds of that issue which appear on its account, deleting the same amount from the account as the amount of the book-entry transfer corporate bonds that are being redeemed.
(8)The provisions of the preceding paragraph apply mutatis mutandis when a bond manager or similar person through which corporate bonds are redeemed for a bondholder or pledgee pays the amount so redeemed to the bondholder or pledgee.
(Changing Entries or Records)
Article 72If a Book-Entry Transfer Institution, etc. learns of a change having arisen with respect to information as set forth in one of the items of Article 68, paragraph (3), (4) or (5) in connection with the book-entry transfer account register that it maintains, it must immediately enter or record the change in the book-entry transfer account register.
Section 3 Effect of Book Entry Trasfer
(Transfer of Book-Entry Transfer Corporate Bonds)
Article 73A transfer of book-entry transfer corporate bonds (other than a claim for interest due free from seizure; the same applies in the following Article through Article 77) does not take effect unless the transferee has had an entry or record created in the holdings column of its account (or in the column where the information set forth in Article 68, paragraph (5), item (ii) is entered or recorded, for the Institution-Held Account), based on an application for book-entry transfer, showing an increase equal to the amount of book-entry transfer corporate bonds subject to the transfer.
(Pledges of Book-Entry Transfer Corporate Bonds)
Article 74A pledge of book-entry transfer corporate bonds does not take effect unless the pledgee has had an entry or record created in the pledge column of its account, based on an application for book-entry transfer, showing an increase equal to the amount of the book-entry transfer corporate bonds subject to the pledge.
(Requirement for Perfection of Book-Entry Transfer Corporate Bonds Which Are Trust Property)
Article 75(1)Unless an entry or record has been created for a book-entry transfer corporate bond in a book-entry transfer account register pursuant to the provisions of Article 68, paragraph (3), item (v), indicating that the bond is trust property, it is not permissible to assert against a third party that the bond is trust property.
(2)An entry or record in a book-entry transfer account register as prescribed in the preceding paragraph is created pursuant to the provisions of Cabinet Order.
(Participants' Presumed Rights)
Article 76A Participant is presumed to be the lawful holder of the rights under a book-entry transfer corporate bond that has been entered or recorded in the account thereof (but only in its own account, if the Participant is an Account Management Institution).
(Acquisition in Good Faith)
Article 77A Participant (or a Book-Entry Transfer Institution with an Institution-Held Account) that has had an entry or record created in its account (but only in its own account, if it is an Account Management Institution), based on an application for book-entry transfer, showing an increase in book-entry transfer corporate bonds of a particular issue acquires the rights associated with the entry or record showing the increase in the book-entry transfer corporate bonds of that issue; provided, however that this does not apply if the Participant has acted in bad faith or with gross negligence.
(Book-Entry Transfer Institutions' Obligations If There Are Entries or Records of Overages)
Article 78(1)If the total amount of book-entry transfer corporate bonds of a particular issue that all bondholders hold based on acquisitions of book-entry transfer corporate bonds under the preceding Article comes to exceed the total issued amount (other than any amount that has been redeemed) of book-entry transfer corporate bonds of that issue, and the aggregate amount referred to in item (i) exceeds the total issued amount referred to in item (ii), the Book-Entry Transfer Institution has a duty to acquire book-entry transfer corporate bonds in that issue until its holdings reach the amount of the overage (meaning the aggregate amount referred to in item (i), less the total issued amount referred to in item (ii)):
(i)the aggregate amount of book-entry transfer corporate bonds of that issue which have been entered or recorded in the accounts of the Participants of the Book-Entry Transfer Institution, in the book-entry transfer account register maintained by that Book-Entry Transfer Institution;
(ii)the total issued amount (other than any amount that has been redeemed) of book-entry transfer corporate bonds of that issue.
(2)If there is any amount as prescribed in item (i) of the preceding paragraph for which an entry or record showing an increase or reduction has been created in an account as prescribed in that item, but the rights associated with that entry or record have not arisen, been transferred, or been extinguished, and it is proven that nobody has acquired book-entry transfer corporate bonds pursuant to the provisions of the preceding Article in the amount for which the entry or record has been created, that amount is treated as if the entry or record had not been created.
(3)Once a Book-Entry Transfer Institution acquires book-entry transfer corporate bonds pursuant to the provisions of paragraph (1), it has a duty to immediately manifest its intention to the issuer to be bound by its release of the issuer from all obligations related to those book-entry transfer corporate bonds.
(4)The rights under the book-entry transfer corporate bonds prescribed in the preceding paragraph are extinguished once an intention to be bound by a release is manifested pursuant to that paragraph.
(5)Once a Book-Entry Transfer Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (3) with respect to book-entry transfer corporate bonds, it must immediately enter deletions for those book-entry transfer corporate bonds in the book-entry transfer account register.
(Account Management Institutions' Obligations If There Are Entries or Records of Overages)
Article 79(1)In a case as prescribed in paragraph (1) of the preceding Article, if there is an Account Management Institution in connection with which the total amount referred to in item (i) comes to exceed the amount referred to in item (ii), the Account Management Institution has a duty to manifest its intention to the issuer to be bound by its release of the issuer from all obligations related to book-entry transfer corporate bonds of that issue in an amount equal to the overage (meaning the total amount referred to in item (i), less the amount referred to in item (ii)):
(i)the total amount of book-entry transfer corporate bonds of that issue which have been entered or recorded in the accounts of the Participants of the Account Management Institution, in the book-entry transfer account register maintained by that Account Management Institution;
(ii)the total amount of book-entry transfer corporate bonds of that issue which have been entered or recorded in the customer account subdivision under the account of the Account Management Institution, in the book-entry transfer account register maintained by its Immediately Superior Institution.
(2)The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to:
(i)the amount prescribed in item (i) of the preceding paragraph;
(ii)the amount set forth in item (ii) of the preceding paragraph, if an entry or record showing an increase or reduction has been created in a customer account as prescribed in that item but the rights associated with that entry or record have not arisen, been transferred, or been extinguished.
(3)In a case as referred to in paragraph (1), if the Account Management Institution does not hold book-entry transfer corporate bonds of the issue prescribed in that paragraph in an amount equal to the overage prescribed in that paragraph, it has a duty to acquire book-entry transfer corporate bonds in that issue until its holdings reach the amount of the overage, before manifesting its intention to be bound by a release under the provisions of that paragraph.
(4)Once an Account Management Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (1), it must immediately notify its Immediately Superior Institution:
(i)that it has manifested the intention to be bound by the release;
(ii)of the issue and the amount of book-entry transfer corporate bonds with respect to which it has manifested the intention to be bound by the release.
(5)Upon being notified as referred to in the preceding paragraph, the Immediately Superior Institution referred to in that paragraph must immediately create the following entries or records regarding book-entry transfer corporate bonds as set forth in item (ii) of that paragraph in the book-entry transfer account register that it maintains:
(i)an entry or record under the account of the Account Management Institution referred to in that paragraph in the subdivision for the institution's own account, showing the occurrence of a reduction equal to the amount referred to in item (ii) of the preceding paragraph;
(ii)an entry or record in the customer account subdivision under the account referred to in the preceding item, showing an increase equal to the amount referred to in item (ii) of the preceding paragraph.
(Handling in the Event of Book-Entry Transfer Transefer Institution's Non-performance of Obligations as Regards Entries or Records of Overages)
Article 80(1)In a case as prescribed in Article 78, paragraph (1), until the Book-Entry Transfer Institution prescribed in that paragraph fully performs the obligations referred to in that paragraph and paragraph (3) of that Article, the issuer does not have a duty to redeem the principal or pay interest on the part of the book-entry transfer corporate bonds of the relevant issue that any of the bondholders holds which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in paragraph (3) of that Article) (hereinafter referred to as the "maximum amount ascribable to the book-entry transfer institution" in this Article and Article 85):
(i)the amount of book-entry transfer corporate bonds of that issue that the bondholder holds (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to book-entry transfer corporate bonds of that issue pursuant to the provisions of paragraph (1) of the preceding Article, the amount of such bonds less the maximum amount ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of that bondholder (but only in respect of the holder of a book-entry transfer corporate bond that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of book-entry transfer corporate bonds of that issue that all bondholders hold (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to book-entry transfer corporate bonds of that issue pursuant to the provisions of paragraph (1) of the preceding Article, the total amount of such bonds less the total of the maximum amounts ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the holders of book-entry transfer corporate bonds that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)In the case prescribed in Article 78, paragraph (1), the Book-Entry Transfer Institution prescribed in that paragraph assumes the following duties toward each bondholder:
(i)in a case as referred to in the preceding paragraph, the duty to redeem the principal and pay interest, in lieu of the issuer, on the part of the book-entry transfer corporate bonds of the relevant issue that each bondholder holds, up to the maximum amount ascribable to the book-entry transfer institution;
(ii)the duty to indemnify the bondholder for any damage caused by non-performance of obligations as referred to in Article 78, paragraph (1) or (3), beyond what is set forth in the preceding item.
(Handling in the Event of Account Management Institutions' Non-performance of Obligations as Regards Entries or Records of Overages)
Article 81(1)In a case as prescribed in Article 79, paragraph (1), until the Account Management Institution prescribed in that paragraph fully performs the obligations referred to in that paragraph and paragraph (3) of that Article, the issuer does not have a duty to redeem the principal or pay interest on the part of the book-entry transfer corporate bonds of the relevant issue that a holder (but only the holder of a book-entry transfer corporate bond that has been entered or recorded in an account opened by that Account Management Institution or by its Subordinate Institution) holds which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in that paragraph) (hereinafter referred to as the "maximum amount ascribable to the account management institution" in this Article and Article 85):
(i)the amount of book-entry transfer corporate bonds of that issue that the holder holds (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to book-entry transfer corporate bonds of that issue pursuant to the provisions of Article 79, paragraph (1), the amount of book-entry transfer corporate bonds of that issue that the holder holds less the maximum amount ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in paragraph (1) of the preceding Article in respect of that bondholder (but only in respect of the holder of a book-entry transfer corporate bond that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of book-entry transfer corporate bonds of that issue held by all of the holders of bonds entered or recorded in accounts opened by the Account Management Institution or by its Subordinate Institution (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to book-entry transfer corporate bonds of that issue pursuant to the provisions of Article 79, paragraph (1), that total amount less the total of the maximum amounts ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the holders of book-entry transfer corporate bonds that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)In the case prescribed in Article 79, paragraph (1), the Account Management Institution prescribed in that paragraph assumes the following duties toward a bondholder as prescribed in the preceding paragraph:
(i)in a case as referred to in the preceding paragraph, the duty to redeem the principal and pay interest, in lieu of the issuer, on the part of the book-entry transfer corporate bonds of the relevant issue that a bondholder as prescribed in the preceding paragraph holds, up to the maximum amount ascribable to the account management institution;
(ii)the duty to indemnify the bondholder for any damage caused by non-performance of obligations as referred to in Article 79, paragraph (1) or (3), beyond what is set forth in the preceding item.
(Handling If the Issuer Redeems Book-Entry Transfer Corporate Bonds in Error)
Article 82(1)Even if an issuer is acting in good faith, its redemption of principal or payment of interest in an amount that the provisions of Article 80, paragraph (1) or paragraph (1) of the preceding Article establish the issuer as not having a duty to redeem or pay does not have the effect of extinguishing the issuer's obligations in respect of other book-entry transfer corporate bonds of that issue.
(2)In a case as referred to in the preceding paragraph, a bondholder does not have a duty to return to the issuer the amount of the principal redeemed or interest paid as prescribed in that paragraph.
(3)If an issuer redeems principal or pays interest as prescribed in paragraph (1), it acquires the rights of a bondholder under the provisions of Article 80, paragraph (2), item (i) or paragraph (2), item (i) of the preceding Article toward the Book-Entry Transfer Institution, etc., to the extent of the amount prescribed in the preceding paragraph.
Section 4 Special Provisions of the Companies Act
(Special Provisions of the Companies Act on the Issuance of Short-Term Corporate Bonds)
Article 83(1)A share option may not be embedded in a short-term corporate bond.
(2)A corporate bond register need not be created for short-term corporate bonds.
(3)The provisions of Part IV, Chapter III of the Companies Act do not apply to a short-term corporate bond.
(Special Provisions of the Companies Act on the Issuance of Corporate Bonds)
Article 84(1)The issuer of book-entry transfer corporate bonds must indicate that the provisions of this Act apply to those book-entry transfer corporate bonds in the notice under Article 677, paragraph (1) of the Companies Act that it gives about them; provided, however, that this does not apply to short-term corporate bonds.
(2)A corporate bond register that is for book-entry transfer corporate bonds must include an entry or record indicating that this Act applies to those book-entry transfer corporate bonds.
(3)A person offering to subscribe for book-entry transfer corporate bonds must mention, in a paper-based document as referred to in Article 677, paragraph (2) of the Companies Act, the account opened for it in which book entries can be made for the book-entry transfer corporate bonds, or must indicate this account to the issuer of those book-entry transfer corporate bonds when concluding the agreement referred to in Article 679 of that Act.
(4)A person seeking to be delivered book-entry transfer corporate bonds pursuant to a request under the main clause of Article 166, paragraph (1) of the Companies Act must indicate to the company delivering those book-entry transfer corporate bonds the account (but not a special account) that has been opened for it in which book entries can be made for those book-entry transfer corporate bonds.
(Bondholders' Voting Rights in the Event of Non-performance of Obligations as Regards Entries or Records of Overages)
Article 85(1)Notwithstanding Article 723, paragraph (1) of the Companies Act, in a case as referred to in Article 80, paragraph (1) or Article 81, paragraph (1), each bondholder holds voting rights exercisable at a bondholders meeting in proportion to the amount of corporate bonds held thereby (other than the sum total of the maximum amount ascribable to the book-entry transfer institution and maximum amount ascribable to the account management institution).
(2)In applying the provisions of Article 718, paragraph (1) and Article 736, paragraph (1) of the Companies Act and Article 49, paragraph (1) of the Secured Bonds Trust Act, a bondholder as referred to in Article 80, paragraph (1) or Article 81, paragraph (1) is deemed not to hold the corporate bonds that correspond to the maximum amount ascribable to the book-entry transfer institution and the maximum amount ascribable to the account management institution.
(Presentation of Certificates)
Article 86(1)In order to demand that the relevant person call a bondholders meeting pursuant to the provisions of Article 718, paragraph (1) of the Companies Act; in order to call a bondholders meeting pursuant to the provisions of paragraph (3) of that Article; in order to vote at a bondholders meeting; or in order to inspect the conditions under which collateral under the provisions of Article 49, paragraph (1) of the Secured Bonds Trust Act is stored, the holder of book-entry transfer corporate bonds, after having been issued a paper-based document pursuant to the provisions of the main clause of paragraph (3), must present that document to the person that each of the following items prescribes for the category of case set forth in the item:
(i)if there is a bond manager:to that bond manager;
(ii)if there is a trust company subject to a trust agreement prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act:to that trust company;
(iii)in a case other than as set forth in the preceding two items:to the issuer.
(2)In order for the holder of book-entry transfer corporate bonds to vote at a bondholders meeting, the bondholder must present the paper-based document as under the preceding paragraph no later than one week prior to the date of the bondholders meeting and on the day of the meeting.
(3)A holder of book-entry transfer corporate bonds may demand that its Immediately Superior Institution issue a paper-based document certifying the information set forth in the items of Article 68, paragraph (3) with regard to the book-entry transfer corporate bonds entered or recorded under its own account in the book-entry transfer account register maintained by its Immediately Superior Institution; provided, however, that this does not apply to a person that has already been issued a document under this paragraph with regard to those book-entry transfer corporate bonds and that has not returned that document to its Immediately Superior Institution.
(4)A bondholder that has been issued a paper-based document pursuant to the main clause of the preceding paragraph may not apply for a book-entry transfer or deletion with respect to the book-entry transfer corporate bonds certified by the document until the bondholder returns that document to the Immediately Superior Institution referred to in that paragraph.
(Special Provisions of the Companies Act on Mergers)
Article 86-2(1)If a company surviving an absorption-type merger (meaning a company surviving an absorption-type merger as prescribed in Article 749, paragraph (1) of the Companies Act; the same applies hereinafter) or the wholly owning parent company resulting from a share exchange as prescribed in Article 767 of that Act (hereinafter collectively referred to as the "surviving or wholly owning company" in this Chapter and Chapters VII to IX, inclusive); or a company incorporated in a consolidation-type merger (meaning a company incorporated in a consolidation-type merger as prescribed in Article 753, paragraph (1) of that Act) or the wholly owning parent company incorporated in a share transfer as prescribed in Article 773, paragraph (1), item (i) of that Act (hereinafter collectively referred to as the "incorporated or wholly owning company" in this Chapter and Chapters VII to IX inclusive) seeks to deliver book-entry transfer corporate bonds at the time of the absorption-type merger or share exchange (hereinafter collectively referred to as an "absorption-type merger or share exchange" in this Chapter and Chapters VII to IX inclusive) or at the time of the consolidation-type merger or share transfer (hereinafter collectively referred to as a "consolidation-type merger or share transfer" in this Chapter and Chapters VII to IX inclusive), it must notify the relevant person as referred to in Article 69-2, paragraph (1), item (i), using the effective date of the absorption-type merger or share exchange or the date of incorporation of the incorporated or wholly owning company (hereinafter collectively referred to as the "effective date or date of incorporation" in this Chapter and Chapters VII to IX inclusive) as the fixed date referred to in that item.
(2)If a surviving or wholly owning company seeks to transfer book-entry transfer corporate bonds at the time of the absorption-type merger or share exchange, it must apply for book entries to be made for those book-entry transfer corporate bonds without delay after the effective date or date of incorporation.
(3)If membership companies merge and the company surviving an absorption-type merger or the company incorporated in a consolidation-type merger seeks to deliver book-entry transfer corporate bonds at the time of the merger, it must specify, in the merger agreement, the accounts (but not special accounts) that have been opened for the members of the membership company in which book entries can be made for those book-entry transfer corporate bonds.
(4)If the company succeeding in an absorption-type company split (meaning the company succeeding in an absorption-type company split as prescribed in Article 757 of the Companies Act; the same applies hereinafter) or the company incorporated in an incorporation-type company split (meaning the company incorporated in an incorporation-type company split as prescribed in Article 763 of that Act; the same applies hereinafter) seeks to deliver book-entry transfer corporate bonds at the time of the company split, it must specify, in the absorption-type company split agreement or incorporation-type company split plan, for the account (but not a special account) that has been opened for the splitting company in which book entries can be made for those book-entry transfer corporate bonds.
(Exclusion from Application)
Article 86-3The provisions of Article 681, items (iv) and (v), Article 682, paragraphs (1) to (3) inclusive, Article 688, paragraph (1), Article 690, paragraph (1), Article 691, paragraphs (1) and (2), Article 693, paragraph (1), Article 694, paragraph (1) and Article 695-2, paragraphs (1) to (3) inclusive do not apply to book-entry transfer corporate bonds.
Section 5 Miscellaneous Provisions
Article 87(1)Upon being notified as referred to in Article 69, paragraph (1), the Book-Entry Transfer Institution that has been so notified must immediately take measures, using the means prescribed by Cabinet Order, that will enable the Participants to learn the information set forth in item (vii) of that paragraph concerning book-entry transfer corporate bonds of the issue to which the notice pertains.
(2)The expenses incurred in connection with the measures referred to in the preceding paragraph are borne by the issuer of the book-entry transfer corporate bonds referred to in that paragraph.
Chapter V Book Entry Trasfer of Japanese Government Bonds
Section 1 General Rules
(Ownership of Rights)
Article 88The ownership of rights (other than a claim for interest prescribed in Article 98) under a Japanese government bond which is designated by the Minister of Finance as being subject to the provisions of this Act and which is handled by a Book-Entry Transfer Institution (hereinafter referred to as a "Book-Entry Transfer JGB") is established by the entries or records in a book-entry transfer account register as under the provisions of this Chapter.
(Non-issuance of Japanese Government Bond Certificates)
Article 89(1)Japanese government bond certificates may not be issued for Book-Entry Transfer JGBs.
(2)Notwithstanding the preceding paragraph, if a Book-Entry Transfer Institution that handles Book-Entry Transfer JGBs has its Article 3, paragraph (1) designation rescinded pursuant to the provisions of Article 22, paragraph (1) or its designation ceases to be effective pursuant to the provisions of Article 41, paragraph (1), and there is no person to succeed to the Book-Entry Transfer Services thereof; or if a Book-Entry Transfer Institution that handles Book-Entry Transfer JGBs ceases to handle those Book-Entry Transfer JGBs, the holder of such a Book-Entry Transfer JGB may ask the national government to issue a Japanese government bond certificate.
(Definitions)
Article 90(1)The phrase "strippable book-entry transfer JGB" as used in this Chapter means a Book-Entry Transfer JGB designated by the Minister of Finance as one that a person may apply to separate into a principal portion and an interest portion (hereinafter referred to as "Bond Stripping") pursuant to the provisions of Article 93, paragraph (1).
(2)The phrase "principal-only book-entry transfer JGB" as used in this Chapter means a Book-Entry Transfer JGB that was the principal portion of a strippable book-entry transfer JGB that has been Stripped pursuant to the provisions of Article 93.
(3)The phrase "interest-only book-entry transfer JGB" as used in this Chapter means a Book-Entry Transfer JGB that was the interest portion of a strippable book-entry transfer JGB that has been Stripped pursuant to the provisions of Article 93.
Section 2 Book-Entry Transfer Account Registers
(Information Required to Be Entered or Recorded in a Book-Entry Transfer Account Register)
Article 91(1)A book-entry transfer account register is subdivided by account for each Participant.
(2)The account of an Account Management Institution in a book-entry transfer account register is subdivided as follows:
(i)an account in which entries or records are created for Book-Entry Transfer JGBs under which the Account Management Institution holds rights (hereinafter referred to as the institution's "own account" in this Chapter);
(ii)an account in which entries or records are created for Book-Entry Transfer JGBs under which the Participants of the Account Management Institution or of its Subordinate Institution hold rights (hereinafter referred to as a "customer account" in this Chapter).
(3)Entries or records giving the following information are made for each account (other than customer accounts) in a book-entry transfer account register:
(i)the name and address of the Participant;
(ii)the information set forth below for the category of Japanese government bond prescribed therein (hereinafter referred to as the "issue"):
(a)for a strippable book-entry transfer JGB:an indication that it is a strippable book-entry transfer JGB, its name and code, and sufficient information to identify the interest rate and interest payment date;
(b)for a principal-only book-entry transfer JGB:an indication that it is a principal-only book-entry transfer JGB, as well as the name and code of the Book-Entry Transfer JGB before stripping;
(c)for an interest-only book-entry transfer JGB:an indication that it is an interest-only book-entry transfer JGB, and sufficient information to identify the interest payment date;
(d)for any other Book-Entry Transfer JGB:its name and code.
(iii)the amount of Book-Entry Transfer JGBs, by issue (other than as set forth in the following item);
(iv)that the Participant in question is a pledgee, if this is the case; and the amount of Book-Entry Transfer JGBs that have been pledged thereto, by issue;
(v)that the Participant in question is the trustee of a trust, if this is the case; and the amount of the Book-Entry Transfer JGBs as referred to in the preceding two items which constitute trust property;
(vi)other information specified by Cabinet Order.
(4)Entries or records giving the following information are made for each customer account in a book-entry transfer account register:
(i)the matters set forth in items (i) and (ii) of the preceding paragraph;
(ii)the amount of Book-Entry Transfer JGBs, by issue;
(iii)other information specified by Cabinet Order.
(5)If a Book-Entry Transfer Institution opens an Institution-Held Account, it must create a subdivision for that account in the book-entry transfer account register and enter or record the following information:
(i)the issue;
(ii)the amount of Book-Entry Transfer JGBs, by issue;
(iii)other information specified by Cabinet Order.
