Order for Enforcement of the Financial Instruments and Exchange Act(Cabinet Order No. 321 of 1965)
Last Version: Cabinet Order No. 309 of 2021
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Order for Enforcement of the Financial Instruments and Exchange Act
Cabinet Order No. 321 of September 30, 1965
The Cabinet enacts this Cabinet Order pursuant to the provisions of Article 2, paragraph (8), Article 3, paragraph (2), Article 32, item (i), Article 54, paragraph (2), Article 62, paragraph (3), Article 65, paragraph (1), Article 66, Article 120, Article 125, paragraph (3), Article 133, Article 193-2, paragraph (1), and Article 194 of the Securities and Exchange Act (Act No. 25 of 1948).
Chapter I General Provisions (Articles 1 through 1-23)
Chapter II Disclosure of Corporate Affairs and Other Related Matters (Articles 2 through 5)
Chapter III Disclosure Required for a Tender Offer
Section 1 Tender Offers for Share Certificates by Persons Other Than the Issuer (Articles 6 through 14-3)
Section 2 Tender Offers for Listed Share Certificates by the Issuer (Articles 14-3-2 through 14-3-13)
Chapter III-2 Disclosure of Status of Large Volume Holdings of Share Certificates (Articles 14-4 through 14-9)
Chapter III-3 Special Provisions on Procedures Taken Using an Electronic Data Processing System for Disclosure (Articles 14-10 through 14-13)
Chapter III-4 Provision or Publication of Specified Information on Securities (Article 14-14)
Chapter III-5 Disclosure of Material Information (Articles 14-15 through 14-17)
Chapter IV Financial Instruments Business Operators (Articles 15 through 17-16)
Chapter IV-2 Financial Instruments Intermediary Service Providers (Articles 18 through 18-4)
Chapter IV-3 Credit Rating Agencies (Articles 18-4-2 through 18-4-8)
Chapter IV-4 High-Speed Traders (Articles 18-4-9 through 18-4-13)
Chapter IV-5 Financial Instruments Firms Associations (Articles 18-4-14 through 18-4-16)
Chapter IV-6 Investor Protection Funds (Articles 18-5 through 18-15)
Chapter V Financial Instruments Exchanges (Articles 19 through 19-3-16)
Chapter V-2 Foreign Financial Instruments Exchanges (Article 19-4)
Chapter V-3 Financial Instruments Clearing Organizations (Articles 19-4-2 through 19-4-5)
Chapter V-4 Securities Finance Companies (Articles 19-5 and 19-6)
Chapter V-5 Designated Dispute Resolution Organizations (Articles 19-7 through 19-9)
Chapter V-6 Specified Financial Index Calculation Agents (Articles 19-10 and 19-11)
Chapter VI Regulations on Transactions of Securities (Articles 20 through 33-4-5)
Chapter VI-2 Administrative Monetary Penalties (Articles 33-5 through 33-22)
Chapter VII Miscellaneous Provisions (Articles 34 through 37-2)
Chapter VIII Delegation of Authority (Articles 37-3 through 44-5)
Chapter IX Investigation into Criminal Cases (Article 45)
Supplementary Provisions
Chapter I General Provisions
(Instruments and Certificates Constituting Securities)
Article 1The instruments and certificates specified by Cabinet Order that are provided for in Article 2, paragraph (1), item (xxi) of the Financial Instruments and Exchange Act (hereinafter referred to as "the Act") are as follows:
(i)negotiable certificates of deposit (meaning one for which a due date for redemption is provided and which falls under a claim related to negotiable instrument payable to order prescribed in Part III, Chapter 1, Section 7, Subsection 1 of the Civil Code (Act No. 89 of 1896), registered negotiable instruments payable to holder prescribed in Subsection 2 of that Section, other registered negotiable instruments prescribed in Subsection 3 of that Section, or claims for bearer instruments prescribed in Subsection 4 of that Section) that are issued by a foreign corporation;
(ii)instruments or certificates that an incorporated educational institution, etc. (meaning an incorporated educational institution prescribed in Article 3 of the Private Educational Institutions Act (Act No. 270 of 1949) or a corporation prescribed in Article 64, paragraph (4) of that Act; the same applies hereinafter) issues through allotment, which indicate a monetary claim (limited to a monetary claim that falls under the claim prescribed in the preceding item) of which that incorporated educational institution, etc. is the obligor and which show the name of that incorporated educational institution, etc. and any other particulars specified by Cabinet Office Order.
(Membership Rights in a General Partnership Company or Limited Partnership Company That Are Deemed to Be Securities)
Article 1-2The membership rights specified by Cabinet Order that are provided for in Article 2, paragraph (2), item (iii) of the Act are as follows:
(i)membership rights in a general partnership company all of whose members fall under either of the following companies:
(a)a stock company; or
(b)a limited liability company; or
(ii)membership rights in a limited partnership company all of whose unlimited-liability members fall under either of the following companies:
(a)a stock company; or
(b)a limited liability company.
(Things Similar to Money)
Article 1-3The things specified by Cabinet Order that are provided for in Article 2, paragraph (2), item (v) of the Act are as follows:
(i)securities;
(ii)bills of exchange;
(iii)promissory notes (excluding promissory notes that fall under what is set forth in item (i));
(iv)goods acquired by allocating all of the money (including what is set forth in the preceding three items) invested or paid by the person that holds the rights set forth in Article 2, paragraph (2), item (i), (ii), (v) or (vi) of the Act (limited to goods specified by Cabinet Office Order as those for which it is found to be necessary to ensure the protection of persons holding the rights); and
(v)anything specified by Cabinet Office Order as being equivalent to what is set forth in the preceding items.
(Participation in Business Subject to Investment)
Article 1-3-2The cases specified by Cabinet Order that are provided for in Article 2, paragraph (2), item (v), (a) of the Act are cases that satisfy all of the following requirements:
(i)that business is executed in connection with the business subject to investment (meaning business subject to investment as defined in Article 2, paragraph (2), item (v) of the Act; hereinafter the same applies in this Article and item (iv) of the following Article) only with the consent of all of the equity holders (meaning equity holders as defined in Article 2, paragraph (2), item (v) of the Act; hereinafter the same applies in this Article) (or, if an agreement has been reached that the consent of all of the equity holders is not required, that business is to be executed only after all of the equity holders have manifested whether or not it is their intention to consent to the decision on the execution of business); and
(ii)that all of the equity holders fall under either of the following cases:
(a)they regularly engage in the business subject to investment; or
(b)they engage in the business subject to investment using a highly specialized ability that is indispensable to the continuation of the business subject to investment.
(Rights Whose Non-Treatment as Securities Is Found Not to Compromise the Public Interest)
Article 1-3-3The rights specified by Cabinet Order that are provided for in Article 2, paragraph (2), item (v), (d) of the Act are as follows:
(i)rights based on a contract connected with the business set forth in the items of Article 2, paragraph (1) of the Insurance Business Act (Act No. 105 of 1995);
(ii)rights connected with the investment or payment made to a corporation established under Japanese laws and regulations (excluding general incorporated associations other than public interest incorporated associations and general incorporated foundations other than public interest incorporated foundations) (excluding the rights indicated on the securities set forth in Article 2, paragraph (1), items (vi) to (ix) and item (xi) of the Act and the rights set forth in Article 2, paragraph (2), item (iii) of that Act which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of that Act);
(iii)rights based on the profit-sharing forestry contract as defined in Article 2, paragraph (3) of the Act on Special Measures concerning Shared Forest (Act No. 57 of 1958);
(iv)rights based on a partnership contract, etc. (meaning a partnership contract prescribed in Article 667, paragraph (1) of the Civil Code or other ongoing contracts) to which only the following persons are party, if the business subject to investment connected with those rights is a business of exclusively performing the services of the following persons:
(a)a certified public accountant;
(b)an attorney-at-law (including registered foreign lawyers);
(c)a judicial scrivener;
(d)a land and buildings investigator;
(e)a certified administrative procedures legal specialist;
(f)a certified tax accountant;
(g)a real property appraiser;
(h)a public consultant on social and labor insurance; and
(i)a patent attorney;
(v)rights based on a contract in which an officer or employee, or any other person specified by Cabinet Office Order of the issuer of share certificates or investment securities (meaning investment securities prescribed in the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951); hereinafter the same applies in this item) (hereinafter those persons are referred to as the "officer, etc." in this item and Article 2-12-4, paragraph (2), item (iv)) promises to continuously purchase share certificates or investment securities of the issuer jointly with another officer, etc. of the issuer according to a fixed plan and without depending on an individual investment decision, which satisfies the requirements specified by Cabinet Office Order; and
(vi)what are specified by Cabinet Office Order as being equivalent to the rights set forth in the preceding items.
(Rights Deemed to be Securities)
Article 1-3-4The rights specified by Cabinet Order that are provided for in Article 2, paragraph (2), item (vii) of the Act are the claims connected with the loans made to an incorporated educational institution, etc. (limited to loans which satisfy all of the requirements set forth in the following items):
(i)the loans (excluding loans without interest) are made by two or more persons and the rate, the time of performance, and any other particulars specified by Cabinet Office Order for the loans are the same; and
(ii)all or some of the loans fall under either of the following:
(a)the loan is made by a person other than one attending a school established by the incorporated educational institution, etc. (meaning a school as defined in Article 2, paragraph (1) of the Private Educational Institutions Act and including the advanced vocational school and vocational school as defined in paragraph (2) of that Article) that receives the loan or any other person specified by Cabinet Office Order as an interested party (referred to as the "interested party" in (b));
(b)it is not prohibited to transfer the claim associated with the loan to a person other than an interested party;
(iii)all or some of the loans fall under either of the following:
(a)the loan is made by a person other than a bank or any other person permitted to make that loan on a regular basis pursuant to the provisions of laws and regulations (referred to as a "bank, etc." in (b)); or
(b)it is not prohibited to transfer the claim associated with the loan to a person other than a bank, etc. (including a claim management and collection company as defined in Article 2, paragraph (3) of the Act on Special Measures Concerning Claim Management and Collection Businesses (Act No. 126 of 1998)).
(Cases in Which the Relevant Securities Are Less Likely to Be Transferred to Persons Other Than Qualified Institutional Investors through the Solicitation For Acquisition)
Article 1-4The case specified by Cabinet Order as being less likely for the relevant securities to be transferred as provided in Article 2, paragraph (3), item (i) of the Act, and the case specified by Cabinet Order that is provided for in the provisions of Article 2, paragraph (3), item (ii), (a) and Article 2-3, paragraph (4), item (ii), (a) of the Act are the cases specified in the following items in accordance with the category of securities set forth in each of those items:
(i)share certificates (including securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of share certificates, preferred equity securities prescribed in the Act on Preferred Equity Investment by Cooperative Structured Financial Institutions (Act No. 44 of 1993; hereinafter referred to as the "Act on Preferred Equity Investment") (the preferred equity securities are referred to as "preferred equity securities" except in this item and the following item), preferred equity securities prescribed in the Act on Securitization of Assets (Act No. 105 of 1998; hereinafter referred to as the "Asset Securitization Act") and the securities prescribed in Article 1, paragraph (2), item (xvii) of that Act which have the nature of those securities, investment securities and foreign investment securities which are securities similar to investment securities prescribed in the Act on Investment Trusts and Investment Corporations (hereinafter the securities are referred to as "investment securities, etc."); hereinafter the same applies in sub-item (a) of the following item, Article 1-5-2, paragraph (2), item (ii), sub-item (a), Article 1-7, item (ii), sub-item (b), 1., Article 1-7-4, item (ii), sub-item (a), Article 1-8-2, item (ii), sub-item (a) and Article 1-8-4, item (iii), (b), 1.), and the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in Article 2, paragraph (1), item (vi) of the Act (hereinafter the securities are referred to as "share certificates, etc." in this item, Article 1-5-2, paragraph (2), item (i), Article 1-7, item (ii), sub-item (a), Article 1-7-4, item (i), Article 1-8-2, item (i), Article 1-8-4, item (iii), sub-item (a), Article 2-4-2, item (ii), sub-item (a) and Article 2-6-2, item (ii), sub-item (a)): a case that meets all of the following requirements:
(a)the issuer of those share certificates, etc. is not a person that has already issued share certificates, etc. indicating the same features as those share certificates, etc. (limited to features on the payment of the dividends of surplus, distribution of residual assets, cancellation of equity by using profits, or the cancellation of preferred equity investment under the provisions of Article 15, paragraph (1) of the Act on Preferred Equity Investment (limited to the part related to item (ii)) which are related to shares (including preferred equity investment prescribed in the Act on Preferred Equity Investment and the preferred equity prescribed in the Asset Securitization Act) or contribution) which fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
(b)what is specified by Cabinet Office Order as being the same type of securities as those share certificates, etc. are not securities for professional investors (meaning securities for professional investors prescribed in Article 4, paragraph (3) of the Act; the same applies hereinafter); and
(c)the requirements specified in the following clause 1. or 2. in accordance with the category of cases prescribed in that clause 1. or 2. are satisfied:
1.cases in which rights associated with the share certificates, etc. are indicated on financial values which can be transferred by using an electronic data processing system (limited to the value that is recorded on an electronic device or any other object by electronic means; the same applies hereinafter) (excluding the cases specified by Cabinet Office Order; the same applies in Article 1-5-2, paragraph (2), item (i), sub-item (b), 1. and item (ii), sub-item (b), 1., Article 1-7-4, item (i), sub-item (c), 1., Article 1-8-2, item (i), sub-item (b), 1. and (ii), sub-item (b), 1, and Article 15-10-6, item (i)): technical measures have been taken that make it impossible to transfer the financial values to persons other than qualified institutional investors (meaning the qualified institutional investors as defined in Article 2, paragraph (3), item (i) of the Act; the same applies hereinafter);
2.cases other than those set forth in 1. above: the solicitation for acquisition (meaning solicitation for acquisition as defined in Article 2, paragraph (3) of the Act; the same applies hereinafter) is to be conducted or the procedures related to the issuance of securities during a reorganization (meaning the procedures related to the issuance of securities during a reorganization as defined in Article 2-3, paragraph (2) of the Act; the same applies in Article 1-7-3, item (vii) and Article 2-4-2, item (i)) are to be taken that makes the acquisition of the share certificates, etc. conditional upon the conclusion of a contract related to the transfer which provides that the person acquiring the share certificates, etc. will not transfer them to persons other than qualified institutional investors;
(ii)share option certificates and share options, preferred equity subscription rights (meaning the preferred equity subscription rights prescribed in the Asset Securitization Act; the same applies hereinafter) or securities with the right of converting into preferred equity securities prescribed in the Asset Securitization Act, securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of those securities, and investment equity subscription right certificates (meaning investment equity subscription right certificates prescribed in the Act on Investment Trusts and Investment Corporations; the same applies hereinafter) and foreign investment securities prescribed in the Act on Investment Trusts and Investment Corporations which are similar to investment equity subscription right certificates (hereinafter referred to as "investment equity subscription right certificates, etc.") (excluding securities set forth in Article 2, paragraph (1), item (xix) of the Act; hereinafter referred to as "share option certificates, etc." in this item, Article 1-5-2, paragraph (2), item (ii), Article 1-7, item (ii), (b), Article 1-7-4, item (ii), Article 1-8-2, item (ii), Article 1-8-4, item (iii), (b), Article 2-4-2, item (ii), (b), Article 2-6-2, item (ii), (b) and Article 2-12-3, item (v)): a case that meets all of the following requirements:
(a)the issuer of the share certificates which is to be acquired, subscribed for, or converted through the exercise of the rights indicated on the share option certificates, etc., and the share certificates, share option certificates, and investment equity subscription right certificates satisfy the requirements set forth in sub-item (a) and (b) of the preceding item, respectively;
(b)the issuer of the share option certificates, etc. (excluding share option certificates and investment equity subscription right certificates; hereinafter the same applies in sub-items (b) and (c)) is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as those share option certificates, etc. and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
(c)what are specified by Cabinet Office Order as being the same type of securities as the share option certificates, etc. are not securities for professional investors; and
(d)a restriction has been placed on the share option certificates, etc. (if those share option certificates, etc. are specified corporate bond certificates with preferred equity subscription rights (meaning the specified corporate bond certificates with preferred equity subscription rights prescribed in the Asset Securitization Act; the same applies hereinafter) and the preferred equity subscription rights may be transferred independently from the specified corporate bond certificates (meaning specified corporate bond certificates prescribed in the Asset Securitization Act; the same applies hereinafter), the specified corporate bond certificates and the preferred equity subscription warrants (meaning a preferred equity subscription warrants prescribed in the Asset Securitization Act; the same applies hereinafter) issued with the specified corporate bond certificates, as per the formalities specified by Cabinet Office Order, prohibiting the person that has acquired or purchased the share option certificates, etc. from transferring them to a person other than a qualified institutional investor, or the share option certificates, etc. satisfy the requirements specified by Cabinet Office Order as being equivalent to this;
(iii)securities other than the securities set forth in the preceding two items: a case that meets all of the following requirements:
(a)the issuer of the securities is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as the securities and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
(b)what are specified by Cabinet Office Order as being the same type of securities as the securities are not securities for professional investors; and
(c)the securities meet the requirements specified by Cabinet Office Order in accordance with the preceding item.
(Cases in Which a Large Number of Persons Are Party to a Solicitation)
Article 1-5The cases specified by Cabinet Order as those in which the transaction is conducted with a large number of persons prescribed in Article 2, paragraph (3), item (i) of the Act as the other parties are cases in which the solicitation for acquisition of securities is conducted with not less than 50 persons as the other parties.
(Cases in Which the Relevant Securities Are Less Likely to Be Transferred to Persons Other Than Professional Investors through the Solicitation for Acquisition)
Article 1-5-2(1)The persons specified by Cabinet Order that are provided for in Article 2, paragraph (3), item (ii), sub-item (b), 2. of the Act are persons falling under either of the following persons:
(i)non-residents (meaning non-residents as defined in Article 6, paragraph (1), item (vi) of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949); the same applies hereinafter) that acquire the relevant securities from residents (meaning the residents prescribed in the first sentence of Article 6, paragraph (1), item (v) of that Act; the same applies hereinafter) through the intermediation, brokerage, or agency of a security related business entity (meaning a financial instruments business operator, etc. (meaning a financial instruments business operator, etc. prescribed in Article 34 of the Act; hereinafter the same applies except in Article 44) or a foreign securities services provider (meaning a foreign securities services provider prescribed in Article 58 of the Act; the same applies hereinafter); the same applies in the following item); or
(ii)non-residents that acquire the relevant securities from security related business entities or another non-resident.
(2)The case specified by Cabinet Order that is provided for in Article 2, paragraph (3), item (ii), (b), 2. of the Act means a case specified in the following items in accordance with the category of securities set forth in each of those items:
(i)share certificates: a case that meets all of the following requirements:
(a)what are specified by Cabinet Office Order as being the same type of securities as the share certificates, etc. do not fall under any of the securities set forth in the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act); and
(b)the requirements specified in the following clause 1. or 2. in accordance with the category of cases set forth in that clause 1. or 2. are satisfied:
1.cases in which rights associated with the share certificates, etc. are indicated on financial values which can be transferred by using an electronic data processing system: technical measures or other measures specified by Cabinet Office Order have been taken that makes it impossible to transfer the financial values to persons other than professional investors, etc. (meaning the professional investors, etc. as defined in Article 2, paragraph (3), item (ii), (b), 2. of the Act; the same applies hereinafter);
2.cases other than those set forth in 1. above: the solicitation for acquisition is conducted on the condition of concluding a contract between the issuer of the share certificates, etc. and the person that seeks to acquire the share certificates, etc. in response to the solicitation for acquisition (hereinafter such a person is referred to as the "acquirer" in this item), as well as between the person that makes the solicitation for acquisition and the acquirer, which provides that the acquirer of the share certificates, etc. will not transfer the acquired share certificates to a person other than professional investors, etc. and which provides other particulars specified by Cabinet Office Order;
(ii)share option certificates, etc.: a case that meets all of the following requirements:
(a)the share certificates that are to be acquired, subscribed for, or converted through the exercise of the rights indicated on the share option certificates, etc. satisfy the requirements set forth in sub-item (a) of the preceding item;
(b)the requirements specified in the following clause 1. or 2. in accordance with the category of cases set forth in that clause 1. or 2. are satisfied:
1.cases in which rights associated with the share option certificates, etc. are indicated on financial values which can be transferred by using an electronic data processing system: technical measures or other measures specified by Cabinet Office Order have been taken that makes it impossible to transfer the financial values to persons other than professional investors, etc.;
2.cases other than those set forth in clause 1. above: the solicitation for acquisition is conducted on the condition of concluding a contract for transfer between the issuer of the share option certificates, etc. (if the share option certificates, etc. are specified corporate bond certificates with preferred equity subscription rights and the preferred equity subscription rights may be transferred independently from the specified corporate bond certificate, the specified corporate bond certificate and the preferred equity subscription warrants issued with the bond certificate) and the person that seeks to acquire the share option certificates, etc. in response to the solicitation for acquisition (hereinafter such a person is referred to as the "acquirer" in this item), as well as between the person that makes the solicitation for acquisition and the acquirer, which provides that the acquirer will not transfer the acquired share option certificates, etc. to persons other than professional investors, etc. and which provides other particulars specified by Cabinet Office Order;
(iii)securities other than the securities set forth in the preceding two items: a case that meets the requirements specified by Cabinet Office Order in accordance with the preceding item.
(Requirements for Solicitation for Acquisition to Not Fall Under Solicitation to a Small Number of Investors)
Article 1-6The requirement specified by Cabinet Order that is provided for in Article 2, paragraph (3), item (ii), (c) of the Act is that the other securities specified by Cabinet Office Order as being the same type of securities as the relevant securities (excluding securities for which the solicitation for acquisition fell under the case set forth in Article 2, paragraph (3), item (ii), (a) of the Act and the case set forth in Article 2-12 at the time of issuance and securities for which the solicitation for acquisition fell under the category of a public offering of securities at the time of its issuance and for which the notification under Article 4, paragraph (1) of the Act has been made or supplements to shelf registration documents prescribed in Article 23-8, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) have been submitted with regard to the public offering of those securities; hereinafter referred to as the "newly issued securities of the same type" in this Article) have been issued within six months prior to the day on which the relevant securities are issued, and the sum of the number of persons to which the solicitation for acquisition of those securities is to be made (if the solicitation for acquisition the securities is made to qualified institutional investors and the securities fall under the cases specified in Article 1-4, the qualified institutional investors are excluded) and the persons to which the solicitation for acquisition of newly issued securities of the same type which have been issued within six months prior to the day on which the relevant securities are issued (if the solicitation for acquisition the newly issued securities of the same type is made to qualified institutional investors and the newly issued securities of the same type fall under the cases specified in Article 1-4, the qualified institutional investors are excluded) is not less than 50 persons.
(Cases in Which the Solicitation for Acquisition Falls Under Solicitation to a Small Number of Investors)
Article 1-7The cases specified by Cabinet Order that are provided for in Article 2, paragraph (3), item (ii), (c) of the Act are cases that meet all of the following requirements:
(i)the solicitation for acquisition is not made only to professional investors (meaning professional investors as defined in Article 2, paragraph (31) of the Act; the same applies hereinafter) and it is not a case in which more than 50 persons (if those persons are qualified institutional investors and the securities involved in the solicitation for acquisition fall under the cases specified in Article 1-4, those persons are excluded) are the other parties to the solicitation for acquisition;
(ii)the requirements specified in the following subitems (a) through (c) in accordance with the category of securities set forth in those sub-items (a) through (c) are satisfied:
(a)share certificates, etc.: all of the following requirements are satisfied:
1.the issuer of the share certificates, etc. is not a person that has already issued share certificates, etc. indicating the same features as those share certificates, etc. (limited to features concerning the payment of the dividends of surplus, distribution of residual assets, cancellation of equity by using profits, or the cancellation of preferred equity investment under Article 15, paragraph (1) of the Act on Preferred Equity Investment (limited to the part that involves item (ii)) which are related to shares (including preferred equity investment prescribed in the Act on Preferred Equity Investment and the preferred equity prescribed in the Asset Securitization Act) or contribution) and that fall under any of the items of Article 24, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27 of the Act); and
2.what are specified by Cabinet Office Order as being the same type of securities as the share certificates, etc. are not securities for professional investors;
(b)share option certificates, etc.: all of the following requirements are satisfied:
1.the issuer of the share certificates that are to be acquired, subscribed for, or converted through the exercise of the rights indicated on the share option certificates, etc., and the share certificates, share option certificates, and investment equity subscription right certificates satisfy the requirements set forth in sub-items (a), 1. and 2., respectively;
2.the issuer of the share option certificates, etc. (excluding share option certificates and investment equity subscription right certificates; hereinafter the same applies in sub-item (b)) is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as the share option certificates, etc. and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
3.what are specified by Cabinet Office Order as being the same type of securities as the share option certificates, etc. are not securities for professional investors; and
4.a restriction has been placed on the share option certificates, etc. (if those share option certificates, etc. are specified corporate bond certificates with preferred equity subscription rights and the preferred equity subscription rights may be transferred independently from the specified corporate bond certificates, the specified corporate bond certificate and the preferred equity subscription warrants issued with the bond certificate), as per the formalities specified by Cabinet Office Order, prohibiting the person that has acquired or purchased the share option certificates, etc. (if the person that has acquired or purchased the share option certificates, etc. is a qualified institutional investor and the share option certificates, etc. fall under the cases specified in Article 1-4, that qualified institutional investor is excluded) from transferring them other than doing so all at once to another single person, or the share option certificates, etc. satisfy the requirements specified by Cabinet Office Order as being equivalent to this;
(c)securities other than the securities set forth in sub-items (a) and (b): all of the following requirements are satisfied:
1.the issuer of the securities is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as the securities and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
2.what are specified by Cabinet Office Order as being the same type of securities as the securities are not securities for professional investors; and
3.the securities meet the requirements specified by Cabinet Office Order in accordance with sub-item (b).
(Cases in Which Securities Are to Be Owned by a Considerably Large Number of Persons through Solicitation for Acquisition)
Article 1-7-2The case specified by Cabinet Order that is provided for in Article 2, paragraph (3), item (iii) of the Act is a case in which the relevant person conducts solicitation for acquisition that causes not less than 500 persons to own the securities related to that solicitation for acquisition.
(Transactions of Securities that Do Not Fall Under Secondary Distributions of Securities)
Article 1-7-3The transactions of securities specified by Cabinet Order that are provided for in Article 2, paragraphs (4) and (6) of the Act are transactions falling under any of the following items:
(i)the purchase and sale of securities on a financial instruments exchange market;
(ii)the purchase and sale of securities on an over-the-counter securities market (meaning an over-the-counter securities market prescribed in Article 67, paragraph (2) of the Act; the same applies hereinafter);
(iii)the purchase and sale of securities (limited to those listed on a financial instruments exchange or over-the-counter traded securities (meaning over-the-counter traded securities as defined in Article 2, paragraph (8), item (x), (c) of the Act; the same applies hereinafter)) through the acts set forth in Article 2, paragraph (8), item (x) of the Act (if the securities are specified listed securities (meaning specified listed securities as defined in Article 2, paragraph (33) of the Act; the same applies hereinafter), limited to a purchase and sale to which only professional investors, etc. are the parties);
(iv)the purchase and sale of securities (limited to securities that fall under Article 24, paragraph (1), item (i) of the Act) conducted by a financial instruments business operator, etc. or professional investor with another financial instruments business operator, etc. or professional investor without recourse to a financial instruments exchange market at an appropriate price taking into account the circumstances surrounding securities transactions based on the trading price of the securities on a financial instruments exchange market for the formation of a fair price and facilitation of smooth distribution of the securities;
(v)the selling of the relevant securities, which have already been issued in a foreign country by a foreign securities services provider pursuant to the provisions of the proviso to Article 58-2 of the Act to a financial instruments business operator, etc. or qualified institutional investor (including securities prescribed in Article 2-12-2, limited to offer to sell, etc., (meaning offer to sell, etc. as defined in Article 2, paragraph (4) of the Act; the same applies hereinafter) that falls under the cases specified in Article 2, paragraph (4), item (ii), sub-items (a) through (c) or procedures related to the delivery of securities during a reorganization (meaning procedures related to the delivery of securities during a reorganization as defined in Article 2-3, paragraph (3) of the Act; the same applies hereinafter) that falls under the case specified in Article 2-3, paragraph (5), item (ii), sub-item (a) or (b) which have not been conducted; referred to as "foreign securities with no restriction on transfer" in the following Article and Article 1-8-4, item (iv));
(vi)the selling of foreign securities with no restriction on transfer by the financial instruments business operator, etc. or qualified institutional investor that has acquired them (hereinafter referred to as "selling financial instruments business operator, etc." in this item) to another financial instruments business operator, etc. (limited to one purchasing the foreign securities with no restriction on transfer for the purpose of having them acquired by other persons; hereinafter referred to as "purchasing financial instruments business operator, etc." in this item) (limited to sales by a selling financial instruments business operator, etc. or purchasing financial instruments business operator, etc. that is a member of an authorized financial instruments firms association (limited to an authorized financial instruments firms association designated by the Commissioner of the Financial Services Agency; hereinafter the same applies in this item and Article 1-8-4, item (iv))), in which the issues, number and other particulars of those foreign securities with no restriction on transfer specified by Cabinet Office Order is reported by the selling financial instruments business operator, etc. (if the selling financial instruments business operator, etc. is not a member of an authorized financial instruments firms association, the purchasing financial instruments business operator, etc.) to the authorized financial instruments firms association;
(vii)the purchase and sale of securities for which solicitation for acquisition that fall under the cases specified in Article 2, paragraph (3), item (ii), (a) to (c) of the Act, offer to sell, etc. that falls under the cases specified in Article 2, paragraph (4), item (ii), sub-items (a) through (c) of the Act, procedures related to the delivery of securities during a reorganization that falls under the cases specified in Article 2-3, paragraph (4), item (ii), sub-item (a) or (b) of the Act or procedures related to the delivery of securities during a reorganization that fall under the cases specified in Article 2-2, paragraph (5), item (ii), (a) or (b) of the Act have not been conducted (hereinafter referred to as "securities with no restriction on transfer" in this item and the following item) and owned by a person other than the following persons:
(a)the issuer of the securities with no restriction on transfer;
(b)an officer (meaning a director, executive officer, accounting advisor, and company auditor (including board members, auditors, and persons equivalent to them); hereinafter the same applies in this item) or incorporator of the corporation (including foreign corporations; hereinafter the same applies in this item) that is the issuer of the securities with no restriction on transfer or any other person equivalent to them (excluding the incorporator and any other person equivalent to them, if there was a period during which that person was not the officer, shareholder, or other member of that corporation after its establishment, and that period exceeded five consecutive years);
(c)a major shareholder (meaning a major shareholder as defined in Article 163, paragraph (1) of the Act; hereinafter the same applies in sub-item (c)) of the corporation that is the issuer of the securities with no restriction on transfer or an officer or incorporator of the major shareholder (limited to cases in which the major shareholder is a corporation) or any other person equivalent to them (excluding the incorporator and any other person equivalent to them, if there was a period during which that person was not the officer, shareholder, or other member of the corporation that constitutes that major shareholder after its establishment, and that period exceeded five consecutive years);
(d)a subsidiary company, etc. of the corporation that is the issuer of the securities with no restriction on transfer (meaning a subsidiary company prescribed in Article 29-4, paragraph (4) of the Act or any other corporation equivalent to the company; hereinafter the same applies in sub-item (d)), or an officer or incorporator of that subsidiary company, etc. or any other person equivalent to them (excluding the incorporator and any other person equivalent to them, if there was a period during which that person was not the officer, shareholder, or other member of that subsidiary company, etc. after its establishment, and that period exceeded five consecutive years); or
(e)a financial instruments business operator, etc.;
(viii)the purchase and sale of securities with no restriction on transfer (limited to those in which both parties to the purchase and sale are persons set forth in sub-items (a) through (e) of the preceding item (excluding those in which both parties are persons specified in sub-item (e) of that item));
(ix)a purchase and sale of securities (limited to corporate bond certificates and other securities specified by Cabinet Office Order) on condition of repurchase or resale in which the repurchase price or resale price and the repurchase date or resale date are set in advance;
(x)the selling of securities to the issuer or a person that seeks to sell the securities to the issuer (including those that seek to sell the securities to that person); or
(xi)the purchase and sale of securities associated with the brokerage for the purchase and sale of securities in a financial instruments exchange market or foreign financial instruments market (meaning foreign financial instruments market as defined in Article 2, paragraph (8), item (iii), (b) of the Act; the same applies hereinafter) by a financial instruments business operator, etc. for a customer.