(6)A book-entry transfer account register may be created as an electronic or magnetic record (limited to one as specified by Ordinance of the Competent Ministry).
(Creating New Entries or Records upon Issuance of Book-Entry Transfer JGBs)
Article 92(1)On issuing Book-Entry Transfer JGBs of a particular issue, the national government must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information:
(i)the issue of Book-Entry Transfer JGBs that it has issued;
(ii)the names of the Participants acquiring the Book-Entry Transfer JGBs referred to in the preceding item;
(iii)the accounts as prescribed in Article 112 for the Participants referred to in the preceding item;
(iv)the amount of Book-Entry Transfer JGBs acquired by each Participant;
(v)the total amount of Book-Entry Transfer JGBs and other information specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately take the following measures for the Book-Entry Transfer JGBs of the issue about which it has been notified:
(i)create an entry or record showing an increase equal to the amount referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph, if the Book-Entry Transfer Institution is the one that opened the account referred to item (iii) of the preceding paragraph, in the column of the account where the information set forth in paragraph (3), item (iii) of the preceding Article is entered or recorded (hereinafter referred to as the "holdings column" in this Chapter);
(ii)create an entry or record showing an increase equal to the amount referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant, and notify its Immediately Subordinate Institution of the information set forth in items (i) to (iv) inclusive of that paragraph, if the Book-Entry Transfer Institution is not the one that opened the account referred to item (iii) of the preceding paragraph.
(3)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Stripping Bonds)
Article 93(1)On receiving an application to Strip a strippable book-entry transfer JGB of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (5) to (7) inclusive and as indicated in the application pursuant to the provisions of paragraph (4), must enter or record the reduction and increase in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the Participant in the holding column of whose account (this excludes a customer account) the strippable book-entry transfer JGB (other than one that has been seized) has been entered or recorded is to file with its Immediately Superior Institution.
(3)The application referred to paragraph (1) may be made only by a person satisfying the requirements specified by the Minister of Finance.
(4)A Participant filing an application as referred to in paragraph (1) (hereinafter referred to as an "applicant" in this Article) must indicate in that application the issue and the amount of strippable book-entry transfer JGBs for which an entry or record showing a reduction will need to be created.
(5)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the amount referred to in the preceding paragraph for the strippable book-entry transfer JGBs referred to in that paragraph; create an entry or record showing an increase equal to the amount of the Book-Entry Transfer JGBs that constitute the principal portion of those strippable book-entry transfer JGBs; and create an entry or record showing an increase equal to each of the amounts of strippable book-entry transfer JGB interest from the Book-Entry Transfer JGBs that constitute the interest portion of those strippable book-entry transfer JGBs, in the applicant's account
(ii)notify the Immediately Superior Institution of the issue and the amounts for which it has created entries or records of the reduction and increases referred to in the preceding item, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(6)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the amount referred to in paragraph (4), for strippable book-entry transfer JGBs as referred to in paragraph (4); create an entry or record showing an increase equal to the amount of the Book-Entry Transfer JGBs that constitute the principal portion of those strippable book-entry transfer JGBs; and create an entry or record showing an increase equal to each of the amounts of strippable book-entry transfer JGB interest from the Book-Entry Transfer JGBs that constitute the interest portion of those strippable book-entry transfer JGBs, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(7)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(Reconstituting Principal and Interest)
Article 94(1)On receiving an application to reconstitute a principal-only book-entry transfer JGB and interest-only book-entry transfer JGBs of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (5) to (7) inclusive and as indicated in the application pursuant to the provisions of paragraph (4), must enter or record the reduction and increase in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the Participant in the holdings column of whose account (this excludes a customer account) the principal-only book-entry transfer JGB and interest-only book-entry transfer JGBs (other than one that has been seized) have been entered or recorded is to file with its Immediately Superior Institution.
(3)The application referred to in paragraph (1) may be made only by a person satisfying the requirements prescribed in paragraph (3) of the preceding Article.
(4)A Participant filing an application as referred to in paragraph (1) (hereinafter referred to as an "applicant" in this Article) must indicate in that application the issue and the amounts of the principal-only book-entry transfer JGB and each of the interest-only book-entry transfer JGBs for which an entry or record showing a reduction will need to be created. In such a case, the interest payment dates and the amounts of each of the interest-only book-entry transfer JGBs to which the application pertains must be the same as the interest payment dates and amounts of each of the interest portions of the strippable book-entry transfer JGB with the same name and code, and of the same amount, as the principal-only book-entry transfer JGB to which the application pertains.
(5)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create entries or records in the applicant's account showing reductions equal to the amounts referred to in the first sentence of that paragraph for the principal-only book-entry transfer JGB and each of the interest-only book-entry transfer JGBs referred to in the first sentence of the preceding paragraph; and create an entry or record in the applicant's account showing an increase equal to the amount of the reduction in the principal-only book-entry transfer JGB, for a strippable book-entry transfer JGB of the same name and code as that principal-only book-entry transfer JGB;
(ii)notify the Immediately Superior Institution of the issue and the amounts for which it has created entries or records of the reductions and increase referred to in the preceding item, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(6)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create entries or records, in the customer account subdivision under the account of the Account Management Institution that has notified it, showing reductions equal to the amounts referred to in the first sentence of paragraph (4), for the principal-only book-entry transfer JGB and each of the interest-only book-entry transfer JGBs referred to in the first sentence of that paragraph; and create an entry or record, in the customer account subdivision under the account of the Account Management Institution that has notified it, showing an increase equal to the amount of the reduction in the principal-only book-entry transfer JGB, for a strippable book-entry transfer JGB of the same name and code as that principal-only book-entry transfer JGB;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of the item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(7)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(Making Book-Entries)
Article 95(1)On receiving an application for a book-entry transfer involving Book-Entry Transfer JGBs of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (8) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction or increase in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the book-entry transfer will create an entry or record of a reduction is to file with its Immediately Superior Institution.
(3)A Participant filing an application as referred to in paragraph (1) (hereinafter referred to as the "applicant" in this Article) must indicate the following information in that application:
(i)the issue and the amount of Book-Entry Transfer JGBs for which entries or records showing a reduction and increase will need to be created when the book-entry transfer is effected;
(ii)whether the reduction will be entered or recorded in the holdings column of the applicant's account or in the column of the applicant's account where the information set forth in Article 91, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
(iii)the account in which an entry or record showing an increase will need to be created (this excludes a customer account; hereinafter referred to as the "transferee account" in this Article);
(iv)whether the increase will be entered or recorded in the holdings column or the pledge column of the transferee account (this excludes the Institution-Held Account).
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the amount referred to in item (i) of the preceding paragraph (hereinafter referred to as the "amount subject to book-entry transfer" in this Article), in either the holdings column or the pledge column of the Participant's account, as indicated pursuant to the provisions of item (ii) of the preceding paragraph;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of items (i), (iii) and (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in either the holdings column or the pledge column of the transferee account (hereinafter referred to as the "transferee column" in this Article), as indicated pursuant to the provisions of item (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information indicated pursuant to the provisions of items (i), (iii) and (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the amount subject to book-entry transfer in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the amount subject to book-entry transfer in the transferee column of the transferee account, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)Upon being notified as referred to in paragraph (4), item (iv) or paragraph (5), item (iv) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph), the Account Management Institution that has been so notified must immediately take the following measures:
(i)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the transferee column of the transferee account, if the Account Management Institution is the one that opened the transferee account;
(ii)create an entry or record showing an increase equal to the amount subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Account Management Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of paragraph (4), item (iv) or paragraph (5), item (iv), if the Account Management Institution is not the one that opened the transferee account.
(8)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Making Deletions)
Article 96(1)On receiving an application for the deletion of a Book-Entry Transfer JGB of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (6) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the reduction resulting from the deletion will be entered or recorded is to file with its Immediately Superior Institution.
(3)A Participant filing an application as referred to in paragraph (1) (hereinafter referred to as the "applicant" in this Article) must indicate the following information in that application:
(i)the issue and the amount of Book-Entry Transfer JGBs for which an entry or record showing a reduction will need to be created when the deletion is effected;
(ii)whether the reduction will be entered or recorded in the holdings column or the pledge column of the applicant's account;
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the amount referred to in item (i) of the preceding paragraph, in either the holdings column or the pledge column of the applicant's account, as indicated pursuant to the provisions of item (ii) of the preceding paragraph;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of item (i) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the amount referred to in paragraph (3), item (i) in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)The national government may demand that, in exchange for the government redeeming Book-Entry Transfer JGBs (or paying interest, if the bonds are interest-only book-entry transfer JGBs), the bondholder or pledgee thereof file an application with its Immediately Superior Institution to enter a deletion for the Book-Entry Transfer JGBs of that issue which appear on its account, deleting the same amount from the account as the amount of the Book-Entry Transfer JGBs that are being redeemed.
(Changing Entries or Records)
Article 97If a Book-Entry Transfer Institution, etc. learns of a change having arisen with respect to information as set forth in one of the items of Article 91, paragraph (3), (4) or (5) in connection with the book-entry transfer account register that it maintains, it must immediately enter or record the change in the book-entry transfer account register.
Section 3 Effect of Book Entry Trasfer
(Transfer of Book-Entry Transfer JGBs)
Article 98A transfer of Book-Entry Transfer JGBs (other than a claim for interest due free from seizure (other than an interest-only book-entry transfer JGB); the same applies in the following Article through Article 102) does not take effect unless the transferee has had an entry or record created in the holdings column of its account (or in the column where the information set forth in Article 91, paragraph (5), item (ii) is entered or recorded, for the Institution-Held Account), based on an application for book-entry transfer, showing an increase equal to the amount of the Book-Entry Transfer JGBs subject to the transfer.
(Pledges of Book-Entry Transfer JGBs)
Article 99A pledge of Book-Entry Transfer JGBs does not take effect unless the pledgee has an entry or record created in the pledge column of its account, based on an application for book-entry transfer, showing an increase equal to the amount of the Book-Entry Transfer JGBs subject to the pledge.
(Requirement for Perfection of Book-Entry Transfer JGBs That Are Trust Property)
Article 100(1)Unless an entry or record has been created for a Book-Entry Transfer JGB in a book-entry transfer account register pursuant to the provisions of Article 91, paragraph (3), item (v), indicating that the JGB is trust property, it is not permissible to assert against a third party that the JGB is trust property.
(2)An entry or record in a book-entry transfer account register as prescribed in the preceding paragraph is created pursuant to the provisions of Cabinet Order.
(Participants' Presumed Rights)
Article 101A Participant is presumed to be the lawful holder of the rights under a Book-Entry Transfer JGB that has been entered or recorded in the account thereof (but only in its own account, if the Participant is an Account Management Institution).
(Acquisition in Good Faith)
Article 102A Participant (or a Book-Entry Transfer Institution with an Institution-Held Account) that has had an entry or record created in its account (but only in its own account, if it is an Account Management Institution), based on an application for book-entry transfer, showing an increase in Book-Entry Transfer JGBs of a particular issue acquires the rights associated with the entry or record showing the increase in the Book-Entry Transfer JGBs of that issue; provided, however that this does not apply if the Participant has acted in bad faith or with gross negligence.
(Book-Entry Transfer Institution's Obligations If There Are Entries or Records of Overages)
Article 103(1)If the total amount of the Book-Entry Transfer JGBs of a particular issue that all bondholders hold based on acquisitions of Book-Entry Transfer JGBs under the preceding Article (other than strippable book-entry transfer JGBs, principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs; hereinafter the same applies to Article 106 inclusive) comes to exceed the total issued amount of Book-Entry Transfer JGBs of that issue, and the aggregate amount referred to in item (i) exceeds the total issued amount which is referred to in item (ii), the Book-Entry Transfer Institution has a duty to acquire Book-Entry Transfer JGBs in that issue until its holdings reach the amount of the overage (meaning the aggregate amount referred to in item (i), less the total issued amount which is referred to in item (ii)):
(i)the aggregate amount of Book-Entry Transfer JGBs of that issue which have been entered or recorded in the accounts of the Participants of the Book-Entry Transfer Institution, in the book-entry transfer account register maintained by the Book-Entry Transfer Institution;
(ii)the total issued amount (other than any amount that has been redeemed) of Book-Entry Transfer JGBs of that issue.
(2)If there is any amount as prescribed in item (i) of the preceding paragraph for which an entry or record showing an increase or reduction has been created in an account as prescribed in that item, but the rights associated with that entry or record have not arisen, been transferred, or been extinguished, and it is proven that nobody has acquired Book-Entry Transfer JGBs pursuant to the provisions of the preceding Article in the amount for which the entry or record has been created, that amount is treated as if the entry or record had not been created.
(3)Once a Book-Entry Transfer Institution acquires Book-Entry Transfer JGBs pursuant to the provisions of paragraph (1), it has a duty to immediately manifest its intention to the national government to be bound by its release of the government from all obligations related to those Book-Entry Transfer JGBs.
(4)The rights under the Book-Entry Transfer JGBs prescribed in the preceding paragraph are extinguished once an intention to be bound by a release is manifested pursuant to that paragraph.
(5)Once a Book-Entry Transfer Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (3) with respect to Book-Entry Transfer JGBs, it must immediately enter deletions for those Book-Entry Transfer JGBs in the book-entry transfer account register.
(Account Management Institutions' Obligations If There Are Entries or Records of Overages)
Article 104(1)In a case as prescribed in paragraph (1) of the preceding Article, if there is an Account Management Institution in connection with which the total amount referred to in item (i) comes to exceed the amount referred to in item (ii), the Account Management Institution has a duty to manifest its intention to the national government to be bound by its release of the government from all obligations related to Book-Entry Transfer JGBs of that issue in an amount equal to the overage (meaning the total amount referred to in item (i), less the amount referred to in item (ii)):
(i)the total amount of Book-Entry Transfer JGBs of that issue entered or recorded in the accounts of the Participants of the Account Management Institution, in the book-entry transfer account register maintained by that Account Management Institution;
(ii)the amount of Book-Entry Transfer JGBs of that issue which have been entered or recorded in the customer account subdivision under the account of the Account Management Institution, in the book-entry transfer account register maintained by its Immediately Superior Institution.
(2)The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to:
(i)the amount prescribed in item (i) of the preceding paragraph;
(ii)the amount set forth in item (ii) of the preceding paragraph, if an entry or record showing an increase or reduction has been created in a customer account as prescribed in that item but the rights associated with that entry or record have not arisen, been transferred, or been extinguished.
(3)In a case as referred to in paragraph (1), if the Account Management Institution does not hold Book-Entry Transfer JGBs of the issue prescribed in that paragraph in an amount equal to the overage prescribed in that paragraph, it has a duty to acquire Book-Entry Transfer JGBs in that issue until its holdings reach the amount of the overage, before manifesting its intention to be bound by a release under the provisions of that paragraph..
(4)Once an Account Management Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (1), it must immediately notify its Immediately Superior Institution:
(i)that it has manifested the intention to be bound by the release;
(ii)of the issue and the amount of Book-Entry Transfer JGBs with respect to which it has manifested the intention to be bound by the release.
(5)Upon being notified as referred to in the preceding paragraph, the Immediately Superior Institution referred to in that paragraph must immediately create the following entries or records regarding Book-Entry Transfer JGBs as referred to in item (ii) of that paragraph, in the book-entry transfer account register that it maintains:
(i)an entry or record under the account of the Account Management Institution referred to in that paragraph in the subdivision for the institution's own account, showing a reduction equal to the amount referred to in item (ii) of the preceding paragraph;
(ii)an entry or record in the customer account subdivision under the account referred to in the preceding item, showing an increase equal to the amount referred to in item (ii) of the preceding paragraph.
(Handling in the Event of Book-Entry Transfer Institution's Non-performance of Obligations as Regards Entries or Records of Overages)
Article 105(1)In a case as prescribed in Article 103, paragraph (1), until the Book-Entry Transfer Institution prescribed in that paragraph fully performs the obligations referred to in that paragraph and paragraph (3) of that Article, the national government does not have a duty to redeem the principal or pay interest on the part of the Book-Entry Transfer JGBs of the relevant issue that any of the bondholders holds which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in paragraph (3) of that Article) prescribed in paragraph (1) of that Article (hereinafter referred to as the "maximum amount ascribable to the book-entry transfer institution" in this Article):
(i)the amount of Book-Entry Transfer JGBs of that issue that the bondholder holds (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer JGBs of that issue pursuant to the provisions of paragraph (1) of the preceding Article, the amount of Book-Entry Transfer JGBs of that issue that the bondholder holds less the maximum amount ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of that bondholder (but only in respect of the holder of a Book-Entry Transfer JGB that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of Book-Entry Transfer JGBs of that issue that all bondholders hold (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer JGBs of that issue pursuant to the provisions of paragraph (1) of the preceding Article, that total amount less the total of the maximum amounts ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)In the case prescribed in Article 103, paragraph (1), the Book-Entry Transfer Institution prescribed in that paragraph assumes the following duties toward each bondholder:
(i)in a case as referred to in the preceding paragraph, the duty to redeem the principal and pay interest, in lieu of the issuer, on the part of the Book-Entry Transfer JGBs of the relevant issue that each bondholder holds, up to the maximum amount ascribable to the book-entry transfer institution;
(ii)the duty to indemnify the bondholder for any damage caused by non-performance of obligations as referred to in Article 103, paragraph (1) or (3), beyond what is set forth in the preceding item.
(Handling in the Event of Account Management Institutions' Non-performance of Obligations as Regards Entries or Records of Overages)
Article 106(1)In a case as prescribed in Article 104, paragraph (1), until the Account Management Institution prescribed in that paragraph fully performs the obligations referred to in that paragraph and paragraph (3) of that Article, the national government does not have a duty to redeem the principal or pay interest on the part of the Book-Entry Transfer JGBs of the relevant issue that a holder (but only the holder of a book-entry transfer JGB that has been entered or recorded in an account opened by that Account Management Institution or by its Subordinate Institution) holds which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in that paragraph) prescribed in that paragraph (hereinafter referred to as the "maximum amount ascribable to the account management institution" in this Article):
(i)the amount of Book-Entry Transfer JGBs of that issue that the bondholder holds (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer JGBs of that issue pursuant to the provisions of Article 104, paragraph (1), the amount of Book-Entry Transfer JGBs of that issue that the bondholder holds less the maximum amount ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in paragraph (1) of the preceding Article in respect of that bondholder (but only in respect of the holder of a Book-Entry Transfer JGB that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of Book-Entry Transfer JGBs of that issue held by all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Account Management Institution or by its Subordinate Institution (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer JGBs of that issue pursuant to the provisions of Article 104, paragraph (1), that total amount less the total of the maximum amounts ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)In the case prescribed in Article 104, paragraph (1), the Account Management Institution prescribed in that paragraph assumes the following duties toward a bondholder as prescribed in the preceding paragraph:
(i)in a case as referred to in the preceding paragraph, the duty to redeem the principal and pay interest, in lieu of the issuer, on the part of the Book-Entry Transfer JGBs of the relevant issue that a bondholder as prescribed in the preceding paragraph holds, up to the maximum amount ascribable to the account management institution;
(ii)the duty to indemnify the bondholder for any damage caused by non-performance of obligations as referred to in Article 104, paragraph (1) or (3), beyond what is set forth in the preceding item.
(Book-Entry Transfer Institution's Obligations As Regards Strippable and Stripped Book-Entry Transfer JGBs If There Are Entries or Records of Overages)
Article 107(1)If, as a result of the acquisition of strippable book-entry transfer JGBs, principal-only book-entry transfer JGBs, or interest-only book-entry transfer JGBs under the provisions of Article 102 (hereinafter referred to as "strippable and stripped book-entry transfer JGBs" up to Article 110 inclusive), the total amount, per issue, of principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs that all of the holders of strippable and stripped book-entry transfer JGBs would be calculated as holding if all of the strippable book-entry transfer JGBs that are held by the holders of strippable and stripped book-entry transfer JGBs were deemed to have been Stripped pursuant to the provisions of Article 93 comes to exceed the total amount, per issue, of principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs that is calculated when all of the strippable book-entry transfer JGBs issued are deemed to have been Stripped pursuant to the provisions of that Article for the total amount of the issuance (other than any amount that has been redeemed), and there are principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs in that issue of a total amount referred to in item (i) that would exceed the total amount referred to in item (ii), the Book-Entry Transfer Institution has a duty to acquire principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs in that issue until its holdings reach the amount of the overage (meaning the total amount referred to in item (i), less the total amount referred to in item (ii)):
(i)the total amount, per issue, of principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs that would be calculated as being entered or recorded in the accounts of the Participants of the Book-Entry Transfer Institution, in the book-entry transfer account register maintained by that Book-Entry Transfer Institution, if all of the strippable book-entry transfer JGBs that have been entered or recorded in the accounts of the Participants of the Book-Entry Transfer Institution, in the book-entry transfer account register maintained by that Book-Entry Transfer Institution, were deemed to have been Stripped pursuant to the provisions of Article 93;
(ii)the total amount, per issue, of principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs which is calculated when all of the strippable book-entry transfer JGBs issued are deemed to have been Stripped pursuant to the provisions of Article 93 for the total amount of the issuance (other than any amount that has been redeemed).
(2)If there is any amount as prescribed in item (i) of the preceding paragraph for which an entry or record showing an increase or reduction has been created in an account as prescribed in that item, but for which the associated with that entry or record have not arisen, been transferred, or extinguished, and it is proven that nobody has acquired strippable or stripped book-entry transfer JGBs pursuant to the provisions of the preceding Article in the amount for which the entry or record has been created, that amount is treated as if the entry or record had not been created.
(3)In applying the provisions of paragraph (1), strippable and stripped book-entry transfer JGBs that have been acquired pursuant to the provisions of Article 102 and that are handled by Book-Entry Transfer Institution that have obtained consent as referred to in Article 13, paragraph (1) are to be calculated for each Book-Entry Transfer Institution handling them.
(4)Once a Book-Entry Transfer Institution acquires principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs pursuant to the provisions of paragraph (1), it has a duty to immediately manifest its intention to the national government to be bound by its release of the government from all obligations related to those principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs.
(5)The rights under the principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs prescribed in the preceding paragraph are extinguished once an intention to be bound by a release is manifested pursuant to that paragraph.
(6)Once a Book-Entry Transfer Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (4) with respect to principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs, it must immediately enter deletions for those principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs in the book-entry transfer account register.
(Account Management Institutions' Obligations as Regards Strippable and Stripped Book-Entry Transfer JGBs If There Are Entries or Records of Overages)
Article 108(1)In a case as prescribed in paragraph (1) of the preceding Article, if there is an Account Management Institution with principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs in an issue for which the total amount referred to in item (i) that comes to exceed the total amount referred to in item (ii), the Account Management Institution has a duty to manifest its intention to the national government to be bound by its release of the government from all obligations related to principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs of that issue in an amount equal to the overage (meaning the total amount referred to in item (ii), less the total amount referred to in item (i)):
(i)the total amount, per issue, of principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs that would be calculated as being entered or recorded in the accounts of the Participants of the Account Management Institution, in the book-entry transfer account register maintained by that Account Management Institution, if all of the strippable book-entry transfer JGBs that have been entered or recorded in the accounts of the Participants of that Account Management Institution, in the book-entry transfer account register maintained by that Account Management Institution, were deemed to have been Stripped pursuant to the provisions of Article 93;
(ii)the total amount, per issue, of principal-only book-entry transfer JGBs and interest-only book-entry transfer JGBs that would be calculated as being entered or recorded in the customer account subdivision under the account of the Account Management Institution, in the book-entry transfer account register maintained by its Immediately Superior Institution, if all of the strippable book-entry transfer JGBs entered or recorded in the customer account subdivision under the account of that Account Management Institution, in the book-entry transfer account register maintained by the Immediately Superior Institution of that Account Management Institution, are deemed to have been Stripped pursuant to the provisions of Article 93.