(Cases in Which the Securities Are Less Likely to Be Transferred to Persons Other Than Qualified Institutional Investors through the Offer to Sell)
Article 1-7-4The case specified by Cabinet Order as one in which there is little likelihood of the securities being transferred as prescribed in Article 2, paragraph (4), item (i) of the Act, and the case specified by Cabinet Order that is provided for in the provisions of Article 2, paragraph (4), item (ii), (a) and Article 2-3, paragraph (5), item (ii), (a) of the Act mean a case specified in the following items in accordance with the category of securities set forth in each of those items:
(i)share certificates, etc.: a case that meets all of the following requirements:
(a)the issuer of the share certificates, etc. is not a person that has already issued share certificates, etc. indicating the same features as those share certificates, etc. (limited to features concerning the payment of the dividends of surplus, distribution of residual assets, cancellation of equity by using profits, or the cancellation of preferred equity investment under Article 15, paragraph (1) of the Act on Preferred Equity Investment (limited to the part that involves item (ii)) which are related to shares (including preferred equity investment provided for in the Act on Preferred Equity Investment and the preferred equity provided for in the Asset Securitization Act) or contribution) and which fall under any of the items of Article 24, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27 of the Act);
(b)what are specified by Cabinet Office Order as being the same type of securities as the share certificates, etc. are not securities for professional investors; and
(c)the requirements specified in the following clause 1. or 2. in accordance with the category of cases set forth in that clause 1. or 2. are satisfied:
1.cases in which rights associated with the share certificates, etc. are indicated on financial values which can be transferred by using an electronic data processing system: technical measures have been taken that make it impossible to transfer the financial values to persons other than qualified institutional investors;
2.cases other than those set forth in clause 1. above: the offer to sell, etc. is to be made or procedures related to the delivery of securities during a reorganization are to be taken that makes the acquisition of the share certificates, etc. conditional upon the conclusion of a contract related to the transfer which provides that the person acquiring the share certificates, etc. will not transfer them to persons other than qualified institutional investors;
(ii)share option certificates, etc.: a case meeting all of the following requirements:
(a)the issuer of the share certificates that are to be acquired, subscribed for, or converted through the exercise of the rights indicated on the share option certificates, etc., and the share certificates, share option certificates, and investment equity subscription right certificates satisfy the requirements set forth in (a) and (b) of the preceding item, respectively;
(b)the issuer of the share option certificates, etc. (excluding share option certificates and investment equity subscription right certificates; hereinafter the same applies in sub-items (b) and (c)) is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as the share option certificates, etc. and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
(c)what are specified by Cabinet Office Order as being the same type of securities as the share option certificates, etc. are not securities for professional investors; and
(d)a restriction has been placed on the share option certificates, etc. (if those share option certificates, etc. are specified corporate bond certificates with preferred equity subscription rights and the preferred equity subscription rights may be transferred independently from the specified corporate bond certificates, the specified corporate bond certificates and the preferred equity subscription warrants issued with the bond certificates), as per the formalities specified by Cabinet Office Order, prohibiting the person that has acquired or purchased the share option certificates, etc. from transferring them to a person other than a qualified institutional investor, or the share option certificates, etc. satisfy the requirements specified by Cabinet Office Order as being equivalent to this;
(iii)securities other than the securities set forth in the preceding two items: a case that meets all of the following requirements:
(a)the issuer of the securities is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as the securities which fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
(b)what are specified by Cabinet Office Order as being the same type of securities as the securities are not securities for professional investors; and
(c)the securities meet the requirements specified by Cabinet Office Order in accordance with the preceding item.
(Cases in Which a Large Number of Persons Are the Other Parties to a Transaction)
Article 1-8The cases specified by Cabinet Order as those in which the transaction is conducted with a large number of persons as the other parties as provided in Article 2, paragraph (4), item (i) of the Act are cases in which the solicitation for acquisition is conducted with not less than 50 persons as the other parties.
(Cases in Which the Relevant Securities Are Less Likely to Be Transferred to Persons Other Than Professional Investors through Offer to Sell)
Article 1-8-2The case specified by Cabinet Order that is provided for in Article 2, paragraph (4), item (ii), sub-item (b), 2. of the Act is a case specified in the following items in accordance with the category of securities set forth in each of those items:
(i)share certificates, etc.: a case that meets all of the following requirements:
(a)what are specified by Cabinet Office Order as being the same type of securities as the share certificates, etc. do not fall under the securities set forth in the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act); and
(b)the requirements specified in the following clause 1. or 2. in accordance with the category of cases set forth that clause 1. or 2. are satisfied:
1.cases in which rights associated with the share certificates, etc. are indicated on financial values which can be transferred by using an electronic data processing system: technical measures or other measures specified by Cabinet Office Order have been taken that make it impossible to transfer the financial values to persons other than professional investors, etc.;
2.cases other than those set forth in clause 1. above: the offer to sell, etc. is made in a way that makes the purchase of the share certificates, etc. conditional upon the conclusion of a contract related to the transfer between the person making the offer to sell, etc. the share certificates, etc. and the person seeking to purchase those share certificates, etc. in response to the offer to sell, etc. them (hereinafter such a person is referred to as the "purchaser" in this item) which provides that the purchaser will not transfer the purchased share certificates, etc. to persons other than professional investors, etc., and which provides other particulars specified by Cabinet Office Order;
(ii)share option certificates, etc.: a case that meets all of the following requirements:
(a)the share certificates that are to be acquired, subscribed for, or converted through the exercise of the rights indicated on the share option certificates, etc. satisfy the requirements set forth in sub-item (a) of the preceding item; and
(b)the requirements specified in the following clause 1. or 2. in accordance with the category of cases set forth in that clause 1. or 2. are satisfied:
1.cases in which rights associated with the share option certificates, etc. are indicated on financial values which can be transferred by using an electronic data processing system: technical measures or other measures specified by Cabinet Office Order have been taken that make it impossible to transfer the financial values to persons other than professional investors, etc.;
2.cases other than those set forth in clause 1. above: the offer to sell, etc. is made that makes the purchase of the share option certificates, etc. conditional upon the conclusion of a contract related to the transfer between the person making the offer to sell, etc. the share option certificates, etc. (or, if the share option certificates, etc. are specified corporate bond certificates with preferred equity subscription rights and the preferred equity subscription rights may be transferred independently from the specified corporate bond certificates, the specified corporate bond certificate and the preferred equity subscription warrants issued with the bond certificate) and the person seeking to purchase those share option certificates, etc. in response to the offer to sell, etc. them (hereinafter such a person is referred to as the "purchaser" in this item) which provides that the purchaser will not transfer the purchased share option certificates, etc. to persons other than professional investors, etc., and which provides other particulars specified by Cabinet Office Order; and
(iii)securities other than the securities set forth in the preceding two items: the securities meet the requirements specified by Cabinet Office Order in accordance with the preceding item.
(Requirements for Solicitation for Selling to Not Fall Under Solicitation to a Small Number of Investors)
Article 1-8-3The requirement specified by Cabinet Order that is provided for in Article 2, paragraph (4), item (ii), (c) of the Act is that the offer to sell, etc. (excluding transactions referred to in the items of Article 1-7-3; hereinafter the same applies in this Article) other securities specified by Cabinet Office Order as being the same type of securities as the securities (excluding the following securities; hereinafter referred to as "already issued securities of the same type" in this Article) has been made within one month prior to the day on which the offer to sell, etc. the securities is made, and the sum of the number of persons to which the offer to sell, etc. the securities is to be made (if the offer to sell, etc. the securities is made to qualified institutional investors and the securities fall under the cases specified in Article 1-7-4, the qualified institutional investors are excluded) and the persons to which the offer to sell, etc. already issued securities of the same type has been made within one month prior to the day on which the offer to sell, etc. of the securities is made (if the offer to sell, etc. already issued securities of the same type is made to qualified institutional investors and the already issued securities of the same type fall under the cases specified in Article 1-7-4, the qualified institutional investors are excluded) is not less than 50 persons:
(i)securities for which the offer to sell, etc. fell under the case set forth in Article 2, paragraph (4), item (ii), (a) of the Act at the time of the offer to sell, etc. them;
(ii)securities for which the offer to sell, etc. fell under the case set forth in Article 2-12 at the time of the offer to sell, etc. them;
(iii)securities for which the offer to sell, etc. corresponded to a secondary distribution of securities at the time of the offer to sell, etc. them, and for which a notification pursuant to the provisions of Article 4, paragraph (1) of the Act has been given or the supplements to shelf registration documents as defined in Article 23-8, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) have been submitted for that secondary distribution of securities;
(iv)securities for which the offer to sell, etc. corresponded to a secondary distribution of foreign securities prescribed in Article 27-32-2, paragraph (1) of the Act at the time of the offer to sell, etc. them, and for which foreign securities information (meaning foreign securities information as defined in that paragraph; the same applies hereinafter) was provided or publicized pursuant to the provisions of that paragraph (including securities that fall under the provisions of the proviso to that paragraph).
(Cases in Which Solicitation for Selling Falls Under Solicitation to a Small Number of Investors)
Article 1-8-4The cases specified by Cabinet Order that are provided for in Article 2, paragraph (4), item (ii), (c) of the Act are cases that meet all of the following requirements:
(i)the offer to sell, etc. is not made only to professional investors, and it is not a case in which 50 or more persons (if those persons are qualified institutional investors and the securities involved in the offer to sell, etc. fall under the cases specified in Article 1-7-4, those persons are excluded) are the other parties to the offer to sell, etc.;
(ii)if a offer to sell, etc. securities that satisfy the requirements set forth in Article 1-7, item (ii) is to be made, the offer to sell, etc. is carried out in accordance with those requirements;
(iii)if a offer to sell, etc. securities other than the securities set forth in the preceding item is to be made, the requirements specified in the following sub-items (a) through (c) in accordance with the category of securities set forth in sub-items (a) through (c) are satisfied:
(a)share certificates, etc.: all of the following requirements are satisfied:
1.the issuer of the share certificates, etc. is not a person that has already issued share certificates, etc. indicating the same features as those share certificates, etc. (limited to features concerning the payment of the dividends of surplus, distribution of residual assets, cancellation of equity by using profits, or the cancellation of preferred equity investment under Article 15, paragraph (1) of the Act on Preferred Equity Investment (limited to the part that involves item (ii)) which are related to shares (including preferred equity investment prescribed in the Act on Preferred Equity Investment and the preferred equity prescribed in the Asset Securitization Act) or contribution) which fall under any of the items of Article 24, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27 of the Act);
2.what is specified by Cabinet Office Order as being the same type of securities as those share certificates, etc. are not securities for professional investors;
(b)share option certificates, etc.: all of the following requirements are satisfied:
1.the issuer of the share certificates that are to be acquired, subscribed for, or converted through the exercise of the rights indicated on the share option certificates, etc., and the share certificates, share option certificates, and investment equity subscription right certificates satisfy the requirements set forth in sub-item (a), 1. and 2., respectively;
2.the issuer of the share option certificates, etc. (excluding share option certificates and investment equity subscription right certificates; hereinafter the same applies in sub-item (b)) is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as those share option certificates, etc. and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
3.what are specified by Cabinet Office Order as being the same type of securities as the share option certificates, etc. are not securities for professional investors; and
4.a restriction has been placed on the share option certificates, etc. (if those share option certificates, etc. are specified corporate bond certificates with preferred equity subscription rights and the preferred equity subscription rights may be transferred independently from the specified corporate bond certificates, the specified corporate bond certificate and the preferred equity subscription warrants issued with the bond certificate), as per the formalities specified by Cabinet Office Order, prohibiting the person that has acquired or purchased the share option certificates, etc. (if the person that has acquired or purchased the share option certificates, etc. is a qualified institutional investor and the share option certificates, etc. fall under the cases specified in Article 1-4, that qualified institutional investor is excluded) from transferring the share option certificates, etc. unless they are transferred all at once to another single person, or those share option certificates, etc. satisfy the requirements specified by Cabinet Office Order as being equivalent to this;
(c)securities other than the securities set forth in sub-items (a) and (b): a case that meets all of the following requirements:
1.the issuer of the securities is not a person that has already issued what are specified by Cabinet Office Order as being the same type of securities as those securities and that fall under any of the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act);
2.what are specified by Cabinet Office Order as being the same type of securities as the securities are not securities for professional investors; and
3.the securities meet the requirements specified by Cabinet Office Order in accordance with (b);
(iv)if a offer to sell, etc. foreign securities with no restriction on transfer is to be made, all of the following requirements are satisfied:
(a)it has been established that, if a financial instruments business operator, etc. (limited to a member of an authorized financial instruments firms association) has made a offer to sell, etc. foreign securities with no restriction on transfer, the issues of the foreign securities with no restriction on transfer, the number calculated according to the provisions of Cabinet Office Order as the number of persons that has acquired and currently hold those foreign securities with no restriction on transfer through the offer to sell, etc. (hereinafter referred to as "number of holders" in this item) and other particulars specified by Cabinet Office Order will be reported to the authorized financial instruments firms association pursuant to the rules of the authorized financial instruments firms association;
(b)it has been established that an authorized financial instruments firms association that receives a report prescribed in sub-item (a) is to calculate and publicize the total number of holders for each issue of foreign securities with no restriction on transfer, pursuant to the rules of the authorized financial instruments firms association;
(c)the total number of holders for each issue of foreign securities with no restriction on transfer referred to in sub-item (a) is not to exceed one thousand.
(Cases in Which Securities Are Held by a Considerably Large Number of Persons through Solicitation for Selling)
Article 1-8-5The case specified by Cabinet Order that is provided for in Article 2, paragraph (4), item (iii) of the Act is a case in which the securities connected with a offer to sell, etc. are to be held by not less than 500 persons by responding to that offer to sell, etc.
(Acts Excluded from the Scope of Financial Instruments Business)
Article 1-8-6(1)The acts specified by Cabinet Order that are provided for in Article 2, paragraph (8) of the Act are as follows:
(i)the acts set forth in the items of Article 2, paragraph (8) of the Act performed by the following persons:
(a)the State;
(b)a local government;
(c)the Bank of Japan; and
(d)foreign governments and other persons equivalent to the persons set forth in sub-items (a) through (c) under foreign laws and regulations;
(ii)among the acts set forth in Article 2, paragraph (8), item (iv) of the Act, acts of conducting over-the-counter derivatives transactions (excluding securities-related over-the-counter derivatives transactions (meaning the transactions set forth in Article 28, paragraph (8), item (iv) of the Act) and cryptoasset-related over-the-counter derivatives transactions (meaning the cryptoasset-related over-the-counter derivatives transactions prescribed in Article 185-24, paragraph (1) of the Act; the same applies in Article 16-4, paragraph (1), item (i), sub-item (d)); hereinafter the same applies in this item) with any of the following persons, or providing intermediation, brokerage (excluding brokerage for clearing of securities, etc.; hereinafter the same applies in this item), or agency for over-the-counter derivatives transactions on behalf of that person (excluding the acts that fall under those set forth in the preceding item and specified over-the-counter derivatives transactions (meaning specified over-the-counter derivatives transactions prescribed in Article 40-7, paragraph (1) of the Act; the same applies hereinafter) and their intermediation, brokerage, or agency (limited to those in which the person engaged in the specified over-the-counter derivatives transactions or their intermediation, brokerage, or agency conducts those transactions or services using an electronic data processing system used for their business of over-the-counter derivatives transactions, etc. (meaning over-the-counter derivatives transactions, etc. as defined in Article 2, paragraph (8), item (iv) of the Act; the same applies hereinafter))):
(a)persons specified by Cabinet Office Order as persons found to have expert knowledge of and experience in derivatives transactions; or
(b)a stock company whose amount of stated capital is not less than the amount specified by Cabinet Office Order;
(iii)among the acts set forth in Article 2, paragraph (8), item (xv) of the Act, investment in a single corporation by allocating all of the money or other property invested or contributed by persons holding a beneficial interest in commodities investment as defined in Article 2, paragraph (6) of the Act on Regulation of Commodity Investment (Act No. 66 of 1991) (if the beneficial interest in commodities investment means the rights set forth in Article 2, paragraph (6), item (ii) of that Act or the rights set forth in Article 2, paragraph (6), item (iii) of that Act (limited to those similar to the rights set forth in Article 2, paragraph (6), item (ii) of that Act), the trustee of a trust related to those rights) (hereinafter the investment is referred to as "specified investment" in this item and the following paragraph) which satisfies all of the following requirements (excluding the acts that falls under those set forth in item (i)):
(a)it has been provided for in either the commodities investment contract (meaning a commodities investment contract as defined in Article 2, paragraph (5) of the Act on Regulation of Commodity Investment) or the trust contract that is associated with the beneficial interest in commodities investment, or in the contract for sale of the beneficial interest in commodities investment that specified investment in the relevant corporation is to be undertaken and that the relevant corporation is to invest money or other property from that specified investment through commodities investment (meaning commodities investment as defined in Article 2, paragraph (1) of that Act; the same applies hereinafter);
(b)the corporation is required to entrust the commodities investment advisor, etc. prescribed in Article 33, paragraph (1) of that Act on Regulation of Commodity Investment with an investment decision prescribed in Article 2, paragraph (2) of that Act related to commodities investment; and
(c)the investment is not the one in which the corporation invests money or other property from specified investment mainly in securities or rights connected with derivatives transactions; and
(iv)beyond what is set forth in the preceding three items, acts specified by Cabinet Office Order taking into account the nature of the acts and other circumstances.
(2)If the corporation set forth in item (iii) of the preceding paragraph invests in another corporation by allocating all of the money or other property from specified investment, or all of anything other than what is invested by commodities investment, that other corporation is deemed to be the relevant corporation in applying the provisions of sub-item (a) through (c) of the preceding item.
(Scope of Financial Institutions)
Article 1-9The financial institutions specified by Cabinet Order that are provided for in the provisions of Article 2, paragraphs (8) and (11), Article 27-2, paragraph (4) of the Act (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act), Article 27-28, paragraph (3) of the Act (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2) of the Act), Article 28, paragraph (4), Article 31-4, paragraphs (3) and (4), Article 33, paragraph (1), Article 33-5, paragraph (2), Article 33-7, Article 33-8, paragraph (1), Article 50, paragraph (1), item (iv), Article 58, Article 60-14, paragraph (1), and Article 66 of the Act are as follows:
(i)The Shoko Chukin Bank, Ltd.;
(ii)an insurance company (meaning an insurance company as defined in Article 2, paragraph (2) of the Insurance Business Act and including a foreign insurance company, etc. as defined in paragraph (7) of that Article; the same applies hereinafter);
(iii)a mutual loan company;
(iv)a securities finance company; and
(v)the persons mainly engaged in making call loans or in acting as an intermediary in the lending and borrowing of call money on a regular basis, who are designated by the Commissioner of the Financial Services Agency.
(Securities Related to a Public Offering or Private Placement Constituting Financial Instruments Business)
Article 1-9-2The securities specified by Cabinet Order that are provided for in Article 2, paragraph (8), item (vii), (g) of the Act are as follows:
(i)the following securities (excluding those whose issuer is the trustee of the trust associated with the relevant securities) which fall under the category of securities aimed at commodities investment or invested through the acquisition (including production), transfer, or use of the goods set forth in Article 37, paragraph (1), item (ii), (a) to (e), or by causing those goods to be used:
(a)the securities set forth in Article 2, paragraph (1), item (xiv) of the Act;
(b)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act, which have the nature of the securities set forth in Article 2, paragraph (1), item (xiv) of the Act;
(c)the rights to be indicated on the securities set forth in sub-items (a) or (b), which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of the Act; and
(d)the rights set forth in Article 2, paragraph (2), item (i) or (ii) of the Act, which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of that Act;
(ii)the rights which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of the Act (excluding the rights set forth in paragraph (8), item (vii), sub-items (e) and (f) of that Article and the preceding item, and limited to cases in which the rights are indicated on financial values that can be transferred by using an electronic data processing system (excluding cases specified by Cabinet Office Order taking into account the need to protect investors)).
(Transactions Excluded from Consideration as Transaction Services Using an Electronic Data Processing System)
Article 1-9-3The transactions specified by Cabinet Order that are provided for in Article 2, paragraph (8), item (x) of the Act are the purchase and sale of securities for professional investors (excluding those set forth in Article 4, paragraph (3), item (iv) of the Act (excluding those set forth in Article 2-12-4, paragraph (3), item (i) or (iii)), and those falling under a case in which disclosure has been made (meaning a case in which disclosure prescribed in Article 4, paragraph (7) of the Act has been made)), or intermediation, brokerage, or agency conducted by an electronic data processing system based on a method for deciding the trading price set forth in Article 2, paragraph (8), item (x), sub-items (a) through (e) of the Act or other similar methods, in which a large number of persons participate simultaneously as one party in the transaction, or in which the transaction is conducted between a large number of persons.
(Criteria for Cases Using the Method of Auction)
Article 1-10The criteria specified by Cabinet Order that are provided for in Article 2, paragraph (8), item (x), (a) of the Act are as follows:
(i)the ratio of the average amount of single-business-day total transaction volumes for purchase and sale (excluding those that fall under derivatives transactions; hereinafter the same applies in this Article) of listed securities, etc. (meaning securities listed on a financial instruments exchange and over-the-counter traded securities; hereinafter the same applies in this Article) conducted in the past six months as calculated on the last day of each month, based on a method for deciding the trading price as set forth in Article 2, paragraph (8), item (x), sub-item (a) of the Act, to the average amount of single-business-day total transaction volumes for purchase and sale of listed securities, etc. conducted in all financial instruments exchange markets and over-the-counter securities markets in the past six months is one percent; and
(ii)the ratio of the average amount of single-business-day total transaction volumes, by issue, for purchase and sale of listed securities, etc. conducted in the past six months, as calculated on the last day of each month, based on a method for deciding the trading price set forth in Article 2, paragraph (8), item (x), sub-item (a) of the Act, to the average amount of single-business-day total transaction volumes for purchase and sale of those issues of listed securities, etc. conducted in all financial instruments exchange markets and over-the-counter securities markets in the past six months is ten percent.
(Scope of Investment Management Business)
Article 1-11The rights specified by Cabinet Order that are provided for in Article 2, paragraph (8), item (xiv) of the Act are the rights indicated on the securities set forth in paragraph (1), item (x) of that Article.
(Acts Constituting Financial Instruments Business)
Article 1-12The acts specified by Cabinet Order that are provided for in Article 2, paragraph (8), item (xviii) of the Act are the following acts:
(i)purchasing, without the object of reselling, the securities (limited to the following securities) associated with an act set forth in Article 2, paragraph (8), item (vii) of the Act by the person that performed the act:
(a)the securities set forth in Article 2, paragraph (8), item (vii), sub-item (a) or (b) of the Act;
(b)the rights required to be indicated on the securities set forth in sub-item (a) which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of the Act; and
(ii)accepting deposits of the rights set forth in the items of Article 2, paragraph (2) of the Act which are deemed to be securities pursuant to the provisions of that paragraph (limited to cases in which those rights are indicated on financial values that can be transferred by using an electronic data processing system and excluding electronically recorded transferable rights (meaning the electronically recorded transferable rights prescribed in paragraph (3) of that Article; the same applies hereinafter)) from customers, in connection with an act set forth in Article 2, paragraph (8), items (i) through (x) of the Act to be performed.
(Grounds Similar to Grounds Related to the Credit Status of a Corporation)
Article 1-13The grounds specified by Cabinet Order that are provided for in Article 2, paragraph (21), item (v), sub-item (a) of the Act and paragraph (22), item (vi), sub-item (a) of that Article mean the grounds related to the credit status of a person that is not a corporation or any other grounds that are specified by Cabinet Office Order as those that affect the basis of the management of the business for a person that conducts business.
(Grounds That May Have a Serious Influence on the Business Activities of the Parties or Other Business Persons)
Article 1-14The grounds specified by Cabinet Order that are provided for in Article 2, paragraph (21), item (v), sub-item (b) of the Act and paragraph (22), item (vi), sub-item (b) of that Article are as follows:
(i)wind storms, torrential rain, heavy snow, floods, storm surges, earthquakes, tsunamis, volcanic eruptions, and any other abnormal natural phenomena; and
(ii)war, revolution, insurrection, riot, civil disturbance, and any other grounds specified by Cabinet Office Order as being equivalent to them.
(Transactions Excluded from Consideration as Over-the-Counter Derivatives Transactions)
Article 1-15The transactions specified by Cabinet Order as those found not to compromise the public interest or the protection of investors as prescribed in Article 2, paragraph (22) of the Act are as follows:
(i)the transactions set forth in Article 2, paragraph (22), item (iii) of the Act (excluding sub-item (b)) incidental to transactions of the receipt of deposits, etc. prescribed in Article 2, paragraph (2) of the Deposit Insurance Act (Act No, 34 of 1971) or savings, etc. prescribed in Article 2, paragraph (2) of the Agricultural and Fishery Cooperation Savings Insurance Act (Act No. 53 of 1973) (limited to the transactions involving the purchase and sale of a currency);
(ii)conclusion of contracts in connection with the insurance business prescribed in Article 2, paragraph (1) of the Insurance Business Act and the business set forth in the items of that paragraph;
(iii)conclusion of contracts in connection with a guarantee of obligations; or
(iv)if all or a part of the debt for a loan is not to be repaid, conclusion of a contract to compensate the creditors for the part of the amount which is not to be repaid (excluding the contracts set forth in the preceding item).
(Acts to be Cause of Cash Settlement)
Article 1-16The act specified by Cabinet Order that is provided for in Article 2, paragraph (22), item (i) of the Act is an act of canceling the purchase and sale contract by the parties to a purchase and sale that promise to deliver and take delivery of a financial instrument (excluding those set forth in Article 2, paragraph (24), items (iii)-3 and (v) of the Act) and its value at a fixed time in the future without recourse to a financial instruments market or a foreign financial instruments market.
(Claims or Other Rights Based on a Deposit Contract, or Instruments or Certificates Indicating Those Claims or Rights)
Article 1-17The things specified by Cabinet Order that are provided for in Article 2, paragraph (24), item (ii) of the Act are the means of payment (excluding those falling under currencies) prescribed in Article 6, paragraph (1), item (vii) of the Foreign Exchange and Foreign Trade Act, the instruments prescribed in Article 6, paragraph (1), item (xi) of that Act, and the claims prescribed in item (xiii) of that paragraph.
(Commodities)
Article 1-17-2The commodities specified by Cabinet Order that are provided for in Article 2, paragraph (24), item (iii)-3 of the Act are designated by the Commissioner of the Financial Services Agency through consultation with the minister having jurisdiction over a commodity market (meaning the minister having jurisdiction over a commodity market as prescribed in Article 194-6-2 of the Act), from among the commodities prescribed in Article 2, paragraph (1) of the Commodity Futures Act (Act No. 239 of 1950) (excluding those for which measures for the stabilization of the prices of the relevant commodities pursuant to the provisions of laws and regulations that are necessary for achieving the supply and demand balance for the relevant commodities have been taken), taking into account the appropriate volume of transactions expected in light of the conditions of transactions carried out by those engaged in the purchase and sale, intermediation, brokerage or agency, production, processing or use of the relevant commodities, and other conditions of economic activities relating to the commodities, as well as other circumstances concerning the price formation and the supply and demand of the commodities, and from the perspective that market derivatives transactions involving the relevant commodities conducted in the financial instruments exchange market will lead to the formation of fair prices for the commodities, while reducing the risk of losses that investors might incur due to the price volatility of the commodities and bringing about other positive effects, and thus market derivatives transactions involving the commodities conducted on the financial instruments exchange market will contribute to the sound development of the national economy.
(Scope of Financial Indexes)
Article 1-18The indicators or figures specified by Cabinet Order that are provided for in Article 2, paragraph (25), item (iii) of the Act are as follows:
(i)figures associated with the results of observations on terrestrial phenomenon, ground motion, geomagnetism, terrestrial electricity, or hydrology published by the Meteorological Agency or other persons;
(ii)figures associated with national accounts statistics prepared by the Cabinet Office in compliance with the standards specified by the United Nations, figures associated with the results of the designated statistical surveys prescribed in Article 3, paragraph (1) of the Statistics Act (Act No. 18 of 1947), or figures associated with the results of the notified statistical surveys prescribed in Article 14 of that Act or any other figures for foreign statistics equivalent to those surveys;
(iii)figures for foreign statistics equivalent to those set forth in the preceding item;
(iv)figures that comprehensively indicate the level of the price of real property or prices of two or more real properties publicized or provided periodically by an administrative organ (including local governments) pursuant to the provisions of laws and regulations or for the purpose of making them available for public use, figures that comprehensively indicate the level of the price of real property or prices of two or more real properties publicized or provided periodically by an organization engaged in business related to real property for the purpose of making them available for use by investors, or any other figures specified by Cabinet Office Order as being equivalent to those figures.
(Transactions Excluded from Consideration as Subject Transactions of Financial Instruments Obligation Assumption Services)
Article 1-18-2The transactions specified by Cabinet Order as those which are found not to compromise the public interest or the protection of investors, taking into account the status of the transactions provided in Article 2, paragraph (28) of the Act, the impact on Japan's capital market, and other circumstances, are transactions giving rise to obligations that a corporation established in compliance with foreign laws and regulations that conducts the same type of services as financial instruments obligation assumption services in a foreign country (limited to those that have been granted the same kind of license referred to in Article 156-2 of the Act or a permission or other administrative dispositions similar to the license in the foreign country for conducting those services pursuant to the provisions of foreign laws and regulations and who have obtained the assurance prescribed in Article 189, paragraph (2), item (i) of the Act or any other thing that is found to be equivalent to the assurance given by the authority responsible for the enforcement of those foreign laws and regulations; the same applies in item (ii) of the following Article) assumes, novates or in any other way bears, which are designated by the Commissioner of the Financial Services Agency as giving rise to obligations that would have a minor impact on Japan's capital market, if defaulted upon.
(Subject Transactions of Financial Instruments Obligation Assumption Service)
Article 1-19The transactions specified by Cabinet Order as those incidental or related to purchase and sale of securities or derivatives transactions that are provided in Article 2, paragraph (28) of the Act are as follows:
(i)the lending and borrowing of the money necessary to settle a margin transaction, etc. (meaning a margin transaction (meaning the margin transaction prescribed in Article 156-24, paragraph (1) of the Act; the same applies hereinafter), a purchase and sale of securities made on a financial instruments business operator's own account (excluding a purchase and sale of securities that falls under a derivative transaction; the same applies hereinafter), or a market derivatives transaction or brokerage for the clearing of securities, etc. (limited to those connected with a margin transaction, the purchase and sale of securities or a market derivatives transaction made on the financial instruments business operator's own account); the same applies in the following item) (limited to an instance of lending and borrowing in which the lending is made by a securities finance company);
(ii)the lending and borrowing of securities (excluding a lending giving rise to an obligation that a corporation established in compliance with foreign laws and regulations that conducts the same type of services as financial instruments obligation assumption services in a foreign country assumes, novates or in any other way bears, which is designated by the Commissioner of the Financial Services Agency as lending giving rise to obligations that would have a minor impact on Japan's capital market if defaulted upon, and limited to lending in connection with a margin transaction, etc. made without recourse to a financial instruments exchange market or an over-the-counter securities market if a person other than a securities finance company lends the securities necessary for the settlement of a margin transaction, etc. using the clearing systems of a financial instruments exchange market or over-the-counter securities market);
(iii)the delivery and receipt of collateral in connection with the transactions set forth in the preceding two items;
(iv)the delivery and receipt of beneficiary certificates or money, etc. (meaning money or listed securities, etc.; the same applies in this item, Article 15-3, item (iv), and Article 15-20, item (iv)) with regard to the establishment (including additional establishment; the same applies in Article 15-3, item (iv) and Article 15-20, item (iv)) of a securities investment trust (meaning a securities investment trust as defined in Article 2, paragraph (4) of the Act on Investment Trusts and Investment Corporations, and limited to one for which it is provided in the basic terms and conditions of the investment trust prescribed in Article 4, paragraph (1) of that Act that the investment trust will be operated by having the rate of fluctuations in the amount of net assets per unit for the investment trust property correspond to the rate of fluctuations in the quotations on a financial instruments market or any other indicator and that the beneficiary certificates of the securities investment trust will be listed on a financial instruments exchange or registered in a register of over-the-counter traded securities; hereinafter the same applies in this item, Article 15-3, item (iv), and Article 15-20, item (iv)), the redemption of a part of the principal of a securities investment trust, or the exchange between beneficiary certificates of a securities investment trust and listed securities, etc. (meaning listed securities, etc. prescribed in Article 1-10, item (i), and limited to those of any of the issues subject to investment of the securities investment trust or those that belongs to the trust property; and
(v)beyond what is set forth in the preceding items, delivery and receipt of financial instruments or money, made for the performance of the obligations that arises from the purchase and sale of securities or derivatives transactions (excluding transactions prescribed in the preceding Article), or the transactions set forth in the preceding items.
(Commodity Exchanges Subject to Restrictions Found to Be of the Same Level as Restrictions on an Incorporated Financial Instruments Exchange)
Article 1-20The person specified by Cabinet Order that is provided for in Article 2, paragraph (38) of the Act is an incorporated commodity exchange as defined in Article 2, paragraph (6) of the Commodity Futures Act (Act No. 239 of 1950).
(Commodity Exchanges Subject to Restrictions Found to Be of the Same Level as Restrictions on a Financial Instruments Exchange Holding Company)
Article 1-21The person specified by Cabinet Order that is provided for in Article 2, paragraph (39) of the Act is a commodity exchange holding company as defined in Article 2, paragraph (11) of the Commodity Futures Act.
(Acts That Constitute High-Speed Trading)
Article 1-22The acts specified by Cabinet Order that are provided for in Article 2, paragraph (41), item (iii) of the Act are the following acts:
(i)investing money or other assets (including instructions for the investment) to conduct any of the acts set forth in Article 2, paragraph (41), item (i) of the Act (excluding the acts set forth in that item); and
(ii)conducting a transaction or an act that causes a person engaged in any of the acts set forth in Article 2, paragraph (41), item (i) of the Act to conduct any of the acts set forth in that item, by conducting over-the-counter derivatives transactions with that person or by other means.
(Assets Deemed to be Money)
Article 1-23The provisions specified by Cabinet Order that are provided for in Article 2-2 of the Act are the provisions of Article 2, paragraph (21), items (i) through (v), Article 22, items (i) through (vi), Article 41-4, the main clause of Article 41-5, Article 42-5, the main clause of Article 42-6, Article 66-13, Article 185-22, paragraph (1), item (i) and Article 202, paragraph (1) of the Act.
Chapter II Disclosure of Corporate Affairs and Other Related Matters
(Scope of Corporate Reorganization)
Article 2The acts specified by Cabinet Order that are provided for in Article 2-3, paragraph (1) of the Act are share transfers.
(Scope of a Reorganizing Company)
Article 2-2The company specified by Cabinet Order that is provided for in Article 2-3, paragraph (4), item (i) of the Act is a company that becomes a company disappearing in a consolidation-type merger (meaning a company disappearing in a consolidation-type merger prescribed in Article 753, paragraph (1), item (i) of the Companies Act (Act No. 86 of 2005)), the company splitting in an absorption-type company split (meaning a company splitting in an absorption-type company split prescribed in Article 758, item (i) of that Act, limited to those that have concluded an absorption-type company split agreement prescribed in Article 757 of that Act for that absorption-type company split for the particulars specified in Article 758, item (viii), sub-item (b) or Article 760, item (vii), sub-item (b) of that Act and other companies specified by Cabinet Office Order as being equivalent to them), the company splitting in an incorporation-type company split (meaning a company splitting in an incorporation-type company split prescribed in Article 763, paragraph (1), item (v) of that Act, limited to those which have determined the particulars specified in item (xii), sub-item (b) of that paragraph or Article 765, paragraph (1), item (viii), sub-item (b) of that Act in the incorporation-type company split plan prescribed in Article 762 of that Act for that incorporation-type company split and other companies specified by Cabinet Office Order as being equivalent to them) or a wholly owned subsidiary company in a share transfer (meaning a wholly owned subsidiary company resulting from a share transfer prescribed in Article 773, paragraph (1), item (v) of that Act).