(2)The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to:
(i)the amount prescribed in item (i) of the preceding paragraph;
(ii)the amount set forth in item (ii) of the preceding paragraph, if an entry or record showing an increase or reduction has been created in a customer account as prescribed in that item but the rights associated with that entry or record have not arisen, been transferred, or been extinguished.
(3)In a case as referred to in paragraph (1), if the Account Management Institution does not hold principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs of the issue prescribed in that paragraph in an amount equal to the overage prescribed in that paragraph, it has a duty to acquire principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs in that issue until its holdings reach the amount of the overage, before manifesting its intention to be bound by a release under the provisions of that paragraph..
(4)Once an Account Management Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (1), it must immediately notify its Immediately Superior Institution:
(i)that it has manifested the intention to be bound by the release;
(ii)of the issue and the amount of principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs with respect to which it has manifested the intention to be bound by the release.
(5)Upon being notified as referred to in the preceding paragraph, the Immediately Superior Institution referred to in that paragraph must immediately create the following entries or records regarding principal-only book-entry transfer JGBs or interest-only book-entry transfer JGBs of the issue set forth in item (ii) of that paragraph, in the book-entry transfer account register that it maintains:
(i)an entry or record under the account of the Account Management Institution referred to in that paragraph in the subdivision for the institution's own account, showing a reduction equal to the amount referred to in item (ii) of the preceding paragraph;
(ii)an entry or record in the customer account subdivision under the account referred to in the preceding item, showing an increase equal to the amount referred to in item (ii) of the preceding paragraph.
(Handling in the Event of Book-Entry Transfer Institution's Non-performance of Obligations as Regards Entries or Records of Overages Involving Strippable and Stripped Book-Entry Transfer JGBs)
Article 109(1)If a Book-Entry Transfer Institution as prescribed in Article 107, paragraph (1) has the obligations referred to in that paragraph and paragraph (4) of that Article as regards principal-only book-entry transfer JGBs in a case as prescribed in paragraph (1) of that Article, the national government does not have a duty to redeem the principal on the part of the principal-only book-entry transfer JGBs of the relevant issue and strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue that any of the bondholders holds which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in paragraph (4) of that Article) (hereinafter referred to as the "maximum amount of principal ascribable to the book-entry transfer institution" in this Article) until the Book-Entry Transfer Institution fully performs those obligations:
(i)the amount of principal-only book-entry transfer JGBs of that issue and strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue that the bondholder holds (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to principal-only book-entry transfer JGBs of that issue pursuant to the provisions of paragraph (1) of the preceding Article, the amount of such JGBs less the maximum amount of principal ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of that bondholder (but only in respect of the holder of a Book-Entry Transfer JGB that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of principal-only, book-entry transfer JGBs of that issue and strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue that all of the bondholders hold (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to principal-only book-entry transfer JGBs of that issue pursuant to the provisions of paragraph (1) of the preceding Article, that total amount less the total of the maximum amounts of principal ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)If a Book-Entry Transfer Institution prescribed in Article 107, paragraph (1) has the obligations referred to in that paragraph and paragraph (4) of that Article as regards interest-only book-entry transfer JGBs in a case as prescribed in paragraph (1) of that Article, the national government does not have a duty to pay the part of the interest on the interest-only book-entry transfer JGBs of the relevant issue that any of the bondholders holds (but only those handled by the Book-Entry Transfer Institution, the same applies in this and the following Article), nor on all strippable book-entry transfer JGBs (but only those handled by the Book-Entry Transfer Institution, the same applies in this and the following Article) with the same interest payment date as the interest-only book-entry transfer JGBs of that issue that any of the bondholders holds, which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the total amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in paragraph (4) of that Article) (hereinafter referred to as the "maximum amount of interest ascribable to the book-entry transfer institution" in this Article), until the Book-Entry Transfer Institution fully performs the obligations referred to in that paragraph and paragraph (4) of that Article:
(i)the total amount of interest on interest-only book-entry transfer JGBs of that issue and all strippable book-entry transfer JGBs with the same interest payment date as the interest-only book-entry transfer JGBs of that issue that the bondholder holds (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to interest-only book-entry transfer JGBs of that issue pursuant to the provisions of paragraph (1) of the preceding Article, the total amount of such interest less the maximum amount of interest ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (2) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of that bondholder (but only in respect of the holder of a Book-Entry Transfer JGB that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution);
(ii)the total amount of interest on interest-only book-entry transfer JGBs of that issue and all the strippable book-entry transfer JGBs with the same interest payment date as the interest-only book-entry transfer JGBs of that issue that all bondholders hold (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to interest-only book-entry transfer JGBs of that issue pursuant to the provisions of paragraph (1) of the preceding Article, that total amount less the total of the maximum amounts of interest ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (2) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(3)In the case prescribed in Article 107, paragraph (1), the Book-Entry Transfer Institution prescribed in that paragraph assumes the following duties toward each bondholder:
(i)in a case as referred to in paragraph (1), the duty to redeem the principal, in lieu of the national government, on the part of the principal-only book-entry transfer JGBs of the relevant issue and strippable book-entry transfer JGBs of the same name and code as the principal-only book-entry transfer JGB of that issue which each bondholder holds, up to the maximum amount of principal ascribable to the book-entry transfer institution;
(ii)in a case as referred to in the preceding paragraph, the duty to pay interest, in lieu of the national government, on the part of the interest on all interest-only book-entry transfer JGBs of the relevant issue and strippable book-entry transfer JGBs with the same name and code as the interest-only book-entry transfer JGBs of that issue which each bondholder holds and which corresponds to the maximum amount of interest ascribable to the book-entry transfer institution;
(iii)the duty to indemnify the bondholder for any damage caused by non-performance of obligations as referred to in Article 107, paragraph (1) or (4) beyond what is set forth in the preceding two items
(Handling in the Event of Account Management Institutions' Non-performance of Obligations as Regards Entries or Records of Overages Involving Strippable and Stripped Book-Entry Transfer JGBs)
Article 110(1)If an Account Management Institution as prescribed in Article 108, paragraph (1) has the obligations referred to in that paragraph and paragraph (3) of that Article as regards principal-only book-entry transfer JGBs in a case as prescribed in paragraph (1) of that Article, the national government does not have a duty to redeem the principal on the part of the principal-only book-entry transfer JGBs of the relevant issue that a holder holds (but only by the holder of a book-entry transfer JGB entered or recorded in the account opened by the Account Management Institution or by its Subordinate Institution), nor on the part of the strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue that the holder holds, which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in that paragraph) (hereinafter referred to as the "maximum amount of principal ascribable to the account management institution" in this Article), until the Account Management Institution fully performs those obligations:
(i)the amount of principal-only book-entry transfer JGBs of that issue and strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue that the bondholder holds (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to principal-only book-entry transfer JGBs of that issue pursuant to the provisions of that paragraph, the amount of such JGBs less the maximum amount of principal ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in Article 108, paragraph (1) in respect of that bondholder (but only in respect of the holder of a Book-Entry Transfer JGB that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of principal-only book-entry transfer JGBs of that issue and strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue held by all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by the Account Management Institution or by its Subordinate Institution (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to principal-only book-entry transfer JGBs of that issue pursuant to the provisions of that paragraph, that total amount less the total of the maximum amounts of principal ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in Article 108, paragraph (1) of the preceding Article in respect of all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)If an Account Management Institution prescribed in Article 108, paragraph (1) has a duty as referred to in that paragraph and paragraph (3) of that Article as regards interest-only book-entry transfer JGBs in the case prescribed in paragraph (1) of that Article, the national government does not have a duty to pay the part of the interest on the interest-only book-entry transfer JGBs of that issue that a holder holds (but only by the holder of a book-entry transfer JGB entered or recorded in the account opened by the Account Management Institution or by its Subordinate Institution), nor the part of the interest on all strippable book-entry transfer JGBs with the same interest payment date as the interest-only book-entry transfer JGBs of that issue that the holder holds, which corresponds to the amount arrived at when the percentage of the total amount referred to in item (ii) that the amount referred to in item (i) accounts for is multiplied by the amount of the overage prescribed in paragraph (1) of that Article (or by the amount of the overage less any amount representing partial performance of the obligation referred to in that paragraph) (hereinafter referred to as the "maximum amount of interest ascribable to the account management institution" in this Article), until the Account Management Institution fully performs those obligations:
(i)the amount of interest on interest-only book-entry transfer JGBs of that issue and all strippable book-entry transfer JGBs with the same interest payment date as the interest-only book-entry transfer JGBs of that issue that the bondholder holds (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to interest-only book-entry transfer JGBs of that issue pursuant to the provisions of Article 108, paragraph (1), the amount of such interest less the maximum amount of interest ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in that paragraph in respect of that bondholder (but only in respect of the holder of a Book-Entry Transfer JGB that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total amount of interest on interest-only book-entry transfer JGBs of that issue and all strippable book-entry transfer JGBs with the same interest payment date as the interest-only book-entry transfer JGBs of that issue held by all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by the Account Management Institution or by its Subordinate Institution (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer JGBs of that issue pursuant to the provisions of Article 108, paragraph (1), that total amount of interest less the total of the maximum amounts of interest ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in that paragraph in respect of all of the holders of Book-Entry Transfer JGBs that have been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(3)In the case prescribed in Article 108, paragraph (1), the Account Management Institution prescribed in that paragraph assumes the following duties toward a bondholder as prescribed in the preceding two paragraphs:
(i)in a case as referred to in paragraph (1), the duty to redeem the principal, in lieu of the national government, on the part of the principal-only book-entry transfer JGBs of the relevant issue and strippable book-entry transfer JGBs with the same name and code as the principal-only book-entry transfer JGBs of that issue which a bondholder as prescribed in paragraph (1) holds, up to the maximum amount of principal ascribable to the account management institution;
(ii)in a case as referred to in in the preceding paragraph, the duty to pay interest, in lieu of the national government, on the part the interest on all interest-only book-entry transfer JGBs of the relevant issue and strippable book-entry transfer JGBs with the same name and code as the interest-only book-entry transfer JGBs of that issue which a bondholder as prescribed in the preceding paragraph holds, up to the maximum amount of interest ascribable to the account management institution;
(iii)the duty to indemnify the bondholder for any damage caused by non-performance of obligations as referred to in Article 108, paragraph (1) or (3), beyond what is set forth in the preceding two items.
(Handling If the National Government Redeems Book-Entry Transfer JGBs in Error)
Article 111(1)Even if the national government is acting in good faith, its redemption of principal or payment of interest, in an amount that it does not have the duty to redeem or pay, for an issue that the provisions of Article 105, paragraph (1), Article 106, paragraph (1), Article 109, paragraph (1) or (2), or paragraph (1) or (2) of the preceding Article establish the national government as not having a duty to redeem or pay does not have the effect of extinguishing its obligations with respect to other Book-Entry Transfer JGBs of that issue.
(2)In a case as referred to in the preceding paragraph, a holder of Book-Entry Transfer JGBs does not have a duty to return to the national government the amount of the principal redeemed or interest paid as prescribed in that paragraph.
(3)If the national government redeems principal or pays interest as prescribed in paragraph (1), it acquires the rights of a holder of Book-Entry Transfer JGBs under the provisions of Article 105, paragraph (2), item (i), Article 106, paragraph (2), item (i), Article 109, paragraph (3), item (i) or (ii) or paragraph (3), item (i) or (ii) of the preceding Article toward the Book-Entry Transfer Institution, etc., to the extent of the amount prescribed in the preceding paragraph.
Section 4 Miscellaneous Provisions
Article 112A person offering to subscribe for Book-Entry Transfer JGBs must indicate to the national government the account opened for that person in which book entries can be made for the Book-Entry Transfer JGBs, at the time of the offer.
Chapter VI Book Entry Trasfer of Local Government Bonds
Section 1 Book Entry Trasfer of Local Government Bonds
(Mutatis Mutandis Application of Provisions on Corporate Bonds to Local Government Bonds)
Article 113The provisions of Chapter IV (other than Article 66, item (i), Article 69, paragraph (1), items (v) and (vi), paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2 and the provisions of Section 4) apply mutatis mutandis to local government bonds. In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 67, paragraph (1)
corporate bond certificates
local government bond certificates (meaning the local government bond certificates prescribed in Article 705, paragraph (2) of the Companies Act, as applied mutatis mutandis pursuant to Article 5-6 of the Local Government Finance Act (Act No. 109 of 1948) following the deemed replacement of terms; the same applies hereinafter)
Article 67, paragraphs (2) and (3)
Corporate bond certificates
Local government bond certificates
Article 68, paragraph (3), item (ii)
trade name
name
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees
the Participants that constitute the holders
Article 69, paragraph (1), item (iv)
for each Participant (other than as set forth in the following item)
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item)
of that paragraph
Article 69, paragraph (2), item (ii)
total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amount referred to in item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act
the person entrusted with a public offering or the management of local government bonds as prescribed in Article 705, paragraph (1) of the Companies Act, as applied mutatis mutandis pursuant to Article 5-6 of the Local Government Finance Act following the deemed replacement of terms
bond manager or similar person
person entrusted with the public offering or similar duty
Article 71, paragraph (8)
bond manager or similar person
person entrusted with the public offering or similar duty
Article 80, paragraph (1), and Article 81, paragraph (1)
this Article and Article 85
this Article
(Clear Indication of the Application of This Act)
Article 114(1)The issuer of local government bonds handled by a Book-Entry Transfer Institution must clearly indicate to a person offering to subscribe for those bonds that this Act applies to those bonds; provided, however, that this does not apply to a person subscribing for the full amount of those local government bonds based on a contract.
(2)A person offering to subscribe for local government bonds handled by a Book-Entry Transfer Institution must indicate to the issuer the account opened for that person in which book entries can be made for the local government bonds, at the time of the offer.
Section 2 Book Entry Trasfer of Investment Corporation Bonds
(Mutatis Mutandis Application of Provisions on Corporate Bonds to Investment Corporation Bonds)
Article 115The provisions of Chapter IV (other than Article 66, item (i), sub-items (a) to (d) inclusive, Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2, Article 83, Article 84, paragraph (4), Article 86-2 and Article 86-3) apply mutatis mutandis to investment corporation bonds (meaning investment corporation bonds as prescribed in Article 2, paragraph (17) of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66, item (i)
a corporate bond that satisfies all of the following requirements (referred to as a "short-term corporate bond" in Article 83):
a short-term investment corporation bonds prescribed in Article 139-12, paragraph (1) of the Act on Investment Trusts and Investment Corporations
Article 67, paragraph (1)
Corporate bond certificates
Investment corporation bond certificates (meaning investment corporation bond certificates as prescribed in Article 2, paragraph (18) of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter)
Article 67, paragraphs (2) and (3)
corporate bond certificate
investment corporation bond certificate
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees
the Participants that constitute the holders
Article 69, paragraph (1), item (iv)
for each Participant (other than as set forth in the following item);
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph,
Article 69, paragraph (2), item (ii)
total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amount referred to in under item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
a corporate bond manager or
the investment corporation bonds manager(meaning an investment corporation bonds manager as prescribed in Article 139-8 of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter) or
bond manager or similar person
investment corporation bonds manager or similar person
Article 71, paragraph (8)
bond manager or similar person
investment corporation bonds manager or similar person
Article 84, paragraph (1)
Article 677, paragraph (1) of the Companies Act
Article 139-4, paragraph (1) of the Act on Investment Trusts and Investment Corporations
Article 84, paragraph (2)
corporate bond register
investment corporation bond register (meaning the investment corporation bond register prescribed in Article 681 of the Companies Act as applied mutatis mutandis pursuant to Article 139-7 of the Act on Investment Trusts and Investment Corporations following the deemed replacement of terms)
Article 84, paragraph (3)
Article 677, paragraph (2) of the Companies Act
Article 139-4, paragraph (2) of the Act on Investment Trusts and Investment Corporations
Article 679
Article 139-6
Article 85, paragraph (1)
bondholders meeting
meeting of investment corporation bondholders (meaning a meeting of investment corporation bondholders as prescribed in Article 139-10, paragraph (1) of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter)
Article 86, paragraph (1)
bondholders meeting
meeting of investment corporation bondholders
Article 86, paragraph (1), item (i)
bond manager
investment corporation bonds manager
Article 86, paragraph (2)
bondholders meeting
meeting of investment corporation bondholders
(Special Provisions of the Act on Investment Trusts and Investment Corporations concerning Book-Entry Transfer Investment Corporation Bonds)
Article 116In applying the provisions of Article 196, paragraphs (1) and (2), Article 197 and Article 219 of the Act on Investment Trusts and Investment Corporations to investment corporation bonds handled by a Book-Entry Transfer Institution (hereinafter referred to as "Book-Entry Transfer Investment Corporation Bonds"), a Book-Entry Transfer Investment Corporation Bond is deemed to be an investment corporation bond certificate as prescribed in that Act which is among the investment securities, etc. prescribed in that Act.
(Exclusion of Book-Entry Transfer Investment Corporation Bonds from Application of the Act on Investment Trusts and Investment Corporations)
Article 116-2The provisions of Article 681, items (iv) and (v), Article 682, paragraphs (1) to (3) inclusive, Article 688, paragraph (1), Article 690, paragraph (1), Article 691, paragraphs (1) and (2), Article 693, paragraph (1), Article 694, paragraph (1) and Article 695-2, paragraphs (1) to (3) inclusive of the Companies Act as applied mutatis mutandis pursuant to Article 139-7 of the Act on Investment Trusts and Investment Corporations do not apply to Book-Entry Transfer Investment Corporation Bonds.
Section 3 Book Entry Trasfer of Bonds Issued by Mutual Companies
(Mutatis Mutandis Application of Provisions on Corporate Bonds to Bonds Issued by Mutual Companies)
Article 117The provisions of Chapter IV (other than Article 66, item (i), sub-items (a) to (d) inclusive, Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), Sub-items (b) and (c), Article 69-2, Article 70-2, Article 83, Article 84, paragraph (4), Article 86-2 and Article 86-3) apply mutatis mutandis to a corporate bond issued by a mutual company (meaning a corporate bond as prescribed in Article 61 of the Insurance Business Act; the same applies hereinafter). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66, item (i)
a corporate bond that satisfies all of the following requirements (referred to as a "short-term corporate bond" in Article 83):
a short-term corporate bond as prescribed in Article 61-10, paragraph (1) of the Insurance Business Act
Article 67, paragraph (1)
Corporate bond certificates
Corporate bond certificates (meaning company bond certificates as prescribed in Article 61, item (vi) of the Insurance Business Act; the same applies hereinafter)
Article 68, paragraph (3), item (ii)
trade name
name
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees
the Participants that constitute the holders
Article 69, paragraph (1), item (iv)
for each Participant (other than as set forth in the following item);
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
Article 69, paragraph (2), item (ii)
total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amounts referred to in item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
a corporate bond manager or
a corporate bond manager (meaning a corporate bond manager as prescribed in Article 61-6 of the Insurance Business Act; the same applies hereinafter) or
Article 84, paragraph (1)
Article 677, paragraph (1) of the Companies Act
Article 61-2, paragraph (1) of the Insurance Business Act
Article 84, paragraph (2)
corporate bond register
corporate bond register (meaning the corporate bond register prescribed in Article 681 of the Companies Act, as applied mutatis mutandis pursuant to Article 61-5 of the Insurance Business Act)
Article 84, paragraph (3)
Article 677, paragraph (2) of the Companies Act
Article 61-2, paragraph (2) of the Insurance Business Act
Article 679
Article 61-4
Article 85, paragraph (1)
bondholders meeting
bondholders meeting (meaning a bondholders meeting as prescribed in Article 61-8, paragraph (1) of the Insurance Business Act; the same applies hereinafter)
(Exclusion of Bonds Issued by Mutual Companies Which Book-Entry Transfer Institution Handle from Application of the Insurance Business Act)
Article 117-2The provisions of Article 681, items (iv) and (v), Article 682, paragraphs (1) to (3) inclusive, Article 688, paragraph (1), Article 690, paragraph (1), Article 691, paragraphs (1) and (2), Article 693, paragraph (1), Article 694, paragraph (1) and Article 695-2, paragraphs (1) to (3) inclusive of the Companies Act as applied mutatis mutandis pursuant to Article 61-5 of the Insurance Business Act do not apply to bonds issued by a mutual company which a Book-Entry Transfer Institution handles.
Section 4 Book Entry Transfer of Specified Corporate Bonds
(Mutatis Mutandis Application of the Provisions on Corporate Bonds to Specified Corporate Bonds)
Article 118The provisions of Chapter IV (other than Article 66, item (i), sub-items (a) to (d), Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2, Article 83, Article 84, paragraph (4), Article 86-2 and Article 86-3) apply mutatis mutandis to specified corporate bonds (meaning specified corporate bonds as prescribed in Article 2, paragraph (7) of the Act on Securitization of Assets, and excluding convertible specified corporate bonds (meaning convertible specified corporate bonds as prescribed in Article 131, paragraph (1) of that Act; the same applies hereinafter) and specified corporate bonds with subscription rights for new preferred equity investment (meaning specified corporate bonds with subscription rights for new preferred equity investment as prescribed in Article 139, paragraph (1) of that Act; the same applies hereinafter); the same applies hereinafter). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66, item (i)
a corporate bond that satisfies all of the following requirements (referred to as a "short-term corporate bond" in Article 83):
a specified short-term company bond as prescribed in Article 2, paragraph (8) of the Act on Securitization of Assets
Article 67, paragraph (1)
Corporate bond certificates
Specified corporate bond certificates (meaning the specified corporate bond certificates as prescribed in Article 2, paragraph (9) of the Act on Securitization of Assets; the same applies hereinafter)
Article 67, paragraphs (2) and (3)
corporate bond certificate
specified corporate bond certificate
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees
the Participants that constitute the holders
Article 69, paragraph (1), item (iv)
for each Participant (other than as set forth in the following item);
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
Article 69, paragraph (2), item (ii)
total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amount referred to in item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
a corporate bond manager or
a specified corporate bonds manager (meaning a the specified corporate bonds manager as prescribed in Article 126 of the Act on Securitization of Assets; the same applies hereinafter) or
bond manager or similar person
specified corporate bonds manager or similar person
Article 71, paragraph (8)
bond manager or similar person
specified corporate bonds manager or similar person
Article 84, paragraph (1)
Article 677, paragraph (1) of the Companies Act
Article 122, paragraph (1) of the Act on Securitization of Assets
Article 84, paragraph (2)
corporate bond register
specified corporate bond register (meaning the specified corporate bond register prescribed in Article 681 of the Companies Act as applied mutatis mutandis pursuant to Article 125 of the Act on Securitization of Assets following the deemed replacement of terms; the same applies hereinafter)
Article 84, paragraph (3)
Article 677, paragraph (2) of the Companies Act
Article 122, paragraph (2) of the Act on Securitization of Assets
Article 679
Article 124
Article 85, paragraph (1)
bondholders meeting
meeting of specified company bondholderss (meaning a meeting of specified corporate bondholders as prescribed in Article 129, paragraph (1) of the Act on Securitization of Assets; the same applies hereinafter)
Article 86, paragraph (1)
bondholders meeting
meeting of specified corporate bondholders
Article 86, paragraph (1), item (i)
bond manager
specified corporate bonds manager
Article 86, paragraph (2)
bondholders meeting
meeting of specified corporate bondholders
(Exclusion of Specified Corporate Bonds That Book-Entry Transfer Institution Handle from Application of the Act on Securitization of Assets)
Article 119The provisions of Article 681, items (iv) and (v), Article 682, paragraphs (1) to (3) inclusive, Article 688, paragraph (1), Article 690, paragraph (1), Article 691, paragraphs (1) and (2), Article 693, paragraph (1), Article 694, paragraph (1) and Article 695-2, paragraphs (1) to (3) inclusive of the Companies Act as applied mutatis mutandis pursuant to Article 125 of the Act on Securitization of Assets do not apply to specified corporate bonds that a Book-Entry Transfer Institution handles.
Section 5 Book Entry Trasfer of Special Corporation Bonds
Article 120The provisions of Chapter IV (other than Article 66, item (i), sub-items (a) to (d), Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2 and Section 4) and Article 114 apply mutatis mutandis to special corporation bonds (meaning the rights required to be indicated on bond certificates issued by a corporation pursuant to a special Act). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66, item (i)
a corporate bond that satisfies all of the following requirements (referred to as a "short-term corporate bond" in Article 83):
rights required to be indicated on the short-term bonds prescribed in Article 54-4, paragraph (1) of the Shinkin Bank Act (Act No. 238 of 1951) or the short-term Norinchukin Bank bonds prescribed in Article 62-2, paragraph (1) of the Norinchukin Bank Act (Act No. 93 of 2001)
Article 67
Corporate bond certificates
Bond certificates
Article 68, paragraph (3), item (ii)
trade name
name
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees
the Participants that constitute the holders
Article 69, paragraph (1), item (iv)
for each Participant (other than as set forth in the following item);
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
Article 69, paragraph (2), item (ii)
total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amount referred to in item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act
the person entrusted with managing the rights that are required to be indicated on bond certificates issued by the corporation pursuant to a special Act
bond manager or similar person
special corporation bonds manager
Article 71, paragraph (8)
bond manager or similar person
special corporation bonds manager
Article 80, paragraph (1) and Article 81, paragraph (1)
this Article and Article 85
this Article
Section 6 Book Entry Trasfer of Beneficial Interest in Domestic and Foreign Investment Trusts
(Mutatis Mutandis Application of Provisions on Bonds and Other Securities to Beneficial Interest in Investment Trusts)
Article 121The provisions of Chapter IV (other than Article 66, item (i), Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2, Article 71, paragraph (8) and Section 4 (other than Article 84, paragraph (2) and Article 85, paragraph (1))), Article 114, paragraph (2) and Article 155 apply mutatis mutandis to a beneficial interest in an investment trust (meaning a beneficial interest as prescribed in Article 2, paragraph (7) of the Act on Investment Trusts and Investment Corporations, and including a beneficial interest under the trust agreement of a foreign investment trust; the same applies hereinafter). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66
claim for interest
claim to a distribution of profits
Article 66, item (ii)
decision to issue
the basic terms and conditions of the investment trust (meaning the basic terms and conditions of an investment trust as prescribed in Article 4, paragraph (1) or Article 49, paragraph (1) of the Act on Investment Trusts and Investment Corporations)
issued based on that decision will be subject
will be subject
Article 67, paragraph (1)
Corporate bond certificates
Beneficiary certificates (meaning beneficiary certificates as prescribed in Article 2, paragraph (7) of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter)
Article 67, paragraphs (2) and (3)
corporate bond certificate
beneficiary certificate
Article 68, paragraph (3), items (iii) through (v), paragraph (4), item (ii), and paragraph (5), item (ii)
amount
number of units
Article 69, paragraph (1)
without delay after the date on which it issues
if a trust has been set up for
Article 69, paragraph (1), item (i)
that it has issued
that it has placed in trust
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees of book-entry transfer corporate bonds
the Participants that will become the beneficiaries of the trust
Article 69, paragraph (1), item (iv)
the amount of book-entry transfer corporate bonds as referred to in item (i) for each Participant (other than as set forth in the following item);
the number of book-entry transfer corporate bonds as referred to in item (i) for each Participant
Article 69, paragraph (1), item (vii)
total amount
total number of units
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
increase equal to the amount
increase equal to the number of units
Article 69, paragraph (2), item (ii)
increase equal to the total of the amounts referred to in items (iv) and (v) of the preceding paragraph
increase equal to the number of units
item (vi)
item (iv)
Article 70, paragraph (1)
showing a reduction or increase
showing a reduction or increase equal to the number of units
Article 70, paragraph (2)
reduction
reduction equal to the number of units
Article 70, paragraph (3), item (i)
showing a reduction and increase
showing a reduction and increase equal to the number of units
amount
number of units
Article 70, paragraph (3), item (ii)
reduction
reduction equal to the number of units
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 70, paragraph (3), items (iii) and (iv)
increase
increase equal to the number of units
Article 70, paragraph (4), item (i)
the amount
the number of units
amount subject to book entry transfer
number of units subject to book entry transfer
reduction
reduction
Article 70, paragraph (4), items (iii) and (iv)
amount subject to book entry transfer
number of units subject to book entry transfer
increase
increase
Article 70, paragraph (5), item (i)
amount subject to book entry transfer
number of units subject to book entry transfer
reduction
reduction
Article 70, paragraph (5), items (iii) and (iv), and paragraph (7)
amount subject to book entry transfer
number of units subject to book entry transfer
increase
increase
Article 71, paragraphs (1) and (2)
reduction
reduction equal to the number of units
Article 71, paragraph (3)
reduction
reduction equal to the number of units
amount
number of units
Article 71, paragraph (4), item (i) and paragraph (5), item (i)
amount
number of units
reduction
reduction
Article 71, paragraph (7)
Unless an issuer goes through a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act (referred to as a "bond manager or similar person" in the following paragraph) to redeem book-entry transfer corporate bonds for a bondholder or pledgee, the issuer may demand that
The issuer may demand that
redeeming
redeeming or cancelling
being redeemed
being redeemed or cancelled
the same amount from the account as the amount of
the same number of units from the account as the number of units of
Article 73
claim for interest
claim to a distribution of profits
showing an increase equal to the amount
showing an increase equal to the number of units
Article 74
increasex
increase in the number of units
Article 77
showing an increase in
showing an increase equal to the number of units of
the increase
the increase
Article 78, paragraph (1)
total amount
total number of units
the total issued amount (other than any amount that has been redeemed)
the total issued units (other than any units that have been redeemed or canceled)
aggregate amount
aggregate number of units
total issued amount
total number of issued units
amount of the overage
number of units in overage
, less the total issued amount
, less the total number of issued units
amount
number of units
Article 78, paragraph (2)
amount
number of units
increase or reduction
increase or reduction
Article 79, paragraph (1)
aggregate amount
aggregate number of units
amount
number of units
amount of the overage
number of units in overage
, less the total issued amount
, less the total number of issued units
in an amount equal to
in a number equal to
Article 79, paragraph (2)
amount
number of units
increase or reductionx
increase or reduction
Article 79, paragraph (3)
amount of the overage
number of units in overage
in an amount
in a number of units
Article 79, paragraph (4), item (ii)
amount
number of units
Article 79, paragraph (5), item (i)
reduction equal to the amount
reduction equal to the number of units
Article 79, paragraph (5), item (ii)
increase equal tox the amount
increase equal to the number of units
Article 80, paragraph (1)
amount
number of units
total amount
total number of units
amount of the overage
number of units in overage
any amount representing
any number of units representing
, less the total issued amount
, less the total number of issued units
the amount arrived at when
the number of units arrived at when
this Article and Article 85
this Article
maximum amount ascribable to the book-entry transfer institution
maximum number of units ascribable to the book-entry transfer institution
redeem the principal or pay interest on
redeem, cancel or distribute profits for
maximum amount ascribable to the account management institution
maximum number of units ascribable to the account management institution
aggregate amount
aggregate number of units
Article 80, paragraph (2), item (i)
maximum amount ascribable to the book-entry transfer institution Limit Amount for the Book-Entry Transfer Institution
maximum number of units ascribable to the book-entry transfer institution Limit Number of Units for the Book-Entry Transfer Institution
redeem the principal or pay interest on
redeem, cancel or distribute profits for
Article 81, paragraph (1)
amount
number of units
total amount
total number of units
amount of the overage
number of units in overage
any amount representing
any number of units representing
, less the total issued amount
, less the total number of issued units
the amount arrived at when
the number of units arrived at when
this Article and Article 85
this Article
maximum amount ascribable to the account management institution
maximum number of units ascribable to the account management institution
redeem the principal or pay interest on
redeem, cancel or distribute profits for
aggregate amount
aggregate number of units
Article 81, paragraph (2), item (i)
maximum amount ascribable to the account management institution Limit Amount for the Account Management Institution
maximum number of units ascribable to the account management institution Limit Number of Units for the Account Management Institution
redeem the principal or pay interest on
redeem, cancel or distribute profits for
Article 82
amount
number of units
redeem the principal or pay interest on
redeem, cancel or distribute profits for
Article 84, paragraph (2)
corporate bond registerx
beneficial interest register (meaning the beneficial interest register prescribed in Article 186 of the Trust Act as applied mutatis mutandis pursuant to Article 6, paragraph (7) of the Act on Investment Trusts and Investment Corporations following the deemed replacement of terms)
Article 85, paragraph (1)
Article 723, paragraph (1) of the Companies Act
the amount of corporate bonds held thereby (other than the sum total of the maximum amount ascribable to the book-entry transfer institution and maximum amount ascribable to the account management institution)
the number of units held thereby (other than the sum total of the maximum number of units ascribable to the book-entry transfer institution and maximum number of units ascribable to the account management institution)
bondholders meeting
resolution referred to in paragraph (1) of that Article
Article 155
Article 116, paragraph (1), Article 192, paragraph (1), Article 469, paragraph (1), Article 785, paragraph (1), Article 797, paragraph (1) or Article 806, paragraph (1) of the Companies Act
Article 18, paragraph (1) of the Act on Investment Trusts and Investment Corporations (including the cases where applied mutatis mutandis pursuant to Article 54, paragraph (1) of said Act)
(Creating Entries or Records of the Merger or Split of Book-Entry Transfer Beneficial Interest in an Investment Trust)
Article 121-2(1)Before merging or splitting a beneficial interest in an investment trust that is of a particular issue (meaning an issue as prescribed in Article 68, paragraph (3), item (ii) as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same applies in this Article) and that a Book-Entry Transfer Institution handles (hereinafter referred to as a "Book-Entry Transfer Beneficial Interest in an Investment Trust"), the issuer of the Book-Entry Transfer Beneficial Interest in the Investment Trust must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date of merger or split:
(i)the issue of Book-Entry Transfer Beneficial Interest in the Investment Trust subject to the merger or split;
(ii)in the case of a merger, the percentage arrived at when the percentage of the total number of issued units referred to in sub-item (b) which the total number of issued units referred to in sub-item (a) represents is subtracted from the number one (hereinafter referred to as the "percent reduction" in this Article):
(a)the total number of issued units of Book-Entry Transfer Beneficial Interest in the Investment Trust after the merger;
(b)the total number of issued units of Book-Entry Transfer Beneficial Interest in the Investment Trust before the merger.
(iii)in the case of a split, the percentage of the total number of issued units referred to in sub-item (b) which the total number of units referred to in sub-item (a) represents (hereinafter referred to as the "percent increase" in this Article):
(a)the total number of units of Book-Entry Transfer Beneficial Interest in the Investment Trust which beneficiaries receive as a result of the split;
(b)the total number of issued units of Book-Entry Transfer Beneficial Interest in the Investment Trust before the split.
(iv)the date of the merger or split.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest in the Investment Trust about which it has been notified.
(3)The provisions of the preceding paragraph apply mutatis mutandis to an Immediately Subordinate Institution that is notified as referred to in that paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(4)Upon being notified as referred to in paragraph (1) or (2) (including as applied mutatis mutandis pursuant to the preceding paragraph), the Book-Entry Transfer Institution, etc. that has been so notified must take the following measures on the date of the merger or split:
(i)the following measures, in the event of a merger (if the Book-Entry Transfer Institution, etc. has a customer account (meaning a customer account as prescribed in Article 68, paragraph (2), item (ii) as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same applies in this Article), this is limited to the measures set forth in sub-item (a)):
(a)create entries or records, under the accounts in which entries or records have been created for Book-Entry Transfer Beneficial Interest in an Investment Trust as referred to in paragraph (1), item (i) in the book-entry transfer account register that the Book-Entry Transfer Institution, etc. maintains (but not in a customer account; for accounts other than the Institution-Held Account, this means the holdings columns (meaning holdings columns as prescribed in Article 69, paragraph (2), item (i), sub-item (a) as applied mutatis mutandis pursuant to the preceding Article) or the pledge columns (meaning pledge columns as prescribed in Article 70, paragraph (3), item (ii) as applied mutatis mutandis pursuant to the preceding Article) of those accounts; hereinafter referred to as the "relevant holdings or pledge column" in this Article) showing reductions equal to the number of units arrived at when each number of units that has been entered or recorded in one of the relevant holdings or pledge columns is multiplied by the percent reduction (if a fractional unit results, it is rounded up);
(b)notify the Immediately Superior Institution of the number of units for which it has entered or recorded reductions pursuant to the provisions of sub-item (a) above.
(ii)the following measures, in the event of a split (if the Book-Entry Transfer Institution, etc. has a customer account, this is limited to the measures set forth in sub-item (a)):
(a)create entries or records, under the relevant holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest in an Investment Trust as referred to in paragraph (1), item (i) in the book-entry transfer account register that the Book-Entry Transfer Institution, etc. maintains, showing increases equal to the number of units arrived at when each number of units that has been entered or recorded in one of the relevant holdings or pledge columns is multiplied by the percent increase (if a fractional unit results, it is disregarded);
(b)notify the Immediately Superior Institution of the number of units for which it has entered or recorded increases pursuant to the provisions of sub-item (a).
(5)Upon being notified as referred to in item (i), sub-item (b) or item (ii), sub-item (b) of the preceding paragraph or as referred to in item (i), sub-item (b) or item (ii), sub-item (b), the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)the following measures, in the event of a merger:
(a)create an entry or record showing a reduction equal to the number of units of which it has been notified, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(b)notify the Immediately Superior Institution of the number of units for which it has entered or recorded a reduction pursuant to the provisions of item (i), sub-item (a) of the preceding paragraph and of the number of units of which the Immediately Subordinate Institution has notified it pursuant to the provisions of sub-item (b) of that item or this item.
(ii)the following measures, in the event of a split:
(a)create an entry or record showing an increase equal to the number of units of which it has been notified, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(b)notify the Immediately Superior Institution of the number of units for which it has entered or recorded an increase pursuant to the provisions of item (ii), sub-item (a) of the preceding paragraph and of the number of units of which the Immediately Subordinate Institution has notified it pursuant to the provisions of sub-item (b) of that item or this item.
(6)A Book-Entry Transfer Institution, etc. that is notified as referred to in paragraph (1) or (2) (including as applied mutatis mutandis pursuant to paragraph (3)), must promptly notify its Immediately Superior Institution (or the issuer, if it is a Book-Entry Transfer Institution) of the numbers of units of Book-Entry Transfer Beneficial Interest in the Investment Trust subject to the merger or split which have been entered or recorded under the accounts of the Participants of the Book-Entry Transfer Institution, etc. (this excludes a customer account) in the book-entry transfer account register that it maintains as of the day immediately preceding the merger or split, and of the number of units of Book-Entry Transfer Beneficial Interest in the Investment Trust of which it has been notified by its Immediately Subordinate Institution pursuant to the provisions of this paragraph.
(Exclusion of Book-Entry Transfer Beneficial Interest in an Investment Trust from Application of the Act on Investment Trusts and Investment Corporations If Ownership Is Established by Entries or Records in the Book-Entry Transfer Account Register)
Article 121-3The provisions of Article 186, items (iii) and (iv), Articles 189 and 194, Article 195, paragraph (1), Article 199, Article 200, paragraph (1) and Article 201, paragraph (1) of the Trust Act as applied mutatis mutandis pursuant to the provisions of Article 5, paragraph (7) of the Act on Investment Trusts and Investment Corporations do not apply to Book-Entry Transfer Beneficial Interest in an Investment Trust whose ownership is established by entries or record in a book-entry transfer account register.
Section 7 Book Entry Trasfer of Beneficial Interest in Loan Trusts
(Mutatis Mutandis Application of Provisions on Bonds and Other Securities to Beneficial Interest in Loan Trusts)
Article 122The provisions of Chapter IV (other than Article 66, item (i), Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2, Article 71, paragraph (8) and Section 4 (other than Article 84, paragraph (2))) and Article 114, paragraph (2) apply mutatis mutandis to a beneficial interest in a loan trust (meaning a beneficial interest as prescribed in Article 2, paragraph (2) of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66
claim for interest
claim to a distribution of profits
Article 66, item (ii)
decision to issue
the basic terms and conditions of the trust (meaning the basic terms and conditions of a trust as prescribed in Article 3, paragraph (1) of the Loan Trust Act)
issued based on that decision will be subject
will be subject
Article 67, paragraph (1)
Corporate bond certificates
Beneficiary certificates (meaning the beneficiary certificates as prescribed in Article 2, paragraph (2) of the Loan Trust Act; the same applies hereinafter)
Article 67, paragraphs (2) and (3)
corporate bond certificate
beneficiary certificate
Article 69, paragraph (1)
without delay after the date on which it issues
if a trust has been set up for
Article 69, paragraph (1), item (i)
that it has issued
that it has placed in trust
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees of book-entry transfer corporate bonds
the Participants that will become the beneficiaries of the trust
Article 69, paragraph (1), item (iv)
for each Participant (other than as set forth in the following item);
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
Article 69, paragraph (2), item (ii)
the total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amount referred to in item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
Unless an issuer goes through a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act (referred to as a "bond manager or similar person" in the following paragraph) to redeem book-entry transfer corporate bonds for a bondholder or pledgee, the issuer may demand that
The issuer may demand that
redeeming
redeeming the principal of the
Article 73
claim for interest
claim to a distribution of profits
Article 78, paragraph (1)
redeemed
redeemed or retired
Article 80 and Article 81
this Article and Article 85
this Article
redeem the principal of
pay profit distributions, purchase,
Article 82
or payment of interest
or payment of profit distribution or purchase
Article 84, paragraph (2)
corporate bond register
beneficial interest register (meaning the beneficial interest register prescribed in Article 186 of the Trust Act as applied mutatis mutandis pursuant to Article 8, paragraph (5) of the Loan Trust Act following the deemed replacement of terms)
(Creating Entries or Records of the Merger or Split of Book-Entry Transfer Beneficial Interest in a Loan Trust)
Article 122-2(1)Before merging or splitting a beneficial interest in a loan trust that is of a particular issue (meaning an issue as prescribed in Article 68, paragraph (3), item (ii) as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same applies in this Article) and that a Book-Entry Transfer Institution handles (hereinafter referred to as a "Book-Entry Transfer Beneficial Interest in a Loan Trust") the issuer of the Book-Entry Transfer Beneficial Interest in the Loan Trust must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date of merger or split:
(i)the issue of the Book-Entry Transfer Beneficial Interest in a Loan Trust subject to the merger or split;
(ii)in the case of a merger, the percentage arrived at when the percentage of the total issued quantity referred to in sub-item (a) which the total issued quantity referred to in sub-item (b) represents is subtracted from the number one (hereinafter referred to as the "percent reduction" in this Article):
(a)the total issued quantity of Book-Entry Transfer Beneficial Interest in the Loan Trust after the merger;
(b)the total issued quantity of Book-Entry Transfer Beneficial Interest in the Loan Trust before the merger.
(iii)in the case of a split, the percentage of the total issued quantity referred to sub-item (b) which the total quantity referred to in sub-item (a) represents (hereinafter referred to as the "percent increase" in this Article):
(a)the total quantity of Book-Entry Transfer Beneficial Interest in the Loan Trust which beneficiaries receive as a result of the split;
(b)the total issued quantity of Book-Entry Transfer Beneficial Interest in the Loan Trust before the split.
(iv)the date of the merger or split.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest in the Loan Trust about which it has been notified.
(3)The provisions of the preceding paragraph apply mutatis mutandis to an Immediately Subordinate Institution that is notified as referred to in that paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(4)Upon being notified as referred to in paragraph (1) or (2) (including as applied mutatis mutandis pursuant to the preceding paragraph), the Book-Entry Transfer Institution, etc. that has been so notified must take the following measures on the date of the merger or split:
(i)the following measures, in the event of a merger (if the Book-Entry Transfer Institution, etc. has a customer account (meaning a customer account as prescribed in Article 68, paragraph (2), item (ii) as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same applies in this Article), this is limited to the measures set forth in sub-item (a)):
(a)create entries or records, under the accounts in which entries or records have been created for Book-Entry Transfer Beneficial Interest in a Loan Trust as referred to in paragraph (1), item (i) in the book-entry transfer account register that the Book-Entry Transfer Institution, etc. maintains (but not in a customer account; for accounts other than the Institution-Held Account, this means the holdings columns (meaning holdings columns as prescribed in Article 69, paragraph (2), item (i), sub-item (a) as applied mutatis mutandis pursuant to the preceding Article) or the pledge columns (meaning pledge columns as prescribed in Article 70, paragraph (3), item (ii) as applied mutatis mutandis pursuant to the preceding Article) of those accounts; hereinafter referred to as the "relevant holdings or pledge column" in this Article) showing reductions equal to the quantities arrived at when each quantity that has been entered or recorded in one of the relevant holdings or pledge columns is multiplied by the percent reduction (if a quantity less than one results, it is rounded up);
(b)notify the Immediately Superior Institution of the quantities for which it has entered or recorded reductions pursuant to the provisions of sub-item (a).
(ii)the following measures, in the event of a split (if the Book-Entry Transfer Institution, etc. has a customer account, this is limited to the measures set forth in sub-item (a)):
(a)create entries or records, under the relevant holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest in a Loan Trust as referred to in paragraph (1), item (i) in the book-entry transfer account register that the Book-Entry Transfer Institution, etc. maintains, showing increases equal to the quantities arrived at when each quantity that has been entered or recorded in one of the relevant holdings or pledge columns is multiplied by the percent increase (if a quantity less than one results, it is rounded up);
(b)notify the Immediately Superior Institution of the quantities for which it has entered or recorded increases pursuant to the provisions of sub-item (a).
(5)Upon being notified as referred to in item (i), sub-item (b) or item (ii), sub-item (b) of the preceding paragraph or as referred to in item (i), sub-item (b) or item (ii), sub-item (b), the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)the following measures, in the event of a merger:
(a)create an entry or record showing a reduction equal to the quantity of which it has been notified, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(b)notify the Immediately Superior Institution of the quantity for which it has entered or recorded a reduction pursuant to the provisions of item (i), sub-item (a) of the preceding paragraph and of the quantity of which the Immediately Subordinate Institution has notified it pursuant to the provisions of sub-item (b) of that item or this item.
(ii)the following measures, in the event of a split:
(a)create an entry or record showing an increase equal to the quantity of which it has been notified, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(b)notify the Immediately Superior Institution of the quantity for which it has entered or recorded an increase pursuant to the provisions of item (ii), sub-item (a) of the preceding paragraph and the quantity of which the Immediately Subordinate Institution has notified it pursuant to the provisions of sub-item (b) of that item or this item.
(6)A Book-Entry Transfer Institution, etc. that is notified as referred to in paragraph (1) or (2) (including as applied mutatis mutandis pursuant to paragraph (3)), must promptly notify its Immediately Superior Institution (or the issuer, if it is a Book-Entry Transfer Institution) of the quantities of Book-Entry Transfer Beneficial Interest in the Loan Trust subject to the merger or split which have been entered or recorded under the accounts of the Participants of the Book-Entry Transfer Institution, etc. (this excludes a customer account) in the book-entry transfer account register that it maintains as of the day immediately preceding the merger or split, and of the quantity of Book-Entry Transfer Beneficial Interest in the Loan Trust of which it has been notified by its Immediately Subordinate Institution pursuant to the provisions of this paragraph.