(Scope of Securities Issued by a Reorganizing Company)
Article 2-3The securities specified by Cabinet Order that are provided for in the provisions of Article 2-3, paragraph (4), item (i) and Article 4, paragraph (1), item (ii), (a) of the Act are as follows:
(i)share option certificates;
(ii)corporate bond certificates with share options;
(iii)certificates of a beneficial interest in a securities trust (meaning the securities set forth in Article 2, paragraph (1), item (xiv) of the Act or the rights set forth in paragraph (2), item (i) of that Article which are deemed to be securities pursuant to the provisions of that paragraph (limited to the rights falling under electronically recorded transferable rights) for which securities set forth in the items of Article 2, paragraph (1) of the Act constitute trust property and for which an indication that the content of the rights associated with the securities that constitute trust property (hereinafter referred to as "entrusted securities") is included in the content of the beneficial interest in that trust and other particulars specified by Cabinet Office Order have been provided in the terms of trust for that trust; the same applies hereinafter), if the entrusted securities are share certificates or the securities set forth in the preceding two items; or
(iv)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate the rights associated with share certificates or securities set forth in item (i) or item (ii).
(Cases in Which There Are a Large Number of Reorganizing Company's Shareholders in the Procedures Related to the Issuance of Securities During a Reorganization)
Article 2-4The cases specified by Cabinet Order that are provided for in Article 2-3, paragraph (4), item (i) of the Act are cases in which the reorganizing company's shareholders, etc. (meaning reorganizing company's shareholders, etc. prescribed in Article 2-3, paragraph (4), item (i) of the Act; the same applies in the following Article through Article 2-7) are not less than 50 persons.
(Cases in Which Procedures Related to the Issuance of Securities During a Reorganization Fall Under Solicitation to a Small Number of Investors)
Article 2-4-2The cases specified by Cabinet Order that are provided for in Article 2-3, paragraph (4), item (ii), (b) of the Act are cases that satisfy all of the following requirements:
(i)the reorganizing company's shareholders, etc. that are involved in the procedures related to the issuance of securities during a reorganization do not consist only of qualified institutional investors, and it is not a case in which the number of reorganizing company's shareholders, etc. is 50 or more;
(ii)the requirements specified in the following sub-items (a) through (c) in accordance with the category of securities set forth in the sub-items (a) through (c) are satisfied:
(a)share certificates, etc.: the requirements set forth in Article 1-7, item (ii), (a) are satisfied;
(b)share option certificates, etc.: the requirements set forth in Article 1-7, item (ii), (b) are satisfied.
(Cases in Which There Are a Considerably Large Number of Reorganizing Company's Shareholders in Procedures Related to the Issuance of Securities During a Reorganization)
Article 2-5The cases specified by Cabinet Order that are provided for in Article 2-3, paragraph (4), item (iii) of the Act are cases in which the reorganizing company's shareholders, etc. are not less than 500 persons.
(Cases in Which There Are a Large Number of Reorganizing Company's Shareholders in the Procedures Related to the Delivery of Securities During a Reorganization)
Article 2-6The cases specified by Cabinet Order that are provided for in Article 2-3, paragraph (5), item (i) of the Act are cases in which the reorganizing company's shareholders, etc. are not less than50 persons.
(Cases in Which Procedures Related to the Delivery of Securities During a Reorganization Constitute Solicitation to a Small Number of Investors)
Article 2-6-2The cases specified by Cabinet Order that are provided for in Article 2-3, paragraph (5), item (ii), (b) of the Act are cases that satisfy all of the following requirements:
(i)the reorganizing company's shareholders, etc. that are involved in the procedures related to the delivery of securities during a reorganization do not consist only of qualified institutional investors, and it is not a case in which the number of reorganizing company's shareholders, etc. is 50 or more;
(ii)the requirements specified in the following sub-items (a) through (c) in accordance with the category of securities set forth in each of the sub-items (a) through (c) are satisfied:
(a)share certificates, etc.: the requirements set forth in Article 1-8-4, item (iii), sub-item (a) are satisfied;
(b)share option certificates, etc.: the requirements set forth in Article 1-8-4, item (iii), sub-item (b) are satisfied;
(c)securities other than the securities set forth in sub-items (a) and (b): the requirements set forth in Article 1-8-4, item (iii), (c) are satisfied.
(Cases in Which There Are a Considerably Large Number of Reorganizing Company's Shareholders in the Procedures Related to the Delivery of Securities During a Reorganization)
Article 2-7The cases specified by Cabinet Order that are provided for in Article 2-3, paragraph (5), item (iii) of the Act are cases in which the reorganizing company's shareholders, etc. are not less than 500 persons.
(Securities to Which the Provisions of Chapter II of the Act Apply)
Article 2-8The securities specified by Cabinet Order that are provided for in Article 3, item (ii) of the Act are the social medical corporation bonds prescribed in the Medical Care Act (Act No. 205 of 1948).
(Scope of Business Subject to Investment Associated with Rights in Securities Investment Business to Which the Provisions of Chapter II of the Act Apply)
Article 2-9(1)The rights specified by Cabinet Order that are provided for in Article 3, item (iii), sub-item (a), 1. of the Act are the rights connected with an business subject to investment (meaning an business subject to investment prescribed in Article 2, paragraph (2), item (v) of the Act and excluding the following businesses) that invests in securities by allocating an amount exceeding 50 percent of the total amount of money or other property that the persons holding the rights set forth in Article 2, paragraph (2), item (v) of the Act have contributed or paid:
(i)investment in a single corporation (hereinafter referred to as a "specified corporation" in this item) by allocating all of the money or other property invested or paid by persons holding a beneficial interest in commodities investment prescribed in Article 2, paragraph (6) of the Act on Regulation of Commodity Investment (limited to a beneficial interest in commodities investment connected with rights set forth in item (i) of that paragraph) (hereinafter the investment is referred to as the "specified investment" in this Article), which satisfies all of the following requirements:
(a)the specified corporation does not invest in securities by allocating an amount exceeding 50 percent of the total amount of money or other property from specified investment; and
(b)the specified corporation is prohibited from receiving contribution from two or more persons by laws and regulations, the articles of incorporation of the specified corporation, articles of endowment, or other things equivalent to them;
(ii)an investment in which the goods appropriated are limited to the goods set forth in Article 1-3, item (iv) which are specified by Cabinet Office Order (hereinafter the contribution is referred to as the "specified investment in kind" in this item), which satisfies all of the following requirements:
(a)the person that is to receive the specified investment in kind is prohibited from receiving contribution from two or more persons by laws and regulations, the articles of incorporation of the person that is to receive the specified investment in kind, articles of endowment, other things equivalent to them, or the contract for specified investment in kind; and
(b)the contract for specified investment in kind provides that the person that is to receive the specified investment in kind will not acquire securities using the goods associated with the specified investment in kind.
(2)If the specified corporation prescribed in item (i) of the preceding paragraph makes a contribution in another corporation by allocating all of the money or other property from specified investment, or all the things other than this, that is invested through commodities investment, that other corporation is deemed to be the specified corporation in applying the provisions of sub-items (a) and (b) of that item.
(Scope of Rights Deemed to Be Securities to Which the Provisions of Chapter II of the Act Apply)
Article 2-10(1)The rights specified by Cabinet Order that are provided for in Article 3, item (iii), sub-item (a), 2. of the Act are the following rights:
(i)among the rights set forth in Article 2, paragraph (2), item (i) of the Act, a beneficial interest in a trust in which investment is made through the allocation of an amount exceeding 50 percent of the total value of the assets belonging to trust property to investment in securities (excluding the following beneficial interests):
(a)the beneficial interest in a trust prescribed in Article 130-2, paragraph (2) of the Employees' Pension Insurance Act (Act No. 115 of 1954) prior to the amendment pursuant to Article 1 of the Act for Partial Amendment to the Employees' Pension Insurance Act to Ensure the Soundness and Reliability of the Public Pension System (Act No. 63 of 2013; hereinafter referred to as the "2013 Employees' Pension Amendment Act" in sub-item (a)) (the Employees' Pension Insurance Act prior to the amendment is referred to as the "former Employees' Pension Insurance Act" in (a)) as applied mutatis mutandis pursuant to Article 130-2, paragraphs (1) and (2), Article 136-3, paragraph (1), item (i), item (iv), (d) of that paragraph and item (v), (f) of that paragraph, and paragraph (2) of that Article of the former Employees' Pension Insurance Act which remain in force pursuant to the provisions of Article 5, paragraph (1) of the Supplementary Provisions of the 2013 Employees' Pension Amendment Act; and the beneficial interest in a trust prescribed in Article 159-2, paragraphs (1) and (2) of the former Employees' Pension Insurance Act, Article 136-3, paragraph (1), item (i), item (iv), (d) of that paragraph and item (v), (f) of that paragraph of the former Employees' Pension Insurance Act as applied mutatis mutandis pursuant to Article 164, paragraph (3) of that Act, and Article 130-2, paragraph (2) of the former Employees' Pension Insurance Act as applied mutatis mutandis pursuant to Article 136-3, paragraph (2) of that Act as applied mutatis mutandis pursuant to Article 164, paragraph (3) of that Act which remain in force pursuant to the provisions of Article 38, paragraph (1) of the Supplementary Provisions of the 2013 Employees' Pension Amendment Act;
(b)the beneficial interest in a trust prescribed in Article 128, paragraph (3) and Article 137-15, paragraph (4) of the National Pension Act (Act No. 141 of 1959);
(c)the beneficial interest in a trust prescribed in Article 30, paragraph (1), item (i), item (iv), sub-item (d), item (v), sub-item (f), and paragraph (2) of the Order for Enforcement of the National Pension Act (Cabinet Order No. 304 of 1990) (including as applied mutatis mutandis pursuant to Article 51, paragraph (1) of that Order);
(d)the beneficial interest in a trust connected with a qualified retirement pension contract (limited to a trust contract) prescribed in Article 20, paragraph (3) of the Supplementary Provisions of the Corporation Tax Act (Act No. 34 of 1965);
(e)the beneficial interest in a trust connected with asset management contracts prescribed in Article 65, paragraph (3) of the Defined-Benefit Corporate Pension Act (Act No. 50 of 2001) (limited to a trust contract set forth in Article 65, paragraph (1), item (i) of that Act), a trust contract set forth in Article 65, paragraph (1), item (i) of that Act concluded under Article 66, paragraph (1) of that Act (including as applied mutatis mutandis pursuant to Article 91-25 of that Act) and a trust contract prescribed in Article 66, paragraph (2) of that Act (including as applied mutatis mutandis pursuant to Article 91-24 of that Act);
(f)the beneficial interest in a trust connected with an asset management contract prescribed in Article 8, paragraph (2) of the Defined Contribution Pension Act (Act No. 88 of 2001) (limited to the trust contract set forth in paragraph (1), item (i) of that Article);
(g)the beneficial interest in a trust prescribed in Article 21, paragraph (1), item (iii) of the Act on the Government Pension Investment Fund (Act No. 105 of 2004);
(h)the beneficial interest in a trust connected with a protective trust contract concluded pursuant to the provisions of Article 51, paragraph (1) of the Act on Book-Entry Transfer of Corporate Bonds and Shares (Act No. 75 of 2001);
(i)the beneficial interest in a trust prescribed in Article 43-2, paragraph (2) of the Act and other beneficial interest in a trust specified by Cabinet Office Order as being similar to the beneficial interest;
(j)the beneficial interest in a trust prescribed in Article 6-2, paragraph (1) and Article 6-3, paragraph (2) of the Workers' Property Accumulation Promotion Act (Act No, 92 of 1971);
(k)the beneficial interest in a trust which falls under a beneficial interest in commodities investment as defined in Article 2, paragraph (6) of the Act on Regulation of Commodity Investment, if rights set forth in Article 2, paragraph (2), item (v) of the Act (limited to cases in which the business subject to investment prescribed in that item that is associated with those rights is conducted through commodities investment or contribution in a single corporation (hereinafter referred to as a "specified corporation" in this item) (hereinafter the contribution is referred to as "specified investment" in this item and paragraph (3)) which satisfies all of the following requirements) or rights set forth in Article 2, paragraph (2), item (vi) of the Act equivalent to the rights are acquired by allocating all of the trust property in that trust:
1.the business is not one in which the specified corporation invests in securities by allocating an amount exceeding 50 percent of the total amount of money or other property from specified investment; and
2.the specified corporation is prohibited from receiving contribution from two or more persons by laws and regulations, the articles of incorporation of the specified corporation, articles of endowment, or any other thing equivalent to them;
(ii)the rights set forth in Article 2, paragraph (2), item (ii) of the Act which have the nature of the rights set forth in the preceding item;
(iii)the rights set forth in Article 2, paragraph (2), item (iii) of the Act, which are the membership rights in a general partnership company, limited partnership company, or limited liability company that makes investment in securities by allocating an amount exceeding 50 percent of the total contribution;
(iv)the rights set forth in Article 2, paragraph (2), item (iv) of the Act which have the nature of the rights set forth in the preceding item; and
(v)the rights set forth in Article 2, paragraph (2), item (vi) of the Act which have the nature of the rights set forth in paragraph (1) of the preceding Article.
(2)The rights specified by Cabinet Order that are provided for in Article 3, item (iii), sub-item (a), 3. of the Act are the claims prescribed in Article 1-3-4.
(3)If the specified corporation prescribed in paragraph (1), item (i), sub-item (k) invests in another corporation by allocating all of the money or other property from specified investment, or by allocating things other than those contributed through commodities investment, in applying the provisions of sub-item (k), 1. and 2. of that item., the other corporation is deemed to be the specified corporation.
(Securities to Which the Provisions of Chapter II of the Act Do Not Apply)
Article 2-11The securities specified by Cabinet Order that are provided for in Article 3, item (v) of the Act are, among the securities set forth in Article 2, paragraph (1), item (xvii) of the Act, the bonds issued by an institution established by a treaty to which Japan is a member state, whose public offering or secondary distribution in Japan requires the consent of the Japanese government pursuant to the treaty.
(Public Offering or Secondary Distribution of Securities Not Requiring a Notification for Public Offering or Secondary Distribution)
Article 2-12The cases specified by Cabinet Order that are provided for in Article 4, paragraph (1), item (i) of the Act are cases falling under any of the following items:
(i)cases in which the company (including a foreign company; hereinafter the same applies except in Article 14-17, item (x), Article 27-4, item (vi) and Article 33-2, item (vi)) that is the issuer of share certificates (limited to those listed on a financial instruments exchange or those that fall under over-the-counter traded securities; hereinafter the same applies in this item) or, the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of share certificates (hereinafter collectively referred to as the "share certificates, etc." in this item) makes a solicitation for acquisition or a offer to sell, etc. the share certificates, etc. with a director, accounting advisor, company auditor, executive officer, or employee (hereinafter referred to as a "director, etc." in this Article) of that company or of another company specified by Cabinet Office Order as a company whose management is controlled by that company as the other party (limited to share certificates, etc. with a restriction prohibiting their transfer for a period not shorter than three months (or for foreign companies, six months) after the lapse of the business year that includes the day on which the director, etc. receives the delivery); and
(ii)cases in which the company that is the issuer of the share option certificates (limited to those for which the particulars set forth in Article 236, paragraph (1), item (vi) of the Companies Act are specified) or, the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of share option certificates with the conditions specified by Cabinet Office Order attached (hereinafter collectively referred to as the "share option certificates, etc." in this item) makes a solicitation for acquisition or a offer to sell, etc. the share option certificates, etc. with a director, etc. of that company or of another company specified by Cabinet Office Order as a company whose management is controlled by that company as the other party.
(Securities Equivalent to Securities Already Issued in a Foreign State)
Article 2-12-2Securities specified by Cabinet Order that are provided for in Article 4, paragraph (1), item (iv) of the Act are securities that have already been issued in Japan but for which solicitation for newly issued securities, etc. (meaning solicitation for newly issued securities, etc. as defined in paragraph (2) of that Article; the same applies hereinafter) was not conducted in Japan at the time of their issuance.
(Secondary Distribution of Securities Not Requiring a Notification for Secondary Distribution of Securities)
Article 2-12-3The requirements specified by Cabinet Order that are provided for in Article 4, paragraph (1), item (iv) of the Act are those specified in the following items in accordance with the category of securities set forth in each of those items:
(i)securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of securities set forth in item (i) of that paragraph (hereinafter referred to as "foreign national government bonds" in this item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of the foreign national government bonds in Japan by using the internet or by other means;
(b)purchase and sale of the foreign national government bonds or other foreign national government bonds issued by their issuer are ongoing in a foreign country;
(c)financial information on the issuer of the foreign national government bonds and other information on the issuer (limited to information stated in Japanese or English) has been made public by the issuer or other person equivalent to them, and any person can easily obtain that information in Japan by using the internet or by any other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27 of the Act);
(ii)securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of securities set forth in item (ii) of that paragraph (hereinafter referred to as "foreign municipal bonds" in this item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of those foreign municipal bonds in Japan by using the internet or by other means;
(b)purchase and sale of the foreign municipal bonds or other foreign municipal bonds that issued by their issuer are ongoing in a foreign country;
(c)financial information on the issuer of the foreign municipal bonds and other information on the issuer (limited to information stated in Japanese or English) has been made public by the issuer or any other person equivalent to them, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27 of the Act);
(iii)securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of securities set forth in item (iii) of that paragraph (hereinafter referred to as "foreign public corporate bonds" in this item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of the foreign public corporate bonds in Japan by using the internet or by any other means;
(b)purchase and sale of the foreign public corporate bonds or of other foreign public corporate bonds issued by their issuer are ongoing in a foreign country;
(c)information about the accounting of the issuer of the foreign public corporate bonds and other information about the issuer (limited to information stated in Japanese or English, and for the information about the accounting of the issuer, limited to information prepared according to criteria found to be appropriate by the Commissioner of the Financial Services Agency for the public interest or protection of investors; the same applies in sub-item (d) of the following item and item (vi), sub-item (c)) is made public by the issuer or other person equivalent to them, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(iv)corporate bond certificates (if certain predetermined conditions are met, limited to those converted into share certificates issued by persons other than the issuer of the corporate bond certificates; hereinafter the same applies in this item) and securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of those corporate bond certificates (hereinafter referred to as "convertible corporate bond certificates issued overseas" in this item and item (vi)): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of the convertible corporate bond certificates issued overseas in Japan by using the internet or by other means;
(b)the convertible corporate bond certificates issued overseas are listed on a financial instruments exchange in a foreign country (meaning an exchange similar to a financial instruments exchange, which is established under foreign laws and regulations; the same applies in Article 12, item (vii) and Article 14-3-7, item (ii)) which is designated by the Commissioner of the Financial Services Agency taking into account the state of the securities listed, the disclosure of information on the issuer, the trading volume, and other circumstances (hereinafter referred to as "designated foreign financial instruments exchange"), or purchase and sale of the convertible corporate bond certificates issued overseas are ongoing in a foreign country;
(c)share certificates that will be converted if certain predetermined conditions are met or securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of share certificates (hereinafter referred to as "share certificates" in this Article) are listed on a financial instruments exchange or a designated foreign financial instruments exchange;
(d)if the convertible corporate bond certificates issued overseas or share certificates of the issuer of the convertible corporate bond certificates issued overseas are listed on the designated foreign financial instruments exchange, based on the rules provided by a designated foreign financial instruments exchange and in other cases based on foreign laws and regulations in which purchase and sale of the convertible corporate bond certificates issued overseas are ongoing (including rules of international organizations similar to them; hereinafter the same applies in this Article), accounting information about the issuer of the convertible corporate bond certificates issued overseas and other information about the issuer is publicized by the issuer, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(v)securities set forth in Article 2, paragraph (1), items (v) through (vii) of the Act (referred to as "bond certificates, etc." in the following item) that fall under share option certificates, etc. (hereinafter referred to as "bond certificates with share options" in this item) and securities set forth in item (xvii) of that paragraph which have the nature of bond certificates with share options (referred to as "bond certificates with share options issued overseas" in this item and the following item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of those bond certificates with share options issued overseas in Japan by using the internet or by other means;
(b)the bond certificates with share options issued overseas are listed on a designated foreign financial instruments exchange, or purchase and sale of the bond certificates with share options issued overseas are ongoing in a foreign country;
(c)the share certificates that are to be acquired, subscribed for, or converted through the exercise of the rights indicated on the bond certificates with share options issued overseas are listed on a designated foreign financial instruments exchange;
(d)based on the rules established by the designated foreign financial instruments exchange on which the bond certificates with share options issued overseas or share certificates prescribed in sub-item (c) are listed, accounting information for the issuer of the bond certificates with share options issued overseas and other information on the issuer (limited to information stated in Japanese or English) has been publicized by the issuer, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(vi)bond certificates, etc. (excluding convertible corporate bond certificates issued overseas and bond certificates with share options issued overseas; hereinafter the same applies in this item) and securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of bond certificates, etc. (hereinafter referred to as "bond certificates issued overseas" in this item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of those bond certificates issued overseas in Japan by using the internet or by other means;
(b)the bond certificates issued overseas are listed on a designated foreign financial instruments exchange, or purchase and sale of the bond certificates issued overseas are ongoing in a foreign country (excluding cases in which a company that holds, in its own name or in another person's name, the majority of the voting rights held by all the shareholders, etc. (meaning voting rights held by all the shareholders, etc. as defined in Article 29-4, paragraph (2) of the Act; the same applies hereinafter) of the issuer of the bond certificates issued overseas (limited to the issuer of share certificates that are listed on a financial instruments exchange or a designated foreign financial instruments exchange; hereinafter referred to as "parent company" in this item) guarantees the redemption of the principal and the payment of interest of the bond certificates issued overseas);
(c)based on the rules established by the designated foreign financial instruments exchange on which the bond certificates issued overseas are listed, if they are listed on a designated foreign financial instruments exchange, or based on foreign laws and regulations in which purchase and sale of the bond certificates issued overseas are ongoing, in other cases, information about the accounting of the issuer of the bond certificates issued overseas and other information on the issuer (in the case provided in the parentheses in sub-item (b), if the parent company has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act), or if information about the accounting of the parent company or other information about the parent company (limited to information stated in Japanese or English) has been publicized by the parent company pursuant to the rules established by the designated foreign financial instruments exchange on which the share certificates of the parent company are listed, and any person can easily obtain that information in Japan by using the internet or by other means, the fact that a guarantee has been received for the bond certificates issued overseas, the name of the parent company providing the guarantee, the content of the business of the issuer, and other information specified by Cabinet Office Order) has been publicized by the issuer, and that information can easily be obtained in Japan using the internet or by any other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of that paragraph (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(vii)share certificates and securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of share certificates (hereinafter referred to as "share certificates issued overseas" in this item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of those share certificates issued overseas in Japan by using the internet or by other means;
(b)the share certificates issued overseas are listed on a designated foreign financial instruments exchange;
(c)based on the rules established by the designated foreign financial instruments exchange on which the share certificates issued overseas are listed, information about the accounting of the issuer of the share certificates issued overseas and other information about the issuer (limited to information stated in Japanese or English) has been made public by the issuer, and any person can easily obtain that information in Japan by using the internet or by any other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(viii)beneficiary certificates of foreign investment trusts set forth in Article 2, paragraph (1), item (x) of the Act which are similar to the beneficiary certificates of investment trusts set forth in Article 12, item (ii) of the Order for Enforcement of the Act on Investment Trusts and Investment Corporations (Cabinet Order No. 480 of 2000) (hereinafter referred to as "foreign-issued beneficiary certificates" in this item) and foreign investment securities set forth in item (xi) of that paragraph (excluding foreign investment securities prescribed in the Act on Investment Trusts and Investment Corporations which are similar to investment equity subscription right certificates or investment corporation bond certificates; hereinafter referred to as "foreign-issued investment securities" in this item): all of the following requirements are satisfied:
(a)any person can easily obtain information on the trading price of the foreign-issued beneficiary certificates or foreign-issued investment securities (hereinafter referred to as "the foreign-issued beneficiary certificates or investment securities" in this item) in Japan by using the internet or by other means;
(b)the foreign-issued beneficiary certificates or investment securities are listed on a designated foreign financial instruments exchange;
(c)based on the rules established by the designated foreign financial instruments exchange on which the foreign-issued beneficiary certificates or investment securities are listed, information on the foreign-issued beneficiary certificates or investment securities (limited to information stated in Japanese or English) has been publicized by the issuer of the foreign-issued beneficiary certificates or investment securities, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act applied mutatis mutandis pursuant to paragraph (5) of that Article (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(ix)securities set forth in Article 2, paragraph (1), item (xix) of the Act (hereinafter referred to as "securities indicating rights" in this item): all of the following requirements are satisfied:
(a)the securities indicating rights indicate the rights associated with transactions set forth in Article 2, paragraph (22), item (iii) or (iv) related to share certificates, etc. (meaning share certificates, securities set forth in Article 2, paragraph (1), item (xi) of the Act (excluding investment corporation bond certificates and foreign investment securities similar to investment corporation bond certificates prescribed in the Act on Investment Trusts and Investment Corporations, as well as investment equity subscription right certificates, etc.; hereinafter referred to as "investment securities" in sub-item (a)) and securities set forth in item (xx) of that paragraph which indicate rights associated with share certificates or investment securities; hereinafter the same applies in sub-item (a)) or corporate bond certificates, etc. (meaning corporate bond certificates and securities set forth in item (xvii) of that paragraph which have the nature of corporate bond certificates; hereinafter the same applies in sub-item (a)) which satisfy all of the following requirements:
1.the share certificates, etc. or corporate bond certificates, etc. are listed on a financial instruments exchange or a designated foreign financial instruments exchange, or purchase and sale of the corporate bond certificates, etc. are ongoing in a foreign country;
2.based on the rules established by the designated foreign financial instruments exchange on which the share certificates, etc. or the corporate bond certificates, etc. are listed, or based on foreing laws and regulations in which purchase and sale of the corporate bond certificates, etc. are ongoing, information about the accounting of the issuer of the share certificates, etc. or the corporate bond certificates, etc. and other information about the issuer (limited to information stated in Japanese or English) has been publicized by the issuer, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act));
(b)it is agreed upon in advance that by the exercise of rights indicated on the securities indicating rights, the transaction connected with those rights will be executed at a fixed time in the future, and that the parties will make settlements by delivering and taking delivery of the difference in values for the transaction;
(c)any person can easily obtain information on the trading price of those securities indicating rights in Japan by using the internet or by other means;
(x)securities set forth in Article 2, paragraph (1), item (xx) of the Act: all of the following requirements are satisfied:
(a)the securities indicate the rights associated with the share certificates;
(b)any person can easily obtain information on the trading price of the securities in Japan by using the internet or by other means;
(c)the securities are listed on a designated foreign financial instruments exchange;
(d)based on the rules established by the designated foreign financial instruments exchange on which the securities are listed, information about the accounting of the issuer of the securities and other information about the issuer (limited to information stated in Japanese or English) has been publicized by the issuer, and any person can easily obtain that information in Japan by using the internet or by other means (excluding cases in which the issuer has submitted an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act)).
(Securities Excluded from Consideration as Securities for Professional Investors)
Article 2-12-4(1)The securities specified by Cabinet Order as those which are found unlikely to be owned by a large number of professional investors prescribed in Article 4, paragraph (3) of the Act, are the securities approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order as those which will not compromise the public interest or protection of investors even if the securities (excluding securities specified by Cabinet Office Order as those which are found to be improper for the protection of investors, taking into account the type and distributiveness, and other particulars of the securities) do not fall under securities for professional investors, if the number of holders of those securities on the last day of the immediately preceding business year (if the securities fall under regulated securities, the specified period (meaning a specified period prescribed in Article 24, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act following the deemed replacement of terms; the same applies in Article 4-2, paragraph (1)) relating to those securities; hereinafter the same applies in this paragraph, Article 3-4 and Article 4-2-2) of or all the last days of the business years that started within two years before the day of the commencement of the immediately preceding business year of the issuer of those securities are less than 300 (limited to the cases in which three years have passed since the end of the business year in which the securities came to fall under securities for professional investors (if there are two or more business years, the latest business year)).
(2)The solicitation with a view to delivering existing securities specified by Cabinet Order that is provided for in Article 4, paragraph (3) of the Act (meaning solicitation with a view to delivering existing securities as defined in paragraph (2) of that Article; hereinafter the same applies in this paragraph and Article 3-3) means solicitation that falls under any of the following items:
(i)solicitation with a view to delivering existing securities by a financial instruments business operator, etc. to professional investors, etc. for themselves;
(ii)solicitation with a view to delivering existing securities to non-residents by entrusting the solicitation to a foreign securities services provider;
(iii)offering to sell share certificates, etc. (meaning the share certificates, etc. prescribed in Article 27-2, paragraph (1) of the Act) in response to a tender offer (meaning the tender offer prscribed in Article 27-2, item (vi) of the Act; the same applies in Section 1 of the following Chapter);
(iv)solicitation with a view to delivering existing securities to an officer, etc. (limited to an officer, etc. that purchases the securities for professional investors (limited to a purchase based on a contract under which the officer, etc., will continually purchase securities for professional investors jointly with another officer, etc. of the issuer in accordance with a fixed plan and without depending on an individual investment decision, for which each officer, etc. contributes less than one million yen on each occasion)) of the issuer of the securities for professional investors (limited to the following ones) that are the subject of the solicitation with a view to delivering existing securities:
(a)the securities set forth in Article 2, paragraph (1), item (ix) of the Act;
(b)the securities set forth in Article 2, paragraph (1), item (xi) of the Act, which are investment securities, etc. or investment equity subscription right certificates, etc.;
(c)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in item (ix) of that paragraph;
(d)the securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in sub-item (a), (b) or (c); or
(e)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in sub-item (a), (b) or (c).
(3)The securities specified by Cabinet Order that are provided for in Article 4, paragraph (3), item (iv) of the Act are the following securities:
(i)the securities which were specified listed securities;
(ii)the over-the-counter traded securities, sold or purchased only in the over-the-counter securities markets which the authorized financial instruments firms association that establishes the over-the-counter securities market prohibits purchases for general investors, etc. (meaning purchases for general investors, etc. prescribed in Article 67, paragraph (3) of the Act) pursuant to the provisions of its articles of incorporation (hereinafter referred to as the "specified over-the-counter traded securities"); or
(iii)the securities which were specified over-the-counter traded securities.
(Scope of Regulated Securities)
Article 2-13The securities specified by Cabinet Order that are provided for in Article 5, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) (hereinafter referred to as the "regulated securities" in this Chapter) are as follows:
(i)the securities set forth in Article 2, paragraph (1), items (iv), (viii), (xiii), and (xv) of the Act (for the securities set forth in Article 2, paragraph (1), item (xv) of the Act, limited to the specified promissory note prescribed in the Asset Securitization Act);
(ii)the securities set forth in Article 2, paragraph (1), items (x) and (xi) of the Act;
(iii)the securities set forth in Article 2, paragraph (1), item (xiv) of the Act (excluding those that fall under certificates of a beneficial interest in a securities trust);
(iv)the securities set forth in Article 2, paragraph (1), item (xvi) of the Act;
(v)the securities set forth in Article 2, paragraph (1), item (xviii);
(vi)certificates of a beneficial interest in a securities trust (limited to those of which the entrusted securities are the securities set forth in the preceding items);
(vii)the rights in a securities investment business, etc. (meaning the rights in a securities investment business, etc. prescribed in Article 3, item (iii), (a) of the Act; the same applies hereinafter) which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of the Act (excluding the claims prescribed in Article 1-3-4);
(viii)the rights set forth in Article 2, paragraph (2), item (i) of the Act which are deemed to be securities pursuant to the provisions of that paragraph (limited to those that fall under electronically recorded transferable rights and excluding those that fall under certificates of a beneficial interest in a securities trust);
(ix)the rights set forth in Article 2, paragraph (2), item (ii) of the Act which are deemed to be securities pursuant to the provisions of that paragraph (limited to those that fall under electronically recorded transferable rights);
(x)the rights set forth in Article 2, paragraph (2), item (iii) of the Act which are deemed to be securities pursuant to the provisions of that paragraph (limited to those that fall under electronically recorded transferable rights), which are membership rights in a general partnership company, limited partnership company, or limited liability company that conducts business by making investments in securities by allocating an amount exceeding 50 percent of the total contribution;
(xi)the rights set forth in Article 2, paragraph (2), item (iv) of the Act which are deemed to be securities pursuant to the provisions of that paragraph (limited to those that fall under electronically recorded transferable rights), which have the nature of the rights set forth in the preceding item;
(xii)the rights set forth in Article 2, paragraph (2), items (v) and (vi) of the Act which are deemed to be securities pursuant to the provisions of that paragraph (limited to those that fall under electronically recorded transferable rights); and
(xiii)things specified by Cabinet Office Order as being equivalent to what is set forth in the preceding items.
(Securities Equivalent to Listed Securities)
Article 3The securities specified by Cabinet Order that are prescribed in Article 6, item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 12, Article 23-12, paragraph (1), Article 24, paragraph (7), Article 24-2, paragraph (3) and Article 24-4-2, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (1) and Article 24-5-2, paragraph (1) of the Act), Article 24-4-3, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 24-4-8, paragraph (2) and Article 24-5-2, paragraph (2) of the Act), Article 24-4-4, paragraph (5), Article 24-4-5, paragraph (2), Article 24-4-7, paragraph (5), Article 24-5, paragraph (6) and Article 24-6, paragraph (3) of the Act, and the cases in which these provisions (excluding Article 24-6, paragraph (3) of the Act) are applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) and the securities specified by Cabinet Order as those for which the state of distribution referred to in Article 24, paragraph (1), item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act and as applied mutatis mutandis pursuant to Article 27 of the Act) is regarded as being equivalent to that for the securities set forth in Article 24, paragraph (1), item (i) of the Act are over-the-counter traded securities, and the authorized financial instruments firms association specified by Cabinet Order prescribed in Article 6, item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act), Article 24-7, paragraph (4), item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 24-7, paragraph (6) of the Act and as applied mutatis mutandis pursuant to Article 27 of the Act), Article 25, paragraphs (3) and (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act), Article 27-30-2, Article 27-30-6, paragraph (1), and Article 27-30-8, paragraph (1) of the Act is an authorized financial instruments firms association which registers the over-the-counter traded securities.