(Special Provisions of the Loan Trust Act on Book-Entry Transfer Beneficial Interest in a Loan Trust)
Article 123Before concluding a trust agreement involving Book-Entry Transfer Beneficial Interest in a Loan Trust, a trust company or similar institution must issue public notice indicating that the provisions of this Act apply to the Book-Entry Transfer Beneficial Interest in the Loan Trust, in addition to the information set forth in the items of Article 7, paragraph (1), of the Loan Trust Act.
(Exclusion of Book-Entry Transfer Beneficial Interest in a Loan Trust from Application of the Loan Trust Act If Ownership Is Established by Entries or Records in the Book-Entry Transfer Account Register)
Article 123-2The provisions of Article 186, items (iii) and (iv), Articles 189 and 194, Article 195, paragraph (1), Article 199, Article 200, paragraph (1) and Article 201, paragraph (1) of the Trust Act as applied mutatis mutandis pursuant to the provisions of Article 8, paragraph (5) of the Loan Trust Act do not apply to Book-Entry Transfer Beneficial Interest in a Loan Trust whose ownership is established by entries or records in a book-entry transfer account register.
Section 8 Book Entry Trasfer of Beneficial Interest in Specific Purpose Trusts
(Mutatis Mutandis Application of Provisions on Bonds and Other Securities to Beneficial Interest in Specific Purpose Trusts)
Article 124The provisions of Chapter IV (other than Article 66, item (i), Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2, Article 71, paragraph (8), Article 83, Article 84, paragraphs (1), (3) and (4), Article 86, paragraph (1), item (ii), Article 86-2 and Article 86-3), Article 114, paragraph (2) and Article 155 apply mutatis mutandis to beneficial interest in a specific purpose trust (meaning beneficial interest as prescribed in Article 2, paragraph (15) of the Act on Securitization of Assets; the same applies hereinafter). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 66
claim for interest
claim to profits
Article 66, item (ii)
decision to issue
specific purpose trust agreement (meaning a specific purpose trust agreement as prescribed in Article 229 of the Act on Securitization of Assets)
issued based on that decision will be subject
will be subject
Article 67, paragraph (1)
Corporate bond certificates
Beneficiary certificates (meaning beneficiary certificates as prescribed in Article 2, paragraph (15) of the Act on Securitization of Assets; the same applies hereinafter)
Article 67, paragraphs (2) and (3)
corporate bond certificate
beneficiary certificate
Article 68, paragraph (3), item (ii)
trade name
name
Article 68, paragraph (3), item (iii)
amount
number of units of the interest in principal prescribed in Article 226, paragraph (1), item (iii), sub-item (b) of the Act on Securitization of Assets (or the interest in profit prescribed in sub-item (b) of the same item, if the issue carries no interest in the principal) (hereinafter referred to as the "number of units of interest")
Article 68, paragraph (3), items (iv) and (v), paragraph (4), item (ii), and paragraph (5), item (ii)
amount
number of units of interest
Article 69, paragraph (1)
without delay after the date on which it issues
if a trust has been set up for
Article 69, paragraph (1), item (i)
that it has issued
that it has placed in trust
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees of book-entry transfer corporate bonds
the Participants that will come to hold rights in the trust
Article 69, paragraph (1), item (iv)
the amount of book-entry transfer corporate bonds as referred to in item (i) for each Participant (other than as set forth in the following item);
the number of units of interest in book-entry transfer corporate bonds as referred to in item (i) for each Participant (other than as set forth in the following item);
Article 69, paragraph (1), item (vii)
total amount
total number of units of interest
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
increase equal to the amount
increase equal to the number of units of interest
Article 69, paragraph (2), item (ii)
increase equal to the total of the amounts referred to in items (iv) and (v) of the preceding paragraph
increase equal to the number of units interest referred to in the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (1)
showing a reduction or increase
showing a reduction or increase equal to the number of units of interest
Article 70, paragraph (2)
reduction
reduction equal to the number of units of interest
Article 70, paragraph (3), item (i)
showing a reduction and increase
showing a reduction and increase equal to the number of units of interests
amount
number of units of interests
Article 70, paragraph (3), item (ii)
reduction
reduction equal to the number units of interest
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 70, paragraph (3), items (iii) and (iv)
increase
increase equal to in the number of units of interest
Article 70, paragraph (4), item (i)
the amount
the number of units of interest
amount subject to book entry transfer
the number of units of interest subject to book entry transfer
reduction
reduction
Article 70, paragraph (4), items (iii) and (iv)
amount subject to book entry transfer
the number of units of interest subject to book entry transfer
increase
increase
Article 70, paragraph (5), item (i)
amount subject to book entry transfer
the number of units of interest subject to book entry transfer
reduction
reduction
Article 70, paragraph (5), items (iii) and (iv), and paragraph (7)
amount subject to book entry transfer
the number of units of interest subject to book entry transfer
increase
increase
Article 71, paragraphs (1) and (2)
reduction
reduction equal to the number of units of interest
Article 71, paragraph (3)
reduction
reduction equal to the number of units of interest
amount
number of units of interest
Article 71, paragraph (4), item (i) and paragraph (5), item (i)
amount
number of units of interest
reduction
reduction
Article 71, paragraph (7)
Unless an issuer goes through a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act (referred to as a "bond manager or similar person" in the following paragraph) to redeem book-entry transfer corporate bonds for a bondholder or pledgee, the issuer may demand that
The issuer may demand that
the same amount from the account as the amount of
the same number of units of interest from the account as the number of units of interest
Article 73
claim for interest
claim to profit
increase equal to the amount
increase equal to the number of units of interest
Article 74
increase equal to the amount
increase equal to the number of units of interest
Article 77
showing an increase in
showing an increase equal to the number of units of interest
the increase
the increase
Article 78, paragraph (1)
total amount
total number of units of interest
the total issued amount (other than any amount that has been redeemed) total amount of... which have been issued
the total issued units of interest (other than any units of interest that have been redeemed)
aggregate amount
aggregate number
total issued amount
total number of issued units of interest
amount of the overage
number in overage
, less the total issued amount
, less the total number of issued units of interest
amount
number of units of interest
Article 78, paragraph (2)
amount
number of units of interest
increase or reduction
increase or reduction equal to the number of units of interest
Article 79, paragraph (1)
aggregate amount
aggregate number
amount
number of units of interest
amount of the overage
number in overage
, less the total issued amount
, less the total number of issued units of interest
in an amount equal to
in a number of units of interest equal to
Article 79, paragraph (2)
amount
number of interests
increase or reduction
increase or reduction
Article 79, paragraph (3)
amount of the overage
number in overage
in an amount
in a number of units of interest
Article 79, paragraph (4), item (ii)
amount
number of units of interest
Article 79, paragraph (5), item (i)
reduction equal to the amount
reduction equal to the number of units of interest
Article 79, paragraph (5), item (ii)
increase equal to the amount
increase equal to the number of units of interest
Article 80, paragraph (1)
amount
number of units of interest
total amount
total number of units of interest
amount of the overage
number in overage
any amount representing
any number of units of interest representing
, less the total issued amount
, less the total number of issued units of interest
the amount arrived at when
the number of units of interest arrived at when
maximum amount ascribable to the book-entry transfer institution
maximum number of units of interest ascribable to the book-entry transfer institution
redeem the principal or pay interest on
redeem or distribute profits for
maximum amount ascribable to the account management institution
maximum number of units of interest ascribable to the account management institution
aggregate amount
aggregate number
Article 80, paragraph (2), item (i)
maximum amount ascribable to the book-entry transfer institution
maximum number of units of interest ascribable to the book-entry transfer institution
redeem the principal or pay interest on
redeem or distribute profits for
Article 81, paragraph (1)
amount
number of units of interest
total amount
total number of units of interest
amount of the overage
number in overagex
any amount representing
any number of units of interest representing
, less the total issued amount
, less the total number of issued units of interestx
the amount arrived at when
number of units of interest arrived at when
maximum amount ascribable to the account management institution
maximum number of units of interest ascribable to the account management institution
redeem the principal or pay interest on
redeem or distribute profits for
aggregate amount
aggregate number
Article 81, paragraph (2), item (i)
maximum amount ascribable to the account management institution
maximum number of units of interest ascribable to the account management institution
redeem the principal or pay interest on
redeem or distribute profits for
Article 82
amount
number of units of interest
redeem the principal or pay interest on
redeem or distribute profits for
Article 84, paragraph (2)
corporate bond register
right holder list (meaning a right holder list as prescribed in Article 235, paragraph (1) of the Act on Securitization of Assets)
Article 85, paragraph (1)
Article 723, paragraph (1) of the Companies Act
Article 244, paragraph (1) of the Act on Securitization of Assets (including as applied mutatis mutandis pursuant to Article 250, paragraph (3) and Article 253 of that Act)
the amount of corporate bonds held thereby (other than the sum total of the maximum amount ascribable to the book-entry transfer institution and maximum amount ascribable to the account management institution)
the number of units of interest held thereby (other than the sum total of the maximum number of units of interest ascribable to the book-entry transfer institution and maximum number of units of interest ascribable to the account management institution)
bondholders meeting
right holders meeting as prescribed in Article 240, paragraph (1) or class right holders meeting as prescribed in Article 251, paragraph (1) of the same Act (referred to as a "right holders or class right holders meeting" in the next Article)
Article 85, paragraph (2)
Article 718, paragraph (1) and Article 736, paragraph (1) of the Companies Act and Article 49, paragraph (1) of the Secured Bonds Trust Act
Article 718, paragraph (1) of the Companies Act, as applied mutatis mutandis pursuant to Article 242, paragraph (5) of the Act on Securitization of Assets (including as applied mutatis mutandis pursuant to Article 250, paragraph (3) and Article 253 of the same Act) and Article 254, paragraph (1) of the Act on Securitization of Assets
the maximum amount ascribable to the book-entry transfer institution and the maximum amount ascribable to the account management institution
the maximum number of units of interest ascribable to the book-entry transfer institution and the maximum number of units of interest ascribable to the account management institution
Article 86, paragraph (1)
Article 718, paragraph (1) of the Companies Act
Article 718, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 242, paragraph (5) of the Act on Securitization of Assets (including as applied mutatis mutandis pursuant to Article 250, paragraph (3) and Article 253 of the same Act) following the deemed replacement of terms
bondholders meeting
right holders or class right holders meeting
paragraph (3) of the same Article
Article 718, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to Article 242, paragraph (5) of the Act on Securitization of Assets (including as applied mutatis mutandis pursuant to Article 250, paragraph (3) and Article 253 of the same Act) following the deemed replacement of terms
; in order to vote at a bondholders meeting
; or in order to vote at a right holders or class right holders meeting
; or in order to inspect the conditions under which collateral under the provisions of Article 49, paragraph (1) of the Secured Bonds Trust Act is stored, the holder
, the holder
Article 86, paragraph (1), item (i)
a bond manager administrator
specific trusts manager (meaning a specific trusts manager as prescribed in Article 2, paragraph (18) of the Act on Securitization of Assets)
to that bond manager
to that specific trusts manager
Article 86, paragraph (1), item (iii)
preceding two items
item (i)
Article 86, paragraph (2)
bondholders meeting
right holders or class right holders meeting
Article 155
Article 116, paragraph (1), Article 192, paragraph (1), Article 469, paragraph (1), Article 785, paragraph (1), Article 797, paragraph (1) or Article 806, paragraph (1) of the Companies Act
Article 271, paragraph (1) of the Act on Securitization of Assets (including as applied mutatis mutandis pursuant to Article 272, paragraph (2) of the same Act)
(Creating Entries or Records of the Merger or Split of Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust)
Article 124-2(1)Before merging or splitting a beneficial interest in a specific purpose trust that is of a particular issue (meaning an issue as prescribed in Article 68, paragraph (3), item (ii) as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same applies in this Article) and that a Book-Entry Transfer Institution handles (hereinafter referred to as a "Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust"), the issuer of the Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date of merger or split:
(i)the issue of Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust subject to the merger or split;
(ii)in the case of a merger, the percentage arrived at when the percentage of the total number of issued units of interest referred to sub-item (b) which the total number of issued units of interest referred to in sub-item (a) represents is subtracted from the number one (hereinafter referred to as the "percent reduction" in this Article):
(a)the total number of issued units of interest constituting Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust after the merger;
(b)the total number of issued units of interest constituting Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust before the merger.
(iii)in the case of a split, the percentage of the total number of issued units of interest referred to in sub-item (b) which the total number of units of interest referred to in sub-item (a) represents (hereinafter referred to as the "percent increase" in this Article):
(a)the total number of units of interest constituting Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust which beneficiaries receive as a result of the split;
(b)the total number of issued units of interest constituting Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust before the split.
(iv)the date of the merger or split.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Beneficial Interest in the Specific Purpose Trust about which it has been notified.
(3)The provisions of the preceding paragraph apply mutatis mutandis to an Immediately Subordinate Institution that is notified as referred to in that paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(4)Upon being notified as referred to in paragraph (1) or (2) (including as applied mutatis mutandis pursuant to the preceding paragraph), the Book-Entry Transfer Institution, etc. that has been so notified must take the following measures on the date of the merger or split:
(i)the followings measures, in the event of a merger (if the Book-Entry Transfer Institution, etc. has a customer account (meaning a customer account as prescribed in Article 68, paragraph (2), item (ii) as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same applies in this Article), this is limited to the measures set forth in sub-item (a)):
(a)create entries or records, under the accounts in which entries or records have been created for Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust as referred to in paragraph (1), item (i) in the book-entry transfer account register that the Book-Entry Transfer Institution, etc. maintains (but not in a customer account; for accounts other than the Institution-Held Account, this means the holdings columns (meaning holdings columns as prescribed in Article 69, paragraph (2), item (i), sub-item (a) as applied mutatis mutandis pursuant to the preceding Article) or the pledge columns (meaning pledge columns as prescribed in Article 70, paragraph (3), item (ii) as applied mutatis mutandis pursuant to the preceding Article) of those accounts; hereinafter referred to as the "relevant holdings or pledge column" in this Article) showing reductions equal to the number of units of interest arrived at when each number of units of interest that has been entered or recorded in one of the relevant holdings or pledge columns is multiplied by the percent reduction (if a fractional interest results, it is rounded up);
(b)notify the Immediately Superior Institution of the number of units of interest for which it has entered or recorded reductions pursuant to the provisions of sub-item (a) above.
(ii)the following measures, in the event of a split (if the Book-Entry Transfer Institution, etc. has a customer account, this is limited to the measures set forth in sub-item (a)):
(a)create entries or records, under the relevant holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust as referred to in paragraph (1), item (i) in the book-entry transfer account register that the Book-Entry Transfer Institution, etc. maintains, showing increases equal to the number of units of interest arrived at when each number of units of interest that has been entered or recorded in one of the relevant holdings or pledge columns is multiplied by the percent increase (if a fractional interest results, it is rounded up);
(b)notify the Immediately Superior Institution of the number of units of interest for which it has entered or recorded increases pursuant to the provisions of sub-item (a).
(5)Upon being notified as referred to in item (i), sub-item (b) or item (ii), sub-item (b) of the preceding paragraph or as referred to in item (i), sub-item (b) or item (ii), sub-item (b), the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)the following measures, in the event of a merger:
(a)create an entry or record showing a reduction equal to the number of units of interest of which it has been notified, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(b)notify the Immediately Superior Institution of the number of units of interest for which it has entered or recorded a reduction pursuant to the provisions of item (i), sub-item (a) of the preceding paragraph and of the number of units of interest of which the Immediately Subordinate Institution has notified it pursuant to the provisions of sub-item (b) of that item or this item.
(ii)the following measures, in the event of a split:
(a)create an entry or record showing an increase equal to the number of units of interest of which it has been notified, in the customer account subdivision under the account of the Account Management Institution that has notified it;
(b)notify the Immediately Superior Institution of the number of units of interest for which it has entered or recorded an increase pursuant to the provisions of item (ii), sub-item (a) of the preceding paragraph and of the number of units of interest of which the Immediately Subordinate Institution has notified it pursuant to the provisions of sub-item (b) of that item or this item.
(6)A Book-Entry Transfer Institution, etc. that is notified as referred to in paragraph (1) or (2) (including as applied mutatis mutandis pursuant to paragraph (3)), must promptly notify its Immediately Superior Institution (or the issuer, if it is a Book-Entry Transfer Institution) of the number of units of interest constituting Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust subject to the merger or split which have been or recorded under the accounts of the Participants of the Book-Entry Transfer Institution, etc. (this excludes a customer account) in the book-entry transfer account register that it maintains as of the day immediately preceding the merger or split, and of the number of units of interest constituting Book-Entry Transfer Beneficial Interest in the Specific Purpose Trust of which it has been notified by its Immediately Subordinate Institution pursuant to the provisions of this paragraph.
(Special Provisions of the Act on Securitization of Assets on Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust)
Article 125In addition to the holder of a Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust being deemed to be the right holder of a beneficiary certificate when the provisions of the Act on Securitization of Assets are applied, the Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust is deemed to be a beneficiary certificate as prescribed in that Act when Article 286 of that Act is applied.
(Exclusion of Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust from Application of the Act on Securitization of Assets)
Article 126(1)The provisions of Article 201, paragraph (1) of the Trust Act applied mutatis mutandis pursuant to Article 239, paragraph (1) of the Act on Securitization of Assets do not apply to Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust.
(2)Notwithstanding Article 103, paragraph (4) of the Trust Act as applied mutatis mutandis pursuant to Article 271, paragraph (4) of the Act on Securitization of Assets (including as applied mutatis mutandis pursuant to paragraph (2) of Article 272 of that Act), in lieu of notifying the relevant persons as under those provisions, the trustee company, etc. of the Book-Entry Transfer Beneficial Interest in a Specific Purpose Trust (meaning a trustee company, etc. as prescribed in Article 2, paragraph (16) of the Act on Securitization of Assets) must issue public notice of the information of which it is required to notify the relevant persons.
Section 9 Book Entry Trasfer of Foreign Bonds
Article 127The provisions of Chapter IV (other than Article 66, item (i), Article 69, paragraph (1), items (v) and (vi) and paragraph (2), item (i), sub-items (b) and (c), Article 69-2, Article 70-2 and the provisions of Section 4) and Article 114 apply mutatis mutandis to foreign bonds (meaning rights required to be indicated on bond certificates issued by a foreign country or foreign corporation). In such a case, the words set forth in the right-hand column of the following table are deemed to replace the words set forth in the middle column of that table in the provisions set forth in the left-hand column thereof, and beyond this, Cabinet Order provides for the necessary technical replacement of terms.
Article 67
Corporate bond certificates
Bond certificates
Article 68, paragraph (3), item (ii)
trade name
name
Article 69, paragraph (1), item (ii)
the Participants that constitute the holders and pledgees
the Participants that constitute the holders
Article 69, paragraph (1), item (iv)
the amount of book-entry transfer corporate bonds as referred to in item (i) for each Participant (other than as set forth in the following item);
for each Participant
Article 69, paragraph (2), item (i), sub-item (a)
of that paragraph (but only one that is a bondholder as referred to in that item),
of that paragraph
Article 69, paragraph (2), item (ii)
total of the amounts referred to in items (iv) and (v) of the preceding paragraph
the amount referred to in item (iv) of the preceding paragraph
item (vi)
item (iv)
Article 70, paragraph (3), item (ii)
or the pledge column of the account of the Participant referred to in the preceding paragraph
of the account of the Participant referred to in the preceding paragraph or in the column of that account where the information set forth in Article 68, paragraph (3), item (iv) is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
Article 71, paragraph (7)
a corporate bond manager or a trust company under a trust agreement as prescribed in Article 2, paragraph (1) of the Secured Bonds Trust Act
the person entrusted with managing the rights required to be indicated on foreign bonds issued by a foreign country or foreign corporation or a trust company under a trust agreement involving such rights as collateral
bond manager or similar person
manager or similar person
Article 71, paragraph (8)
bond manager or similar person
manager or similar person
Article 80, paragraph (1) and Article 81, paragraph (1)
this Article and Article 85
this Article
Chapter VI-2 Book Entry Trasfer of Beneficial Interest in Trusts Issuing Beneficiary Certificates
Section 1 General Rules
(Ownership of Rights)
Article 127-2(1)The ownership of a beneficial interest in a trust issuing beneficiary certificates (other than a beneficial interest as prescribed in Article 185, paragraph (2) of the Trust Act) which is handled by a Book-Entry Transfer Institution (hereinafter referred to as a "Book-Entry Transfer Beneficial Interest" in this Chapter) is established by the entries or records in a book-entry transfer account register as under the provisions of this Chapter.
(2)The issuer must be acting as provided in the act of trust to give the consent referred to in Article 13, paragraph (1) with respect to beneficial interest therein.
(Non-issuance of Beneficiary Certificates)
Article 127-3(1)Beneficiary certificates may not be issued for Book-Entry Transfer Beneficial Interest.
(2)Notwithstanding the preceding paragraph, if a Book-Entry Transfer Institution that handles Book-Entry Transfer Beneficial Interest has its Article 3, paragraph (1) designation rescinded pursuant to the provisions of Article 22, paragraph (1) or its designation ceases to be effective pursuant to the provisions of Article 41, paragraph (1), and there is no person to succeed to the Book-Entry Transfer Services thereof; or if a Book-Entry Transfer Institution that handles Book-Entry Transfer Beneficial Interest ceases to handle that Book-Entry Transfer Beneficial Interest, the beneficiary of such a Book-Entry Transfer Beneficial Interest may ask the issuer to issue a beneficiary certificate.
(3)A beneficiary certificate as referred to in the preceding paragraph is in bearer form.
Section 2 Book-Entry Transfer Account Registers
(Information Required to Be Entered or Recorded in a Book-Entry Transfer Account Register)
Article 127-4(1)A book-entry transfer account register is subdivided by account for each Participant.
(2)The account of an Account Management Institution in a book-entry transfer account register is subdivided as follows:
(i)an account in which entries or records are created for Book-Entry Transfer Beneficial Interest in which the Account Management Institution holds rights (hereinafter referred to as the institution's "own account" in this Chapter);
(ii)an account in which entries or records are created for Book-Entry Transfer Beneficial Interest in which the Participants of the Account Management Institution or of its Subordinate Institution hold rights (hereinafter referred to as a "customer account" in this Chapter).
(3)Entries or records giving the following information are made for each account (other than customer accounts) in a book-entry transfer account register:
(i)the name and address of the Participant;
(ii)the issuer's name and the type of the Book-Entry Transfer Beneficial Interest (hereinafter referred to as the "issue" in this Chapter);
(iii)the number of units of Book-Entry Transfer Beneficial Interest, by issue (other than as set forth in the following item);
(iv)that the Participant in question is a pledgee, if this is the case; and the number of units of Book-Entry Transfer Beneficial Interest that have been pledged thereto, by issue;
(v)that the Participant in question is the trustee of a trust, if this is the case; and the number of units of Book-Entry Transfer Beneficial Interest as referred to in the preceding two items which constitute trust property;
(vi)if an entry or record has been created showing an increase or reduction in the number referred to in item (iii) or (iv), whether it shows an increase or reduction, the number by which the units of Book-Entry Transfer Beneficial Interest have increased or been reduced, and the date on which the entry or record was created;
(vii)other information specified by Cabinet Order.
(4)Entries or records giving the following information are made for each customer account in a book-entry transfer account register:
(i)the information set forth in items (i) and (ii) of the preceding paragraph;
(ii)the number of units of Book-Entry Transfer Beneficial Interest, by issue;
(iii)other information specified by Cabinet Order.
(5)If a Book-Entry Transfer Institution opens an Institution-Held Account, it must create a subdivision for that account in the book-entry transfer account register and enter or record the following information:
(i)the issue;
(ii)the number of units of Book-Entry Transfer Beneficial Interest, by issue;
(iii)other information specified by Cabinet Order.
(6)A book-entry transfer account register may be created as an electronic or magnetic record (limited to one as specified by Ordinance of the Competent Ministry).
(Creating New Entries or Records upon Issuance of Book-Entry Transfer Beneficial Interest)
Article 127-5(1)The issuer of Book-Entry Transfer Beneficial Interest of a particular issue must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information without delay after the date on which the Book-Entry Transfer Beneficial Interest is created:
(i)the issue of Book-Entry Transfer Beneficial Interest that it has issued ;
(ii)the names of the Participants that constitute the beneficiaries and pledgees of the Book-Entry Transfer Beneficial Interest referred to in the preceding item;
(iii)the accounts opened for the Participants referred to in the preceding item, in which book entries can be made for the Book-Entry Transfer Beneficial Interest referred to in item (i);
(iv)the number of units of Book-Entry Transfer Beneficial Interest referred to in item (i) for each Participant (other than as set forth in the following item);
(v)that a Participant is a pledgee, if this is the case; and the number of units of Book-Entry Transfer Beneficial Interest as referred to in item (i) that have been pledged thereto;
(vi)that a Participant is the trustee of a trust, if this is the case; and the number of units of Book-Entry Transfer Beneficial Interest as referred to in item (iv) and the preceding item which constitute trust property;
(vii)information as set forth in item (vii), paragraph (3) of the preceding Article which Cabinet Order prescribes as information that the issuer is able to learn;
(viii)the total number of units of the Book-Entry Transfer Beneficial Interest referred to in item (i) and other information specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately take the following measures for the issue of Book-Entry Transfer Beneficial Interest about which it has been notified:
(i)create the following entries or records, if the Book-Entry Transfer Institution is the one that opened the account referred to item (iii) of the preceding paragraph:
(a)an entry or record showing an increase equal to the number referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph (but only one that is a beneficiary as referred to in that item), in the column of the account where the information set forth in paragraph (3), item (iii) of the preceding Article is entered or recorded (hereinafter referred to as the "holdings column" in this Chapter);
(b)an entry or record showing an increase equal to the number referred to in item (v) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph (but only one that is a pledgee as referred to in that item), in the column of the account where the information set forth in paragraph (3), item (iv) of the preceding Article is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
(c)an entry or record in the account showing an increase equal to the number of units of Book-Entry Transfer Beneficial Interest constituting trust property as referred to in item (vi) of the preceding paragraph;
(d)an entry or record in the account showing the information set forth in item (vii) of the preceding paragraph;
(e)an entry or record in the account showing the information set forth in item (viii) of the preceding paragraph.
(ii)create an entry or record showing an increase equal to the total of the numbers referred to in items (iv) and (v) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant, and notify the Immediately Subordinate Institution of the information set forth in items (i) to (vii) inclusive of that paragraph, if the Book-Entry Transfer Institution is not the one that opened the account referred to item (iii) of the preceding paragraph.
(3)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Procedure If a Trustee Cannot Find the Account of a Beneficiary)
Article 127-6(1)If a trustee seeks to deliver Book-Entry Transfer Beneficial Interest of a particular issue but is unable to find an account that has been opened for the beneficiary or pledgee of that beneficial interest in which book entries can be made for Book-Entry Transfer Beneficial Interest, the Trustee (or the person specified by Ordinance of the Competent Ministry as being equivalent to a trustee, if it is delivering Book-Entry Transfer Beneficial Interest at the time of a merger of trusts or in any other case specified by Ordinance of the Competent Ministry; hereinafter referred to as the "notifier" in this Article) must notify the person that Ordinance of the Competent Ministry prescribes as the one that will become the beneficiary or pledgee of the Book-Entry Transfer Beneficial Interest, of the following information, by one month prior to the fixed date referred to in item (i):
(i)that the trustee will notify the relevant party as referred to in paragraph (1) of the preceding Article or apply for a book-entry transfer to be made for the beneficiary (other than the beneficiary of a beneficial interest underlying a pledge, if there is a pledgee) or pledgee of the Book-Entry Transfer Beneficial Interest on a fixed date;
(ii)that the notifier must be notified of the account opened for the beneficiary or pledgee referred to in the preceding item (other than an account opened by a Book-Entry Transfer Institution, etc. based on a request as referred to in the main clause of paragraph (3)) in which book entries can be made for the Book-Entry Transfer Beneficial Interest by the fixed date referred to in that item;
(iii)the name and address of the Book-Entry Transfer Institution, etc. that opens accounts based on requests as referred to in the main clause of paragraph (3);
(iv)other information specified by Ordinance of the Competent Ministry.
(2)If the notifier referred to in the preceding paragraph is a person other than a trustee as referred to in that paragraph, the notifier must notify that trustee, on the fixed date referred to in item (i) of that paragraph, of the account referred to in item (ii) of that paragraph of which the beneficiary or pledgee referred to in that item has notified it.
(3)If a beneficiary or pledgee as referred to in paragraph (1), item (i) does not notify the notifier of an account as referred to in item (ii) of that paragraph by the fixed date referred to in item (i) of that paragraph, the trustee must request the Book-Entry Transfer Institution, etc. referred to in item (iii) of that paragraph to open an account for the beneficiary or pledgee in which book entries can be made for Book-Entry Transfer Beneficial Interest (hereinafter referred to as a "special account"); provided, however, that this does not apply if there is a special account open that the trustee has requested be opened for the beneficiary or pledgee.
(4)If a trustee is the issuer of a beneficial interest that constitutes a Book-Entry Transfer Beneficial Interest as referred to in paragraph (1) but has not given the consent referred to in Article 13, paragraph (1) by the fixed date referred to in paragraph (1), item (i), it must promptly give the consent referred to in Article 13, paragraph (1) to the Book-Entry Transfer Institution with respect to that beneficial interest.
(5)In the case prescribed in paragraph (1), when the trustee notifies the relevant party as referred to in paragraph (1) of the preceding Article, it must use the account referred to in paragraph (1), item (ii) of which it is notified by the beneficiary or pledgee referred to in paragraph (1), item (i) (or the special account that the company has requested be opened, if it has not been so notified) as the account referred to in paragraph (1), item (iii) of the preceding Article.
(Making Book-Entries)
Article 127-7(1)On receiving an application for a book-entry transfer involving Book-Entry Transfer Beneficial Interest of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (8) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction or increase in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)Unless otherwise prescribed in this Act, the application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the book-entry transfer will create an entry or record showing a reduction is to file with its Immediately Superior Institution.
(3)A person filing an application as referred to in paragraph (1) must indicate the following information in that application:
(i)the issue and the number of units of Book-Entry Transfer Beneficial Interest for which entries or records showing a reduction and increase will need to be created when the book-entry transfer is effected;
(ii)whether the reduction will be entered or recorded in the holdings column or the pledge column of the account of the Participant referred to in the preceding paragraph;
(iii)the account in which the entry or record showing the increase will need to be created (this excludes a customer account; hereinafter referred to as the "transferee account" in this Article);
(iv)whether the increase will be entered or recorded in the holdings column or the pledge column of the transferee account (this excludes the Institution-Held Account).
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the number referred to in item (i) of the preceding paragraph (hereinafter referred to as the "number subject to book-entry transfer" in this Article) in the holdings column or pledge column of the account of the Participant referred to in paragraph (2), as indicated pursuant to the provisions of item (ii) of the preceding paragraph;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of items (i), (iii) and (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the number subject to book-entry transfer in either the holdings column or the pledge column of the transferee account, as indicated pursuant to the provisions of item (iv) of the preceding paragraph (or in the column where the information set forth in Article 127-4, paragraph (5), item (ii) is entered or recorded, for an Institution-Held Account; hereinafter referred to as the "transferee column"), if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create an entry or record showing an increase equal to the number subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information indicated pursuant to the provisions of items (i), (iii) and (iv) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the number subject to book-entry transfer in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the number subject to book-entry transfer in the transferee column of the transferee account, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create an entry or record showing an increase equal to the number subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)Upon being notified as referred to in paragraph (4), item (iv) or paragraph (5), item (iv) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph), the Account Management Institution that has been so notified must immediately take the following measures:
(i)create an entry or record showing an increase equal to the number subject to book-entry transfer in the transferee column of the transferee account, if the Account Management Institution is the one that opened the transferee account;
(ii)create an entry or record showing an increase equal to the number subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Account Management Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of paragraph (4), item (iv) or paragraph (5), item (iv), if the Account Management Institution is not the one that opened the transferee account.
(8)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Special Provisions on Making Book-Entries for Book-Entry Transfer Beneficial Interest That Has Been Entered or Recorded in a Special Account)
Article 127-8(1)A Participant may not apply to apply for a book-entry transfer involving a Book-Entry Transfer Beneficial Interest that has been entered or recorded in a special account if the transferee account is other than that of the Participant or that of the issuer of the Book-Entry Transfer Beneficial Interest.
(2)If, after the notice referred to in Article 127-5, paragraph (1), or an application for a book-entry transfer involving a Book-Entry Transfer Beneficial Interest of a particular issue is made, a person that, before the notice or application, acquired a beneficial interest in a trust disappearing in a merger of trusts but that cannot be delivered the Book-Entry Transfer Beneficial Interest that replaces that beneficial interest at the time of the merger because no entry or record has been made for the person in the beneficial interest register, or any other person specified by Ordinance of the Competent Ministry (hereinafter referred to as the "acquirer or other such person" in this Article) files a joint request together with the Participant in whose special account the Book-Entry Transfer Beneficial Interest has been entered or recorded, the issuer must take the following actions. The same applies if the acquirer or other such person files a request accompanied by an authenticated copy or certified copy of an enforceable judgment that orders the Participant to file such a request or accompanied by any other paper document specified by Ordinance of the Competent Ministry as being equivalent thereto, and the same also applies in cases prescribed by Ordinance of the Competent Ministry as those in which the interests of the Participant and other interested persons are unlikely to be prejudiced even if the issuer takes the following actions as requested by the acquirer or other such person:
(i)filing a request as referred to in the main clause of Article 127-6, paragraph (3) for the acquirer or other such person;
(ii)filing an application for the book-entry transfer of that Book-Entry Transfer Beneficial Interest in the transferee account that has been opened as per the request referred to in the preceding item.
(3)A Participant other than the issuer that has requested for a special account to be opened may not apply for a book-entry transfer with the special account as the transferee account.
(Making Deletions)
Article 127-9(1)On receiving an application for the deletion of a Book-Entry Transfer Beneficial Interest of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (6) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the reduction resulting from the deletion will be entered or recorded is to file with its Immediately Superior Institution.
(3)A Participant filing an application as referred to in paragraph (1) (hereinafter referred to as the "applicant" in this Article) must indicate the following information in that application:
(i)the issue and the number of units of Book-Entry Transfer Beneficial Interest for which an entry or record showing a reduction will need to be created when the deletion is effected;
(ii)whether the reduction will be entered or recorded in the holdings column or the pledge column of the applicant's account.
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the number referred to in item (i) of the preceding paragraph in the holdings column or pledge column of the applicant's account as indicated pursuant to the provisions of item (ii) of the preceding paragraph;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of item (i) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the number referred to in paragraph (3), item (i) in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)Unless an issuer goes through a through a beneficiaries' agent to pay its full obligation underlying a beneficial claim associated with a Book-Entry Transfer Beneficial Interest for the beneficiary or pledgee, the issuer may demand that, in exchange for the issuer paying the beneficiary or pledgee its full obligation underlying the beneficial claim associated with the Book-Entry Transfer Beneficial Interest, the beneficiary or pledgee file an application with its Immediately Superior Institution to enter a deletion for the number of units of Book-Entry Transfer Beneficial Interest of that issue which appear on its account, deleting the same number from the account as the number of units of Book-Entry Transfer Beneficial Interest that are being paid.
(8)The provisions of the preceding paragraph apply mutatis mutandis when a beneficiaries' agent through which all obligations under a beneficial claim associated with a Book-Entry Transfer Beneficial Interest have been paid for a beneficiary or pledgee pays the amount so paid to the beneficiary or pledgee.
(Deleting All Entries or Records)
Article 127-10(1)The issuer of Book-Entry Transfer Beneficial Interest of a particular issue must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) no later than two weeks prior to the date referred to in item (ii) before deleting all of the entries or records regarding that Book-Entry Transfer Beneficial Interest:
(i)the issue of Book-Entry Transfer Beneficial Interest;
(ii)the date for the deletion of all of the entries or records regarding that Book-Entry Transfer Beneficial Interest.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest about which it has been notified.
(3)Upon being notified as referred to in paragraph (1), the Book-Entry Transfer Institution that has been so notified must delete the entries or records for all units of Book-Entry Transfer Beneficial Interest as referred to in item (i) of that paragraph from the accounts in the book-entry transfer account register that it maintains under which entries or records have been created for such Book-Entry Transfer Beneficial Interest (for accounts other than the Institution-Held Account or a customer account, this means the holdings column or the pledge column; hereinafter referred to as a "holdings or pledge column" in this Chapter).
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(Creating Entries or Records for a Merger of Book-Entry Transfer Beneficial Interest)
Article 127-11(1)Before merging Book-Entry Transfer Beneficial Interest of a particular issue through a trust modification, the issuer of the Book-Entry Transfer Beneficial Interest must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date on which the merger of beneficial interest takes effect:
(i)the issue of Book-Entry Transfer Beneficial Interest subject to the merger;
(ii)the percentage arrived at when the percentage of the total number referred to in sub-item (b) which the total number referred to in sub-item (a) represents is subtracted from the number one (hereinafter referred to as the "percent reduction" in this Article):
(a)the total number of units of Book-Entry Transfer Beneficial Interest after the merger of beneficial interest;
(b)the total number of units of Book-Entry Transfer Beneficial Interest before the merger of beneficial interest;
(iii)the date on which the merger of beneficial interest will take effect;
(iv)the issuer's account (or one of them, if it has multiple accounts).
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest about which it has been notified.
(3)Upon being notified as referred to in paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the date referred to in item (iii) of that paragraph, must create entries or records under the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest as referred to in item (i) of that paragraph in the book-entry transfer account register that it maintains, showing reductions equal to the numbers arrived at when each of the numbers that has been entered or recorded in a holdings or pledge column is multiplied by the percent reduction.
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing a reduction pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be recorded or entered in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create for that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (iv), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(Creating Entries or Records for the Splitting of Book-Entry Transfer Beneficial Interest)
Article 127-12(1)Before splitting Book-Entry Transfer Beneficial Interest of a particular issue through a trust modification, the issuer of the Book-Entry Transfer Beneficial Interest must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date on which the split of beneficial interest takes effect:
(i)the issue of Book-Entry Transfer Beneficial Interest subject to the split;
(ii)the percentage of the total number referred to in sub-item (b) which the total number referred to in sub-item (a) represents (hereinafter referred to as the "percent increase" in this Article):
(a)the total number of units of Book-Entry Transfer Beneficial Interest that beneficiaries will receive as a result of the splitting of the beneficial interest;
(b)the total number of units of Book-Entry Transfer Beneficial Interest before the splitting of the beneficial interest.
(iii)the date on which the splitting of beneficial interest will take effect;
(iv)the issuer's account (or one of them, if it has multiple accounts).
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest about which it has been notified.
(3)Upon being notified as referred to in paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the date referred to in item (iii) of that paragraph, must create entries or records under the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest as referred to in item (i) of that paragraph in the book-entry transfer account register that it maintains, showing increases equal to the numbers arrived at when each of the numbers that have been entered or recorded in a holdings or pledge column is multiplied by the percent increase.
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing an increase pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be entered or recorded in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create for that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (iv), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(Creating Entries or Records If Book-Entry Transfer Beneficial Interest of Another Issue Is Delivered as a Result of a Merger of Trusts)
Article 127-13(1)If beneficial interest in each of the trusts involved in a merger of trusts is Book-Entry Transfer Beneficial Interest and the trustee seeks to deliver Book-Entry Transfer Beneficial Interest at the time of the merger of trusts, the trustee must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information, no later than two weeks prior to the date on which the merger takes effect. In such a case, the provisions of Articles 127-5 and 127-6 do not apply:
(i)the issue of Book-Entry Transfer Beneficial Interest that the beneficiaries or the previous trusts will be delivered at the time of the merger of trusts;
(ii)the issues of Book-Entry Transfer Beneficial Interest in the previous trusts;
(iii)the percentage of the total number referred to in sub-item (b) which the total number referred to in sub-item (a) represents (hereinafter referred to as the "allotment ratio" in this Article):
(a)the total number of units of Book-Entry Transfer Beneficial Interest as referred to in item (i);
(b)the total number of units of Book-Entry Transfer Beneficial Interest as referred to in the preceding item.
(iv)the date on which the merger of trusts will take effect;
(v)the account of the issuer of Book-Entry Transfer Beneficial Interest as referred to in item (i) (or one of them, if it has multiple accounts);
(vi)information as set forth in Article 127-4, paragraph (3), item (vii) which Cabinet Order prescribes as information that the issuer is able to learn;
(vii)the total number of units of Book-Entry Transfer Beneficial Interest as referred to in item (i) which will be newly created as a result of the merger of trusts, and other information specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the first sentence of the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in items (i) to (vi) of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest about which it has been notified.
(3)Upon being notified as referred to in the first sentence of paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the date on which the merger of trusts takes effect, must take the following measures in the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest as referred to in item (ii) of that paragraph in the book-entry transfer account register that it maintains:
(i)create entries or records showing increases in Book-Entry Transfer Beneficial Interest as referred to in paragraph (1), item (i) equal to the numbers arrived at when each number of units of Book-Entry Transfer Beneficial Interest as referred to in item (ii) of that paragraph for which an entry or record has been created in a holdings or pledge column is multiplied by the allotment ratio, and create entries or records giving the information prescribed in item (vi) of that paragraph;
(ii)delete the entries or records for all Book-Entry Transfer Beneficial Interest as referred to in paragraph (1), item (ii).
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing an increase pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be recorded or entered in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create in that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (v), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(Creating Entries or Records If Book-Entry Transfer Beneficial Interest of Another Issue Is Delivered as a Result of the Splitting of a Trust)
Article 127-14(1)If the beneficial interest in a split trust (meaning a split trust as prescribed in Article 155, paragraph (1), item (vi) of the Trust Act; hereinafter the same applies in this paragraph) is Book-Entry Transfer Beneficial Interest and the trustee seeks to deliver Book-Entry Transfer Beneficial Interest at the time of the absorption-type trust split; or if the beneficial interest in a trust prior to a creation-type trust split is Book-Entry Transfer Beneficial Interest and the trustee seeks to deliver Book-Entry Transfer Beneficial Interest at the time of the creation-type trust split, the trustee must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information, no later than two weeks prior to the day on which the trust split takes effect. In such a case, the provisions of Articles 127-5 and 127-6 do not apply:
(i)the issue of Book-Entry Transfer Beneficial Interest that the beneficiaries of the split trust or the previous trust will be delivered at the time of the split;
(ii)the issue of Book-Entry Transfer Beneficial Interest in the split trust or the previous trust;
(iii)the percentage of the total number referred to in sub-item (b) which the total number referred to in sub-item (a) represents (hereinafter referred to as the "allotment ratio" in this Article):
(a)the total number of units of Book-Entry Transfer Beneficial Interest as referred to in item (i);
(b)the total number of units of Book-Entry Transfer Beneficial Interest as referred to in the preceding item.
(iv)the date on which the trust split will take effect;
(v)the account of the issuer of Book-Entry Transfer Beneficial Interest as referred to in item (i) (or one of them, if it has multiple accounts);
(vi)information as set forth in Article 127-4, paragraph (3), item (vii) which Cabinet Order prescribes as information that the issuer is able to learn;
(vii)the total number of units of Book-Entry Transfer Beneficial Interest as referred to in item (i) which will be newly created as a result of the splitting of the trust, and other information specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the first sentence of the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in items (i) to (vi) of that paragraph as regards the issue of Book-Entry Transfer Beneficial Interest about which it has been notified.
(3)Upon being notified as referred to in the first sentence of paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the date when the trust split takes effect, must create entries or records in the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Beneficial Interest as referred to in item (ii) of that paragraph in the book-entry transfer account register that it maintains, showing increases in Book-Entry Transfer Beneficial Interest as referred to in item (i) of that paragraph equal to the numbers arrived at when each number of units of Book-Entry Transfer Beneficial Interest as referred to in item (ii) of that paragraph for which an entry or record has been created in the holdings or pledge column is multiplied by the allotment ratio, and giving the information prescribed in item (vi) of that paragraph.
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing an increase pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be recorded or entered in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create in that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (v), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(Changing Entries or Records)
Article 127-15If a Book-Entry Transfer Institution learns of a change having arisen with respect to information as set forth in one of the items of Article 127-4, paragraphs (3), (4) or (5) in connection with the book-entry transfer account register that it maintains, it must immediately enter or record the change in the book-entry transfer account register.
Section 3 Effect of Book Entry Trasfer
(Transfer of Book-Entry Transfer Beneficial Interest)
Article 127-16A transfer of Book-Entry Transfer Beneficial Interest does not take effect unless the transferee has had an entry or record created in the holdings column of its account (or in the column where the information set forth in Article 127-4, paragraph (5), item (ii) is entered or recorded, for the Institution-Held Account), based on an application for book-entry transfer, showing an increase equal to the number of units of Book-Entry Transfer Beneficial Interest subject to the transfer.
(Pledges of Book-Entry Transfer Beneficial Interest)
Article 127-17A pledge of Book-Entry Transfer Beneficial Interest does not take effect unless the pledgee has had an entry or record created in the pledge column of its account, based on an application for book-entry transfer, showing an increase equal to the number of units of Book-Entry Transfer Beneficial Interest subject to the pledge.
(Requirement for Perfection of Book-Entry Transfer Beneficial Interest That Is Trust Property)
Article 127-18(1)Unless an entry or record has been created for Book-Entry Transfer Beneficial Interest in a book-entry transfer account register pursuant to the provisions of Article 127-4, paragraph (3), item (v), indicating that the Book-Entry Transfer Beneficial Interest is trust property, it is not permissible to assert against a third party that the Book-Entry Transfer Beneficial Interest is trust property.
(2)An entry or record in a book-entry transfer account register as prescribed in the preceding paragraph is created pursuant to the provisions of Cabinet Order.
(Participants' Presumed Rights)
Article 127-19A Participant is presumed to be the lawful holder of the rights under a Book-Entry Transfer Beneficial Interest that has been entered or recorded in the account thereof (but only in its own account, if the Participant is an Account Management Institution).
(Acquisition in Good Faith)
Article 127-20A Participant (or a Book-Entry Transfer Institution with an Institution-Held Account) that has had an entry or record created in its account (but only in its own account, if it is an Account Management Institution), based on an application for book-entry transfer, showing an increase in Book-Entry Transfer Beneficial Interest of a particular issue acquires the rights associated with the entry or record showing the increase in the Book-Entry Transfer Beneficial Interest of that issue; provided, however that this does not apply if the Participant has acted in bad faith or with gross negligence.
(Book-Entry Transfer Institution's Obligations If There Are Entries or Records of Overages)
Article 127-21(1)If the total number of units of Book-Entry Transfer Beneficial Interest of an issue as prescribed in the preceding Article which all beneficiaries hold based on acquisitions of Book-Entry Transfer Beneficial Interest under that Article comes to exceed the total number of units of Book-Entry Transfer Beneficial Interest of that issue which have been issued (excluding the number of units of Book-Entry Transfer Beneficial Interest whose associated beneficial claims have had their underlying obligations paid in full), and the aggregate number referred to in item (i) comes to exceed the total number referred to in item (ii), the Book-Entry Transfer Institution has a duty to acquire Book-Entry Transfer Beneficial Interest in that issue until its holdings reach the number in overage (meaning the aggregate number referred to in item (i), less the total number referred to in item (ii)):
(i)the aggregate number of units of Book-Entry Transfer Beneficial Interest of that issue which have been entered or recorded in the accounts of Participants of the Book-Entry Transfer Institution, in the book-entry transfer account register maintained by that Book-Entry Transfer Institution;
(ii)the total number of units of Book-Entry Transfer Beneficial Interest of that issue (other than the number of units of Book-Entry Transfer Beneficial Interest whose associated beneficial claims have had their underlying obligations paid in full).