(Securities Specified by Cabinet Order That Are Provided for in Article 15, Paragraph (3) of the Act)
Article 3-2The securities specified by Cabinet Order that are provided for in Article 15, paragraph (3) of the Act are the securities set forth in Article 2, paragraph (1), items (x) and (xi) of the Act.
(Corporate Bonds Specified by Cabinet Order That Are Provided for in Article 23-8, Paragraph (2) of the Act)
Article 3-2-2The corporate bonds, etc. specified by Cabinet Order that are prescribed in Article 23-8, paragraph (2) of the Act are as follows:
(i)the short-term bonds that are prescribed in the Insurance Business Act;
(ii)the specified short-term corporate bonds that are prescribed in the Asset Securitization Act;
(iii)the short-term investment corporation bonds that are prescribed in the Act on Investment Trusts and Investment Corporations; or
(iv)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act (including foreign investment securities that are similar to the investment corporation bond certificate prescribed in the Act on Investment Trusts and Investment Corporations; the same applies in item (iii) of the following Article) which are specified by Cabinet Office Order as being equivalent to the short-term corporate bonds prescribed in the Act on Book-Entry Transfer of Corporate Bonds and Shares or those set forth in the preceding three items.
(Solicitation Not Requiring Notice on Solicitation to a Small Number of Investors)
Article 3-3The solicitation specified by Cabinet Order that is provided for in Article 23-13, paragraph (4) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) is a solicitation with a view to delivering new securities or solicitation with a view to delivering existing securities (limited to one that falls under the cases specified in the items of that paragraph) issued for the following securities:
(i)preferred equity subscription warrants;
(ii)the securities set forth in Article 2, paragraph (1), item (xv) of the Act (including the securities set forth in item (xvii) of that Article which have the nature of the securities set forth in item (xv) of that paragraph); or
(iii)the specified short-term corporate bonds prescribed in the Asset Securitization Act, short-term corporate bonds prescribed in the Act on Book-Entry Transfer of Corporate Bonds and Shares, short-term corporate bonds prescribed in the Insurance Business Act, and the short-term investment corporation bond prescribed in the Act on Investment Trusts and Investment Corporations (including the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which are specified by Cabinet Office Order as being equivalent to them).
(Due Date for Submission of Annual Securities Reports for a Foreign Person)
Article 3-4The period specified by Cabinet Order that is provided for in Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) and Article 27 of the Act) is six months; provided, however, that if a foreign person that is the issuer of the securities set forth in the items of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) or Article 24, paragraph (1), items (i) through (iii) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act is found to be unable to submit the annual securities report within six months after the end of their business year due to the laws and regulations or practices in their home country or any other compelling reasons, that period is the period approved in advance by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Scope of Securities That Makes It Unnecessary to Submit an Annual Securities Report)
Article 3-5(1)The securities specified by Cabinet Order that are provided for in the proviso to Article 24, paragraph (1) of the Act are the following securities:
(i)share certificates;
(ii)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of share certificates;
(iii)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in the preceding item; or
(iv)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in item (ii).
(2)The number calculated pursuant to the provisions of Cabinet Order that is provided for in the proviso to Article 24, paragraph (1) of the Act is 300.
(Amount of Assets That Makes It Unnecessary to Submit an Annual Securities Report)
Article 3-6(1)The amount that is specified by Cabinet Order as the amount of assets that is provided for in the proviso to Article 24, paragraph (1) of the Act is the amount of the stated capital.
(2)The amount specified by Cabinet Order that is provided for in the proviso to Article 24, paragraph (1) of the Act is the amount specified in the following items in accordance with the category of the electronically recorded transferable rights set forth in each of those items:
(i)the rights set forth in Article 2, paragraph (2), item (i) of the Act (limited to certificates of a beneficial interest in a securities trust of which the entrusted securities are share certificates): 500 million yen; and
(ii)the rights set forth in Article 2, paragraph (2), item (iii) of the Act: 100 million yen.
(3)The number specified by Cabinet Order that is provided for in the proviso to Article 24, paragraph (1) of the Act is 300.
(4)The securities specified by Cabinet Order as those for which the state of distribution is regarded as being equivalent to that for the specified listed securities prescribed in Article 24, paragraph (1), item (ii) of the Act are specified over-the-counter traded securities.
(5)The securities specified by Cabinet Order that are provided for in Article 24, paragraph (1), item (iv) of the Act are share certificates, certificates of a beneficial interest in a securities trust of which the entrusted securities are share certificates, the securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with share certificates, and electronically recorded transferable rights that are deemed to be securities pursuant to the provisions of paragraph (2) of the Article (excluding those that fall under regulated securities), which are the rights set forth in item (iii) of that paragraph.
(6)The number specified by Cabinet Order that are provided for in Article 24, paragraph (1), item (iv) of the Act is the following number specified in the following items in accordance with the category of the securities set forth in each of those items:
(i)share certificates, certificates of a beneficial interest in a securities trust of which the entrusted securities are share certificates, and securities set forth in Article 2, paragraph (1), item (xx) that indicate rights associated with share certificates: 1000 (if the securities are securities for professional investors, the number obtained by adding the number of professional investors calculated pursuant to the provisions of Cabinet Office Order to 1000); and
(ii)securities other than the securities set forth in the preceding item: 500.
(Approval That an Annual Securities Report Need Not Be Submitted)
Article 4(1)If an issuer of securities set forth in Article 24, paragraph (1), item (iii) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) or Article 24, paragraph (1), item (iv) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) (excluding the issuer of the securities that fall under regulated securities; the same applies in the following paragraph) seeks the approval provided for in the proviso to Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act), the issuer must submit a written application for approval together with the articles of incorporation, a copy of the shareholder register, and any other documents specified by Cabinet Office Order to the Commissioner of the Financial Services Agency.
(2)If the application for approval referred to in the preceding paragraph has been filed, and the Commissioner of the Financial Services Agency finds that the person filing the application falls under any of the following items, the Commissioner is to approve that annual securities reports need not be submitted for the business years starting from the business year that includes the day on which the application has been filed (if the day is a day within three months after the commencement of the business year (if the person is a foreign person, within the period specified in Article 3-4; hereinafter the same applies in this paragraph), the immediately preceding business year) and lasting until the business year immediately preceding the business year that includes the day on which the person comes to no longer fall under the relevant item (if the day is a day within three months after the commencement of a business year, the immediately preceding business year):
(i)a person in liquidation;
(ii)a person whose business has been suspended for a considerable period of time; or
(iii)an issuer of the securities set forth in Article 24, paragraph (1), item (iii) of the Act for which the number of the holders of those securities calculated pursuant to the provisions of Cabinet Office Order is less than the number specified by Cabinet Office Order.
(3)The approval referred to in the preceding paragraph is to be given on the condition that the person referred to in that paragraph submits a copy of the shareholder register and other documents specified by Cabinet Office Order to the Commissioner of the Financial Services Agency within three months after the end of each business year (limited to the business year that includes the day on which the application set forth in the preceding paragraph has been made and those which end within the period specified by Cabinet Office Order after the day of the end of the business year) (if the person is a foreign person, within the period specified in Article 3-4) pursuant to the provisions of Cabinet Office Order.
(4)In the case in which an application for approval referred to in paragraph (1) has been filed (excluding cases in which the approval under the provisions of paragraph (2) has been given), if the person filing that application is a person that is subject to a order for commencement of reorganization proceedings and the application has been filed within three months after the day on which the order for commencement of reorganization proceedings has been issued, the Commissioner of the Financial Services Agency is to approve that the person is not required to submit an annual securities report for the business year that includes the day on which the order for commencement of reorganization proceedings was issued.
(Approval That an Annual Securities Report Need Not Be Submitted in Connection with Regulated Securities)
Article 4-2(1)The provisions of paragraph (1) of the preceding Article apply mutatis mutandis when the issuer of the securities set forth in Article 24, paragraph (1), items (iii) and (iv) of the Act which fall under regulated securities seeks the approval prescribed in the proviso to Article 24, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) and the provisions of paragraphs (2) and (3) of the preceding Article apply mutatis mutandis to that approval. In such a case, the terms "the application has been filed" and "business year" in paragraph (2) of the preceding Article is deemed to be replaced with "the application has been filed with regard to the securities" and "specified period", respectively, the phrase "the securities set forth in Article 24, paragraph (1), item (iii) of the Act" in paragraph (2), item (iii) of the preceding Article is deemed to be replaced with "the securities set forth in Article 24, paragraph (1), item (iii) of the Act which fall under regulated securities" and the terms "each business year" and "the business year that includes the day on which the application set forth in the preceding paragraph was filed and those which end within the period specified by Cabinet Office Order after the day of the end of that business year" in paragraph (3) of the preceding Article are deemed to be replaced with "each specified period with regard to the securities" and "the specified period that includes the day on which the application set forth in the preceding paragraph was filed and those which end within the period specified by Cabinet Office Order after the day of the end of that specified period", respectively.
(2)The amount specified by Cabinet Order as the amount of stated capital of the company that is prescribed in the proviso to Article 24, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) following the deemed replacement of terms, is those specified in the following items in accordance with the category of rights in securities investment business, etc. or electronically recorded transferable rights set forth in each of those items:
(i)the rights set forth in Article 2, paragraph (2), item (i) of the Act: the total value of assets belonging to a trust property;
(ii)the rights set forth in Article 2, paragraph (2), item (iii) of the Act: the amount of stated capital; and
(iii)the rights set forth in Article 2, paragraph (2), item (v) of the Act: the total amount of investment or contribution.
(3)The amount specified by Cabinet Order as prescribed in the proviso to Article 24, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act following the deemed replacement of terms is 100 million yen.
(4)The securities specified by Cabinet Order referred to in Article 24, paragraph (1), item (iv) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act following the deemed replacement of terms are, among the rights in securities investment business, etc. which are deemed to be securities pursuant to the provisions of Article 2, paragraph (2) of the Act, the rights set forth in items (i), (iii), and (v) of that paragraph, and among electronically recorded transferable rights which are deemed to be securities pursuant to the provisions of that paragraph (limited to those that fall under regulated securities), the rights set forth in item (i) of that paragraph (excluding those that fall under certificates of a beneficial interest in a securities trust), and the rights set forth in items (iii) and (v) of that paragraph.
(5)The number specified by Cabinet Order that is precribed in Article 24, paragraph (1), item (iv) of the Act as applied mutatis mutandis pursuant to Article 24, paragraph (5) of the Act following the deemed replacement of terms is 500.
(Due Date for Submission of Foreign Company Reports)
Article 4-2-2The period specified by Cabinet Order that is provided for in Article 24, paragraphs (1) and (5) of the Act as applied pursuant to the provisions of Article 24, paragraph (10) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) following the deemed replacement of terms is four months; provided, however, that if the foreign company submitting a report (meaning the foreign company submitting a report as defined in Article 24, paragraph (8) of the Act; the same applies hereinafter) is found to be unable to submit its foreign company report (meaning a foreign company report prescribed in Article 24, paragraph (8) of the Act; the same applies hereinafter) within four months after the end of its business year due to the laws and regulations or practices in their home country or any other compelling reasons, that period is the period approved in advance by the Commissioner of the Financial Services Agency, pursuant to the provisions of Cabinet Office Order.
(Due Date for Submission of an Annual Securities Report If a Person Has Been Notified That They Are Not Allowed to Submit a Foreign Company Report)
Article 4-2-3The period specified by Cabinet Order that is provided for in Article 24, paragraph (13) of the Act (including as applied mutatis mutandis pursuant to Article 24-7, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 24-7, paragraph (6) of the Act) and as applied mutatis mutandis pursuant to Article 27 of the Act) is a period that runs from the day on which the notice under Article 24, paragraph (12) of the Act has been given until the last day of the period in which the annual securities report under the provisions of Article 24, paragraph (1) of the Act is to be submitted, if the submission has been decided pursuant to Article 24, paragraph (1) of the Act, or until the day on which one month has elapsed from the day of notice, whichever comes later.
(Public Notice of the Fact that an Amendment Report Has Been Submitted)
Article 4-2-4(1)The public notice under the provisions of Article 24-2, paragraph (2) of the Act must be given by any of the following means after submitting the amendment report referred to in that paragraph, without delay:
(i)means of taking measures to make the information that is required to be given in a public notice available to many and unspecified persons by a means of using an electronic data processing system for disclosure (meaning an electronic data processing system for disclosure as defined in Article 27-30-2 of the Act; the same applies hereinafter) pursuant to the provisions of Cabinet Office Order (hereinafter referred to as "electronic public notice" in this Article); or
(ii)means of publication in a daily newspaper that publishes information on current events pursuant to the provisions of Cabinet Office Order.
(2)A person that gives public notice by electronic public notice pursuant to the preceding paragraph must continue to provide the public notice by electronic public notice until the last day in the five-year period after the day on which the person submitted the annual securities report and the documents attached to it for which the amendment reports set forth in Article 24-2, paragraph (2) of the Act have been submitted.
(3)If a person giving public notice by electronic public notice pursuant to the provisions of paragraph (1) is unable to give the public notice by electronic public notice due to a fault in a telecommunications line or any other grounds, the person must give public notice, in lieu of the electronic public notice, by the means set forth in paragraph (1), item (ii) or other means specified by Cabinet Office Order with the approval of the Commissioner of the Financial Services Agency, pursuant to the provisions of Cabinet Office Order.
(4)Notwithstanding the provisions of paragraph (2), if public notice is interrupted (meaning that the information that was made available to many and unspecified persons is no longer available, or the information has been altered after having been made available; hereinafter the same applies in this paragraph) during the period in which the public notice by electronic public notice is required to be given pursuant to paragraph (2) (the period is referred to as a "public notice period" in item (ii)), and the case falls under all of the following cases, the interruption of the public notice does not impact the effect of the public notice:
(i)if the person that gives public notice by electronic public notice has acted in good faith and without gross negligence with regard to the interruption of public notice or if that person has legitimate grounds for interrupting the public notice;
(ii)the total time during which the public notice was interrupted does not exceed one-tenth of the public notice period; and
(iii)promptly after learning that the public notice had been interrupted, the person that gives public notice by electronic public notice has given public notice of that fact, the time when the public notice was interrupted, and the details of the interruption by appending the information to the relevant public notice, pursuant to the provisions of Cabinet Office Order.
(Scope of Companies Required to Submit a Confirmation Letter)
Article 4-2-5(1)The company specified by Cabinet Order that is provided for in Article 24-4-2, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) is the issuer of the securities set forth in Article 24, paragraph (1), item (i) or (ii) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) (limited to securities that fall under the securities set forth in the following items):
(i)share certificates;
(ii)preferred equity securities;
(iii)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in the preceding two items;
(iv)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in the preceding three items; or
(v)the securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in items (i) through (iii).
(2)If the provisions of the Act are applied mutatis mutandis when a person submits an amendment report (meaning an amendment report prescribed in Article 24-2, paragraph (1) of the Act; hereinafter the same applies in this paragraph) pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1), or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-2, paragraph (1) of the Act following the deemed replacement of terms under the provisions of Article 24-4-2, paragraph (4) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms under Article 24-4-2, paragraph (4) of the Act is as given in the following table:
Provisions of the Act hose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24-4-2, paragraph (1)
statements in the annual securities report
statements in the amendment report
annual securities report, etc.
amendment report
foreign company report
documents similar to that amendment report which have been prepared in English
a foreign company report
documents similar to that amendment report which have been prepared in English
Article 24-4-2, paragraph (2)
together with an annual securities report
together with amendment reports
(3)If the provisions of the Act are applied mutatis mutandis when a confirmation letter (meaning a confirmation letter prescribed in Article 24-4-2, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act); the same applies hereinafter) has been submitted pursuant to the provisions of Article 24-4-2, paragraph (1) or (2) of the Act (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (3) of the Act (including as applied mutatis mutandis pursuant to Article 24-4-2, paragraph (4) of the Act) and Article 24-4-2, paragraph (4) of the Act, and when those provisions are applied mutatis mutandis pursuant to Article 27 of the Act) under Article 24-4-2, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act, hereinafter the same applies in this paragraph), the technical replacement of terms pursuant to the provisions of Article 24-4-2, paragraph (5) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 6
the statement and other documents under the provisions of paragraph (1) and paragraph (13) of the preceding Article
a confirmation letter
(4)If the provisions of the Act are applied mutatis mutandis when a foreign company submitting a report submits a confirmation letter pursuant to Article 24-4-2, paragraph (1) or (2) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) under Article 24-4-2, paragraph (6) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph) (limited to if the foreign company has submitted a foreign company report), the technical replacement of terms pursuant to the provisions of Article 24-4-2, paragraph (6) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24, paragraphs (8), paragraph (9) and paragraphs (11) through (13)
annual securities report
confirmation letter
foreign company report
foreign company confirmation letter
foreign company submitting a report
foreign company
(Deemed Replacement of Terms in Connection with Amended Confirmation Letters)
Article 4-2-6(1)If the provisions of the Act are applied mutatis mutandis to the confirmation letter under Article 24-4-3, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article), the technical replacement of terms under Article 24-4-3, paragraph (1) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 7
the statement or any of the other documents
the confirmation letter
Article 9, paragraph (1)
Article 5, paragraph (1) and paragraph (13)
the confirmation letter under the provisions of Article 7
the statement and other documents
the amendment confirmation letter
Article 10, paragraph (1)
securities registration statement
confirmation letter
(2)If the provisions of the Act are applied mutatis mutandis when an amended confirmation letter (meaning an amended confirmation letter prescribed in Article 24-4-3, paragraph (1) of the Act; the same applies hereinafter) for a confirmation letter has been submitted pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-3, paragraph (1) of the Act pursuant to the provisions of Article 24-4-3, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms under Article 24-4-3, paragraph (2) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 6
the statementand other documents under the provisions of paragraph (1) and paragraph (13) of the preceding Article
amendment confirmation letter
(3)If the provisions of the Act are applied mutatis mutandis when a foreign company submits an amended confirmation letter for a confirmation letter submitted pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-3, paragraph (1) of the Act pursuant to the provisions of Article 24-4-3, paragraph (3) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms pursuant to the provisions of Article 24-4-3, paragraph (3) of the Act is as given in the following table:
Provisions of the Act hose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24, paragraph (8)
annual securities report
amendment confirmation letter
a foreign company required to submit an annual securities report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph through paragraph (13)) (including foreign companies which have submitted an annual securities report pursuant to Article 23-3, paragraph (4); hereinafter referred to as a "foreign company submitting a report")
a foreign company required to submit an annual securities report pursuant to paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph through paragraph (13)) (limited to foreign companies that have submitted a foreign company report)
an annual securities report to be submitted under the provisions of paragraph (1) and the documents to be attached to be attached to it pursuant to paragraph (6) (hereinafter referred to as "annual securities reports, etc." in this Article)
an amendment confirmation letter
is similar to an annual securities report, etc. disclosed in a foreign country (meaning making the report available for public inspection based on laws and regulations of that foreign country (including the rules established by the operator of a foreign financial instruments market or other persons specified by Cabinet Office Order); the same applies in Article 24-4-7, paragraph (6) and Article 24-5, paragraph (7))
state the particulars required to be stated on the amendment confirmation letter
foreign company report
foreign company amendment confirmation letter
Article 24, paragraph (9)
foreign company eport
Foreign Company Amendment Confirmation Letter
and documents stating the particulars not stated in a foreign company report specified by Cabinet Office Order as necessary and appropriate for the public interest or protection of investors, and other documents
and other documents
Article 24, paragraph (11)
foreign company submitting a report
foreign company (limited to the foreign companies that have submitted a foreign company report)
foreign company report
foreign company amendment confirmation letter
to be an annual securities report, etc.
to be an amendment confirmation letter
an annual securities report, etc.
an amendment confirmation letter
(Scope of Companies Required to Submit an Internal Control Report)
Article 4-2-7(1)The person specified by Cabinet Order provided for in Article 24-4-4, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) is the issuer of the securities set forth in Article 24, paragraph (1), item (i) or (ii) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) (limited to the securities that fall under the securities set forth in the following items):
(i)share certificates;
(ii)preferred equity investment certificates;
(iii)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in the preceding two items;
(iv)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in the preceding three items; or
(v)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in item (i) to item (iii).
(2)If the provisions of the Act are applied mutatis mutandis when an internal control report (meaning the internal control report prescribed in Article 24-4-4, paragraph (1) of the Act; the same applies hereinafter) and the documents attached to it have been submitted pursuant to the provisions of Article 24-4-4, paragraph (1) or (2) of the Act (including as applied mutatis mutandis pursuant to Article 24-4-4, paragraph (3) of the Act and as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article and the following Article) and Article 24-4-4, paragraph (4) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) pursuant to the provisions of Article 24-4-5, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms pursuant to the provisions of Article 24-4-4, paragraph (5) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 6
the statement and other documents under the provisions of paragraph (1) and paragraph (13) of the preceding Article
the internal control report and the documents attached to it
(3)If the provisions of the Act are applied mutatis mutandis when a foreign company submitting a report submits the internal control report under the provisions of Article 24-4-4, paragraph (1) or (2) of the Act pursuant to Article 24-4-4, paragraph (6) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph) (limited to if the foreign company has submitted a foreign company report), the technical replacement of terms pursuant to the provisions of Article 24-4-4, paragraph (6) of the Act is as given in the following table:
Provisions of the Act hose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to eplace the Original erms
Article 24, paragraph (8), paragraph (9) and paragraphs (11) through (13)
foreign company report
foreign company internal control report
foreign company submitting a report
foreign company
annual securities report
internal control report
(Deemed Replacement of Terms in Connection with Amendment of Internal Control Reports)
Article 4-2-8(1)If the provisions of the Act are applied mutatis mutandis to an internal control report and the documents attached to it under Article 24-4-5, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article), the technical replacement of terms pursuant to the provisions of Article 24-4-5, paragraph (1) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 7
a statement or other documents under the provisions of Article 5, paragraph (1) and paragraph (13)
an internal control report and the documents attached to it
Article 9, paragraph (1)
Article 5, paragraph (1) and paragraph (13)
an internal control report and the documents attached to it
a statement or other documents
the amendment report
Article 10, paragraph (1)
a securities registration statement
n internal control report and the documents attached to it
(2)If the provisions of the Act are applied mutatis mutandis when an amendment report (meaning the amendment report prescribed in Article 24-4-5, paragraph (1) of the Act; hereinafter the same applies in this Article and the following Article) has been submitted for an internal control report and the documents attached to it pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-5, paragraph (1) of the Act pursuant to Article 24-4-5, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms pursuant to the provisions of Article 24-4-5, paragraph (2) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 6
the statement under the provisions of paragraph (1) and paragraph (13) of the preceding Article
the relevant amendment report
(3)If the provisions of the Act are applied mutatis mutandis when a foreign company submits an amendment report for the internal control report submitted pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-5, paragraph (1) of the Act following the deemed replacement of terms pursuant to Article 24-4-5, paragraph (3) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms pursuant to the provisions of Article 24-4-5, paragraph (3) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24, paragraph (8)
an annual securities report
an amendment report
a foreign company required to submit an annual securities report pursuant to the provisions of paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph through paragraph (13)) (including the foreign company that has submitted an annual securities report pursuant to the provisions of Article 23-3, paragraph (4); hereinafter referred to as a "foreign company submitting a report")
a foreign company required to submit an nnual securities report pursuant to the provisions of paragraph (1) (including applied mutatis mutandis pursuant to paragraph (5); hereinafter the same applies in this paragraph through paragraph (13)) (limited to the foreign company that has submitted a foreign company report)
an annual securities report under the provisions of paragraph (1) and the documents required to be attached to it pursuant to the provisions of paragraph (6) (hereinafter referred to as "annual securities report, etc." in this Article)
an amendment report
is similar to an nnual securities report, etc. disclosed in a foreign country (meaning making the report available for public inspection based on laws and regulations of that foreign country (including the rules established by the operator of a foreign financial instruments market or other persons specified by Cabinet Office Order); the same applies in Article 24-4-7, paragraph (6) and Article 24-5, paragraph (7))
and state the particulars required to be stated in an amendment report
foreign company report
foreign company amendment report
Article 24, paragraph (9)
a foreign company report
a foreign company amendment report
and documents stating the particulars not stated in the foreign company report specified by Cabinet Office Order as necessary and appropriate for the public interest or protection of investors , and other documents
and other documents
Article 24, paragraph (11)
foreign company submitting a report
foreign company (limited to the foreign company that has submitted a foreign company report)
a foreign company report
Foreign Company Amendment Report
an annual securities report
an amendment report
an annual securities report, etc.
an amendment report
(Deemed Replacement of Terms in Connection with Liability for Damages Related to an Internal Control Report)
Article 4-2-9If the provisions of the Act are applied mutatis mutandis to a case in which an internal control report (including its amendment report) contains a false statement about a material particular, lacks a statement about a material particular that is required to be stated, or lacks a statement of material fact that is necessary to prevent a misunderstanding, under Article 24-4-6 of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article), the technical replacement of terms pursuant to the provisions of Article 24-4-6 of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 22, paragraph (2)
the preceding paragraph
the preceding paragraph as applied mutatis mutandis pursuant to Article 24-4-6
(Scope of Companies Required to Submit a Quarterly Securities Report)
Article 4-2-10(1)The company that is the issuer and other persons specified by Cabinet Order that are provided for in Article 24-4-7, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) are the issuer of the securities set forth in Article 24, paragraph (1), item (i) or (ii) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) (limited to the securities that fall under the securities set forth in the following items):
(i)share certificates;
(ii)preferred equity securities;
(iii)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in the preceding two items;
(iv)certificates of a beneficial interest in securities trust of which the entrusted securities are the securities set forth in the preceding three items; or
(v)the securities set forth in Article 2, paragraph (1), item (xx) of the Act which indicate the rights associated with the securities set forth in item (i) through (iii).
(2)The period specified by Cabinet Order that is to be excluded from the three-month periods into which a business year is divided, that is provided for in Article 24-4-7, paragraph (1) of the Act, is the last of those three month periods.
(3)The period not exceeding 45 days designated by Cabinet Order that is provided for in Article 24-4-7, paragraph (1) of the Act is 45 days.
(4)The period not exceeding 60 days specified by Cabinet Order that is provided for in Article 24-4-7, paragraph (1) of the Act is the period specified in the following items in accordance with the category of quarters (meaning each three-month period of the business year prescribed in Article 24-4-7, paragraph (1) of the Act; hereinafter the same applies in this paragraph) set forth in each of those items:
(i)the quarter following the first quarter of the business year: 60 days; and
(ii)a quarter other than the quarter set forth in the preceding item: 45 days.
(5)If the provisions of the Act are applied mutatis mutandis to a quarterly securities report (meaning a quarterly securities report as defined in Article 24-4-7, paragraph (1) of the Act; the same applies hereinafter) under Article 24-4-7, paragraph (4) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph and the following paragraph), the deemed replacement of terms pursuant to the provisions of Article 24-4-7, paragraph (4) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 9, paragraph (1)
Article 5, paragraph (1) and paragraph (13)
a quarterly securities eport
a statement or other documents
an amendment reports
(6)If the provisions of the Act are applied mutatis mutandis to a case in which a quarterly securities report or its amendment report (meaning the amendment report prescribed in Article 24-4-7, paragraph (4) of the Act; hereinafter the same applies in this Article and the following Article) contains a false statement about a material particular, lacks a statement about a material particular that is required to be stated, or lacks a statement of material fact that is necessary for preventing a misunderstanding ,under Article 24-4-7, paragraph (4) of the Act, the technical replacement of terms pursuant to the provisions of Article 24-4-7, paragraph (4) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 22, paragraph (1)
securities registration statement
quarterly securities report or its amendment report
(7)If the provisions of the Act are applied mutatis mutandis when a quarterly securities report has been submitted pursuant to the provisions of Article 24-4-7, paragraph (1) or (2) of the Act (including as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (3) of the Act and as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article and the following Article) and when an amendment report for the quarterly securities report has been submitted pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (4) of the Act, under Article 24-4-7, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act), the technical replacement of terms pursuant to the provisions of Article 24-4-7, paragraph (5) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 6
the statement and other documents under the provisions of paragraph (1) and paragraph (13) of the preceding Article
the relevant quarterly securities eport and its amendment report
(8)The period specified by Cabinet Order that is provided for in Article 24-4-7, paragraph (10) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) is a period that starts to run from the day on which the notice under Article 24-4-7, paragraph (9) of the Act has been given until the last day of the period in which the quarterly securities report under Article 24-4-7, paragraph (1) of the Act is to be submitted, if its submission has been decided pursuant to Article 24-4-7, paragraph (1) of the Act, or until the day on which 15 days have elapsed from the day of notice, whichever comes later.
(9)If the provisions of the Act are applied mutatis mutandis when a foreign company submitting a report submits an amendment report for the foreign company quarterly securities report (meaning the foreign company quarterly securities report prescribed in Article 24-4-7, paragraph (6) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act)) and its supplementary documents (meaning the supplementary documents prescribed in Article 24-4-7, paragraph (7) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act)) submitted pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (4) of the Act following the deemed replacement of terms pursuant to Article 24-4-7, paragraph (11) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this paragraph), the technical replacement of terms pursuant to the provisions of Article 24-4-7, paragraph (11) of the Act is as given in the following table:
Provisions of the Act hose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24-4-7, paragraph (6)
a foreign company submitting a report required to submit a quarterly securities report pursuant to the provisions of paragraph (1)
a foreign company submitting a report required to submit an amendment report of a foreign company quarterly securities report and its supplementary documents which have been submitted pursuant to the provisions of Article 7, Article 9, paragraph (1), or Article 10, paragraph (1) as applied mutatis mutandis pursuant to paragraph (4) following the deemed replacement of terms
a quarterly securities report
an amendment report
foreign company quarterly securities report
amendment report of a foreign company quarterly securities report
Article 24-4-7, paragraph (7)
foreign company quarterly securities report
amendment report of a foreign company quarterly securities report
Article 24-4-7, paragraph (8)
foreign company quarterly securities report
amendment report of a foreign company quarterly securities reports
quarterly securities report
amendment report
(Deemed Replacement of Terms in Connection with Confirmation Letters for Quarterly Securities Reports)
Article 4-2-11If the provisions of the Act are applied mutatis mutandis when a person submits a quarterly securities report pursuant to Article 24-4-7, paragraph (1) or (2) of the Act and when a person submits an amendment report pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-4-7, paragraph (4) of the Act following the deemed replacement of terms under Article 24-4-8, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article), the technical replacement of terms pursuant to the provisions of Article 24-4-8, paragraph (1) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24-4-2, paragraph (1)
the relevant annual securities report
the relevant quarterly securities report
(Due Date for the Submission of a Semiannual Securities Report If the Relevant Person Has Been Notified That It Is Not Allowed to Submit a Foreign Company Semiannual Securities Report)
Article 4-2-12The period specified by Cabinet Order that is provided for in Article 24-5, paragraph (11) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) is the period from the day on which the notice under Article 24-5, paragraph (10) of the Act has been given until the last day of the period in which the semiannual securities report under Article 24-5, paragraph (1) of the Act is to be submitted, if its submission has been decided pursuant to Article 24-5, paragraph (1) of the Act, or until the day on which 15 days have elapsed from the day of notice, whichever comes later.
(Deemed Replacement of Terms in Connection with Confirmation Letters for Semiannual Securities Reports)
Article 4-2-13If the provisions of the Act are applied mutatis mutandis when a person submits a semiannual securities report pursuant to Article 24-5, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 24-5, paragraph (3) of the Act and as applied mutatis mutandis pursuant to Article 27 of the Act) and when a person submits an amendment report (meaning the amendment report set forth in Article 24-5, paragraph (5) of the Act) is to be submitted pursuant to the provisions of Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-5, paragraph (5) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) following the deemed replacement of terms under Article 24-5-2, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act), the technical replacement of terms pursuant to the provisions of Article 24-5-2, paragraph (1) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24-4-2, paragraph (1)
the relevant annual securities report
the relevant semiannual securities report
(Share Certificates Equivalent to Listed Share Certificates)
Article 4-3(1)The share certificates specified by Cabinet Order that are provided for in Article 24-6, paragraph (1) of the Act are share certificates that fall under over-the-counter traded securities.
(2)The securities specified by Cabinet Order that are provided for in Article 24-6, paragraph (1) of the Act are the following securities:
(i)investment securities (meaning investment securities prescribed in the Act on Investment Trusts and Investment Corporations; hereinafter the same applies in this paragraph) listed on a financial instruments exchange;
(ii)investment securities that fall under over-the-counter traded securities;
(iii)certificates of a beneficial interest in a securities trust of which the entrusted securities are share certificates listed on a financial instruments exchange, the share certificates set forth in the preceding paragraph, or the investment securities set forth in the preceding two items;
(iv)certificates of a beneficial interest in a securities trust (limited to those of which the entrusted securities are share certificates or investment securities, and excluding those that fall under the preceding item) which fall under listed securities (meaning the securities listed on a financial instruments exchange; the same applies in item (vi)) or over-the-counter traded securities;
(v)securities set forth in Article 2, paragraph (1), item (xx) of the Act which indicate rights associated with share certificates listed on a financial instruments exchange, share certificates prescribed in the preceding paragraph, or investment securities set forth in item (i) or (ii); or
(vi)securities set forth in Article 2, paragraph (1), item (xx) of the Act (limited to securities that indicate rights associated with share certificates or investment securities, and excluding those that fall under the preceding item) which fall under listed securities or over-the-counter traded securities.
(3)The decision of an organ specified by Cabinet Order that is provided for in Article 24-6, paragraph (1) of the Act is a resolution of the board of officers meeting under the provisions of Article 80-2, paragraph (3) of the Act on Investment Trusts and Investment Corporations.