(2)If there is any number as prescribed in item (i) of the preceding paragraph for which an entry or record showing an increase or reduction has been created in an account as prescribed in that item, but the rights associated with that entry or record have not arisen, been transferred, or been extinguished, and it is proven that nobody has acquired Book-Entry Transfer Beneficial Interest pursuant to the provisions of the preceding Article in the number for which the entry or record has been created, that number is treated as if the entry or record had not been created.
(3)Once a Book-Entry Transfer Institution acquires Book-Entry Transfer Beneficial Interest pursuant to the provisions of paragraph (1), it has a duty to immediately manifest its intention to the issuer to be bound by its release of the issuer from all obligations related to that Book-Entry Transfer Beneficial Interest.
(4)The rights under the Book-Entry Transfer Beneficial Interest prescribed in the preceding paragraph are extinguished once an intention to be bound by a release is manifested pursuant to that paragraph.
(5)Once a Book-Entry Transfer Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (3) with respect to Book-Entry Transfer Beneficial Interest, it must immediately enter deletions for the Book-Entry Transfer Beneficial Interest in the book-entry transfer account register.
(Account Management Institutions' Obligations If There Are Entries or Records of Overages)
Article 127-22(1)In a case as prescribed in paragraph (1) of the preceding Article, if there is an Account Management Institution in connection with which the aggregate number referred to in item (i) comes to exceed the number referred to in item (ii), the Account Management Institution has a duty to manifest its intention to the issuer to be bound by its release of the issuer from all obligations related to Book-Entry Transfer Beneficial Interest of that issue in a number equal to the overage (meaning the aggregate number referred to in item (i), less the number referred to in item (ii)):
(i)the aggregate number of units of Book-Entry Transfer Beneficial Interest of that issue which have been entered or recorded in the accounts of the Participants of the Account Management Institution, in the book-entry transfer account register maintained by that Account Management Institution;
(ii)the number of units of Book-Entry Transfer Beneficial Interest of that issue which have been entered or recorded in the customer account subdivision under the account of the Account Management Institution, in the book-entry transfer account register maintained by its Immediately Superior Institution.
(2)The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to:
(i)the number prescribed in item (i) of the preceding paragraph;
(ii)the number set forth in item (ii) of the preceding paragraph, if an entry or record showing an increase or reduction has been created in a customer account as prescribed in that item but the rights associated with that entry or record have not arisen, been transferred, or been extinguished.
(3)In a case as referred to in paragraph (1), if the Account Management Institution does not hold Book-Entry Transfer Beneficial Interest of the issue prescribed in that paragraph in an amount equal to the overage prescribed in that paragraph, it has a duty to acquire Book-Entry Transfer Beneficial Interest in that issue until its holdings reach the number in overage, before manifesting its intention to be bound by a release under the provisions of that paragraph.
(4)Once an Account Management Institution manifests its intention to be bound by a release pursuant to the provisions of paragraph (1), it must immediately notify its Immediately Superior Institution:
(i)that it has manifested the intention to be bound by the release;
(ii)of the issue and the number of units of Book-Entry Transfer Beneficial Interest with respect to which it has manifested the intention to be bound by the release.
(5)Upon being notified as referred to in the preceding paragraph, the Immediately Superior Institution referred to in that paragraph must immediately create the following entries or records regarding Book-Entry Transfer Beneficial Interest as set forth in item (ii) of that paragraph, in the book-entry transfer account register that it maintains:
(i)an entry or record under the account of the Account Management Institution referred to in that paragraph in the subdivision for the institution's own account, showing a reduction equal to the number referred to in item (ii) of the preceding paragraph;
(ii)an entry or record in the customer account subdivision under the account referred to in the preceding item, showing an increase equal to the number referred to in item (ii) of the preceding paragraph.
(Handling in the Event of Book-Entry Transfer Institution's Non-performance of Obligations as Regards Entries or Records of Overages)
Article 127-23(1)In a case as prescribed in Article 127-21, paragraph (1), until the Book-Entry Transfer Institution prescribed in that paragraph fully performs the obligations referred to in that paragraph and paragraph (3) of that Article, a beneficiary may not assert an interest against the issuer as regards the part of the Book-Entry Transfer Beneficial Interest of the relevant issue that the beneficiary holds which corresponds to the number arrived at when the percentage of the total number referred to in item (ii) that the number referred to in item (i) accounts for is multiplied by the number in overage as prescribed in paragraph (1) of that Article (or by the number in overage less any number representing partial performance of the obligation referred to in paragraph (3) of that Article) (hereinafter referred to as the "maximum number ascribable to the book-entry transfer institution" in the next paragraph):
(i)the number of units of Book-Entry Transfer Beneficial Interest of that issue that the beneficiary holds (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer Beneficial Interest of that issue pursuant to the provisions of paragraph (1) of the preceding Article, the number of units of Book-Entry Transfer Beneficial Interest of that issue that the beneficiary holds less the maximum number ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of that beneficiary (but only in respect of the beneficiary of Book-Entry Transfer Beneficial Interest that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total number of units of Book-Entry Transfer Beneficial Interest of that issue that all beneficiaries hold (or, if the Book-Entry Transfer Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer Beneficial Interest of that issue pursuant to the provisions of paragraph (1) of the preceding Article, that total number of units of interest less the total of the maximum numbers ascribable to the account management institution constituting that Subordinate Institution, as prescribed in paragraph (1) of the following Article, for the overage prescribed in paragraph (1) of the preceding Article in respect of all of the beneficiaries of Book-Entry Transfer Beneficial Interest that has been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution ).
(2)In the case prescribed in Article 127-21, paragraph (1), the Book-Entry Transfer Institution prescribed in that paragraph assumes the following duties toward each beneficiary:
(i)in a case as referred to in the preceding paragraph, the duty to pay, in lieu of the issuer, the obligation underlying the beneficial claim associated with the Book-Entry Transfer Beneficial Interest of the relevant issue that each beneficiary holds, up to the maximum number ascribable to the book-entry transfer institution;
(ii)the duty to indemnify the beneficiary for any damage caused by non-performance of obligations as referred to in Article 127-21, paragraph (1) or (3), beyond what is set forth in the preceding item.
(Handling in the Event of Account Management Institutions' Non-performance of Obligations as Regards Entries or Records of Overages)
Article 127-24(1)In a case as prescribed in Article 127-22, paragraph (1), until the Account Management Institution prescribed in that paragraph fully performs the obligations referred to in that paragraph and paragraph (3) of that Article, a beneficiary (but only the beneficiary of a Book-Entry Transfer Beneficial Interest that has been entered or recorded in an account opened by that Account Management Institution or by its Subordinate Institution) may not assert an interest against the issuer as regards the part of the Book-Entry Transfer Beneficial Interest of the relevant issue that the beneficiary holds which corresponds to the number arrived at when the percentage of the total number referred to in item (ii) that the number referred to in item (i) accounts for is multiplied by the number in overage prescribed in paragraph (1) of that Article (or by the number in overage less any number representing partial performance of the obligation referred to in that paragraph) (hereinafter referred to as the "maximum number ascribable to the account management institution" in this Article):
(i)the number of units of Book-Entry Transfer Beneficial Interest of that issue that the beneficiary holds (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer Beneficial Interest of that issue pursuant to the provisions of paragraph (1) of Article 127-22, the number of units of such interest less the maximum number ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in that paragraph in respect of that beneficiary (but only in respect of the beneficiary of a Book-Entry Transfer Beneficial Interest that has been entered or recorded in an account opened by that Subordinate Institution or by its Subordinate Institution));
(ii)the total number of units of Book-Entry Transfer Beneficial Interest of that issue held by all of the beneficiaries with a Book-Entry Transfer Beneficial Interest that have been entered or recorded in accounts opened by that Account Management Institution or by its Subordinate Institution (or, if the Account Management Institution has a Subordinate Institution that is required to manifest an intention to be bound by a release of obligations with respect to Book-Entry Transfer Beneficial Interest of that issue pursuant to the provisions of paragraph (1) of Article 127-22, that total number of units of interest less the total of the maximum numbers ascribable to the account management institution that constitutes that Subordinate Institution, for the overage prescribed in that paragraph in respect of all of the beneficiaries of Book-Entry Transfer Beneficial Interest that has been entered or recorded in accounts opened by that Subordinate Institution or by its Subordinate Institution).
(2)In the case prescribed in Article 127-22, paragraph (1), the Account Management Institution prescribed in that paragraph assumes the following duties toward a beneficiary as prescribed in the preceding paragraph:
(i)in a case as referred to in the preceding paragraph, the duty to pay, in lieu of the issuer, the obligation underlying the beneficial claim associated with the part of the Book-Entry Transfer Beneficial Interest of the relevant issue that a beneficiary as prescribed the preceding paragraph holds, up to the maximum number ascribable to the account management institution;
(ii)the duty to indemnify the beneficiary for any damage caused by non-performance of obligations as referred to in Article 127-22, paragraph (1) or (3), beyond what is set forth in the preceding item.
(Handling If the Issuer Pays Obligations Underlying Beneficial Claims Associated with Book-Entry Transfer Beneficial Interest in Error)
Article 127-25(1)Even if an issuer is acting in good faith, its payment of an obligation underlying a beneficial claim associated with a number of units of interest that the provisions of Article 127-23, paragraph (1) or paragraph (1) of the preceding Article establish the issuer as not having a duty to pay does not have the effect of extinguishing the issuer's obligations in respect of other Book-Entry Transfer Beneficial Interest of that issue.
(2)In a case as referred to in the preceding paragraph, a beneficiary does not have a duty to return to the issuer the amount of the obligation paid as prescribed in that paragraph.
(3)If an issuer pays an obligation as prescribed in paragraph (1), it acquires the rights of a beneficiary under Article 127-23, paragraph (2), item (i) or paragraph (2), item (i) of the preceding Article toward the Book-Entry Transfer Institution, etc., to the extent of the amount prescribed in the preceding paragraph.
Section 4 Special Provisions of the Trust Act
(Special Provisions of the Trust Act on Information Required to Be Specified or Recorded in the Beneficial Interest Register)
Article 127-26A beneficial interest register that is for Book-Entry Transfer Beneficial Interest must include an entry or record indicating that this Act applies to that Book-Entry Transfer Beneficial Interest.
(Presentation of Certificates)
Article 127-27(1)In order to exercise a beneficial interest (this excludes the exercise of a beneficial claim), a beneficiary of a Book-Entry Transfer Beneficial Interest, after having been issued a paper-based document pursuant to the main clause of paragraph (3), must present that document to the issuer.
(2)In order to vote at a beneficiaries meeting, the beneficiary of a Book-Entry Transfer Beneficial Interest must present the document prescribed in the preceding paragraph one week prior to the date of the beneficiaries meeting, and must also present it on the day of the meeting.
(3)A beneficiary of Book-Entry Transfer Beneficial Interest may demand that its Immediately Superior Institution issue a paper-based document certifying the information set forth in the items of Article 127-4, paragraph (3) with regard to Book-Entry Transfer Beneficial Interest entered or recorded under its own account in the book-entry transfer account register maintained by its Immediately Superior Institution (other than the information specified by Ordinance of the Competent Ministry); provided, however, that this does not apply to a person that has already been issued a document under this paragraph with regard to that Book-Entry Transfer Beneficial Interest, and that has not returned that document to its Immediately Superior Institution.
(4)A beneficiary that has been issued a paper-based document pursuant to the main clause of the preceding paragraph may not apply for a book-entry transfer or deletion with respect to the Book-Entry Transfer Beneficial Interest certified by the document until the beneficiary returns the document to the Immediately Superior Institution referred to in that paragraph.
(Special Provisions of the Trust Act on the Exercise of Appraisal Rights on a Beneficial Interest)
Article 127-28If a beneficiary of Book-Entry Transfer Beneficial Interest exercises its appraisal rights on that Book-Entry Transfer Beneficial Interest pursuant to the provisions of Article 103, paragraph (1) or (2) of the Trust Act, the issuer may demand that, in exchange for its paying for the Book-Entry Transfer Beneficial Interest, the beneficiary file an application with its Immediately Superior Institution to make book entries for the Book-Entry Transfer Beneficial Interest using the issuer's account as the transferee account.
(Special Provisions of the Trust Act on Trust Mergers)
Article 127-29(1)If a beneficial interest that will be extinguished in a merger of trusts is not a Book-Entry Transfer Beneficial Interest and the trustee seeks to issue a Book-Entry Transfer Beneficial Interest to a beneficiary at the time of the merger, it must notify the relevant person as referred to in Article 127-6, paragraph (1), item (i), using the effective date of the merger of trusts as the date referred to in that item.
(2)If a beneficial interest that will be extinguished in a merger of trusts is a Book-Entry Transfer Beneficial Interest and the trustee seeks to issue a beneficiary interest that is not a Book-Entry Transfer Beneficial Interest at the time of the merger, it must give the relevant person notice of the deletion of all entries or records, using the effective date of the merger of trusts as the date referred to in Article 127-10, paragraph (1), item (ii).
(Special Provisions of the Trust Act on Book-Entry Transfer Beneficial Interest)
Article 127-30In applying the provisions of the Trust Act that concern Book-Entry Transfer Beneficial Interest, Book-Entry Transfer Beneficial Interest is deemed to be beneficial interest in a trust issuing beneficiary certificates.
(Exclusion from Application)
Article 127-31The provisions of Article 186, items (iii) and (iv), Articles 189 and 194, Article 195, paragraph (1), Article 197, paragraphs (1) to (3) inclusive, Article 198, paragraphs (1) and (2), Article 199, Article 200, paragraph (1) and Article 201, paragraph (1) do not apply to Book-Entry Transfer Beneficial Interest.
Section 5 Miscellaneous Provisions
Article 127-32(1)Upon being notified as referred to in Article 127-5, paragraph (1), the Book-Entry Transfer Institution that has been so notified must immediately take measures, using the means prescribed by Cabinet Order, that will enable the Participants to learn the information set forth in item (vii) of that paragraph concerning Book-Entry Transfer Beneficial Interest of the issue to which the notice pertains.
(2)The expenses incurred in connection with the measures referred to in the preceding paragraph are paid out of the trust property associated with the Book-Entry Transfer Beneficial Interest referred to in that paragraph.
Chapter VII Book Entry Trasfer of Shares
Section 1 General Rules
Article 128(1)The ownership of rights under a share (other than a share with a restriction on transfer) in a company not providing for the issuance of share certificates in its articles of incorporation, which is handled by a Book-Entry Transfer Institution (hereinafter referred to as a "Book-Entry Transfer Share"), is established by the entries or records in a book-entry transfer account register as under the provisions of this Chapter.
(2)The issuer must be acting with the consent of all of the incorporators or in accordance with a board of directors' resolution to give the consent referred to in Article 13, paragraph (1) with respect to shares therein.
Section 2 Book-Entry Transfer Account Registers
(Information Required to Be Entered or Recorded in a Book-Entry Transfer Account Register)
Article 129(1)A book-entry transfer account register is subdivided by account for each Participant.
(2)The account of an Account Management Institution in a book-entry transfer account register is subdivided as follows:
(i)an account in which entries or records are created for Book-Entry Transfer Shares under which the Account Management Institution holds rights (hereinafter referred to as the institution's "own account" in this Chapter);
(ii)an account in which entries or records are created for Book-Entry Transfer Shares under which the Participants of the Account Management Institution or of its Subordinate Institution hold rights (hereinafter referred to as a "customer account" in this Chapter).
(3)Entries or records giving the following information are made for each account (other than customer accounts) in a book-entry transfer account register:
(i)the name and address of the Participant;
(ii)the issuer's trade name and the class of Book-Entry Transfer Shares, if the issuer is a company with multiple classes of shares (hereinafter referred to as the "issue" in this Chapter);
(iii)the number of Book-Entry Transfer Shares, by issue (other than as set forth in the following item);
(iv)that the Participant in question is a pledgee, if this is the case; the number of Book-Entry Transfer Shares that have been pledged thereto, by issue; the number of Book-Entry Transfer Shares of each issue that each shareholder has pledged thereto; and the names and addresses of those shareholders;
(v)that the Participant in question is the trustee of a trust, if this is the case; and the number of Book-Entry Transfer Shares as referred to in the preceding two items which constitute trust property;
(vi)if an entry or record has been created showing an increase or reduction in the number referred to in item (iii) or (iv), whether it shows an increase or reduction, the number by which the Book-Entry Transfer Shares have increased or been reduced, and the date on which the entry or record was created;
(vii)other information specified by Cabinet Order.
(4)Entries or records giving the following information are made for each customer account in a book-entry transfer account register:
(i)the information set forth in items (i) and (ii) of the preceding paragraph;
(ii)the number of Book-Entry Transfer Shares, by issue;
(iii)other information specified by Cabinet Order.
(5)If a Book-Entry Transfer Institution opens an Institution-Held Account, it must create a subdivision for that account in the book-entry transfer account register and enter or record the following information:
(i)the issue;
(ii)the number of Book-Entry Transfer Shares, by issue;
(iii)other information specified by Cabinet Order.
(6)A book-entry transfer account register may be created as an electronic or magnetic record (limited to one as specified by Ordinance of the Competent Ministry).
(Creating New Entries or Records upon Issuance of Book-Entry Transfer Shares)
Article 130(1)The issuer of Book-Entry Transfer Shares of a particular issue must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information without delay after the date on which it issues those Book-Entry Transfer Shares (or after the day on which it gives the consent referred to in Article 13, paragraph (1), if the issuer gives that consent with regard to shares therein after the incorporation of the company (hereinafter referred to as "consent after incorporation" in this paragraph)):
(i)the issue of the Book-Entry Transfer Shares that it has issued or for which it has given consent after incorporation;
(ii)the names of the Participants that constitute the holders and the registered pledgees (meaning a registered pledgee of shares as prescribed in Article 152, paragraph (1) of the Companies Act; the same applies hereinafter) of the Book-Entry Transfer Shares referred to in the preceding item;
(iii)the accounts opened for the Participants referred to in the preceding item in which book entries can be made for the Book-Entry Transfer Shares referred to in item (i);
(iv)the number of Book-Entry Transfer Shares as referred to in item (i) for each Participant (other than as set forth in the following item);
(v)that a Participant is a registered pledgee of shares, if this is the case; the number of Book-Entry Transfer Shares as referred to in item (i) that have been pledged to each Participant; and the number of these shares that each shareholder has pledged;
(vi)the names and addresses of the shareholders referred to in the preceding item;
(vii)that a Participant is the trustee of a trust, if this is the case; and the number of Book-Entry Transfer Shares as referred to in items (iv) and (v) which constitute trust property;
(viii)information as set forth in paragraph (3), item (vii) of the preceding Article which Cabinet Order prescribes as information that the issuer is able to learn;
(ix)the total number of Book-Entry Transfer Shares as referred to in item (i) and other information specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately take the following measures for the issue of Book-Entry Transfer Shares about which it has been notified:
(i)create the following entries or records, if the Book-Entry Transfer Institution is the one that opened the account referred to item (iii) of the preceding paragraph:
(a)an entry or record showing an increase equal to the number referred to in item (iv) of the preceding paragraph for a Participant as referred to in item (ii) of that paragraph (but only one that is a shareholder as referred to in that item), in the column of the account where the information set forth in paragraph (3), item (iii) of the preceding Article is entered or recorded (hereinafter referred to as the "holdings column" in this Chapter);
(b)an entry or record showing an increase equal to the number of Book-Entry Transfer Shares as referred to in item (v) of the preceding paragraph and the number of these shares ascribable to each shareholder, for a Participant as referred to in item (ii) of that paragraph (but only one that is a registered pledgee of shares as referred to in that item), in the column of the account where the information set forth in paragraph (3), item (iv) of the preceding Article is entered or recorded (hereinafter referred to as the "pledge column" in this Chapter);
(c)an entry or record in the pledge column of the account showing the information referred to in item (vi) of the preceding paragraph;
(d)an entry or record in the account showing an increase equal to the number of Book-Entry Transfer Shares constituting trust property as referred to in item (vii) of the preceding paragraph;
(e)an entry or record in the account showing the information set forth in item (viii) of the preceding paragraph.
(ii)create an entry or record showing an increase equal to the total of the number referred to in item (iv) of the preceding paragraph and the number of Book-Entry Transfer Shares as referred to in item (v) of that paragraph for a Participant as referred to in item (ii) of that paragraph, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant, and notify the Immediately Subordinate Institution of the information set forth in items (i) to (viii) inclusive of that paragraph, if the Book-Entry Transfer Institution is not the one that opened the account referred to item (iii) of the preceding paragraph.
(3)If an Account Management Institution is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding paragraph apply mutatis mutandis to the Account Management Institution that has been so notified.
(Procedures If a Company Cannot Find the Account of a Shareholder)
Article 131(1)If a company seeks to deliver Book-Entry Transfer Shares of a particular issue but is unable to find an account that has been opened for the holder or registered pledgee of the Book-Entry Transfer Shares it seeks to deliver in which book entries can be made for Book-Entry Transfer Shares, the company (or the person specified by Ordinance of the Competent Ministry as being equivalent to such a company, if it is delivering Book-Entry Transfer Shares at the time of a consolidation-type merger or in any other case specified by Ordinance of the Competent Ministry; hereinafter referred to as the "notifier" in this Article) must notify the person that Ordinance of the Competent Ministry prescribes as the one that will become the holder or registered pledgee of those Book-Entry Transfer Shares, of the following information, by one month prior to the fixed date referred to in item (i):
(i)that the company will notify the relevant party as referred to in paragraph (1) of the preceding Article or apply for a book-entry transfer to be made for the holder (other than the holder of shares underlying a pledge, if there is a registered pledgee) or registered pledgee of the Book-Entry Transfer Shares on a fixed date;
(ii)that the notifier must be notified of the account opened for the shareholder or registered pledgee referred to in the preceding item (other than an account opened by a Book-Entry Transfer Institution, etc. based on a request as referred to in the main clause of paragraph (3)) in which book entries can be made for the Book-Entry Transfer Shares, by the fixed date referred to in that item;
(iii)the name and address of the Book-Entry Transfer Institution, etc. that opens accounts based on requests as referred to in the main clause of paragraph (3);
(iv)other information specified by Ordinance of the Competent Ministry.
(2)If the notifier referred to in the preceding paragraph is a person other than a company as referred to in that paragraph, the notifier must notify the company, on the fixed date referred to in item (i) of that paragraph, of the account as referred to in item (ii) of that paragraph of which the shareholder or registered pledgee referred to in that item has notified it.
(3)If a shareholder or registered pledgee as referred to in paragraph (1), item (i) does not notify the notifier of an account as referred to in item (ii) of that paragraph by the fixed date referred to in item (i) of that paragraph, the company must request the Book-Entry Transfer Institution, etc. referred to in item (iii) of that paragraph to open an account for the shareholder or registered pledgee in which book entries can be made for the Book-Entry Transfer Shares (hereinafter referred to as a "special account" in this Chapter); provided, however, that this does not apply if there is a special account open that the company has requested be opened for the shareholder or registered pledgee.
(4)If a company is the issuer of shares that constitute Book-Entry Transfer Shares as referred to in paragraph (1) but has not given the consent referred to in Article 13, paragraph (1) by the fixed date referred to in paragraph (1), item (i), it must promptly give the consent referred to in Article 13, paragraph (1) to the Book-Entry Transfer Institution with respect to those shares.