(4)The meeting specified by Cabinet Order that is provided for in Article 24-6, paragraph (1) of the Act is the board of officers meeting at which the resolution set forth in the preceding paragraph has been made.
(5)The day specified by Cabinet Order that is provided for in Article 24-6, paragraph (1) of the Act is the day on which the period set forth in Article 80-2, paragraph (1), item (iv) of the Act on Investment Trusts and Investment Corporations as applied pursuant to the provisions of Article 80-5, paragraph (2) of that Act following the deemed replacement of terms expires.
(Companies Closely Related to the Relevant Person)
Article 4-4(1)The company specified by Cabinet Order that is provided for in Article 24-7, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) is one of the following companies:
(i)a company that holds the majority of the voting rights held by all the shareholders, etc. of a subsidiary company submitting annual securities reports (meaning the subsidiary company submitting annual securities reports prescribed in Article 24-7, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act); the same applies in the following item, Article 4-7, paragraph (1), Article 39, paragraph (3) and Article 41-2, paragraph (3)) in its own name or another person's name (or under a fictitious name; hereinafter the same applies in this Article and Article 4-7); or
(ii)if a company and a corporation, etc. (meaning a corporation or other organization; the same applies hereinafter) in which the company holds a majority of the voting rights held by all the shareholders, etc. in its own name or another person's name, jointly hold the majority of the voting rights held by all the shareholders, etc. of a subsidiary company submitting annual securities reports in their own names or another person's name, the company.
(2)If a company and a corporation, etc. in which the company holds a majority of the voting rights held by all the shareholders, etc. in its own name or another person's name (hereinafter the corporation, etc. is referred to as the "controlled corporation, etc." in this paragraph and Article 4-7), jointly hold the majority of the voting rights held by all the shareholders, etc. of another corporation, etc. in their own names or another person's name, the other corporation, etc. is deemed to be the controlled corporation, etc. of the company and the provisions of item (ii) of the preceding paragraph and this paragraph apply.
(Due Date for Submission of a Parent Company Status Report for a Foreign Company)
Article 4-5The period specified by Cabinet Order that is provided for in Article 24-7, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 24-7, paragraph (6) of the Act and as applied mutatis mutandis pursuant to Article 27 of the Act) is three months; provided, however, that if the foreign company (if applied mutatis mutandis pursuant to Article 24-7, paragraph (6) of the Act, a foreign person) that is a parent company, etc. (meaning a parent company, etc. as defined in Article 24-7, paragraph (1) of the Act; the same applies in Article 4-8) is found to be unable to submit a parent company, etc. status report (meaning the parent company, etc. status report prescribed in Article 24-7, paragraph (1) of the Act; the same applies hereinafter) within three months after the end of its business year due to the laws and regulations or practices in its home country or any other compelling reasons, that period is the period approved in advance by the Commissioner of the Financial Services Agency, pursuant to the provisions of Cabinet Office Order.
(Deemed Replacement of Terms in Connection with the Amendment of a Parent Company Status Report)
Article 4-6With regard to a parent company, etc. status report prescribed in Article 24-7, paragraph (1) of the Act, the technical replacement of terms pursuant to the provisions of paragraph (3) of that Article when the provisions of the Act are applied mutatis mutandis pursuant to that paragraph is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 9, paragraph (1) of the Act
the statement and other documents under the provisions of Article 5, paragraph (1) and paragraph (13) or Article 7, paragraph (1)
the parent company, etc. status report or the amendment report under the provisions of Article 7
(Persons Other Than a Company That Has a Close Relationship with the Person in Question)
Article 4-7(1)The persons other than a company specified by Cabinet Order that are provided in Article 24-7, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 24-7, paragraph (6) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act) following the deemed replacement of terms, are the following persons:
(i)a cooperative financial institution (meaning the issuer of the securities set forth in Article 2, paragraph (1), item (vii) of the Act (including the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the aforementioned securities)) that holds the majority of the voting rights held by all the shareholders, etc. of a subsidiary company submitting annual securities reports in its own name or another person's name, or any other person specified by Cabinet Office Order (hereinafter referred to as the "cooperative financial institution, etc." in this Article); or
(ii)if a cooperative financial institution, etc. and its controlled corporation, etc. jointly hold the majority of the voting rights held by all the shareholders, etc. of a subsidiary company submitting annual securities reports in their own names or another person's name, the cooperative financial institution, etc.
(2)If a cooperative financial institution, etc. and its controlled corporation, etc. jointly hold the majority of voting rights held by all the shareholder, etc. of another corporation, etc. in their own names or in another person's name, the other corporation, etc. is deemed to be the controlled corporation, etc. of the cooperative financial institution, etc. and the provisions of item (ii) of the preceding paragraph and this paragraph apply.
(Deemed Replacement of Terms in Connection with the Submission of a Parent Company Status Report by a Person Other Than a Company)
Article 4-8If the parent company, etc. prescribed in Article 24-7, paragraph (1) of the Act is a person other than a company, the technical replacement of terms under paragraph (6) of that Article when the provisions of the Act are applied mutatis mutandis pursuant to that paragraph is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 24-7, paragraph (1) of the Act
foreign company
foreign person
(Deemed Replacement of Terms When an Issuer Is a Person Other Than a Company)
Article 4-9If the provisions of the Act are applied mutatis mutandis to a case in which an issuer is a person other than a company under the provisions of Article 27 of the Act, the technical replacement of terms pursuant to the provisions of that Article is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 13, paragraph (1) of the Act
share option certificates
investment equity subscription right certificates
allotment of share options without contribution specified in Article 277 of the Companies Act
allotment of investment equity subscription rights without contribution specified in Article 88-13 of the Act on Investment Trusts and Investment Corporations
Article 23-3, paragraph (1) of the Act
share option certificates
investment equity subscription right certificates
of share options
of investment equity subscription right certificates
Article 24, paragraph (10) of the Act
foreign company
foreign person
(Scope of Securities That Makes It Unnecessary for an Issuer Other Than a Company to Submit an Annual Securities Report)
Article 4-10(1)The securities specified by Cabinet Order that are provided for in the proviso to Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; the same applies in the following paragraph and the following Article) are the following securities:
(i)preferred equity securities;
(ii)securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of preferred equity securities;
(iii)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in the preceding item; or
(iv)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in item (ii).
(2)The number calculated pursuant to the provisions of Cabinet Order that is provided for in the proviso to Article 24, paragraph (1) of the Act, is 300.
(Amount of Stated Capital That Makes It Unnecessary for an Issuer Other Than a Company to Submit an Annual Securities Report)
Article 4-11(1)The amount specified by Cabinet Order as the amount of the stated capital provided for in the proviso to Article 24, paragraph (1) of the Act is the amount of net assets of the incorporated educational institution, etc. stated on the balance sheet.
(2)The amount specified by Cabinet Order that is provided for in the proviso to Article 24, paragraph (1) of the Act is 100 million yen.
(3)The number specified by Cabinet Order that is provided for in the proviso to Article 24, paragraph (1) of the Act is 300.
(4)The securities specified by Cabinet Order that are provided for in Article 24, paragraph (1), item (iv) of the Act (including as applied mutatis mutandis pursuant to Article 27 of the Act; the same applies in the following paragraph) are preferred equity securities and the claims set forth in Article 1-3-4.
(5)The number specified by Cabinet Order that is provided for in Article 24, paragraph (1), item (iv) of the Act is the number specified in the following items in accordance with the category of securities set forth in each of those items:
(i)preferred equity securities: 1000 (if the preferred equity securities are securities for professional investors, the number obtained by adding the number of professional investors calculated pursuant to the provisions of Cabinet Office Order to 1000); or
(ii)the claims set forth in Article 1-3-4: 500.
(Issuer of Foreign Bonds that is Not Required to Submit a Semiannual Securities Report)
Article 5The issuer of the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in item (i) or (ii) of that paragraph or the issuer of the securities set forth in item (xvii) of that paragraph which have the nature of the securities set forth in item (iii) of that paragraph (limited to the issuer designated by the Commissioner of the Financial Services Agency as those whose omission of submission of a semiannual securities report and an extraordinary report (meaning the semiannual securities report and extraordinary report prescribed in Article 24-5 of the Act as applied mutatis mutandis pursuant to Article 27 of the Act; hereinafter the same applies in this Article) does not compromise the public interest or the protection of investors) is not required to submit a semiannual securities report and an extraordinary report.
Chapter III Disclosure Required for a Tender Offer
Section 1 Tender Offers for Share Certificates by Persons Other Than the Issuer
(Securities That Are Required to Be Purchased through Tender Offer)
Article 6(1)The securities set forth in Article 27-2, paragraph (1) of the Act which are specified by Cabinet Order are the following securities (excluding share certificates associated with shares for which voting rights cannot be exercised for all the matters that can be resolved at a shareholders meeting (referred to as "shares with no voting rights" in Article 14-5-2) or other securities specified by Cabinet Office Order; hereinafter referred to as "share certificates, etc." in this Section):
(i)share certificates, share option certificates, and corporate bond certificates with share options;
(ii)instruments or certificates issued by a foreign person which have the nature of the securities set forth in the preceding item;
(iii)investment securities, etc. and investment equity subscription right certificates, etc.;
(iv)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in the preceding three items; and
(v)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in items (i) through (iii).
(2)The securities specified by Cabinet Order as those for which the state of distribution provided for in Article 27-2, paragraph (1) of the Act is equivalent to the specified listed securities are specified over-the-counter traded securities.
(3)The actions specified by Cabinet Order as being similar to an acquisition for value of share certificates, etc. provided for in Article 27-2, paragraph (1) of the Act are as follows:
(i)a unilateral option contract for a purchase and sale of share certificates, etc. (limited to cases in which the person in question holds the right to complete the purchase and sale and acquires the position of buyer through the exercise of that right);
(ii)acquisition of an option (meaning an option as defined in Article 2, paragraph (1), item (xix) of the Act; the same applies hereinafter) to make a purchase and sale of share certificates, etc. (limited to if the exercise of that option causes the person exercising it to acquire the position of buyer in the purchase and sale);
(iii)any other actions specified by Cabinet Office Order.
(Purchases Exempted from Tender Offers)
Article 6-2(1)The purchase, etc. of share certificates, etc. specified by Cabinet Order that is provided for in the proviso to Article 27-2, paragraph (1) of the Act is the following purchase, etc. of share certificates, etc. (meaning a purchase, etc. prescribed in that paragraph; hereinafter the same applies in this Section):
(i)a purchase, etc. of share certificates, etc. made through the exercise of the right by the person that holds that right to receive the allotment of shares;
(ii)a purchase, etc. of share certificates, etc. that a person holding a beneficiary certificate of an investment trust set forth in Article 12, item (i) of the Order for the Enforcement of the Act on Investment Trusts and Investment Corporations makes by exchanging that beneficiary certificate pursuant to Article 12, item (i), sub-item (a) of that Order;
(iii)a purchase, etc. of share certificates, etc. that a person holding a beneficiary certificate of an investment trust set forth in Article 12, item (ii) of the Order for the Enforcement of the Act on Investment Trusts and Investment Corporations makes by exchanging that beneficiary certificate pursuant to Article 12, item (ii), sub-item (c) of that Order;
(iv)a specified purchase, etc. (meaning a purchase, etc. of share certificates, etc. prescribed in paragraph (3); hereinafter the same applies in this paragraph) of share certificates, etc. that are being issued by the issuer of share certificates, etc. which are in the possession of the person making that specified purchase, etc., if, before the specified purchase, etc., the sum of the rate of that person's ownership ratio of share certificates, etc. (meaning the ownership ratio of share certificates, etc. defined in Article 27-2, paragraph (8) of the Act; hereinafter the same applies in this Section) and the ownership ratio of share certificates, etc. of that person's specially related parties (meaning the specially related parties set forth in the proviso to Article 27-2, paragraph (1) of the Act) exceeds 50 percent (excluding cases in which the ownership ratio of share certificates, etc. for share certificates, etc. in the possession of the person that conducts the specified purchase, etc. (if there are specially related parties (meaning specially related parties set forth in Article 27-2, paragraph (1), item (i) of the Act) to the person, the rate obtained by adding the ownership ratio of share certificates, etc. of those specially related parties; hereinafter the same applies in this Section) is not less than two-thirds after the specified purchase, etc. is made);
(v)if a corporation, etc. that is in the position of holding shares or contribution associated with a number of voting rights exceeding 50 percent of the number of voting rights held by all the shareholders, etc. of a corporation, etc. (excluding the cases specified by Cabinet Office Order; hereinafter referred to as a "special controlling interest" in this item) (the corporation, etc. is referred to as the "parent corporation, etc." in the following item), holds a special controlling interest over another corporation, etc., the specified purchase, etc. made by the other corporation, etc.;
(vi)if the person that makes a specified purchase, etc. and the parent corporation, etc. of the person that makes a specified purchase, etc. and any other person specified by Cabinet Office Order (hereinafter referred to as a "related corporation, etc. " in this item) jointly hold shares or investment equity (including the status as a member of a foreign investment corporation (meaning a foreign investment corporation prescribed in Article 2, paragraph (25) of that Act; the same applies hereinafter); hereinafter the same applies in this Section) associated with voting rights (including voting rights associated with shares and investment equity (meaning the investment equity as defined in Article 2, paragraph (14) of the Act on Investment Trusts and Investment Corporations; hereinafter the same applies in this Section) that cannot be asserted against the issuer pursuant to the provisions of Article 147, paragraph (1) or Article 148, paragraph (1) of the Act on the Book-Entry Transfer of Corporate Bonds and Shares (including as applied mutatis mutandis pursuant to Article 228, paragraph (1) of that Act)) exceeding one-third of the number of voting rights held by all the shareholders, etc. of another issuer, the specified purchase, etc. of share certificates, etc. of the other issuer made by the related corporation, etc. (excluding the persons specified by Cabinet Office Order) (excluding the specified purchase, etc. set forth in the preceding item);
(vii)a specified purchase, etc. made in a case specified by Cabinet Office Order as a case in which the holders of share certificates, etc. are few in number, which is specified by Cabinet Office Order as a case in which all the holders of the share certificates, etc. have given consent to make the specified purchase, etc. associated with the share certificates, etc. by means other than a tender offer;
(viii)a specified purchase, etc. made through the exercise of a security interest;
(ix)a specified purchase, etc. made by acquisition of all or part of a business;
(x)a purchase, etc. of share certificates, etc. made in response to a secondary distribution of share certificates, etc. (limited to cases in which the notification under the provisions of Article 4, paragraph (1) of the Act has been given or the supplements to shelf registration documents as defined in Article 23-8, paragraph (1) of the Act has been submitted pursuant to the provisions of that paragraph for the secondary distribution);
(xi)if the issuer provides, as a feature of all or part of its shares, that the shareholders may demand the issuer to redeem the shares, the purchase, etc. of the share certificates, etc. which are delivered in exchange of the redemption of the shares;
(xii)if the issuer provides, as a feature of all or part of its shares, that the issuer may acquire the shares or share options on condition of occurrence of certain events, the purchase, etc. of the share certificates, etc. which are delivered in exchange of the acquisition of the shares or share options;
(xiii)if an officer (meaning a director, executive officer, accounting advisor (if the accounting advisor is a corporation, the member to perform its duties is included; the same applies in Article 9, paragraph (1) and Article 14-8-2, paragraph (1)), or company auditor, and in the case of an investment corporation (meaning an investment corporation as defined in Article 2, paragraph (12) of the Act on Investment Trusts and Investment Corporations and including a foreign investment corporation), meaning the corporate officer, supervisory officer, or any equivalent person; hereinafter the same applies in this item) or employee of the issuer of the share certificates, etc. entrusts the purchase, etc. of the issuer's share certificates, etc. to a financial instruments business operator (limited to those that conduct type 1 financial instruments business (meaning the type I financial instruments business as defined in Article 28, paragraph (1) of the Act; the same applies hereinafter); the same applies in Article 10, item (i) and Article 14-3-5, item (i)) jointly with other officers or employees of the issuer, the purchase, etc. of share certificates, etc. made if that purchase, etc. is to be made continuously according to a fixed plan and without depending on an individual investment decision, and other cases specified by Cabinet Office Order;
(xiv)the purchase, etc. of share certificates, etc. which are issued by an issuer other than one that is required to submit an annual securities report pursuant to the provisions of Article 24, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to paragraph (5) of that Article (including as applied mutatis mutandis pursuant to Article 27 of the Act)) (excluding an issuer of share certificates, etc. which are specified listed securities or specified over-the-counter traded securities);
(xv)if a clearing member (meaning a clearing member prescribed in Article 156-7, paragraph (2), item (iii) of the Act) that has the obligation to deliver the share certificates, etc. to the financial instruments clearing organization (if the financial instruments clearing organization conducts collaborative financial instruments obligation assumption services prescribed in Article 156-20-16, paragraph (1), including the collaborating clearing organization, etc. set forth in that paragraph; hereinafter the same applies in this item) or if the foreign financial instruments clearing organization has failed to perform that obligation by the due date for the performance of the obligations specified in the business rules of the financial instruments clearing organization or foreign financial instruments clearing organization, the purchase, etc. of share certificates, etc. to be made pursuant to the provisions of the business rules; or
(xvi)the purchase, etc. of share certificates, etc. through a demand for a share, etc. cash-out (meaning a demand for a share, etc. cash-out prescribed in Article 179-3, paragraph (1) of the Companies Act; the same applies in Article 28-2, item (xiii), Article 29-2-5, item (vi), and Article 31) (if the issuer of share certificates, etc. has issued share option certificates by the time of the purchase, etc. (excluding cases in which all the share option certificates are those specified by Cabinet Office Order that is provided for in Article 8, paragraph (5), item (iii)), limited to cases in which the demand for a share option cash-out prescribed in Article 179, paragraph (3) of that Act is made together with the demand for a share, etc. cash-out prescribed in Article 179, paragraph (2) of that Act).
(2)The transactions specified by Cabinet Order that are provided for in Article 27-2, paragraph (1), item (i) of the Act are the following transactions:
(i)transactions of over-the-counter traded securities on an over-the-counter securities market;
(ii)transactions of securities (limited to those listed on a financial instruments exchange; hereinafter the same applies in this item) through the acts set forth in Article 2, paragraph (8), item (x) of the Act (limited to those made using an electronic data processing system designated by the Commissioner of the Financial Services Agency as satisfying all of the following requirements) (if the securities are specified listed securities, the transactions are limited to those in which professional investors, etc. are the only parties):
(a)it has been established that the class, issue, and price of the securities subject to an offer to sell, an offer to purchase, or a purchase and sale that has been made using an electronic data processing system, and any other particulars specified by Cabinet Office Order as particulars that should indicate the content of the offer or of the purchase and sale, are to be immediately publicized;
(b)the method for deciding the trading price associated with a offer to sell, an offer to purchase, or a purchase and sale that is to be made using an electronic data processing system is a method that involves an auction or any other method specified by Cabinet Office Order as one that involves the price being formed with the participation of a large number of persons;
(c)it is found that the opportunity for a person holding securities for which an offer to purchase has been made using an electronic data processing system to sell those securities using that electronic data processing system in a timely manner has been ensured; and
(iii)transactions of securities by the method of an auction on a foreign financial instruments market designated by the Commissioner of the Financial Services Agency as being equivalent to a financial instruments exchange market or by other methods specified by Cabinet Office Order as being equivalent to an auction.
(3)The case specified by Cabinet Order as a purchase, etc. being made from an extremely small number of persons, as prescribed in Article 27-2, paragraph (1), item (i) of the Act, and the case specified by Cabinet Order as a purchase, etc. of share certificates, etc. being made from an extremely small number of persons, as prescribed in item (ii) of that paragraph, are cases in which the sum of the number of counterparties to the purchase, etc. of share certificates, etc. and counterparties to purchase, etc. of share certificates, etc. that have been issued by the issuer of the relevant share certificates, etc. which have been made outside a financial instruments exchange market during the period of 60 days prior to the day on which the relevant purchases, etc. are made (excluding the persons specified by Cabinet Office Order) (excluding a purchase, etc. made through a tender offer, a purchase, etc. of share certificates, etc. made through transactions set forth in the items of the preceding paragraph (excluding a purchase, etc. in the case prescribed in the following Article, paragraph (7), item (i)), any purchase, etc. of share certificates, etc. that a person holding share options makes through the exercise of those share options, and purchases, etc. set forth in paragraph (1), items (i) through (iii) and items (x) through (xv)) is less than ten.
(4)The transactions specified by Cabinet Order that are provided for in Article 27-2, paragraph (1), item (ii) of the Act are the transactions set forth in paragraph (2), item (i).
(Purchases to Which Restrictions on Tender Offer Are Applied)
Article 7(1)The case specified by Cabinet Order as equivalent to the possession of share certificates, etc. which is provided for in Article 27-2, paragraph (1), item (i) of the Act is one of the following cases:
(i)a case in which the person that conducts the purchase, etc. has the right to request delivery of share certificates, etc. under a purchase and sale contract or other contracts;
(ii)a case in which the person that conducts the purchase, etc. has the authority to exercise voting rights as a shareholder or investor (meaning an investor as defined in Article 2, paragraph (16) of the Act on Investment Trusts and Investment Corporations and including the members of a foreign investment corporation; the same applies in Article 14-6-2, item (ii)) of the issuer of share certificates, etc., or the authority to give instructions on the exercise of voting rights, based on a money trust contract or other contracts, or the provisions of laws;
(iii)a case in which the person that conducts the purchase, etc. has the authority necessary to make investments in share certificates, etc. based on a discretionary investment contract (meaning a discretionary investment contract as defined in Article 2, paragraph (8), item (xii), (b) of the Act; the same applies hereinafter) or other contracts, or the provisions of laws;
(iv)a case in which the person that conducts the purchase, etc. has entered into a unilateral option contract for a purchase and sale of share certificates, etc. (limited to cases in which the person in question holds the right to complete the purchase and sale and acquires the position of buyer through the exercise of that right);
(v)a case in which the person that conducts the purchase, etc. has acquired an option to make a purchase and sale of share certificates, etc. (limited to if the exercise of that option causes the person exercising it to acquire the position of buyer in the purchase and sale); and
(vi)any other cases specified by Cabinet Office Order.
(2)The period specified by Cabinet Order that is provided for in Article 27-2, paragraph (1), item (iv) of the Act is three months.
(3)The proportion specified by Cabinet Order related to the acquisition of share certificates, etc. referred to in Article 27-2, paragraph (1), item (iv) of the Act, is ten percent of the total number of share certificates, etc. issued by the issuer of the share certificates, etc. sought to be acquired. In such a case, the calculation of that proportion is to be made pursuant to the provisions of Cabinet Office Order based on the number of voting rights associated with the share certificates, etc.
(4)The proportion specified by Cabinet Order related to the purchase, etc. of share certificates, etc. made through the specified purchase and sale, etc. or the purchase, etc. made outside of financial instruments exchange markets, referred to in Article 27-2, paragraph (1), item (iv) of the Act, is five percent of the total number of share certificates, etc. issued by the issuer of share certificates, etc. for which the purchase, etc. is sought In such a case, the calculation of that proportion is to be made pursuant to the provisions of Cabinet Office Order based on the number of voting rights associated with the share certificates, etc.
(5)The period specified by Cabinet Order that is provided for in Article 27-2, paragraph (1), item (v) of the Act is the period starting from the day of commencement of the period of purchase, etc. of share certificates, etc. stated on the tender offer statement (meaning a tender offer statement prescribed in Article 27-3, paragraph (2) of the Act) for a tender offer conducted for the share certificates, etc. to the day on which the period ends.
(6)The proportion specified by Cabinet Order that is provided for in Article 27-2, paragraph (1), item (v) of the Act is five percent of the total number of share certificates, etc. issued by the issuer of the share certificates, etc. for which the purchase, etc. is sought. In such a case, the calculation of that proportion is to be made pursuant to the provisions of Cabinet Office Order based on the number of voting rights associated with the share certificates, etc.
(7)The purchase, etc. of share certificates, etc. specified by Cabinet Order that is provided for in Article 27-2, paragraph (1), item (vi) of the Act is one of the following purchases, etc. of share certificates, etc.:
(i)if the ownership ratio of share certificates, etc. for share certificates, etc. in the possession of the purchaser of share certificates, etc. (meaning the person that makes the purchase, etc. of share certificates, etc.; the same applies in the following item) exceeds one-third after the purchase, etc. of share certificates, etc. is made, the purchase, etc. which is made through a transaction set forth in paragraph (2), items (ii) and (iii) of the preceding Article; and
(ii)if the provisions of Article 27-2, paragraph (1), item (iv) of the Act are applied to the acquisition of share certificates, etc. (meaning the purchase, etc. of share certificates, etc. and the acquisition of newly issued share certificates, etc. prescribed in Article 27-2, paragraph (1), item (iv) of the Act; hereinafter the same applies in this item) made by the purchaser of share certificates, etc. and to the acquisition of share certificates, etc. made by their specially related party (meaning a specially related party prescribed in Article 27-2, paragraph (7), item (ii) of the Act) by deeming the acquisition to be the acquisition of share certificates, etc. made by the purchaser of share certificates, etc., the purchase, etc. of share certificates, etc. made as the acquisition of share certificates, etc. that falls under a purchase, etc. of share certificates, etc. prescribed in Article 27-2, paragraph (1), item (iv) of the Act.
(Period of Purchase)
Article 8(1)The period specified by Cabinet Order that is provided for in Article 27-2, paragraph (2) of the Act is to be not less than 20 days (the number of days that constitute the days set forth in the items of Article 1, paragraph (1) of the Act on Holidays of Administrative Organs (Act No. 91 of 1988) (hereinafter referred to as "holidays of administrative organs") is not included) but not more than 60 days (holidays of administrative organs are not included) starting from the day on which the tender offeror (meaning the tender offeror prescribed in Article 27-3, paragraph (2) of the Act; hereinafter the same applies in this Section) has given public notice of the commencement of the tender offer (meaning the public notice under the provisions of Article 27-3, paragraph (1) of the Act; hereinafter the same applies in this Section).
(2)The thing specified by Cabinet Order as being equivalent to the purchase price provided for in Article 27-2, paragraph (3) of the Act, is the ratio of exchange between the share certificates, etc. and the securities or things other than money, if securities or things other than money are delivered as the consideration of the purchase, etc., and if money is delivered for the difference that arises from the exchange, that amount of money is to be included.
(3)If a purchase, etc. of share certificates, etc. is to be made by a tender offer, the price for the purchase, etc. (meaning the price for the purchase, etc. prescribed in Article 27-2, paragraph (3) of the Act) must be the same for all tendering shareholders, etc. (meaning tendering shareholders, etc. prescribed in Article 27-12, paragraph (1) of the Act; hereinafter the same applies in this Section); provided, however, that if the tender offeror has tendering shareholders, etc. choose two or more types of consideration, they must make the types of consideration that can be chosen the same for all the tendering shareholders, etc., and must make the price same for each type of consideration regarding the tendering shareholders, etc. that have selected that type of consideration.
(4)The affairs specified by Cabinet Order that are provided for in Article 27-2, paragraph (4) of the Act are as follows:
(i)the custody and return of tendered share certificates, etc. (meaning tendered share certificates, etc. prescribed in Article 27-12, paragraph (3) of the Act);
(ii)paying for the purchase, etc. (if securities or things other than money are delivered as the consideration for purchase, etc., including the delivery of the securities or things other than money); and
(iii)affairs for fixing the number of share certificates, etc. for which purchase, etc. is to be made by the pro rata method (meaning the pro rata method prescribed in Article 27-13, paragraph (5) of the Act).
(5)The conditions and methods specified by Cabinet Order that are provided for in Article 27-2, paragraph (5) of the Act are as follows:
(i)once the period of purchase, etc. has ended, a written notice of purchase, etc. stating the number of share certificates, etc. subject to the purchase, etc. and any other particulars specified by Cabinet Office Order is to be sent to the tendering shareholders, etc. without delay;
(ii)the transfer or other settlement of the purchase, etc. is to be made after the expiration of the period of purchase, etc. without delay; and
(iii)if the sum of the ownership ratio of share certificates, etc. of the person making the purchase, etc. is not less than two-thirds after the purchase, etc. has been conducted, the offer to purchase, etc. or the solicitation for sale, etc. (meaning sale, etc. prescribed in Article 27-2, paragraph (6) of the Act; hereinafter the same applies in this Chapter) is to be made pursuant to the provisions of Cabinet Office Order for all of the share certificates, etc. (excluding share certificates, etc. specified by Cabinet Office Order as those that do not compromise the public interest or the protection of investors) that are issued by the issuer of the relevant share certificates, etc.
(6)The person that is required to send a written notice pursuant to the provisions of item (i) of the preceding paragraph may, if specified by Cabinet Office Order, provide a person with the particulars that are required to be stated in the written notice by means of using an electronic data processing system or any other means of information and communications technology specified by Cabinet Office Order in lieu of sending the written notice. In such a case, the person that has provided the particulars is deemed to have sent the written notice.
(Special Relationship)
Article 9(1)The special relationship specified by Cabinet Order provided for in Article 27-2, paragraph (7), item (i) of the Act is a person's relationship with the following persons, if the person making a purchase, etc. of share certificates, etc. is an individual:
(i)a relative of the person (limited to their spouse and relatives by blood or affinity within the first degree of kinship; hereinafter the same applies in this Article);
(ii)if the person that makes the purchase, etc. of share certificates, etc. (including the person's relatives) is in the position of holding shares or contribution associated with not less than 20 percent of the voting rights held by all the shareholders, etc. of a corporation, etc. in the person's own name or another person's name (or under a fictitious name; hereinafter the same applies in this Article) (hereinafter the relationship is referred to as a "special capital relationship" in this Article), the corporation, etc. and its officers (meaning director, executive officer, accounting advisor, or company auditor (including board member, inspector, and persons equivalent to them); hereinafter the same applies in this Article) (excluding cases in which the person will come to have a special capital relationship by making the purchase, etc. of the share certificates, etc.).
(2)The special relationship specified by Cabinet Order that is provided for in Article 27-2, paragraph (7), item (i) of the Act is a person's relationship with the following persons, if the person that makes the purchase, etc. of share certificates, etc. is a corporation, etc.:
(i)that person's officers;
(ii)if that person has a special capital relationship with another corporation, etc. (excluding a case in which that person will come to have a special capital relationship by making a purchase, etc. of share certificates, etc.), the other corporation, etc. and its officers; and
(iii)an individual that has a special capital relationship with that person, a corporation, etc. that has a special capital relationship with that person, or the officer of that corporation, etc.
(3)If an individual (including that individual's relatives; hereinafter the same applies in this Article) and their controlled corporation, etc., or a corporation, etc. and its controlled corporation, etc. jointly hold shares or contribution associated with voting rights constituting not less than 20 percent of the voting rights held by all the shareholders, etc. of another corporation, etc. in their own names or another person's name, the individual or the corporation, etc. is deemed to have a special capital relationship with the other corporation, etc. and the provisions of the preceding two paragraphs apply.
(4)If an individual and their controlled corporation, etc. or a corporation, etc. and its controlled corporation, etc. jointly hold shares or contribution associated with voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of another corporation, etc. in their own names or another person's name, the other corporation, etc. is deemed to be the controlled corporation, etc. of the individual or the corporation, etc. and the provisions of the preceding paragraph apply.
(5)The controlled corporation, etc. referred to in the preceding two paragraphs means another corporation, etc. in which an individual or a corporation, etc. holds shares or contribution associated with voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of the other corporation, etc. in their own name or another person's name.
(Securities to Be Added in the Calculation of the Ownership Ratio of Share Certificates)
Article 9-2The securities specified by Cabinet Order that are provided for in Article 27-2, paragraph (8), items (i) and (ii) of the Act are the following securities:
(i)corporate bond certificates with share options;
(ii)share option certificates;
(iii)if the issuer provides, as a feature of all or part of their shares, that the shareholders may demand the issuer to redeem the shares, the share certificates of those shares;
(iv)if the issuer provides, as a feature of all or part of their shares, that the issuer may acquire their shares on the condition of occurrence of certain events, the share certificates of those shares;
(v)instruments or certificates issued by a foreign person which have the nature of the securities set forth in the preceding items; and
(vi)investment equity subscription right certificates, etc.
(Public Notice of the Commencement of a Tender Offer)
Article 9-3(1)The public notice under the provisions of Article 27-3, paragraph (1), Article 27-6, paragraph (1), Article 27-8, paragraph (11), Article 27-10, paragraph (4), Article 27-11, paragraph (2), and Article 27-13, paragraph (1) of the Act must be given by one of the following means:
(i)means of taking measures to make the information that is required to be given in a public notice available to many and unspecified persons by the means of using an electronic data processing system for disclosure pursuant to the provisions of Cabinet Office Order (referred to as the "electronic public notice" in paragraphs (3) through (5)); or
(ii)means of publication in a daily newspaper that publishes information on current events (including daily newspapers that generally report industrial and economic matters; the same applies in item (i) of the following Article and Article 14-3-4, paragraph (1), item (ii)) pursuant to the provisions of Cabinet Office Order.
(2)Among the public notices referred to in the preceding paragraph, the public notice under the provisions of the main clause of Article 27-8, paragraph (11) of the Act must be given immediately after submitting the amended statement referred to in that paragraph.
(3)A person that gives public notice by electronic public notice pursuant to the provisions of paragraph (1) must publish that fact in a daily newspaper that publishes information on current events pursuant to the provisions of Cabinet Office Order after giving the public notice without delay.
(4)A person that gives public notice by electronic public notice pursuant to paragraph (1) must continue to provide the electronic public notice until the day specified in the following items in accordance with the category of public notice set forth in each of those items:
(i)a public notice under the provisions of Article 27-3, paragraph (1), Article 27-6, paragraph (1), Article 27-8, paragraph (11), Article 27-10, paragraph (4), or Article 27-11, paragraph (2) of the Act: the last day of the tender offer period; and
(ii)a public notice under the provisions of Article 27-13, paragraph (1) of the Act: the last day in the one-month period after giving the public notice.
(5)The provisions of Article 4-2-4, paragraphs (3) and (4) apply mutatis mutandis to a person that gives public notice by electronic public notice pursuant to the provisions of paragraph (1). In such a case, the term "paragraph (1), item (ii)" in Article 4-2-4, paragraph (3) is deemed to be replaced with "Article 9-3, paragraph (1), item (ii)" and the term "paragraph (2)" in Article 4-2-4, paragraph (4) is deemed to be replaced with "Article 9-3, paragraph (4)".
(6)The period specified by Cabinet Order that is provided for in the second sentence of Article 27-3, paragraph (1) and Article 27-10, paragraph (2), item (ii) and paragraph (3) of the Act is 30 days (not counting holidays of administrative organs).
(Public Announcement of the Numbers of Tendered Share Certificates)
Article 9-4The public announcement under the provisions of Article 27-13, paragraph (1) of the Act must be made by disclosure to the following news organizations, pursuant to the provisions of Cabinet Office Order:
(i)newspaper publishers engaged in the sale of daily newspapers that publish information on current events on a regular basis;
(ii)news agencies engaged in the comprehensive transmission of information on current events to the newspaper publishers set forth in the preceding item on a regular basis; and
(iii)Japan Broadcasting Corporation and private broadcasters (meaning private broadcasters as defined in Article 2, item (iii)-3 of the Broadcast Act (Act No. 132 of 1950); the same applies hereinafter).
(Persons Affiliated with a Tender Offeror)
Article 10The persons concerned specified by Cabinet Order that are provided for in Article 27-3, paragraph (3) of the Act are the following persons:
(i)a financial instruments business operator or a bank, etc. (meaning a bank, a cooperative financial institution as defined in Article 2, paragraph (1) of the Act on Preferred Equity Investment (hereinafter referred to as the "cooperative financial institution"), and a financial institution set forth in the items of Article 1-9; the same applies in Article 14-3-5, item (i)) that conducts the affairs prescribed in Article 8, paragraph (4) on behalf of the tender offeror; or
(ii)a person that makes the purchase, etc. of share certificates, etc. by means of a tender offer by acting as an agent for the tender offeror.
(Share Certificates Equivalent to Listed Share Certificates)
Article 11The share certificates, etc. specified by Cabinet Order that are provided for in Article 27-3, paragraph (4), item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (6) of the Act (including as applied mutatis mutandis pursuant to Article 27-13, paragraph (3) of the Act), Article 27-11, paragraph (4), and Article 27-13, paragraph (3) of the Act; hereinafter the same applies in this Article) are share certificates, etc. that fall under over-the-counter traded securities, and the authorized financial instruments firms association specified by Cabinet Order that is provided for in Article 27-3, paragraph (4), item (ii) of the Act is the authorized financial instruments firms association that registers those share certificates, etc.
(Cases in Which a Purchase May Be Made by Means Other Than a Tender Offer)
Article 12The cases specified by Cabinet Order that are provided for in Article 27-5, item (iii) of the Act (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (10) of the Act) are the following cases:
(i)a case in which the person set forth in the items of Article 10 makes the purchase, etc. under the entrustment of a person other than the tender offeror or their specially related party (meaning a specially related party prescribed in Article 27-2, paragraph (7) of the Act; excluding a person that has given a notice under the provisions of Article 27-5, item (ii) of the Act to the Commissioner of the Financial Services Agency; hereinafter the same applies in this Section);
(ii)a case in which the person set forth in the items of Article 10 makes a purchase, etc. which is authorized for the facilitation of smooth distribution of securities by the rules established by a financial instruments exchange or an authorized financial instruments firms association;
(iii)a case in which the person that holds share options makes the purchase, etc. through the exercise of those share options;
(iv)a case in which the purchase, etc. set forth in Article 6-2, paragraph (1), items (i) through (iii), item (xi), and item (xii) is to be made;
(v)a case in which the person set forth in the items of Article 10 makes the purchase, etc. through the exercise of an option to make a purchase and sale of share certificates, etc. held by the person or through the exercise of the option to make a purchase and sale of share certificates, etc. that the person has granted;
(vi)a case in which the purchase, etc. set forth in Article 6-2, paragraph (1), item (xv) is to be made;
(vii)a case in which a purchase, etc. is to be made in a foreign country where the foreign financial instruments exchange which lists the share certificates, etc. is located, by a foreign tender offer (meaning an offer to purchase, etc. or the solicitation for sale, etc., of share certificates, etc. that is made to many and unspecified persons based on foreign laws and regulations and that is similar to a tender offer; the same applies in Article 14-3-7, item (ii)) based on the provisions of foreign laws and regulations; and
(viii)a case in which a purchase, etc. of share certificates, etc. is to be made in response to the request for the purchase of shares under the provisions of Article 116, paragraph (1), Article 182-4, paragraph (1), Article 192, paragraph (1), Article 469, paragraph (1), Article 785, paragraph (1), Article 797, paragraph (1), Article 806, paragraph (1) or Article 816-6, paragraph (1) of the Companies Act, or in response to the demand for the purchase of investment equity under the provisions of Article 141, paragraph (1), Article 149-3, paragraph (1), Article 149-8, paragraph (1), or Article 149-13, paragraph (1) of the Act on Investment Trusts and Investment Corporations.
(Prohibited Changes to the Terms of Purchase)
Article 13(1)The acts specified by Cabinet Order that are provided for in Article 27-6, paragraph (1), item (i) of the Act are as follows:
(i)the splitting of shares or investment equity; and
(ii)the allotment of shares or share options to shareholders (limited to those made without requiring an additional payment), or allotment of investment equity subscription rights (meaning the investment equity subscription rights as defined in Article 2, paragraph (17) of the Act on Investment Trusts and Investment Corporations; the same applies in Article 14, paragraph (1), item (i), sub-item (n)) to investors (meaning the investors as defined in Article 2, paragraph (16) of that Act).
(2)The changes to the terms of purchase, etc. specified by Cabinet Order that are provided for in Article 27-6, paragraph (1), item (iv) of the Act are as follows:
(i)if the conditions set forth in Article 27-13, paragraph (4), item (i) of the Act have been attached, increasing the number of share certificates, etc. stated in the public notice of the commencement of the tender offer and tender offer statement prescribed in that item; provided, however, that this does not apply if, after giving the public notice of the commencement of the tender offer, a person other than the tender offeror, their specially related party, or the issuer of the share certificates, etc. for which the tender offer has been commenced (hereinafter referred to as the "subject company" in this Section) has given a public notice of the commencement of a tender offer or a public notice or public announcement (meaning a public notice or public announcement under the provisions of Article 27-6, paragraph (2) or (3) of the Act) of a change to the terms of purchase which increases the number of share certificates, etc. planned to be purchased, and has made the tender offer with regard to the share certificates, etc. issued by the subject company;
(ii)an extension of the period of purchase, etc. that exceeds the period specified in Article 8, paragraph (1); provided, however, that this does not apply if the period specified in the following items in accordance with the category of cases set forth in each of those items is extended:
(a)if the period of purchase, etc. must be extended pursuant to the provisions of Article 27-8, paragraph (8) of the Act: the period to be extended pursuant to that paragraph; and
(b)if a person other than the tender offeror or their specially related party has given for the share certificates, etc. issued by the subject company, public notice of the commencement of the tender offer (including the public notice of the commencement of the tender offer prescribed in Article 27-3, paragraph (2) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act) or a public notice or public announcement (meaning the public notice or public announcement under the provisions of Article 27-6, paragraph (2) or (3) of the Act or Article 27-8, paragraph (8) of the Act (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act or Article 27-22-3, paragraph (4) of the Act)) of a change to the terms of purchase that extends the period of purchase, etc., during the tender offer period (meaning the tender offer period as prescribed in Article 27-5 of the Act; hereinafter the same applies in this Section): a period not exceeding the number of days counted from the day following the last day of the tender offer period (including the tender offer period prescribed in Article 27-5 of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act) until the last day of the tender offer period given in the public notice of the commencement of the tender offer or the public notice or public announcement of those changes;
(iii)to change the type of consideration for purchase, etc.; provided, however, that this does not apply if a new type of consideration is added as an option for the tendering shareholders, etc. to choose; and
(iv)if the condition set forth in Article 27-11, paragraph (1) of the Act is attached, a change to the details of the condition.
(Period Required to Submit a Target Company's Position Statement)
Article 13-2(1)The period specified by Cabinet Order that is provided for in Article 27-10, paragraph (1) of the Act is ten days (not counting holidays of administrative organs).
(2)The period specified by Cabinet Order that is provided for in Article 27-10, paragraph (11) of the Act is five days (not counting holidays of administrative organs).
(Withdrawal of a Tender Offer)
Article 14(1)The cases specified by Cabinet Order that are provided for in Article 27-11, paragraph (1) of the Act are as follows; provided, however, that in the cases set forth in items (i) through (iii), excluding those that satisfy the criteria specified by Cabinet Office Order as being minor:
(i)the fact that the organ which is responsible for making decisions on the execution of operations of the subject company or its subsidiary company (meaning a subsidiary company as defined in Article 2, item (iii) of the Companies Act; hereinafter the same applies in this Article and Article 14-8-2) has made a decision to take one of the following actions (limited to an action that has been publicized on or after the day on which it gave the public notice of the commencement of the tender offer):
(a)a share exchange;
(b)a share transfer;
(c)a share delivery;
(d)a company split;
(e)a merger;
(f)a dissolution (excluding the dissolution as a result of merger);
(g)the filing of a petition for commencement of bankruptcy proceedings, rehabilitation proceedings or reorganization proceedings;
(h)a reduction of the amount of stated capital;
(i)the transfer, acquisition, suspension, or discontinuation of all or part of the business;
(j)the filing of an application for delisting share certificates, etc. made to a financial instruments exchange;
(k)the filing of an application for rescinding the registration of share certificates, etc. made to an authorized financial instruments firms association;
(l)the filing of a notice under the provisions of Article 74, paragraph (5) of the Deposit Insurance Act;
(m)the splitting of shares or investment equity;
(n)the allotment of shares or share options (limited to those made without requiring an additional payment), or allotment of investment equity subscription rights;
(o)the issuance of shares, share options, corporate bonds with share options or investment equity (excluding those set forth in sub-items (l) and (n));
(p)the disposal of treasury shares (meaning the treasury shares prescribed in Article 113, paragraph (4) of the Companies Act) (excluding those set forth in sub-item (n));
(q)providing different provisions on the particulars set forth in Article 108, paragraph (1), item (viii) or (ix) of the Companies Act for shares that have already been issued;
(r)the disposal or transfer of important properties;
(s)borrowing a large amount of money; and
(t)an action equivalent to what is set forth in sub-items (a) through (s) which the tender offeror has designated in the public notice of the commencement of the tender offer and the tender offer statement (meaning the tender offer statement as defined in Article 27-3, paragraph (2) of the Act; hereinafter the same applies in this Article);
(ii)the fact that the organ which is responsible for making decisions on the execution of operations of the subject company has made the following decisions specified in accordance with the category of cases set forth as follows (limited to those publicized on or after the day on which the public notice of the commencement of the tender offer was given):
(a)if the organ which is responsible for making decisions on the execution of operations of the subject company has already made a decision that it may issue new shares or take other acts (limited to those to be taken on or after the last day of the period of purchase, etc. for that tender offer) that will reduce the ownership ratio of share certificates, etc. of the tender offeror by less than the proportion specified by Cabinet Office Order after the tender offer and has publicized the content of that decision on the day when the public notice of the commencement of the tender offer was given: a decision that the decision is to be maintained; or
(b)if a subject company or its subsidiary company has issued share certificates, etc. for two or more classes of shares with different features which have different provisions for the particulars set forth in Article 108, paragraph (1), item (viii) or (ix) of the Companies Act on the day when the public notice of the commencement of the tender offer was given: a decision that the different provisions will not be changed;
(iii)the occurrence of the following facts for a subject company (limited to those that has occurred on or after the day on which the public notice of the commencement of the tender offer was given); provided, however, that in the cases under sub-items (a), (c), (e) and (g), excluding the cases in which the actions are taken by the tender offeror and their specially related party:
(a)a petition seeking an injunction against the business or a provisional disposition order seeking a disposition equivalent to this has been filed;
(b)a revocation of license, suspension of business, or other dispositions equivalent to such an action pursuant to laws and regulations has been given;
(c)a petition for the commencement of bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or the exercise of an enterprise mortgage (hereinafter referred to as a "petition for commencement of bankruptcy proceedings, etc.") has been filed by a person other than the subject company;
(d)dishonor of a negotiable instrument or check (limited to those due to the shortage of funds necessary for payment), or a disposition to suspend transactions is given by a clearinghouse (hereinafter referred to as "dishonor, etc.");
(e)a suspension of transaction has been made by the major trading partner (meaning a trading partner for which the sales or purchases in the previous business year are not less than ten percent of the total amount of sales or purchases);
(f)damage resulting from a disaster;
(g)an action involving a claim based on a property right has been filed;
(h)the delisting of share certificates (limited to the delisting of share certificates from all financial instruments exchanges on which the share certificates are listed);
(i)the rescission of registration of share certificates (limited to cases in which all the authorized financial instruments firms associations which register the share certificates have rescinded the registration (excluding rescissions made on the grounds of listing the share certificates)); or
(j)facts equivalent to those set forth in sub-items (a) through (i) which the tender offeror has designated in the public notice of the commencement of the tender offer and the tender offer statement;
(iv)if permission, authorization, approval, or a similar disposition (hereinafter referred to as "permission, etc." in this item) by an administrative agency pursuant to other laws and regulations is necessary for the acquisition of share certificates, etc., the fact that the permission, etc. was not obtained by the day immediately preceding the last day of the tender offer period; and
(v)other things specified by Cabinet Office Order as being equivalent to what is set forth in the preceding items.
(2)The changes to material circumstances specified by Cabinet Order that are provided for in Article 27-11, paragraph (1) of the Act are the following particulars:
(i)death;
(ii)being subject to an order for commencement of guardianship;
(iii)a dissolution;
(iv)being subject to an order for commencement of bankruptcy proceedings, rehabilitation proceedings, or reorganization proceedings;
(v)a petition for commencement of bankruptcy proceedings, etc. has been filed by a person other than the tender offeror or their specially related party; or
(vi)the fact of dishonor, etc.
(Methods of Canceling Contracts)
Article 14-2The method specified by Cabinet Order that is provided for in Article 27-12, paragraph (2) of the Act is the method of delivering or sending a document canceling the contract connected with a tender offer to the person designated by the tender offeror (limited to the persons specified by Cabinet Office Order), and the time specified by Cabinet Order that is provided for in Article 27-12, paragraph (2) of the Act is the time when the document has been delivered to or has reached the designated person.
(Cases in Which a Partial Tender Offer Is Allowed)
Article 14-2-2The rate specified by Cabinet Order that is provided for in Article 27-13, paragraph (4) of the Act is two-thirds.
(Authorized Financial Instruments Firms Associations Providing Public Inspection)
Article 14-3The authorized financial instruments firms association specified by Cabinet Order that is provided for in Article 27-14, paragraph (3) of the Act is an authorized financial instruments firms association prescribed in Article 11.
Section 2 Tender Offers for Listed Share Certificates by the Issuer
(Scope of Application of a Tender Offer)
Article 14-3-2(1)The transactions specified by Cabinet Order that are provided for in Article 27-22-2, paragraph (1) of the Act are the transactions of over-the-counter traded securities in an over-the-counter securities market.
(2)The provisions specified by Cabinet Order that are provided for in Article 27-22-2, paragraph (1), item (i) of the Act are the provisions of Article 80-2, paragraph (1) of the Act on Investment Trusts and Investment Corporations (including as applied pursuant to the provisions of Article 80-5, paragraph (2) of that Act following the deemed replacement of terms).
(3)The purchase, etc. (meaning a purchase, etc. prescribed in Article 27-22-2, paragraph (1) of the Act; hereinafter the same applies in this Section) specified by Cabinet Order as one that is made by a method that makes the particulars of that purchase, etc. available to a large number of persons that is provided in Article 27-22-2, paragraph (1), item (ii) of the Act, is a purchase, etc. made after informing a large number of persons of the particulars of that purchase, etc. (limited to those which include the wording that an offer to purchase, etc. or solicitation for sale, etc. of listed share certificates, etc. (meaning the listed share certificates, etc. prescribed in Article 24-6, paragraph (1) of the Act; hereinafter the same applies in this Section) is to be made in connection with the purchase, etc.) through publication in a newspaper or magazine, or through documents, broadcasting, movies, or other methods.
(Period of Purchase)
Article 14-3-3(1)The period specified by Cabinet Order that is provided for in Article 27-2, paragraph (2) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act is not less than 20 days (not counting holidays of administrative organs) but not more than 60 days (not counting holidays of administrative organs) from the day on which the tender offeror (meaning the tender offeror prescribed in Article 27-3, paragraph (2) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act; hereinafter the same applies in this Section) has given the public notice of the commencement of the tender offer (meaning the public notice under the provisions of Article 27-3, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act; hereinafter the same applies in this Section except in Article 14-3-8, item (i), sub-item (b)).
(2)The thing specified by Cabinet Order as being equivalent to the purchase price that is provided in Article 27-2, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act, is the ratio of exchange between the share certificates, etc. and the securities or things other than money if securities or things other than money are delivered as the consideration of the purchase, etc., and if money is delivered for the difference that arises from the exchange, that amount of money is to be included.
(3)If a purchase, etc. of listed share certificates, etc. is to be made by a tender offer prescribed in the main clause of Article 27-22-2, paragraph (1) of the Act (hereinafter referred to as the "tender offer" in this Section), the price for the purchase, etc. (meaning the price for the purchase, etc. prescribed in Article 27-2, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act; hereinafter the same applies in this Section) must be the same for all tendering shareholders, etc. (meaning an tendering shareholder, etc. prescribed in Article 27-12, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act; hereinafter the same applies in this Section); provided, however, that if the tender offeror allows tendering shareholders, etc. to choose two or more types of consideration, they must make the types of consideration that can be chosen the same for all the tendering shareholders, etc., and must make the price same for each type of consideration regarding the tendering shareholders, etc. that have selected that type of consideration.
(4)The affairs specified by Cabinet Order that are provided for in Article 27-2, paragraph (4) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act are as follows:
(i)the custody and refund of listed share certificates, etc. tendered (meaning the listed share certificates, etc. tendered that are prescribed in Article 27-12, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act following the deemed replacement of terms);
(ii)the payment for the purchase, etc. (if securities or things other than money are delivered as the consideration for purchase, etc., the delivery of the securities or things other than money is to be included); and
(iii)affairs to fix the number of listed share certificates, etc. for which purchase, etc. is to be made by the pro rata method (meaning the pro rata method prescribed in Article 27-13, paragraph (5) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act).
(5)The conditions and methods specified by Cabinet Order that are provided for in Article 27-2, paragraph (5) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act are as follows:
(i)when the period of purchase, etc. has ended, the written notice for the purchase, etc. that states the number of listed share certificates, etc. for which purchase, etc. is to be made and other particulars specified by Cabinet Office Order, is to be sent to the tendering shareholders, etc. without delay; and
(ii)the transfer or other settlement of the purchase, etc. is to be made after the expiration of the period of purchase, etc. without delay.
(6)The person that is required to send a written notice pursuant to the provisions of item (i) of the preceding paragraph may, in the cases specified by Cabinet Office Order, provide relevant persons with the particulars that are required to be stated in the written notice by a means of using an electronic data processing system or other means using information and communications technology which are specified by Cabinet Office Order, in lieu of sending the written notice. In such a case, the person that has provided those particulars is deemed to have sent the written notice.
(Public Notice of the Commencement of a Tender Offer)
Article 14-3-4(1)Public notices pursuant to the provisions of Article 27-3, paragraph (1), Article 27-6, paragraph (2), Article 27-8, paragraph (11), Article 27-11, paragraph (2), and Article 27-13, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act must be given by one of the following means:
(i)means of taking measures to make the information that is required to be given in a public notice available to many and unspecified persons by the means of using an electronic data processing system for disclosure pursuant to the provisions of Cabinet Office Order (referred to as the "electronic public notice" in paragraph (3) to paragraph (5)); or
(ii)means of publication in a daily newspaper that publishes information on current events pursuant to the provisions of Cabinet Office Order.
(2)Among the public notices referred to in the preceding paragraph, the public notice under the provisions of the main clause of Article 27-8, paragraph (11) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act must be given immediately after the amended statement referred to in Article 27-8, paragraph (11) of the Act has been submitted.
(3)A person that gives public notice by electronic public notice pursuant to the provisions of paragraph (1) must publish that fact in a daily newspaper that publishes information on current events pursuant to the provisions of Cabinet Office Order after having given that public notice without delay.
(4)A person that gives public notice by electronic public notice pursuant to paragraph (1) must continue to provide the electronic public notice until the day specified in the following items in accordance with the category of public notice set forth in each of those items:
(i)public notice pursuant to the provisions of Article 27-3, paragraph (1), Article 27-6, paragraph (2), Article 27-8, paragraph (11), or Article 27-11, paragraph (2) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act: the last day of the tender offer period; and
(ii)public notice pursuant to the provisions of Article 27-13, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act: the last day in the one-month period that starts after giving the public notice.
(5)The provisions of Article 4-2-4, paragraphs (3) and (4) apply mutatis mutandis to a person that gives the public notice by electronic public notice pursuant to paragraph (1). In such a case, the term "paragraph (1), item (ii)" in Article 4-2-4, paragraph (3) is deemed to be replaced with "Article 14-3-4, paragraph (1), item (ii)" and the term "paragraph (2)" in Article 4-2-4, paragraph (4) is deemed to be replaced with "Article 14-3-4, paragraph (4)".
(6)The provisions of Article 9-4 apply mutatis mutandis to the public announcement under the provisions of Article 27-13, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act.
(Person Affiliated with a Tender Offeror)
Article 14-3-5The persons concerned specified by Cabinet Order that are provided for in Article 27-3, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act are the following persons:
(i)a financial instruments business operator or a bank, etc. that conducts the affairs prescribed in Article 14-3-3, paragraph (4) on behalf of the tender offeror; or
(ii)a person that makes the purchase, etc. of listed share certificates, etc. by means of a tender offer by acting as an agent for the tender offeror.
(Share Certificates Equivalent to Listed Share Certificates)
Article 14-3-6The share certificates, etc. specified by Cabinet Order that are provided for in Article 27-3, paragraph (4), item (ii) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraphs (2) and (3) of the Act are the share certificates, etc. that fall under over-the-counter traded securities, and the authorized financial instruments firms association specified by Cabinet Order that is provided for in Article 27-3, paragraph (4), item (ii) of the Act is the authorized financial instruments firms association that registers the share certificates, etc.
(Cases in Which a Purchase May Be Made by Means Other Than a Tender Offer)
Article 14-3-7The cases specified by Cabinet Order that are provided for in Article 27-22-2, paragraphs (2) and (5) and Article 27-5 of the Act as applied mutatis mutandis pursuant to Article 27-22-3, paragraph (5) of the Act following the deemed replacement of terms are the following cases:
(i)a case in which a purchase, etc. of share certificates, etc. is to be made in response to a request for the purchase of shares under the provisions of Article 116, paragraph (1), Article 182-4, paragraph (1), Article 469, paragraph (1), Article 785, paragraph (1), Article 797, paragraph (1), Article 806, paragraph (1), or Article 816-6, paragraph (1) of the Companies Act or a demand for the purchase of investment equity under the provisions of Article 141, paragraph (1), Article 149-3, paragraph (1), Article 149-8, paragraph (1), or Article 149-13, paragraph (1) of the Act on Investment Trusts and Investment Corporations, or based on the obligations under laws and regulations;
(ii)a case in which a purchase, etc. is to be conducted in a foreign country where the foreign financial instruments exchange which lists the share certificates, etc. is located, by means of a foreign tender offer based on the provisions of laws and regulations of that foreign country;
(iii)a case in which a person set forth in the items of Article 14-3-5 makes a purchase, etc. set forth in Article 12, items (iii) and (iv);
(iv)a case in which a person set forth in the items of Article 14-3-5 makes the purchase, etc. under the entrustment of a person other than the tender offeror;
(v)a case in which a person set forth in the items of Article 14-3-5 makes the purchase, etc. which is authorized for the facilitation of smooth distribution of securities by the rules established by a financial instruments exchange or an authorized financial instruments firms association; and
(vi)a case in which a person set forth in one of the items of Article 14-3-5 makes a purchase, etc. through the exercise of an option to make a purchase and sale of the listed share certificates, etc. held by them or due to the exercise of an option to make a purchase and sale of listed share certificates, etc. that the person has granted.
(Prohibited Changes to the Terms of Purchase)
Article 14-3-8The changes to the terms of purchase, etc. specified by Cabinet Order that are provided for in Article 27-6, paragraph (1), item (iv) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act are as follows:
(i)an extension of the period of purchase, etc. that exceeds the period specified in Article 14-3-3, paragraph (1); provided, however, that this does not apply in the following cases if the period specified in each of those items is to be extended:
(a)if the period of purchase, etc. must be extended pursuant to the provisions of Article 27-8, paragraph (8) of the Act as applied mutatis mutandis pursuant to the provisions of Article 27-22-2, paragraph (2) and Article 27-22-3, paragraph (4) of the Act: the period to be extended pursuant to Article 27-8, paragraph (8) of the Act; and
(b)if a person other than the tender offeror has given, with regard to the share certificates, etc. issued by the tender offeror, a public notice of the commencement of a tender offer (meaning the public notice prescribed in Article 27-3, paragraph (1) of the Act) or a public notice or public announcement (meaning the public notice or public announcement under the provisions of Article 27-6, paragraph (2) or (3) or Article 27-8, paragraph (8) of the Act) of the changes to the terms of purchase that extend the period of purchase, etc. during the tender offer period (meaning the tender offer period prescribed in Article 27-5 of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act): a period not exceeding the number of days counted from the day following the last day of the tender offer period until the last day of the tender offer period (meaning the tender offer period set forth in Article 27-5 of the Act) given in the public notice of the commencement of the tender offer or the public notice or public announcement of the changes;
(ii)a change to the types of consideration for purchase, etc.; provided, however, that this does not apply if a new type of consideration is added as an option for the tendering shareholders, etc. to choose; and
(iii)if the conditions prescribed in Article 27-11, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act are attached, a change to the content of the conditions.
(Methods of Canceling Contracts)
Article 14-3-9The methods specified by Cabinet Order that is provided for in Article 27-12, paragraph (2) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act is the methods of delivering or sending a document stating the cancellation of the contract connected with a tender offer to the person designated by the tender offeror (limited to the persons specified by Cabinet Office Order), and the time specified by Cabinet Order that is provided for in Article 27-12, paragraph (2) of the Act is the time when the document has been delivered to or has reached the designated person.
(Authorized Financial Instruments Firms Associations Providing Public Inspection)
Article 14-3-10An authorized financial instruments firms association specified by Cabinet Order that is provided for in Article 27-14, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act is the authorized financial instruments firms association prescribed in Article 14-3-6.
(Deemed Replacement of Terms in Connection with a Tender Offer for Listed Share Certificates by the Issuer)
Article 14-3-11(1)If a purchase, etc. by means of a tender offer is made pursuant to the provisions of Article 27-22-2, paragraph (1) of the Act, the technical replacement of terms pursuant to the provisions of paragraph (13) of that Article when the provisions of the Act are applied mutatis mutandis pursuant to paragraph (2) of that Article is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original erms
Article 27-2 (limited to paragraphs (2) through (6))
Article 27-12, paragraph (3)
Article 27-12, paragraph (3) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
prescribed in this Section
prescribed in the following Section
Article 27-4
paragraph (2) of the preceding Article
paragraph (2) of the preceding Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-7
paragraph (2) or (3) of the preceding Article
paragraph (1) or (2) of the preceding Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
paragraph (8) of the following Article
paragraph (8) of the following Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-8 (excluding paragraph (6), paragraph (10), and paragraph (12))
the provisions of this Section
the provisions of the following Section
Article 27-6, paragraph (1)
Article 27-6, paragraph (1) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-6, paragraph (2)
Article 27-6, paragraph (2) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-9
the provisions of paragraphs (1) through (4) of the preceding Article
the provisions of paragraphs (1) through (4) of the preceding Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-12
Article 27-8, paragraph (8)
Article 27-8, paragraph (8) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
paragraphs (1) and (4) of the following Article, 27-14, paragraph (1) and Article 27-21, paragraphs (1) and (2)
the provisions of paragraphs (1) and (4) of the following Article, Article 27-14, paragraph (1), and Article 27-21, paragraph (1) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-13 (excluding paragraph (3))
Article 27-11, paragraph (2)
Article 27-11, paragraph (2) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
the proviso to Article 27-11, paragraph (1)
the proviso to Article 27-11, paragraph (1) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-6, paragraph (2)
Article 27-6, paragraph (2) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-14
paragraph (1) of the following Article
paragraph (1) of the following Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-3, paragraph (4) (including as applied mutatis mutandis pursuant to Articles 27-8, paragraph (6), Article 27-11, paragraph (4), and paragraph (3) of the preceding Article)
Article 27-3, paragraph (4) as applied mutatis mutandis pursuant to Article 27-22-2, paragraphs (2) and (3) and Article 27-22-2, paragraph (4) (including as applied mutatis mutandis pursuant to paragraph (8) of that Article)
Article 27-17
Article 27-5 (including as applied mutatis mutandis pursuant to Article 27-8, paragraph (10); hereinafter the same applies in this paragraph)
Article 27-5 as applied mutatis mutandis pursuant to Article 27-22-2, paragraphs (2) and (5)
Article 27-5
Article 27-5 as applied mutatis mutandis pursuant to Article 27-22-2, paragraphs (2) and (5)
paragraph (2), item (i) of the following Article
paragraph (2), item (i) of the following Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-6, paragraph (2) or (3)
Article 27-6, paragraph (2) or (3) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
paragraph (2) of the following Article and Article 27-20, paragraph (2)
paragraph (2) of the following Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-18
Article 27-13, paragraph (4)
Article 27-13, paragraph (4) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
paragraph (1) of the preceding Article
paragraph (1) of the preceding Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-21, paragraph (1)
Article 27-17, paragraph (1)
Article 27-17, paragraph (1) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-18, paragraph (2)
Article 27-18, paragraph (2) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
(2)With regard to a public notice or public announcement given pursuant to the provisions of Article 27-8, paragraphs (8) and (11) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act, the technical replacement of terms pursuant to the provisions of Article 27-22-2, paragraph (13) of the Act when the provisions of the Act are applied mutatis mutandis pursuant to Article 27-22-2, paragraph (6) of the Act is as given in the following table:
Provisions of the Act hose erms are Deemed to be replaced
Original Terms
Terms eemed to Replace the Original Terms
Article 27-7
paragraph (8) of the following Article
paragraph (8) of the following Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
(3)With regard to the tender offer report prescribed in Article 27-13, paragraph (2) of the Act as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2) of the Act, the technical replacement of terms pursuant to the provisions of Article 27-22-2, paragraph (13) of the Act when the provisions of the Act are applied mutatis mutandis pursuant to Article 27-22-2, paragraph (7) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original terms
Terms deemed to replace the original terms
Article 27-8 (limited to paragraphs (1) through (5))
(including the period which is required to be extended pursuant to paragraph (8); the same applies in paragraph (7))
(including the period which is required to be extended pursuant to paragraph (8))
(Transitional Period After the Public Announcement)
Article 14-3-12The period specified by Cabinet Order that is provided for in Article 27-22-3, paragraph (3) of the Act is 12 hours.
(Deemed Replacement of Terms in Connection with the Public Announcement of Material Facts Concerning a Company That Is a Tender Offeror)
Article 14-3-13If a purchase, etc. of listed share certificates, etc. has been made in violation of Article 27-5 of the Act as applied mutatis mutandis pursuant to Article 27-22-3, paragraph (5) of the Act, the technical replacement of terms pursuant to the provisions of Article 27-22-3, paragraph (8) of the Act when the provisions of the Act are applied mutatis mutandis pursuant to Article 27-22-3, paragraph (8) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 27-17
Article 27-5
Article 27-5 as applied mutatis mutandis pursuant to Article 27-22-3, paragraph (5)
paragraph (2), item (i) of the following Article
paragraph (2), item (i) of the following Article as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
Article 27-6, paragraph (2) or (3)
Article 27-6, paragraph (2) or (3) as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)
(excluding tendered share certificates, etc. that could not have been sold, etc. through the pro rata method; the same applies in paragraph (2) of the following Article and Article 27-20, paragraph (2))
(excluding tendered share certificates, etc. that could not have been sold, etc. through the pro rata method)
Chapter III-2 Disclosure of Status of Large Volume Holdings of Share Certificates
(Scope of Share-Related Securities)
Article 14-4(1)The share certificates, corporate bond certificates with share options, and other securities specified by Cabinet Order that are provided for in Article 27-23, paragraph (1) of the Act are the following securities:
(i)share certificates, share option certificates, and corporate bond certificates with share options;
(ii)instruments or certificates issued by a foreign person which have the nature of the securities set forth in the preceding item;
(iii)investment securities, etc. or investment equity subscription right certificates, etc.;
(iv)certificates of a beneficial interest in a securities trust of which the entrusted securities are the securities set forth in the preceding three items; and
(v)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate the rights associated with the securities set forth in items (i) through (iii).
(2)The share-related securities specified by Cabinet Order as those for which the state of distribution is equivalent to those listed on a financial instruments exchange, that are provided for in Article 27-13, paragraph (1) of the Act, are over-the-counter traded securities.
(Scope of Securities That Indicate Rights Associated with Subject Securities)
Article 14-4-2The securities specified by Cabinet Order as those indicating rights associated with subject securities, that are provided in Article 27-23, paragraph (1) of the Act, are as follows:
(i)the securities set forth in Article 2, paragraph (1), item (xix) of the Act that indicate an option to make a purchase and sale of subject securities (meaning the subject securities as defined in Article 27-23, paragraph (2) of the Act; hereinafter the same applies in this Article) (limited to if the exercise of that option would cause the person exercising it to acquire the position of buyer in the purchase and sale);
(ii)certificates of a beneficial interest in a securities trust of which the entrusted securities are subject securities;
(iii)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate the rights associated with subject securities;
(iv)corporate bond certificates (excluding corporate bond certificates with share options) with a special provision that allows the redemption of the bond certificates through the subject securities (limited to subject securities issued by a company other than the company issuing the corporate bond certificates) (limited to those in connection with which the person holding the corporate bond certificates has the right to have the issuer company of the corporate bond certificates redeem the corporate bond certificates through subject securities); and
(v)the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities referred to in the preceding item.