(5)In the case prescribed in paragraph (1), when the company notifies the relevant party as referred to in paragraph (1) of the preceding Article, it must use the account referred to in paragraph (1), item (ii) of which it is notified by the shareholder or registered pledgee referred to in paragraph (1), item (i) (or the special account that the company has requested be opened, if it has not been so notified) as the account referred to in paragraph (1), item (iii) of the preceding Article.
(Making Book-Entries)
Article 132(1)On receiving an application for a book-entry transfer involving Book-Entry Transfer Shares of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (8) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction or increase in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)Unless otherwise prescribed in this Act, the application referred to in the preceding paragraph is something that the Participant in whose account (this excludes a customer account) the book-entry transfer will create an entry or record of a reduction is to file with its Immediately Superior Institution.
(3)A person filing an application as referred to in paragraph (1) must indicate the following information in that application:
(i)the issue and the number of Book-Entry Transfer Shares for which entries or records showing a reduction and increase will need to be created when the book-entry transfer is effected;
(ii)whether the reduction will be entered or recorded in the holdings column or the pledge column of the account of the Participant referred to in the preceding paragraph;
(iii)the names and addresses of the holders of Book-Entry Transfer Shares in connection with which entries or records will need to be created, and the number constituting each holder's part of the number of Book-Entry Transfer Shares that is referred to in item (i) (hereinafter referred to as the "number subject to book-entry transfer" in this Article), if the reduction will be entered or recorded in the pledge column of the account referred to in the preceding item;
(iv)the account in which the entry or record showing the increase will need to be created (this excludes a customer account; hereinafter referred to as the "transferee account" in this Chapter);
(v)whether the increase will be entered or recorded in the holdings column or the pledge column of the transferee account (this excludes the Institution-Held Account);
(vi)the number constituting each shareholder's part of the number subject to book-entry transfer and the names and addresses of those shareholders, if the increase will be entered or recorded in the pledge column of the transferee account (this excludes the Institution-Held Account).
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create the following entries or records in the holdings column or pledge column of the account of the Participant referred to in paragraph (2), as indicated pursuant to the provisions of item (ii) of the preceding paragraph:
(a)an entry or record showing a reduction equal to the number subject to book-entry transfer;
(b)an entry or record showing a reduction equal to the number of Book-Entry Transfer Shares ascribable to each shareholder as referred to in item (iii) of the preceding paragraph, if the entry or record showing the reduction referred to in sub-item (a) is created in the pledge column.
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of items (i) and (iv) to (vi) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the number subject to book-entry transfer in either the holdings column or the pledge column of the transferee account, as indicated pursuant to the provisions of item (v) of the preceding paragraph (or in the column where the information set forth in Article 129, paragraph (5), item (ii) is entered or recorded, for an Institution-Held Account; hereinafter referred to as the "transferee column"), if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create the following entries or records in the pledge column, in a case as referred to in the preceding item, if the transferee column is the pledge column:
(a)an entry or record showing an increase equal to the number of Book-Entry Transfer Shares for each shareholder as referred to in item (vi) of the preceding paragraph;
(b)an entry or record giving the name and address of the shareholders.
(v)create an entry or record showing an increase equal to the number subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information indicated pursuant to the provisions of items (i) and (iv) through (vi) inclusive of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the number subject to book-entry transfer in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is not the Common Immediately Superior Institution for the book-entry transfer;
(iii)create an entry or record showing an increase equal to the number subject to book-entry transfer in the transferee column of the transferee account, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer and is also the one that has opened the transferee account;
(iv)create the entries or records set forth in item (iv), sub-items (a) and (b) of the preceding paragraph in the pledge column, in a case as referred to in the preceding item, if the transferee column is the pledge column;
(v)create an entry or record showing an increase equal to the number subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Book-Entry Transfer Institution, etc.'s Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is the Common Immediately Superior Institution for the book-entry transfer but is not the one that opened the transferee account.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(7)Upon being notified as referred to in paragraph (4), item (v) or paragraph (5), item (v) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph), the Account Management Institution that has been so notified must immediately take the following measures:
(i)create an entry or record showing an increase equal to the number subject to book-entry transfer in the transferee column of the transferee account, if the Account Management Institution is the one that opened the transferee account;
(ii)create the entries or records set forth in paragraph (4), item (iv), sub-items (a) and (b) in the pledge column in a case as referred to in the preceding item, if the transferee column is the pledge column.
(iii)create an entry or record showing an increase equal to the number subject to book-entry transfer, in the customer account subdivision under the account of whichever of the Account Management Institution's Immediately Subordinate Institutions is the Superior Institution of the Participant whose transferee account it is, and notify the Immediately Subordinate Institution of the information of which it has been notified pursuant to the provisions of paragraph (4), item (v) or paragraph (5), item (v), if the Account Management Institution is not the one that opened the transferee account.
(8)The provisions of the preceding paragraph apply mutatis mutandis to an Account Management Institution that is notified as referred to in item (iii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(Special Provisions on Making Book-Entries for Book-Entry Transfer Shares That Have Been Entered or Recorded in a Special Account)
Article 133(1)A Participant may not apply for a book-entry transfer involving a Book-Entry Transfer Share that has been entered or recorded in a special account if the transferee account is other than that of the Participant or that of the issuer of the Book-Entry Transfer Share.
(2)If, after the notice referred to in Article 130, paragraph (1), or an application for a book-entry transfer involving Book-Entry Transfer Shares of a particular issue is made, a person that, before the notice or application, acquired shares of a particular issue before they became Book-Entry Transfer Shares, but for which no entry or record has been created in the shareholder register, or any other person specified by Ordinance of the Competent Ministry (hereinafter referred to as the "acquirer or other such person" in this Article) files a joint request together with the Participant with the special account in which the Book-Entry Transfer Shares have been entered or recorded, the issuer must take the following actions. The same applies if the acquirer or other such person files a request accompanied by an authenticated copy or certified copy of an enforceable judgment that orders the Participant to file such a request or accompanied by any other paper document specified by Ordinance of the Competent Ministry as being equivalent thereto, and the same also applies in cases prescribed by Ordinance of the Competent Ministry as those in which the interests of the Participant and other interested persons are unlikely to be prejudiced even if the issuer takes the following actions as requested by the acquirer or other such person:
(i)filing a request as referred to in the main clause of Article 131, paragraph (3) for the acquirer or other such person;
(ii)filing an application for the book-entry transfer of those Book-Entry Transfer Shares in the transferee account that has been opened as per the request referred to in the preceding item.
(3)A Participant other than the issuer that has requested for a special account to be opened may not apply for a book-entry transfer with the special account as the transferee account.
(Making Deletions)
Article 134(1)On receiving an application for the deletion of a Book-Entry Transfer Share of a particular issue, a Book-Entry Transfer Institution, etc., pursuant to the provisions of paragraphs (4) to (6) inclusive and as indicated in the application pursuant to the provisions of paragraph (3), must create an entry or record showing a reduction in the book-entry transfer account register that it maintains, or must notify the relevant person.
(2)The application referred to in the preceding paragraph is something that the issuer is to file with the Immediately Superior Institution with which it has opened the account (this excludes a customer account) in which the reduction resulting from the deletion will be entered or recorded.
(3)In its application under paragraph (1) the issuer must indicate the issue and the number of Book-Entry Transfer Shares for which an entry or record showing a reduction will need to be created as the result of the deletion.
(4)Upon receipt of an application as referred to in paragraph (1), the Book-Entry Transfer Institution, etc. receiving it must take the following measures without delay:
(i)create an entry or record showing a reduction equal to the number prescribed in the preceding paragraph in the holdings column of the issuer's account;
(ii)notify the Immediately Superior Institution of the information indicated pursuant to the provisions of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(5)Upon being notified as referred to in item (ii) of the preceding paragraph, the Book-Entry Transfer Institution, etc. that has been so notified must immediately take the following measures:
(i)create an entry or record showing a reduction equal to the number under paragraph (3) in the customer account subdivision under the account of the Account Management Institution that has notified it;
(ii)notify the Immediately Superior Institution of the information of which it has been notified pursuant to the provisions of item (ii) of the preceding paragraph, if the Book-Entry Transfer Institution, etc. is an Account Management Institution.
(6)The provisions of the preceding paragraph apply mutatis mutandis to a Book-Entry Transfer Institution, etc. that is notified as referred to in item (ii) of the preceding paragraph (including as applied mutatis mutandis pursuant to this paragraph), once it has been so notified.
(Deleting All Entries or Records)
Article 135(1)The issuer of Book-Entry Transfer Shares of a particular issue must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date under item (ii) before deleting all of the entries or records regarding those Book-Entry Transfer Shares:
(i)the issue of Book-Entry Transfer Shares;
(ii)the date for the deletion of all of the entries or records regarding those Book-Entry Transfer Shares.
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Shares about which it has been notified.
(3)Upon being notified as referred to in paragraph (1), the Book-Entry Transfer Institution that has been so notified must delete the entries or records for all Book-Entry Transfer Shares as referred to in item (i) of that paragraph from the accounts in the book-entry transfer account register that it maintains under which entries or records have been created for such Book-Entry Transfer Shares (for accounts other than the Institution-Held Account or a customer account, this means holdings column or the pledge column; hereinafter referred to as a "holdings or pledge column" in this Chapter).
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(Creating Entries or Records for a Merger of Book-Entry Transfer Shares)
Article 136(1)Before merging Book-Entry Transfer Shares of a particular issue, the issuer thereof must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date under item (iii):
(i)the issue of Book-Entry Transfer Shares subject to the merger of shares;
(ii)the percentage arrived at when the percentage of the total issued number referred to in sub-item (b) which the total issued number referred to in sub-item (a) represents is subtracted from the number one (hereinafter referred to as the "percent reduction" in this Article):
(a)the total issued number of Book-Entry Transfer Shares after the merger of shares;
(b)the total issued number of Book-Entry Transfer Shares before the merger of shares;
(iii)the date on which the merger of shares will take effect;
(iv)the issuer's account (or one of them, if it has multiple accounts).
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of Book-Entry Transfer Shares about which it has been notified.
(3)Upon being notified as referred to in paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the date referred to in item (iii) of that paragraph, must create entries or records under the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Shares as referred to in item (i) of that paragraph in the book-entry transfer account register that it maintains, showing reductions equal to the numbers arrived at when each of the numbers that has been entered or recorded in a holdings or pledge column is multiplied by the percent reduction.
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing a reduction pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be recorded or entered in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create for that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (iv), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(Creating Entries or Records for the Splitting of Book-Entry Transfer Shares)
Article 137(1)Before splitting Book-Entry Transfer Shares of a particular issue, the issuer thereof must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the date on which the share split takes effect:
(i)the issue of Book-Entry Transfer Shares subject to the split;
(ii)the percentage of the total issued number referred to in sub-item (b) which the total number referred to in sub-item (a) represents (hereinafter referred to as the "percent increase" in this Article):
(a)the total number of Book-Entry Transfer Shares that the shareholders will receive as a result of the share split;
(b)the total issued number of Book-Entry Transfer Shares before the share split.
(iii)the record date for the share split (meaning the record date as prescribed in Article 124, paragraph (1) of the Companies Act; hereinafter the same applies in this Chapter) and the date on which the share split takes effect;
(iv)the issuer's account (or one of them, if it has multiple accounts).
(2)Upon being notified as referred to in the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in the items of that paragraph as regards the issue of the Book-Entry Transfer Shares about which it has been notified.
(3)Upon being notified as referred to in paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the date referred to in item (iii) of that paragraph, must create entries or records under the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Shares as referred to in item (i) of that paragraph in the book-entry transfer account register that it maintains, showing increases equal to the numbers arrived at when each of the numbers that have been entered or recorded in a holdings or pledge column is multiplied by the percent increase.
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing an increase pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be recorded or entered in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create for that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (iv), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(Creating Entries or Records If Book-Entry Transfer Shares of Another Issue Are Delivered as a Result of a Merger)
Article 138(1)If the shares of a company disappearing in a merger or of a company effecting a share exchange or share transfer (hereinafter referred to as a "disappearing or wholly owned company" in this Chapter through Chapter IX) are Book-Entry Transfer Shares, and the surviving or wholly owning company or incorporated or wholly owning company seeks to deliver Book-Entry Transfer Shares at the time of the absorption-type merger or share exchange or at the time of the consolidation-type merger or share transfer, the disappearing or wholly owned company must notify the Book-Entry Transfer Institution to which it has given the consent referred to in Article 13, paragraph (1) of the following information no later than two weeks prior to the effective date or date of incorporation. In such a case, the provisions of Articles 130 and 131 do not apply:
(i)the issue of Book-Entry Transfer Shares that shareholders holding Book-Entry Transfer Shares in the disappearing or wholly owned company will be delivered at the time of the absorption-type merger or share exchange or at the time of the consolidation-type merger or share transfer;
(ii)the issue of Book-Entry Transfer Shares in the disappearing or wholly owned company;
(iii)the percentage of the total issued number referred to in sub-item (b) which the total number referred to in sub-item (a) represents (hereinafter referred to as the "allotment ratio" in this Article):
(a)the total number of Book-Entry Transfer Shares as referred to in item (i);
(b)the total issued number of Book-Entry Transfer Shares as referred to in the preceding item.
(iv)the effective date or date of incorporation;
(v)the account of the issuer of the Book-Entry Transfer Shares referred to in item (i) (or one of them, if it has multiple accounts);
(vi)information as set forth in Article 129, paragraph (3), item (vii) which Cabinet Order prescribes as information that the issuer is able to learn;
(vii)the total number of Book-Entry Transfer Shares as referred to in item (i) which are subject to issuance, and other information as specified by Ordinance of the Competent Ministry.
(2)Upon being notified as referred to in the first sentence of the preceding paragraph, the Book-Entry Transfer Institution that has been so notified must immediately notify its Immediately Subordinate Institution of the information set forth in items (i) to (vi) of that paragraph as regards the issue of Book-Entry Transfer Shares about which it has been notified.
(3)Upon being notified as referred to in the first sentence of paragraph (1), the Book-Entry Transfer Institution that has been so notified, on the effective date or date of incorporation, must take the following measures in the holdings and pledge columns in which entries or records have been created for Book-Entry Transfer Shares as referred to in item (ii) of that paragraph in the book-entry transfer account register that it maintains:
(i)create entries or records showing increases in Book-Entry Transfer Shares as referred to in paragraph (1), item (i) equal to the numbers arrived at when each number of Book-Entry Transfer Shares as referred to in item (ii) of that paragraph for which an entry or record has been created in a holdings or pledge column is multiplied by the allotment ratio, and create entries or records giving the information set forth in item (vi) of that paragraph;
(ii)delete the entries or records for all Book-Entry Transfer Shares as referred to in paragraph (1), item (ii).
(4)If an Account Management Institution is notified as referred to in paragraph (2) (including as applied mutatis mutandis pursuant to this paragraph), the provisions of the preceding two paragraphs apply mutatis mutandis to the Account Management Institution that has been so notified.
(5)Notwithstanding paragraph (3), if a Book-Entry Transfer Institution's creation of an entry or record showing an increase pursuant to the provisions of paragraph (3) (including as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same applies in this paragraph) would cause a non-whole number to be recorded or entered in a holdings or pledge column as prescribed paragraph (3), in lieu of creating the entry or record that it is required to create in that holdings or pledge column, the Book-Entry Transfer Institution, etc. must create an entry or record as prescribed by Cabinet Order in the holdings or pledge column subdivision of a Participant under that holdings or pledge column, or in the holdings column of the account referred to in paragraph (1), item (v), and issue the necessary instructions for the creation of the relevant entry or record to its Subordinate Institution pursuant to the provisions of Cabinet Order. In such a case, the Subordinate Institution must take measures that comply with those instructions.
(6)If the surviving or wholly owning company referred to in the first sentence of paragraph (1) seeks to transfer its own Book-Entry Transfer Shares at the time of the absorption-type merger or share exchange, it must apply for the deletion of those Book-Entry Transfer Shares on the effective date or date of incorporation. In such a case, notwithstanding the provisions of Article 140, those Book-Entry Transfer Shares are deemed to have been transferred to the shareholder of the disappearing or wholly owned company referred to in the first sentence of paragraph (1) at the time that the entry or record is created for the reduction referred to in Article 134, paragraph (4), item (i) pursuant to that application.
(Changing Entries or Records)
Article 139If a Book-Entry Transfer Institution, etc. learns of a change having arisen with respect to information as set forth in one of the items of Article 129, paragraph (3), (4) or (5) in connection with the book-entry transfer account register that it maintains, it must immediately enter or record the change in the book-entry transfer account register.
Section 3 Effect of Book Entry Trasfer
(Transfer of Book-Entry Transfer Shares)
Article 140A transfer of Book-Entry Transfer Shares does not take effect unless the transferee has had an entry or record created in the holdings column of its account (or in the column where the information set forth in Article 129, paragraph (5), item (ii) is entered or recorded, for the Institution-Held Account), based on an application for book-entry transfer, showing an increase equal to the number of Book-Entry Transfer Shares subject to the transfer.
(Pledges of Book-Entry Transfer Shares)
Article 141A pledge of Book-Entry Transfer Shares does not take effect unless the pledgee has had an entry or record created in the pledge column of its account, based on an application for book-entry transfer, showing an increase equal to the number of Book-Entry Transfer Shares subject to the pledge.
(Requirement for Perfection of Book-Entry Transfer Shares That Are Trust Property)
Article 142(1)Unless an entry or record has been created for a Book-Entry Transfer Share in a book-entry transfer account register pursuant to the provisions of Article 129, paragraph (3), item (v), indicating that the Book-Entry Transfer Share is trust property, it is not permissible to assert against a third party that the share is trust property.
(2)An entry or record in a book-entry transfer account register as prescribed in the preceding paragraph is created pursuant to the provisions of Cabinet Order.
(Participants' Presumed Rights)
Article 143A Participant is presumed to be the lawful holder of the rights under a Book-Entry Transfer Share that has been entered or recorded in the account thereof (but only in its own account, if the Participant is an Account Management Institution).
(Acquisition in Good Faith)
Article 144A Participant (or a Book-Entry Transfer Institution with an Institution-Held Account) that has had an entry or record created in its account (but only in its own account, if it is an Account Management Institution), based on an application for book-entry transfer, showing an increase in Book-Entry Transfer Shares of a particular issue acquires the rights associated with the entry or record showing the increase in the Book-Entry Transfer Shares of that issue; provided, however that this does not apply if the Participant has acted in bad faith or with gross negligence.
(Book-Entry Transfer Institution's Obligations If There Are Entries or Records of Overages)
Article 145(1)If the total number of Book-Entry Transfer Shares of an issue as prescribed in the preceding Article which all shareholders hold based on acquisitions of Book-Entry Transfer Shares under that Article comes to exceed the total issued number of Book-Entry Transfer Shares of that issue (other than any retired Book-Entry Transfer Shares), and the aggregate number referred to in item (i) exceeds the total issued number referred to in item (ii), the Book-Entry Transfer Institution has a duty to acquire Book-Entry Transfer Shares in that issue until its holdings reach the number in overage (meaning the aggregate number referred to in item (i), less the total issued number referred to in item (ii)):
(i)the aggregate number of Book-Entry Transfer Shares of that issue which have been entered or recorded in the accounts of the Participants of the Book-Entry Transfer Institution, in the book-entry transfer account register maintained by that Book-Entry Transfer Institution;
(ii)the total issued number of Book-Entry Transfer Shares of that issue (other than any retired Book-Entry Transfer Shares and Book-Entry Transfer Shares with regard to which the issuer may not notify the relevant person as referred to in Article 159, paragraph (1)), pursuant to that Article.
(2)If there is any number as prescribed in item (i) of the preceding paragraph for which an entry or record showing an increase or reduction has been created in an account as prescribed in that item, but the rights associated with that entry or record have not arisen, been transferred, or been extinguished, and it is proven that nobody has acquired Book-Entry Transfer Shares pursuant to the provisions of the preceding Article in the number for which the entry or record has been created, that number is treated as if the entry or record had not been created.
(3)Once a Book-Entry Transfer Institution acquires Book-Entry Transfer Shares pursuant to the provisions of paragraph (1), it has a duty to immediately manifest its intention to the issuer to be bound by its renunciation of all rights to those Book-Entry Transfer Shares.
(4)The rights under the Book-Entry Transfer Shares prescribed in the preceding paragraph are extinguished once an intention to be bound by a renunciation is manifested pursuant to that paragraph.
(5)Once a Book-Entry Transfer Institution manifests its intention to be bound by a renunciation pursuant to the provisions of paragraph (3) with respect to Book-Entry Transfer Shares, it must immediately enter deletions for those Book-Entry Transfer Shares in the book-entry transfer account register.
(6)If the issuer of Book-Entry Transfer Shares of an issue as referred to in paragraph (1) disposes of its own shares in order to allow the Book-Entry Transfer Institution to acquire Book-Entry Transfer Shares as under that paragraph, the provisions of Part II, Chapter II, Section 8 of the Companies Act do not apply. In such a case, the shares must be disposed of at a fair value.
(Account Management Institutions' Obligations If There Are Entries or Records of Overages)
Article 146(1)In a case as prescribed in paragraph (1) of the preceding Article, if there is an Account Management Institution in connection with which the total number referred to in item (i) comes to exceed the number referred to in item (ii), the Account Management Institution has a duty to manifest its intention to the issuer to be bound by its renunciation of all rights to the Book-Entry Transfer Shares of that issue in a number equal to the overage (meaning the aggregate number referred to in item (i), less the number referred to in item (ii)):
(i)the aggregate number of Book-Entry Transfer Shares of that issue which have been entered or recorded in the accounts of the Participants of the Account Management Institution, in the book-entry transfer account register maintained by that Account Management Institution;
(ii)the number of Book-Entry Transfer Shares of that issue which have been entered or recorded in the customer account subdivision under the account of the Account Management Institution, in the book-entry transfer account register maintained by its Immediately Superior Institution.
(2)The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to:
(i)the number prescribed in item (i) of the preceding paragraph;
(ii)the number set forth in item (ii) of the preceding paragraph, if an entry or record showing an increase or reduction has been created in a customer account as prescribed in that item but the rights associated with that entry or record have not arisen, been transferred, or been extinguished.
(3)In a case as referred to in paragraph (1), if the Account Management Institution does not hold Book-Entry Transfer Shares of the issue prescribed in that paragraph in an amount equal to the overage prescribed in that paragraph, it has a duty to acquire Book-Entry Transfer Shares in that issue until its holdings reach the amount of the overage, before manifesting its intention to be bound by a renunciation under the provisions of that paragraph.
(4)Once an Account Management Institution has manifested its intention to be bound by a renunciation pursuant to the provisions of paragraph (1), it must immediately notify its Immediately Superior Institution:
(i)that it has manifested the intention to be bound by the renunciation;
(ii)of the issue and the number of Book-Entry Transfer Shares with respect to which it has manifested the intention to be bound by the renunciation.
(5)Upon being notified as referred to in the preceding paragraph, the Immediately Superior Institution referred to in that paragraph must immediately create the following entries or records regarding Book-Entry Transfer Shares of the issue set forth in item (ii) of that paragraph, in the book-entry transfer account register that it maintains:
(i)an entry or record under the account of the Account Management Institution referred to in that paragraph in the subdivision for the institution's own account, showing a reduction equal to the number referred to in item (ii) of the preceding paragraph;
(ii)an entry or record in the customer account subdivision under the account referred to in the preceding item, showing an increase equal to the number referred to in item (ii) of the preceding paragraph.
(6)If the issuer of Book-Entry Transfer Shares of an issue as referred to in paragraph (1) disposes of its own shares in order to allow the Account Management Institution referred to in paragraph (3) to acquire Book-Entry Transfer Shares as under that paragraph, the provisions of Part II, Chapter II, Section 8 of the Companies Act do not apply. In such a case, the shares must be disposed of at a fair value.