(Holidays Days Not Included in the Reporting Period)
Article 14-5The holidays specified by Cabinet Order that are provided for in Article 27-23, paragraph (1) of the Act are the holidays of administrative organs (excluding Sundays).
(Scope of Subject Securities)
Article 14-5-2The securities specified by Cabinet Order that are provided for in Article 27-23, paragraph (2) of the Act are as follows:
(i)share certificates (excluding the share certificates associated with what is specified by Cabinet Office Order as a share with no voting rights);
(ii)share option certificates and corporate bond certificates with share options (excluding those that grant only the right to acquire shares with no voting rights as the share option);
(iii)instruments or certificates issued by a foreign person which have the nature of the securities set forth in the preceding two items;
(iv)investment securities, etc.; and
(v)investment equity subscription right certificates, etc.
(Persons Equivalent to the Person with the Right to Request Delivery of Share Certificates)
Article 14-6The person specified by Cabinet Order that is provided for in Article 27-23, paragraph (3) of the Act is any of the following persons:
(i)a person that has entered into a unilateral option contract for a purchase and sale of share certificates, etc. (meaning share certificates, etc. prescribed in Article 27-23, paragraph (1) of the Act; hereinafter the same applies in this Chapter) (limited to cases in which the person holds the right to complete the purchase and sale and acquires the position of buyer through the exercise of that right); and
(ii)a person that has acquired the option to make a purchase and sale of share certificates, etc. (limited to cases in which the option is indicated on a security set forth in Article 14-4-2, item (i)) (limited to if the exercise of that option causes the person exercising it to acquire the position of buyer in the purchase and sale).
(Things Excluded from Share Certificates Held)
Article 14-6-2The rights specified by Cabinet Order that are provided for in Article 27-23, paragraph (4) of the Act are the following rights:
(i)the right to request delivery of share certificates, etc. under a purchase and sale contract or other contracts;
(ii)the right to exercise voting rights as a shareholder or investor of the issuer of share certificates, etc. or the right to give instructions on the exercise of voting rights based on a money trust contract or other contracts, or the provisions of laws;
(iii)the rights necessary to make investments in share certificates, etc. based on a discretionary investment contract or other contracts, or the provisions of laws;
(iv)the right to complete that purchase and sale and acquire the position of buyer, based on a unilateral option contract for a purchase and sale of share certificates, etc.; and
(v)the right of a person exercising the option to make a purchase and sale of share certificates, etc. to acquire the position of buyer in the purchase and sale through the exercise of that option.
(Special Relationship)
Article 14-7(1)The special relationship specified by Cabinet Order that is provided for in Article 27-23, paragraph (6) of the Act means one of the following relationships:
(i)the relationship of a husband and wife;
(ii)the relationship between a person that holds shares or contribution associated with voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of a company in their own name or another person's name (or under a fictitious name; hereinafter the same applies in this Article) (hereinafter the person is referred to as a "controlling shareholder, etc." in this Article) and that company (hereinafter referred to as the "controlled company" in this Article);
(iii)the relationship between a controlled company and another controlled company of its controlling shareholder, etc.; and
(iv)any other relationship specified by Cabinet Office Order as being equivalent to the relationships set forth in the preceding three items.
(2)If a husband and wife jointly hold shares or contribution associated with voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of a company in their own names or another person's name, the husband and wife are each deemed to be the controlling shareholder, etc. of the company, and the provisions of the preceding paragraph apply.
(3)If a controlling shareholder, etc. and their controlled company jointly hold shares or contribution associated with voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of another company in their own names or another person's name, the other company is also deemed to be the controlled company of the controlling shareholder, etc. and the provisions of paragraph (1) and this paragraph apply.
(Changes to Material Particulars That Are Required to Be Stated in a Statement of Large Volume Holdings)
Article 14-7-2(1)The cases specified by Cabinet Order as a change to a material particular that is required to be stated in a statement of large-volume holdings, which are provided for in the provisions of Article 27-25, paragraph (1) and Article 27-26, paragraph (2), items (i) and (ii) of the Act are, among the changes to the content required to be stated in the statement of large-volume holdings or statement of changes (including its amendment reports), changes other than those set forth in the following items:
(i)the fact that a holder whose ratio of share certificates, etc. held singly is less than one percent has become a new joint holder (meaning the joint holder prescribed in Article 27-23, paragraph (5) of the Act and including the person deemed to be a joint holder pursuant to the provisions of paragraph (6) of that Article; hereinafter the same applies in this Chapter);
(ii)the fact that a holder whose ratio of share certificates, etc. held singly was less than one percent has ceased to be a joint holder;
(iii)changes to the name, address, or location of a joint holder whose ratio of share certificates, etc. held singly is less than one percent;
(iv)increase or decrease of less than one percent in the ratio of share certificates, etc. held singly;
(v)conclusion of the following contracts concerning the share certificates, etc. held by a holder of share certificates, etc. and by their joint holder, or among the changes to the content of those contracts, those which are specified by Cabinet Office Order as being minor:
(a)contracts providing that the share certificates, etc. are to be provided as a collateral;
(b)contracts providing that the share certificates, etc. are to be resold;
(c)a unilateral option contract for a purchase and sale (limited to cases in which the person in question holds the right to complete the purchase and sale and acquires the position of seller through the exercise of that right);
(d)contracts for lending and borrowing; and
(e)contracts equivalent to the contracts set forth in sub-items (a) through (d); and
(vi)other things specified by Cabinet Office Order as being equivalent to what is set forth in the preceding items.
(2)The term "ratio of share certificates, etc. held singly" as used in the preceding paragraph means the ratio obtained by dividing the number of share certificates, etc. held (meaning the share certificates, etc. held prescribed in Article 27-23, paragraph (4) of the Act) by the number obtained by adding the number of corporate bond certificates with share options held by the holder and the joint holder and any other securities specified by Cabinet Office Order to the total number of the issued shares or the issued investment equity of the issuer of the share certificates, etc.
(Criteria for Transfer of a Large Number of Share Certificates in a Short Period)
Article 14-8(1)The criteria specified by Cabinet Order that are provided for in Article 27-25, paragraph (2) of the Act are that the holding ratio of share certificates, etc. (meaning the holding ratio of share certificates, etc. prescribed in Article 27-23, paragraph (4) of the Act; hereinafter the same applies in this Article) after the change which is required to be stated in the statement of changes referred to in Article 27-25, paragraph (2) of the Act comes to be less than half of the highest holding ratio of share certificates, etc. (limited to those for which the calculation is based on the day on or after the day 60 days prior to the day on which calculation of the holding ratio of share certificates, etc. after the change has been based, and those for which the calculation is based on or before the day immediately preceding the day 60 days prior to the day on which calculation of the holding ratio of share certificates, etc. after the change has been based which is nearest to the day 60 days prior to the day on which calculation of the holding ratio of share certificates, etc. after the change has been based) which has been stated or is required to have been stated in the statements of large-volume holdings (meaning the statements of large-volume holdings prescribed in Article 27-23, paragraph (1) or Article 27-26, paragraph (1) of the Act) related to the statement of changes or in another statement of changes (meaning the statement of changes set forth in Article 27-25, paragraph (1) or Article 27-26, paragraph (2) of the Act) related to the statements of large-volume holdings, and has decreased by more than five percent in comparison with the highest holding ratio of share certificates, etc.; provided, however, that this does not apply if the sum of the holding ratio of share certificates, etc. that has decreased as a result of the fact that a person that is to submit a statement of changes due to a decrease in the holding ratio of share certificates, etc. or their joint holder has transferred share certificates. etc. during the 60 days prior to the day on which calculation of the holding ratio of share certificates, etc. after the change has been based (referred to as the "period subject to a report of short-term, large-volume transfer" in the following paragraph) in a volume not more than half of the highest holding ratio of share certificates, etc. or not more than five percent.
(2)The person specified by Cabinet Order that is provided for in Article 27-25, paragraph (2) of the Act is, if deeming the total number of share certificates, etc. transferred by the person that is to submit a statement of changes due to a decrease in the holding ratio of share certificates, etc. or their joint holder during the period subject to a report of short-term, large-volume transfer to be the person making the submission with the total number of share certificates, etc. held by that person making the submission (meaning the total number of share certificates, etc. prescribed in Article 27-23, paragraph (4) of the Act), the person making the submission with a holding ratio of share certificates, etc. of less than one percent.
(Act of Making a Material Proposal)
Article 14-8-2(1)The acts specified by Cabinet Order as acts of making material changes in or having a material impact on the business activities of the issuer of share certificates, etc. prescribed in Article 27-26, paragraph (1) of the Act, are the acts of proposing the following particulars related to the issuer or their subsidiary company at a shareholders meeting or investors' meeting, or to the officers (meaning a member that execute the operations, director, executive officer, accounting advisor, company auditor, or equivalent persons and including those that are found to have at least the same amount of control over the corporation as a member that execute the operations, director, executive officer, or equivalent persons of the corporation, irrespective of their titles, such as advisor or consultant; the same applies in item (iv)); provided, however, that those that satisfy the criteria specified by Cabinet Office Order as being minor are excluded:
(i)disposal or acquisition of important properties;
(ii)borrowing a large amount of money;
(iii)selection or removal of a representative director;
(iv)material changes in the constitution of officers (including material changes in the number of officers or their terms of office);
(v)appointment or dismissal of a manager or other important employees;
(vi)establishment, changes to, or closure of a branch office or other important organizations;
(vii)share exchange, share transfer, share delivery, or splitting or merger of a company;
(viii)transfer, acquisition, suspension, or discontinuation of all or part of the business;
(ix)material changes in the policy concerning dividend distribution;
(x)material changes in the policy concerning the increase or decrease in the amount of stated capital;
(xi)delisting from the financial instruments exchange market of the securities issued by the issuer or the rescission of registration on the over-the-counter securities market;
(xii)listing on the financial instruments exchange market of the securities issued by the issuer or registration in a register of over-the-counter traded securities; and
(xiii)other particulars specified by Cabinet Office Order as being equivalent to what is set forth in the preceding items.
(2)The combinations of two or more days of each month designated pursuant to the provisions of Cabinet Order that are provided for in Article 27-26, paragraph (3) of the Act, are any of the following combinations:
(i)the second and forth Monday of each month (if there is a fifth Monday, this is to be the second, fourth and fifth Monday); or
(ii)the fifteenth and last day of each month (if those days fall on a Saturday, this is to be the day before Saturday, and if those days fall on a Sunday, this is to be two days before Sunday).
(3)The period specified by Cabinet Order that is provided for in Article 27-26, paragraphs (4) and (5) of the Act is the period until five days (not counting holidays of administrative organs) have elapsed from the first base date (meaning the base date set forth in Article 27-26, paragraph (3) of the Act) that arrives after the day on which the holding ratio of share certificates, etc. has exceeded five percent or the day it has increased.
(Share Certificates Equivalent to Listed Share Certificates)
Article 14-9The share certificates, etc. specified by Cabinet Order that are provided for in Article 27-27, item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2) of the Act; hereinafter the same applies in this Article) are share certificates, etc. that fall under the over-the-counter traded securities, and the authorized financial instruments firms association specified by Cabinet Order that is provided for in Article 27-27, item (ii) and Article 27-28, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 27-29, paragraph (2) of the Act) is the authorized financial instruments firms associations that registers the share certificates, etc.
Chapter III-3 Special Provisions on Procedures Taken Using an Electronic Data Processing System for Disclosure
(Means of Taking Electronic Disclosure Procedures or Discretionary Electronic Disclosure Procedures Using an Electronic Data Processing System for Disclosure)
Article 14-10(1)A person that takes electronic disclosure procedures (meaning the electronic disclosure procedures as defined in Article 27-30-2 of the Act; hereinafter the same applies in this Article and the following Article) or discretionary electronic disclosure procedures (meaning the discretionary electronic disclosure procedures as defined in Article 27-30-2 of the Act; hereinafter the same applies in this Article and the following Article) using an electronic data processing system for disclosure pursuant to the provisions of Article 27-30-3, paragraph (1) or (2) of the Act must, pursuant to the provisions of Cabinet Office Order, take those procedures by inputting the particulars that are required to be stated in documents when electronic disclosure procedures or discretionary electronic disclosure procedures are taken in writing, using an input-output device that complies with the technical standards specified by the Commissioner of the Financial Services Agency.
(2)A person that takes electronic disclosure procedures or discretionary electronic disclosure procedures referred to in the preceding paragraph must, pursuant to the provisions of Cabinet Office Order, notify the Commissioner of the Financial Services Agency to that effect in advance, and submit their articles of incorporation and other documents; provided, however, that this does not apply if the person that has already made the notification pursuant to the provisions of this paragraph periodically submits the articles of incorporation and other documents pursuant to the provisions of Cabinet Office Order and other cases specified by Cabinet Office Order.
(Means of Taking Electronic Disclosure Procedures or Discretionary Electronic Disclosure Procedures by Submission of Magnetic Discs)
Article 14-11(1)A person that seeks to obtain approval from the Commissioner of the Financial Services Agency to take electronic disclosure procedures or discretionary electronic disclosure procedures through the submission of a magnetic disc (including any object that can securely record certain information by equivalent means; hereinafter the same applies in this Article) pursuant to the provisions of Article 27-30-4, paragraph (1) or (2) of the Act must submit documents stating the reasons for submitting a magnetic disc and other particulars specified by Cabinet Office Order to the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(2)A person that submits a magnetic disc by obtaining the approval referred to in the preceding paragraph must, pursuant to the provisions of Cabinet Office Order, record the particulars that are required to be stated in documents when electronic disclosure procedures or discretionary electronic disclosure procedures are taken in writing in a magnetic disc that complies with the technical standards specified by the Commissioner of the Financial Services Agency and submit the magnetic disc to the Commissioner.
(Exclusion of Application of Electronic Disclosure Procedures Taken by Using of Electronic Data Processing System for Disclosure)
Article 14-11-2The grounds specified by Cabinet Order that are provided for in Article 27-30-5, paragraph (1), item (i) of the Act are the case of not being able to operate the computer referred to in Article 27-30-2 of the Act, due to a cut off of the power supply or other reasons.
(Means of Public Inspection by the Commissioner of the Financial Services Agency)
Article 14-12When making the particulars that have been recorded in a file available for public inspection pursuant to the provisions of Article 27-30-7, paragraph (1) of the Act, the Commissioner of the Financial Services Agency is to make those particulars available for public inspection by displaying the particulars on the screens of input-output devices of computers used at finance bureaus and Fukuoka Local Finance Branch Bureau as well as by using the internet.
(Means of Public Inspection by a Financial Instruments Exchange)
Article 14-13When making the particulars which has been notified available for public inspection pursuant to the provisions of Article 27-30-8, paragraph (1) of the Act, a financial instruments exchange or an authorized financial instruments firms association prescribed in Article 3 is to make those particulars available for public inspection by displaying the particulars on the screens of input-output devices of computers used at their offices.
Chapter III-4 Provision or Public Announcement of Specified Information on Securities
(Cases in Which Specified Information on Securities Need Not Be Provided or Publicized)
Article 14-14The case specified by Cabinet Order that is provided for in Article 27-31, paragraph (1) of the Act is the case in which solicitation is made to less than fifty persons.
Chapter III-5 Disclosure of Material Information
(Securities Excluded from Consideration as the Securities of a Listed Company)
Article 14-15The securities specified by Cabinet Order as those to be excluded from consideration as securities that are provided in Article 27-36, paragraph (1) of the Act, are the following securities:
(i)the securities set forth in Article 2, paragraph (1), item (v) of the Act, which are specified by Cabinet Office Order as the securities by which assets are acquired by money obtained from the issuance of those securities and the obligations of those securities are performed by money obtained from the administration and disposition of those assets; and
(ii)the securities set forth in Article 2, paragraph (1), item (xi) which are issued by persons other than the following persons:
(a)an investment corporation (meaning an investment corporation as defined in Article 2, paragraph (12) of the Act on Investment Trusts and Investment Corporations; hereinafter the same applies in this item and Article 14-17, item (vi)) which provides in its bylaws that it is to invest an amount exceeding 50 percent of the total amount of its assets in real property or other assets specified by Cabinet Office Order;
(b)one specified by Cabinet Office Order as an investment corporation in which the sum of the value of the assets specified by Cabinet Office Order that is provided for in sub-item (a), accounts for more than 50 percent of the total amount of its assets; or
(c)a foreign investment corporation that is similar to an investment corporation set forth in sub-item (a) or (b).
(Scope of Securities Whose Issuer Becomes a Listed Company)
Article 14-16The securities set forth in Article 2, paragraph (1), item (v), item (vii), item (ix), or item (xi) of the Act (excluding those set forth in the items of the preceding Article) which are listed on a financial instruments exchange or fall under over-the-counter traded securities, or any other securities specified by Cabinet Order, which are provided for in Article 27-36, paragraph (1) of the Act are as follows:
(i)the securities set forth in Article 2, paragraph (1), item (v), item (vii), item (ix), or item (xi) of the Act (excluding those set forth in the items of the preceding Article and foreign investment securities set forth in Article 2, paragraph (1), item (xi) of the Act; hereinafter the same applies in the following item) which are listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities (meaning the tradable securities prescribed in Article 67-18, item (iv) of the Act; the same applies hereinafter);
(ii)a beneficiary certificate of securities in trust of which the entrusted securities are the securities set forth in Article 2, paragraph (1), item (v), item (vii), item (ix), or item (xi) of the Act (excluding those set forth in the preceding item), which are listed on a financial instruments exchange, or fall under over-the-counter traded securities or tradable securities;
(iii)the instruments or certificates issued by a foreign person which have the nature of the securities set forth in Article 2, paragraph (1), item (v), item (vii), or item (ix) of the Act (excluding those set forth in item (i) of the preceding Article; hereinafter the same applies in this Article) or the foreign investment securities set forth in Article 2, paragraph (1), item (xi) of the Act (excluding those set forth in item (ii) of the preceding Article; hereinafter the same applies in this Article), which are listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities (excluding those listed on a designated foreign financial instruments exchange);
(iv)the instruments or certificates issued by a foreign person which have the nature of the securities set forth in Article 2, paragraph (1), item (v), item (vii), or item (ix) of the Act (excluding those set forth in the preceding item and those listed on a designated foreign financial instruments exchange) or a beneficiary certificate of securities in trust of which the entrusted securities are the foreign investment securities set forth in Article 2, paragraph (1), item (xi) of the Act (excluding those set forth in the preceding item and those listed on a designated foreign financial instruments exchange), which are listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities; and
(v)the instruments or certificates issued by a foreign person which have the nature of the securities set forth in Article 2, paragraph (1), item (v), item (vii), or item (ix) of the Act (excluding those set forth in item (iii), those listed on a designated foreign financial instruments exchange, and those that are the entrusted securities of the certificates of a beneficial interest in a securities trust set forth in the preceding item) or the instruments or certificates a person that has been deposited the foreign investment securities set forth in Article 2, paragraph (1), item (xi) of the Act (excluding those set forth in item (iii), those listed on a designated foreign financial instruments exchange, and those that are the entrusted securities of the certificates of a beneficial interest in a securities trust set forth in the preceding item) issues in a country other than the country where the deposited instruments or certificates or foreign investment securities had been issued, which indicate rights related to deposited instruments or certificates or foreign investment securities, among which those listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities.
(Scope of Listed Securities)
Article 14-17The securities set forth in Article 2, paragraph (1), item (v), item (vii), item (ix), or item (xi) of the Act (excluding those set forth in the items of Article 14-15) that are provided for in the proviso to Article 27-36, paragraph (1) of the Act of the listed company, etc., and those set forth in item (xix) of that paragraph that indicate options on the aforementioned securities, and other securities specified by Cabinet Order are as follows:
(i)securities set forth in Article 2, paragraph (1), item (v), item (vii), item (ix), or item (xi) of the listed company, etc. (excluding those set forth in the items of Article 14-15 and the foreign investment securities set forth in item (xi) of that paragraph);
(ii)instruments or certificates issued by the listed company, etc. that is a foreign person which have the nature of the securities set forth in Article 2, paragraph (1), item (v), item (vii), or item (ix) of the Act (excluding those set forth in Article 14-15, item (i); the same applies in the following item and item (iv)) or foreign investment securities set forth in item (xi) of that paragraph of the listed company, etc. (excluding those set forth in Article 14-15, item (ii); the same applies in the following item and item (iv)), which are listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities;
(iii)instruments or certificates issued by the listed company, etc. that is a foreign person which have the nature of the securities set forth in Article 2, paragraph (1), item (v), item (vii), or item (ix) of the Act (excluding those set forth in the preceding item) or foreign investment securities set forth in item (xi) of that paragraph of the listed company, etc. (excluding those set forth in the preceding item), and the certificates of a beneficial interest in a securities trust whose entrusted securities constitute those securities are listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities;
(iv)instruments or certificates issued by a listed company, etc. that is a foreign person which have the nature of the securities set forth in Article 2, paragraph (1), item (v), (vii) or (ix) of the Act (excluding those set forth in the preceding two items) or foreign investment securities set forth in item (xi) of that paragraph of a listed company, etc. (excluding those set forth in the preceding two items), which the securities set forth in item (xx) of that paragraph that indicate rights related to those securities are listed on a financial instruments exchange or fall under over-the-counter traded securities or tradable securities;
(v)securities set forth in Article 2, paragraph (1), item (x) of the Act which are related to an investment trust (meaning an investment trust as defined in Article 2, paragraph (3) of the Act on Investment Trusts and Investment Corporations; the same applies hereinafter) which are provided in the basic terms and conditions of the trust contract that the trust property is only to be invested in securities set forth in the preceding items of a listed company, etc. (hereinafter referred to as "subject securities" in this Article), or a foreign investment trust (meaning a foreign investment trust as defined in Article 2, paragraph (24) of that Act; the same applies hereinafter) similar to those securities;
(vi)securities set forth in Article 2, paragraph (1), item (xi) of the Act which are issued by an investment corporation or by a foreign investment corporation similar to the corporation which provides in its bylaws that assets are only to be invested in subject securities of a listed company, etc.;
(vii)securities set forth in Article 2, paragraph (1), item (xix) of the Act that indicate options on subject securities of a listed company, etc.;
(viii)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with subject securities of a listed company, etc.;
(ix)certificates of a beneficial interest in a securities trust of which the entrusted securities are subject securities of the listed company, etc.;
(x)corporate bond certificates issued by a company other than a listed company, etc. (excluding corporate bond certificates with share options) which have a special provision that allows the redemption of those corporate bond certificates through subject securities of a listed company, etc. (limited to those for which the person that holds the corporate bond certificates has the right to have the issuing company of those corporate bond certificates redeem those corporate bond certificates through subject securities); and
(xi)instruments or certificates issued by a foreign person which have the nature of securities set forth in the preceding item.
Chapter IV Financial Instruments Business Operators
(Wholesale Underwriting of Securities Constituting a Managing Underwriter)
Article 15The wholesale underwriting of securities specified by Cabinet Order that is provided for in Article 28, paragraph (1), item (iii), sub-item (a) of the Act is that for which discussions are held with the issuer or holder (excluding a financial instruments business operator and registered financial institution (meaning a registered financial institution as defined in Article 2, paragraph (11) of the Act; the same applies hereinafter); hereinafter the same applies in this Article and Article 17-3, item (iii)) of the securities for fixing the content of the wholesale underwriting contract (meaning any of the contracts referred to in the following items concluded for a public offering or secondary distribution of securities, solicitation for acquisition only for professional investors (meaning the solicitation for acquisition only for professional investors set forth in Article 4, paragraph (3), item (i) of the Act; the same applies hereinafter), or solicitation for selling, etc. only for professional investors (meaning the solicitation for selling, etc. only for professional investors as defined in Article 2, paragraph (6) of the Act; the same applies hereinafter)) at the time of concluding that wholesale underwriting contract, and which are specified by Cabinet Office Order:
(i)a contract providing that the relevant party will acquire all or part of the securities from the issuer or the holder of those securities for the purpose of having those securities acquired by other persons;
(ii)a contract providing that, if there are no persons to acquire all of part of the securities, the underwriter will acquire the remaining securities from the issuer or holder of the securities; and
(iii)a contract providing that, if the securities are share option certificates (meaning share option certificates prescribed in Article 28, paragraph (7), item (iii) of the Act; hereinafter the same applies in this item and Article 17-3, item (iii), sub-item (c)) and the person that has acquired the share option certificates does not exercise share options (meaning the share options prescribed in Article 28, paragraph (7), item (iii) of the Act; hereinafter the same applies in this item and Article 17-3, item (iii), sub-item (c)) for all or some of the share option certificates, the relevant person is to acquire the share option certificates for the unexercised share options from the issuer or holder, and that person or a third party exercises those share options.
(Acts that Lead to Cash Settlement)
Article 15-2The act specified by Cabinet Order that is provided for in Article 28, paragraph (8), item (iv), sub-item (a) of the Act is, for purchase and sale in which the parties promise to deliver and take delivery of a security and its value at a fixed time in the future without recourse to a financial instruments market or a foreign financial instruments market, an action that cancels the purchase and sale contract taken by the parties.
(Subject Transactions of Brokerage for Clearing of Securities Which Are Securities-Related Services)
Article 15-3The transactions specified by Cabinet Order that are provided for in Article 28, paragraph (8), item (vii) of the Act are as follows:
(i)the lending and borrowing of the money needed to settle a margin transaction, etc. (meaning a margin transaction, purchase and sale of securities, or securities-related market derivatives transaction (meaning the transactions set forth in Article 28, paragraph (8), item (iii) of the Act; the same applies hereinafter) made on a financial instruments business operator's own account, or brokerage for clearing of securities, etc. (limited to that related to a margin transaction, purchase and sale of securities, or securities-related market derivatives transaction made on a financial instruments business operator's own account); the same applies in the following item) (limited to lending done by a securities finance company);
(ii)the lending and borrowing of securities (if a person other than a securities finance company lends the securities necessary for the settlement of a margin transaction, etc. by using the clearing systems of a financial instruments exchange market or over-the-counter securities market, this is limited to lending associated with a margin transaction, etc. made without recourse to a financial instruments exchange market or an over-the-counter securities market);
(iii)the delivery and receipt of collateral for the transactions set forth in the preceding two items;
(iv)the delivery and receipt of beneficiary certificates or money, etc. related to the establishment of a securities investment trust, the redemption of a part of the principal of a securities investment trust, or the exchange between beneficiary certificates of a securities investment trust and listed securities, etc.; and
(v)beyond what is set forth in the preceding three items, the delivery and receipt of securities or money, made for the performance of obligations that arise from the purchase and sale of securities, transactions of securities-related derivatives (meaning the transactions of securities-related derivatives prescribed in Article 28, paragraph (8), item (vi) of the Act; the same applies hereinafter), or the transactions set forth in the preceding items.
(Employees Related to the Application or Notification for Registration)
Article 15-4The employee specified by Cabinet Order that is provided for in Article 29-2, paragraph (1), item (iv) and Article 29-4, paragraph (1), items (ii) and (iii) of the Act is an employee that falls under any of the following items:
(i)a person that supervises the work of providing guidance to ensure that laws and regulations, etc. (meaning laws and regulations, dispositions of a government agency given based on laws and regulations, the articles of incorporation, or any other rules; the same applies hereinafter) are observed with regard to a financial instruments business, or any other person specified by Cabinet Office Order as being equivalent to them;
(ii)a person that supervises the department that gives advice or makes investments (including their instructions) with regard to investment advisory business (meaning an investment advisory business prescribed in Article 28, paragraph (6) of the Act; the same applies hereinafter) or investment management business (meaning the investment management business prescribed in Article 28, paragraph (4) of the Act; the same applies hereinafter), or any other person specified by Cabinet Office Order as being equivalent to that person.
(Securities Not Requiring a Statement in a Written Application for Registration That Electronic Public offering Services Will Be Conducted)
Article 15-4-2The securities specified by Cabinet Order that are provided for in Article 29-2, paragraph (1), item (vi) of the Act are the following securities:
(i)the securities set forth in Article 2, paragraph (1), items (i) and (ii) of the Act;
(ii)the securities for which the government guarantees the redemption of the principal or the payment of interest;
(iii)the securities prescribed in Article 2-11;
(iv)the securities for which a notification under the provisions of Article 4, paragraphs (1) through (3) or a shelf registration (meaning the shelf registration prescribed in Article 23-3, paragraph (3) of the Act) has been made;
(v)in the case in which disclosure prescribed in Article 4, paragraph (7) of the Act (limited to the case set forth in item (ii) of that paragraph) has been made for securities, those securities;
(vi)the securities associated with a secondary distribution that falls under Article 4, paragraph (1), item (iv) of the Act; and
(vii)the rights set forth in Article 2, paragraph (2), item (v) or (vi) of the Act that are deemed to be securities pursuant to the provsions of that paragraph, which are associated with the business of lending money by allocating an amount exceeding 50 percent of the total amount of money or other property invested or paid by persons that hold the rights in question.
(Calculation of the Amount of Brought-In Capital)
Article 15-5If assets brought into Japan include an amount indicated in a foreign currency, the amount of brought-in capital referred to in Article 29-2, paragraph (4) of the Act must be calculated by converting the amount into Japanese currency using the exchange rate (meaning the basic exchange rate or the arbitrated exchange rate of a foreign currency prescribed in Article 7, paragraph (1) of the Foreign Exchange and Foreign Trade Act; the same applies hereinafter) and adding up that amount to the rest of amount of the assets.
(Scope of Laws That Are to be the Criteria for Registration)
Article 15-6The laws specified by Cabinet Order that are provided for in Article 29-4, paragraph (1), item (i), sub-item (c) and Article 33-5, paragraph (1), item (ii) of the Act are as follows:
(i)the Patent Act (Act No. 121 of 1959);
(ii)the Utility Model Act (Act No. 123 of 1959);
(iii)the Design Act (Act No. 125 of 1959);
(iv)the Trademark Act (Act No. 127 of 1959);
(v)the Copyright Act (Act No. 48 of 1970);
(vi)the Act on Layout-Design of Semiconductor Integrated Circuits (Act No. 43 of 1985);
(vii)the Act on Special Measures of Corporate Reorganization Proceedings and Other Insolvency Proceedings of Financial Institutions (Act No. 95 of 1996);
(viii)the Plant Variety Protection and Seed Act (Act No. 83 of 1998);
(ix)the Civil Rehabilitation Act (Act No. 225 of 1999);
(x)the Act on Recognition of and Assistance for Foreign Insolvency Procedures (Act No. 129 of 2000);
(xiii)the Corporate Reorganization Act (Act No. 54 of 2002);
(xiv)the Bankruptcy Act (Act No. 75 of 2004); and
(xv)the Companies Act.
(Minimum Amount of Stated Capital of a Financial Instruments Business Operator)
Article 15-7(1)The amount specified by Cabinet Order that is provided for in Article 29-4, paragraph (1), item (iv), sub-item (a) of the Act (including as applied mutatis mutandis pursuant to Article 31, paragraph (5) of the Act) is the amount specified in the following items in accordance with the category of cases set forth in each of those items:
(i)if a financial instruments business operator seeks to conduct business related to the acts set forth in Article 28, paragraph (1), item (iii), sub-item (a) of the Act: three billion yen;
(ii)if a financial instruments business operator seeks to conduct business related to the acts set forth in Article 28, paragraph (1), item (iii), sub-item (b) of the Act (excluding the case set forth in the preceding item): 500 million yen;
(ii)-2if a financial instruments business operator seeks to conduct specified over-the-counter derivatives transactions or intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency by using an electronic data processing system to be used for its business of over-the-counter derivatives transactions, etc. (excluding the cases set forth in the preceding two items): 300 million yen;
(iii)if a financial instruments business operator seeks to conduct a type I financial instruments business (excluding a type I small amount electronic public offering business (meaning the type I small amount electronic public offering business prescribed in Article 29-4-2, paragraph (10) of the Act; the same applies hereinafter)) (excluding the cases set forth in the preceding three items): 50 million yen;
(iv)if a financial instruments business operator seeks to conduct an investment management business (excluding an investment management business for qualified investors (meaning the investment management business for qualified investors prescribed in Article 29-5, paragraph (1) of the Act; the same applies hereinafter)) (excluding the cases set forth in items (i) through (ii)-2): 50 million yen;
(v)if a financial instruments business operator seeks to conduct a Type II Financial Instruments Business (meaning a Type II Financial Instruments Business prescribed in Article 28, paragraph (2) of the Act and excluding a Type II Small Amount Electronic Public offering Service (meaning a Type II Small Amount Electronic Public offering Service prescribed in Article 29-4-3, paragraph (4) of the Act; the same applies hereinafter)) (excluding the cases set forth in the preceding items): ten million yen;
(vi)if a financial instruments business operator seeks to conduct a type I small amount electronic public offering service (excluding the cases set forth in items (i) through (iv)): ten million yen;
(vii)if a financial instruments business operator seeks to conduct an investment management business for qualified investors (excluding the cases set forth in items (i) through (iv)): ten million yen; and
(viii)if a financial instruments business operator seeks to conduct a type II small amount electronic public offering service (excluding the cases set forth in the preceding items): five million yen.
(2)If an applicant is a foreign corporation and the amount of stated capital or the total amount of contribution referred to in Article 29-4, paragraph (1), item (iv), sub-item (a) of the Act is to be converted into Japanese currency, the conversion is to be made by using the exchange rate at the time of registration under Article 29 of the Act, or at the time of filing an application for changes to the registration under Article 31, paragraph (4) of the Act.
(Persons Similar to Those Engaged in the Same Type of Business as a Type 1 Financial Instruments Business in a Foreign Country)
Article 15-8The persons specified by Cabinet Order that are provided for in Article 29-4, paragraph (1), item (v), sub-item (a) of the Act (including as applied mutatis mutandis pursuant to Article 31, paragraph (5) of the Act) are persons all of whose issued shares or equity in investment are held by persons engaged in the same type of business as type 1 financial instruments business.
(Minimum Net Assets of a Financial Instruments Business Operator)
Article 15-9(1)The amount specified by Cabinet Order that is provided for in Article 29-4, paragraph (1), item (v), sub-item (b) of the Act (including as applied mutatis mutandis pursuant to Article 31, paragraph (5) of the Act) is the amount specified in the items of Article 15-7, paragraph (1) (excluding items (v) and (viii)) in accordance with the category of cases set forth in each of those items.
(2)If an applicant is a foreign corporation and the amount of net assets referred to in Article 29-4, paragraph (1), item (iv) of the Act is to be converted into Japanese currency, the conversion is to be made using the exchange rate at the time of registration under Article 29 of the Act, or at the time of filing an application for changes to the registration under Article 31, paragraph (4) of the Act.
(Special Relationship)
Article 15-10(1)The special relationship specified by Cabinet Order that is provided for in Article 29-4, paragraph (5), item (ii) of the Act (including as applied mutatis mutandis pursuant to Article 31, paragraph (5) and Article 32, paragraph (5) of the Act) is the relationship specified in the following items in accordance with the category of persons set forth in each of those items:
(i)a person that holds subject voting rights (meaning subject voting rights as defined in Article 29-4, paragraph (2) of the Act and excluding subject voting rights that are deemed to be held pursuant to the provisions of Article 29-4, paragraph (5) of the Act (limited to the part that involves item (ii)); hereinafter the same applies in this item) or a person whose subject voting rights are held by a controlled company: the relationship between that person and the following persons:
(a)a person that jointly holds subject voting rights with that person, or that has agreed to jointly exercise subject voting rights with that person (referred to as a "joint holder" in paragraph (3));
(b)the person's spouse;
(c)the person's controlled company;
(d)the person's controlling shareholder, etc.; and
(e)another controlled company of the person's controlling shareholder, etc.;
(ii)persons other than those set forth in the preceding item: the relationship between that person and the persons set forth in sub-item (a) or (b) of that item.
(2)The term "controlling shareholder, etc." as used in item (i), sub-items (d) and (e) of the preceding paragraph means a person that holds voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of a company, and the term "controlled company" as used in item (i) of the preceding paragraph means a company in which voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. are held by a controlling shareholder, etc. In such a case, if a controlling shareholder, etc. and their controlled company jointly hold voting rights exceeding 50 percent of voting rights held by all the shareholders, etc. of another company, the other company is deemed to be the controlled company of the controlling shareholder, etc. and the controlling shareholder, etc. is deemed to be the controlling shareholder, etc. of the other company.
(3)If there is a person that, together with a joint holder, jointly holds voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of a company, each of those persons is deemed to be a controlling shareholder, etc. (meaning a controlling shareholder, etc. prescribed in the preceding paragraph; the same applies in the following paragraph) of the company and the company is deemed to be a controlled company (meaning a controlled company prescribed in the preceding paragraph; the same applies in the following paragraph) of that person, and the provisions of paragraph (1) apply.
(4)If there is a person that, together with their spouse, jointly holds voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of a company, that person is deemed to be the controlling shareholder, etc. of that company, the company is deemed to be the controlled company of that person, and the provisions of paragraph (1) apply.
(Securities for Which Handling of Public Offerings Cannot Be Conducted in a Type I Small Amount Electronic Public Offering Business or a Type II Small Amount Electronic Public Offering Business)
Article 15-10-2(1)The things specified by Cabinet Order that are provided for in Article 29-4-2, paragraph (10) of the Act are the following things:
(i)the securities set forth in Article 15-4-2, items (iv) and (v); and
(ii)the right prescribed in Article 2-9, paragraph (1) and the rights set forth in Article 2-10, paragraph (1), item (v) and Article 15-4-2, item (vii).
(2)The things specified by Cabinet Order that are provided for in Article 29-4-3, paragraph (4) of the Act are those set forth in item (ii) of the preceding paragraph.
(Handling of Public Offerings of Securities When the Total Issue Value and the Amount to Be Paid by Persons Acquiring the Securities Are Small)
Article 15-10-3The requirements specified by Cabinet Order that are provided for in Article 29-4-2, paragraph (10) and Article 29-4-3, paragraph (4) of the Act are the following requirements:
(i)the amount calculated by the method specified by Cabinet Office Order as the total issue value is less than 100 million yen; and
(ii)the amount calculated by the method specified by Cabinet Office Order as the amount to be paid by the person that acquires the securities is 500,000 yen or less.
(Scope of Right Holders in Investment Management Business for Qualified Investors)
Article 15-10-4The persons specified by Cabinet Order that are provided for in Article 29-5, paragraph (1), item (i) of the Act are the following persons:
(i)a creditor of an investment corporation (meaning a creditor of an investment corporation prescribed in Article 139-3, paragraph (1), item (vii) of the Act on Investment Trusts and Investment Corporations) of a registered investment corporation (meaning a registered investment corporation as defined in Article 2, paragraph (13) of that Act) that is the counterparty to a contract set forth in Article 2, paragraph (8), item (xii), sub-item (a) of the Act; and
(ii)an investor (meaning an employee of a foreign investment corporation) and a foreign creditor of an investment corporation (meaning a person that holds the rights indicated on the foreign investment securities provided for in the Act on Investment Trusts and Investment Corporations which are equivalent to the investment corporation bond certificates) that is the counterparty to a contract set forth in Article 2, paragraph (8), item (xii), sub-item (b) of the Act.
(Total Amount of All Investment Properties in Investment Management Business for Qualified Investors)
Article 15-10-5The amount specified by Cabinet Order that is provided for in Article 29-5, paragraph (1), item (ii) of the Act is 20 billion yen.
(Dealings in Private Placement Less Likely to be Transferred to Persons Other Than Qualified Investors)
Article 15-10-6The dealings in private placement specified by Cabinet Order that are provided for in Article 29-5, paragraph (2) of the Act are those that satisfy the requirements prescribed in the following items in accordance with the category of cases set forth in each of those items:
(i)cases in which rights associated with the securities are indicated on financial values which can be transferred by using an electronic data processing system: technical measures or other measures specified by Cabinet Office Order have been taken so that financial values cannot be transferred to persons other than qualified institutional investors (meaning the qualified institutional investors prescribed in Article 29-5, paragraph (3) of the Act; the same applies in the following item); and
(ii)cases other than those set forth in the preceding item: the dealings in private placement are undertaken in a way that makes the acquisition conditional upon the conclusion of a contract for transfer between the issuer of the securities and the person that seeks to acquire the securities in response to the solicitation for acquisition for those securities (hereinafter the person is referred to as the "acquirer" in this item), as well as between the person that makes the solicitation for acquisition and the acquirer, which provides that the acquirer will not transfer the securities they acquired to persons other than qualified institutional investors and provides other particulars specified by Cabinet Office Order.
(Persons Having a Close Relationship with a Financial Instruments Business Operator)
Article 15-10-7The persons specified by Cabinet Order as being closely related to a financial instruments business operator (including a person that seeks to obtain the registration referred to in Article 29 of the Act), prescribed in Article 29-5, paragraph (3) of the Act, are the following persons:
(i)an officer (meaning an officer prescribed in Article 29-2, paragraph (1), item (iii) of the Act) of the financial instruments business operator;
(ii)an employee of the financial instruments business operator;
(iii)the parent company, etc. (meaning a parent company, etc. prescribed in Article 15-16, paragraph (3)) of the financial instruments business operator; and
(iv)the persons specified by Cabinet Office Order as being equivalent to the persons set forth in the preceding three items.
(Persons Investing Assets Related to Investment Business)
Article 15-10-8The persons specified by Cabinet Order that are provided for in Article 29-5, paragraph (4), item (ii) of the Act are the following persons:
(i)a financial instruments business operator, etc. (limited to those that engage in investment management business); and
(ii)a corporation established under foreign laws and regulations, which is engaged in investment management business in a foreign country (excluding those set forth in the preceding item).
(Minimum Amount of Stated Capital for Authorization)
Article 15-11(1)The amount specified by Cabinet Order that is provided for in Article 30-4, item (ii) of the Act is 300 million yen.
(2)If an applicant is a foreign corporation and the amount of stated capital referred to in Article 30-4, item (ii) of the Act and the amount of net assets referred to in item (iii) of that paragraph are to be converted into Japanese currency, that conversion is made by using the exchange rate at the time of filing an application for the authorization referred to in Article 30, paragraph (1) of the Act.
(Amount of Business Security Deposit)
Article 15-12The amount specified by Cabinet Order that is provided for in Article 31-2, paragraph (2) of the Act is the amount specified in the following items in accordance with the category of persons set forth in each of those items:
(i)an individual engaged in a Type II Financial Instruments Business (meaning a Type II Financial Instruments Business prescribed in Article 28, paragraph (2) of the Act and excluding a Type II Small Amount Electronic Public Offering Service): ten million yen;
(ii)a person that engages only in investment advisory and agency business (meaning an investment advisory and agency business prescribed in Article 28, paragraph (3) of the Act; the same applies hereinafter): five million yen; and
(iii)an individual engaged in a Type II Small Amount Electronic Public Offering Service (excluding the person set forth in item (i)): five million yen.
(Requirements for Contract in Lieu of Business Security Deposits)
Article 15-13If a financial instruments business operator (limited to an individual engaged in a Type II Financial Instruments Business (meaning the Type II Financial Instruments Business prescribed in Article 28, paragraph (2) of the Act; the same applies hereinafter) or a person that engages only in investment advisory and agency business; hereinafter the same applies in this Article through Article 15-15) concludes a contract prescribed in Article 31-2, paragraph (3) of the Act, they must conclude the contract with a bank, an insurance company, or other financial institutions specified by Cabinet Office Order, and the content of that contract must conform to the following requirements:
(i)if the relevant person becomes subject to an order pursuant to the provsions of Article 31-2, paragraph (4) of the Act, the amount of business security deposit under that order are to be deposited without delay on behalf of the financial instruments business operator;
(ii)the contract will be valid for a period of one year or longer; and
(iii)unless approved by the Commissioner of the Financial Services Agency, the contract may not be cancelled, or the content of the contract may not be changed.
(Procedures for the Execution of Rights in Connection with Business Security Deposits)
Article 15-14(1)The person that holds the rights referred to in Article 31-2, paragraph (6) of the Act (hereinafter simply referred to as the "rights" in this Article) may file a petition for execution of the rights to the Commissioner of the Financial Services Agency.
(2)If a petition referred to in the preceding paragraph has been filed and is found to be well-grounded, the Commissioner of the Financial Services Agency must issue public notice to persons holding rights for the business security deposit to the effect that the rights must be reported within a fixed period of not less than 60 days, and that persons not reporting their rights within that period will be excluded from the distribution procedures, and must notify the person that has filed the petition referred to in the preceding paragraph (the person is referred to as the "petitioner" in the following paragraph and paragraph (4)) and the depositor (meaning a financial instruments business operator and the person that has deposited all or part of the business security deposit referred to in Article 31-2, paragraph (1) of the Act on behalf of the financial instruments business operator based on the contract prescribed in paragraph (3) of that Article pursuant to the order issued under the provisions of paragraph (4) of that Article; the same applies in paragraph (4) and paragraph (5)) to that effect.
(3)After a public notice under the provisions of the preceding paragraph has been given, even if the petitioner withdraws the petition, this does not stop the procedures from proceeding.
(4)The Commissioner of the Financial Services Agency must conduct an investigation into the rights after the period set forth in paragraph (2) has elapsed, without delay. In such a case, the Commissioner of the Financial Services Agency must give public notice and notify the depositor of the due date and place in advance, and give the petitioner, persons that have reported their rights within the relevant period, and the depositor, an opportunity to present evidence and state their opinions concerning the existence of the rights and the amount of claims secured by those rights.
(5)The Commissioner of the Financial Services Agency must prepare a distribution list based on the results of the investigation under the preceding paragraph and give public notice and notify the depositor of this without delay.
(6)A dividend distribution is to be made after 80 days have elapsed from the day on which the public notice under the preceding paragraph was given and in accordance with the distribution list referred to in that paragraph.
(7)If securities (including book-entry corporate bonds, etc. prescribed in Article 129, paragraph (1) of the Act on Book-Entry Transfer of Corporate Bonds and Shares) have been deposited, and it is necessary for the execution of rights, the Commissioner of the Financial Services Agency may convert the securities. In such a case, the costs for the conversion are deducted from the conversion value.
(Refund of Business Security Deposit)
Article 15-15(1)A financial instruments business operator, their successor, or the person that has deposited the business security deposit on behalf of the financial instruments business operator may, if the financial instruments business operator has come to fall under any of the following cases, have all the deposit for operation from the deposit refunded by obtaining the approval of the Commissioner of the Financial Services Agency:
(i)if the registration under Article 29 of the Act has been rescinded pursuant to the provisions of Article 52, paragraph (1) or (4) or Article 54 of the Act;
(ii)if the registration under Article 29 of the Act has become invalid pursuant to the provisions of Article 50-2, paragraph (2) of the Act; or
(iii)if the financial instruments business operator has obtained a registration of change referred to in Article 31, paragraph (4) of the Act for conducting financial instruments business other than a Type II Financial Instruments Business (limited to cases in which business is performed by an individual) or investment advisory and agency business.
(2)A financial instruments business operator or a person that has deposited a business security deposit on behalf of the financial instruments business operator may, if the amount of business security deposit (including the contract amount (meaning the contract amount prescribed in Article 31-2, paragraph (3) of the Act; hereinafter the same applies in this paragraph)) related to the financial instruments business operator has come to exceed the amount specified in Article 15-12, have all or part of the exceeding amount refunded, within the amount obtained by deducting the contract amount from the amount of the business security deposit, by obtaining the approval of the Commissioner of the Financial Services Agency.
(Scope of a Parent Corporation and a Subsidiary Corporation)
Article 15-16-1(1)A person that satisfies the requirements specified by Cabinet Order that is provided for in Article 31-4, paragraph (3) of the Act means one of the following persons (excluding those specified by Cabinet Office Order):
(i)the relevant person's parent company, etc.;
(ii)a subsidiary company, etc. of the relevant person's parent company, etc. (excluding the person themselves and the person set forth in the preceding item and item (i) of the following paragraph);
(iii)an affiliated company, etc. of the relevant person's parent company, etc. (excluding the person set forth in item (ii) of the following paragraph); and
(iv)the following companies, partnerships, or any other business entity equivalent to them (including those equivalent to them in a foreign country and excluding the person themselves and the persons set forth in the preceding three items and the items of the following paragraph; hereinafter referred to as the "company, etc." in this item) related to the individual that holds voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc. of the relevant person (hereinafter referred to as the "specified individual shareholder"):
(a)a company, etc. (including the subsidiary company, etc. and affiliated company, etc. of the company, etc.) in which that specified individual shareholder holds voting rights exceeding 50 percent of the voting rights held by all the shareholders, etc.; and
(b)a company, etc. in which that specified individual shareholder holds voting rights that saccount for not less than 20 percent but not more than 50 percent of the voting rights held by all the shareholders, etc.
(2)The person that satisfies the requirements specified by Cabinet Order that are provided for in Article 31-4, paragraph (4) of the Act means one of the following persons (excluding those specified by Cabinet Office Order):
(i)the relevant person's subsidiary company, etc.; and
(ii)the relevant person's affiliated company, etc.
(3)The term "parent company, etc." as used in paragraph (1), items (i) through (iii) means those specified by Cabinet Office Order as a company, etc. which has control over the organ (meaning the shareholders meeting and any other organs equivalent to it; hereinafter referred to as the "decision making body" in this paragraph) which is responsible for deciding the policies for finance, operations, and business of another company, etc. (meaning a company, partnership, or any other entity equivalent to it (including an equivalent entity in a foreign country); hereinafter the same applies in this Article) and the term "subsidiary company, etc." as used in paragraph (1), item (ii) and item (iv), sub-item (a), and item (i) of the preceding paragraph means another company, etc. whose decision making body is controlled by a parent company, etc. In such a case, if the parent company, etc. and subsidiary company, etc. or the subsidiary company, etc. has control over the decision making body of another company, etc., the other company, etc. is deemed to be the subsidiary company, etc. of the parent company, etc.
(4)The term "affiliated company, etc."as used in paragraph (1), item (iii), item (iv), sub-item (a), and paragraph (2), item (ii) means another company, etc. (excluding a subsidiary company, etc.) specified by Cabinet Office Order for which a company etc. (including its subsidiary companies, etc. (meaning subsidiary companies, etc. prescribed in the preceding paragraph; hereinafter the same applies in this paragraph)) is able to exert a material influence on decisions on financial policies and operational or business policies through contribution, assumption of office as a director or other equivalent position by a person that is or has been an officer or employee of the company, etc., financing, guarantee of obligations, provision of collateral, provision of technology, or transactions, etc. in operations and business.
(5)The particulars necessary for the determination of the holding of the voting rights prescribed in paragraph (1), item (iv) are specified by Cabinet Office Order taking into account of the manner in which they are held and other circumstances.
(Scope of Subsidiary Corporation of a Specified Major Shareholder)
Article 15-16-2(1)The persons that satisfy the requirements specified by Cabinet Order prescribed in Article 32-2, paragraph (2) of the Act are the following persons:
(i)the relevant person's subsidiary company, etc.; and
(ii)the relevant person's affiliated company, etc.
(2)The term "subsidiary company, etc." as used in item (i) of the preceding paragraph means another company, etc. whose body that decides its financial and operational or business policies (meaning shareholders meeting or other equivalent body; hereinafter referred to as "decision-making body" in this paragraph) is controlled by its parent company, etc. (company, etc. specified by Cabinet Office Order that controls the decision-making body of another company, etc. (meaning a company, partnership or other equivalent entity, including an equivalent entity in a foreign country; hereinafter the same applies in this Article) . In such a case, if a parent company, etc. and its subsidiary company, etc. or its subsidiary company, etc. controls the decision-making body of another company, etc., that company, etc. is deemed to be a subsidiary company, etc. of the parent company, etc.
(3)The term "affiliated company, etc." as used in paragraph (1), item (ii) means another company, etc. (excluding a subsidiary company, etc.) specified by Cabinet Office Order for which a company, etc. (including its subsidiary companies, etc. (meaning subsidiary companies, etc. prescribed in the preceding paragraph; hereinafter the same applies in this paragraph)) is capable of exerting a material influence on decisions on financial policies and operational or business policies through contribution, assumption of office as a director or other equivalent position by a person that is or has been an officer or employee of the company, etc., financing, guarantee of obligations, provision of collateral, provision of technology, or transactions, etc. in operations and business.
(Securities Similar to Short-Term Corporate Bonds)
Article 15-17(1)The things specified by Cabinet Order as being similar to short-term corporate bonds that are provided in Article 33, paragraph (2), item (i) of the Act are as follows:
(i)the short-term corporate bonds prescribed in Article 61-10, paragraph (1) of the Insurance Business Act; and
(ii)those specified by Cabinet Office Order as being equivalent to the securities set forth in Article 2, paragraph (1), item (iv) of the Act.
(2)The things specified by Cabinet Order as being similar to short-term investment corporation bonds that are provided in Article 33, paragraph (2), item (i) of the Act are securities similar to investment corporation bond certificates which are issued by a foreign investment corporation and which are equivalent to the short-term investment corporation bonds prescribed in Article 139-12, paragraph (1) of the Act on Investment Trusts and Investment Corporations.
(3)The securities set forth in Article 2, paragraph (1), item (xvii) of the Act which are specified by Cabinet Order that are provided for in Article 33, paragraph (2), item (i) of the Act are, among the securities which have the nature of the securities set forth in Article 2, paragraph (1), item (xv) of the Act, those for which the period between the day of issuance and the day of redemption is shorter than one year, or those specified by Cabinet Office Order as being equivalent to the short-term corporate bonds set forth in Article 66, item (i) of the Act on Book-Entry Transfer of Corporate Bonds and Shares, or the securities set forth in paragraph (1), item (i) of this Order or the provisions of Article 2, paragraph (1), item (iv) or (vii) of the Act.
(4)The securities set forth in Article 2, paragraph (1), item (xxi) of the Act which are specified by Cabinet Order that are provided for in Article 33, paragraph (2), item (i) of the Act are, among the securities set forth in Article 1, item (i), those for which the period between the day of issuance and the day of redemption is shorter than one year.
(Securities Excluded as a Subject of Private Placement by a Financial Institution)
Article 15-18The securities specified by Cabinet Order that are provided for in Article 33, paragraph (2), item (iv), (a) of the Act are securities set forth in Article 2, paragraph (1), item (xix) of the Act (including securities set forth in Article 2, paragraph (1), item (xix) of the Act that indicate options on those securities) that indicate the options on the following securities:
(i)share certificates (including preferred equity securities), share option certificates, corporate bond certificates with share options, and other securities specified by Cabinet Office Order as being equivalent to them;
(ii)securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in the preceding item; and
(iii)securities set forth in Article 2, paragraph (1), item (xx) of the Act that indicate rights associated with the securities set forth in the preceding two items.
(Cases in Which a Large Number of Persons Are the Other Parties to a Transaction)
Article 15-19The cases specified by Cabinet Order that are provided for in Article 33, paragraph (2), item (v) of the Act are cases in which the transaction set forth in sub-item (b) of that item is conducted with not less than 50 persons as the other parties.
(Subject Transaction of Brokerage for Clearing of Securities by a Financial Institution)
Article 15-20The transactions specified by Cabinet Order that are provided for in Article 33, paragraph (2), item (vi) of the Act are as follows:
(i)the lending and borrowing of the money necessary for the settlement of brokerage for clearing of securities, etc. (limited to those related to a margin transaction, or the purchase and sale of securities or securities-related market derivatives transaction made on a financial instruments business operator's own account; the same applies in the following item) (limited to those related to lending done by a securities finance company);
(ii)the lending and borrowing of securities (if persons other than a securities finance company lend the securities necessary for the settlement of brokerage for clearing of securities, etc. by using the clearing systems of a financial instruments exchange market or over-the-counter securities market, this is limited to lending related to brokerage for clearing of securities, etc. made without recourse to a financial instruments exchange market or an over-the-counter securities market);
(iii)the delivery and receipt of collateral in a transaction set forth in the preceding two items;
(iv)the delivery and receipt of beneficiary certificates or money, etc. related to the establishment of a securities investment trust, the redemption of a part of the principal of a securities investment trust, or the exchange between beneficiary certificates of a securities investment trust and listed securities, etc.; and
(v)beyond what is set forth in the preceding items, delivery and receipt of securities or money made for the performance of the obligations that arise from the purchase and sale of securities, transaction of securities-related derivatives, or the transactions set forth in the preceding items.
(Persons Engaged in a Specified Financial Instruments Business)
Article 15-21(1)When the person engaged in a specified financial instruments business prescribed in Article 33-8, paragraph (2) of the Act performs that business, they must clarify they are the person that acts as an agent for the registered financial institution related to that business.
(2)The persons specified by Cabinet Order that are provided for in Article 33-8, paragraph (2), item (i) of the Act are the following persons:
(i)a life insurance agent that is an individual (meaning a life insurance agent as defined in Article 2, paragraph (19) of the Insurance Business Act and excluding the officers and employees of a life insurance company as defined in paragraph (3) of that Article or a foreign life insurance company as defined in paragraph (8) of that Article);
(ii)an officer that has the representative authority of a life insurance agent that is a corporation (meaning a life insurance agent as defined in Article 2, paragraph (19) of the Insurance Business Act);
(iii)a non-life insurance representative that is an individual (meaning a non-life insurance representative as defined in Article 2, paragraph (21) of the Insurance Business Act; hereinafter the same applies in this paragraph);
(iv)the employee of a non-life insurance representative that is an individual, for whom the notification under the provisions of Article 302 of the Insurance Business Act has been given;
(v)the officers or employees of a non-life insurance representative that is a corporation, for whom the notification under the provisions of Article 302 of the Insurance Business Act has been given; and
(vi)the officers that have the representative authority of a non-life insurance representative that is a corporation.
(Provision of Particulars Using Information and Communications Technology)
Article 15-22(1)When seeking to provide a person with the particulars prescribed in Article 34-2, paragraph (4) of the Act pursuant to the provisions of that paragrpah (including as applied mutatis mutandis pursuant to the provisions of Article 34-3, paragraph (12) (including as applied mutatis mutandis pursuant to the provisions of Article 34-4, paragraph (6) of the Act), Article 34-4, paragraph (3), Article 37-3, paragraph (2), Article 37-4, paragraph (2), Article 37-5, paragraph (2), Article 40-2, paragraph (6), Article 40-5, paragraph (3), and Article 42-7, paragraph (2) of the Act; hereinafter the same applies in this Article), a financial instruments business operator, etc. must indicate to the person to which they will provide that information the type and content of the means prescribed in that paragraph to be used to provide the information (hereinafter referred to as "electronic or magnetic means" in this Article) and obtain consent for this in writing or by electronic or magnetic means, in advance and pursuant to the provisions of Cabinet Office Order.
(2)If a financial instruments business operator, etc. that has obtained the consent under the provsions of the preceding paragraph receives a notice from the relevant person, either in writing or by electronic or magnetic means, indicating that the person is not willing to be provided with particulars by electronic or magnetic means, the financial instruments business operator, etc. must not use electronic or magnetic means to provide the person with the particulars prescribed in Article 34-2, paragraph (4) of the Act; provided, however, that this does not apply if the person gives the consent under the provisions of the preceding paragraph at another time.
(Obtaining Consent Using Information and Communications Technology)
Article 15-23(1)When seeking to obtain a person's consent by the means specified by Cabinet Office Order that are prescribed in Article 34-2, paragraph (12) of the Act (hereinafter referred to as "electronic or magnetic means" in this Article) in lieu of consent in writing under the provisions of Article 34-2, paragraph (11) of the Act pursuant to the provisions of Article 34-2, paragraph (12) of the Act (including as applied mutatis mutandis pursuant to Article 34-3, paragraph (3) (including as applied mutatis mutandis pursuant to Article 34-4, paragraph (6) of the Act) and Article 43-4, paragraph (3) of the Act; hereinafter the same applies in this Article) , a financial instruments business operator, etc. must indicate to the person whose consent is sought the type and content of the electronic or magnetic means to be used and obtain consent for this in writing or by electronic or magnetic means, in advance and pursuant to the provisions of Cabinet Office Order.
(2)If a financial instruments business operator that has obtained a person's consent pursuant to the provisions of the preceding paragraph receives a notice from that person, either in writing or by electronic or magnetic means, indicating that the person will not give consent by electronic or magnetic means, the financial instruments business operator must not use electronic or magnetic means to obtain the person's consent prescribed in Article 34-2, paragraph (12) of the Act; provided, however, that this does not apply if the person has given the consent under the provisisons of the preceding paragraph at another time.
(Technical Replacement of Terms When a Subject Contract Is a Continuous Contract)
Article 15-24(1)In applying the provisions of Article 34-3, paragraph (4) of the Act when the subject contract referred to in Article 34-3, paragraph (4), item (ii) of the Act is an investment advisory contract (meaning an investment advisory contract as defined in Article 2, paragraph (8), item (xi) of the Act; the same applies hereinafter) or a discretionary investment contract, the phrase "the applicant is deemed to be a professional investor for the purpose of application of this Act (excluding Article 29-5, paragraph (3) and this Subsection)" in Article 34-3, paragraph (4) of the Act is deemed to be replaced with "the applicant is deemed to be a professional investor for the purpose of application of this Act (excluding Article 29-5, paragraph (3), this Subsection, and Article 45 (limited to the part that involves item (iii) and item (iv))), and the applicant is deemed to be a professional investor only during the period until the expiration date (if the financial instruments business operator, etc. has given the consent pursuant to the provisions of paragraph (2) and has given a consent in writing pursuant to the provisions of that paragraph for the request for renewal prescribed in paragraph (7) which the applicant has made prior to the expiration date, the expiration date related to the request for renewal) for the purpose of the application of Article 45 (limited to the part that involves item (iii) and item (iv))".
(2)In applying the provisions of Article 34-3, paragraph (4) of the Act when the subject contract referred to in Article 34-3, paragraph (4), item (ii) of the Act as applied mutatis mutandis pursuant to Article 34-4, paragraph (6) of the Act is an investment advisory contract or a discretionary investment contract, the phrase "the applicant is deemed to be a professional investor for the purpose of application of this Act (excluding Article 29-5, paragraph (3) and this Subsection)" in Article 34-4, paragraph (4) of the Act is deemed to be replaced with "the applicant is deemed to be a professional investor for the purpose of application of this Act (excluding Article 29-5, paragraph (3), this Subsection, and Article 45 (limited to the part that involves item (iii) and item (iv))), and the applicant is deemed to be a professional investor only during the period until the expiration date (if the financial instruments business operator, etc. has delivered the documents and made the confirmation pursuant to the provisions of paragraph (2) of the following Article and has given the consent pursuant to the provisions of paragraph (2) as applied mutatis mutandis pursuant to paragraph (6) of the following Article, and has given a consent in writing pursuant to the provisions of paragraph (2) for the request for renewal prescribed in paragraph (7) which the applicant has made prior to the expiration date, the expiration date related to the request for renewal) for the purpose of the application of Article 45 (limited to the part that involves item (iii) and item (iv))".
(Assets Excluded from Specified Assets That Are Subject to Investment)
Article 15-25The assets specified by Cabinet Order that are provided for in Article 35, paragraph (1), item (xv), (a) of the Act are as follows:
(i)building lots (meaning the building lots set forth in Article 2, item (i) of the Building Lots and Buildings Transaction Business Act (Act No. 176 of 1952)) and buildings;
(ii)commodities as defined in Article 2, paragraph (1) of the Commodity Futures Act; and
(iii)rights associated with commodities investment, etc. transactions as set forth in Article 3, item (x) of the Order for the Enforcement of the Act on Investment Trusts and Investment Corporations.
(Goods That Are the Subject of Investment Constituting a Notification Business)
Article 15-26The goods specified by Cabinet Order that are provided for in Article 35, paragraph (2), item (v)-2 of the Act are the commodities as defined in Article 2, paragraph (1) of the Commodity Futures Act.
(Material Particulars That Have an Impact on Customers' Judgment)
Article 16(1)The particulars specified by Cabinet Order that are provided for in Article 37, paragraph (1), item (iii) of the Act are as follows:
(i)the particulars of fees, remuneration, or other consideration payable by the customer for a financial instruments transaction contract (meaning a financial instruments transaction contract prescribed in Article 34 of the Act; the same applies hereinafter) which are specified by Cabinet Office Order;
(ii)if there is customer margin, other security deposit, or any other thing specified by Cabinet Office Order payable by the customer for the financial instruments transaction contract, its amount or its calculation method;
(iii)if there is a possibility that the amount (meaning the amount obtained by multiplying the number or volume of the transactions to the amount of consideration offered for the transactions or the agreed figure (meaning the agreed figure prescribed in Article 2, paragraph (21), item (ii) of the Act; the same applies hereinafter); hereinafter the same applies in this item and Article 18, paragraph (1), item (iii)) of derivative transactions (in the case of the transactions set forth in Article 2, paragraph (21), item (iii) of the Act, the transactions set forth in sub-item (a) and (b) of that item which are closed by the exercise of the rights under that item, in the case of the transactions set forth in Article 2, paragraph (22), item (iii) of the Act, the transactions set forth in sub-items (a) and (b) of that item which are closed by the exercise of the rights under that item, and in the case of the transactions set forth in Article 2, paragraph (22), item (iv) of the Act, the transactions for which money is to be paid or received that are prescribed in that item and which are closed by the exercise of the rights under that item), margin transactions, and other transactions specified by Cabinet Office Order conducted by a customer (hereinafter referred to as the "derivatives transaction, etc." in this item and Article 18, paragraph (1), item (iii)) exceeds the amount of the customer margin, other security deposit, or any other amount specified by Cabinet Office Order payable by the customer for the derivatives transaction, etc. (hereinafter referred to as the "amount of security deposit, etc." in this Article and Article 18), the following particulars:
(a)the fact that the amount of the derivatives transaction, etc. may exceed the amount of security deposit, etc.; and
(b)the ratio of the amount of the derivatives transaction, etc. to the amount of security deposit, etc. (if that ratio cannot be calculated, that fact and the reason);
(iv)the following particulars, if there is a risk of losses arising directly from fluctuations in money rates, the value of currencies, quotations on a financial instruments market, or any other indicators, regarding an act of financial instruments transaction (meaning an act constituting financial instruments transaction prescribed in Article 34 of the Act; the same applies hereinafter) conducted by a customer:
(a)the indicator in question; and
(b)the fact that there is a risk of losses arising from fluctuations in that indicator and the reasons for this;
(v)if there is a risk that the amount of loss referred to in the preceding item may exceed the amount of security deposit, etc. (hereinafter referred to as the "risk of loss in excess of principal" in this item), the following particulars:
(a)the indicator referred to in the preceding item, which is the direct cause for the risk of loss in excess of principal; and
(b)the fact that there is a risk of loss in excess of principal due to fluctuations in the indicator set forth in sub-item (a) and the reason for this;
(vi)if there is a difference between the sale price and purchase price of the financial instruments indicated by the financial instruments business operator, etc. for over-the-counter derivatives transactions (in the cases of the transactions set forth in Article 2, paragraph (22), items (ii) through (vi) of the Act, the particulars specified by Cabinet Office Order as being equivalent to the sale price and purchase price), that fact; and
(vii)the particulars specified by Cabinet Office Order as being equivalent to the particulars set forth in the preceding items.
(2)Notwithstanding the provisions of the preceding paragraph, the particulars specified by Cabinet Order that are provided for in Article 37, paragraph (1), item (iii) of the Act, when the acts prescribed in Article 37, paragraph (1) of the Act are to be performed by broadcasting using the broadcasting equipment of a private broadcaster or any other means specified by Cabinet Office Order as being equivalent to this, are as follows:
(i)if there is a risk of losses arising directly from fluctuations in money rates, the value of currencies, quotations on a financial instruments market, or any other indicator, regarding an act constituting financial instruments transaction conducted by a customer, an indication of this risk (if there is a risk that the amount of loss may exceed the amount of security deposit, etc., including an indication of that risk); and
(ii)the particulars specified by Cabinet Office Order as being equivalent to the particulars set forth in the preceding item.
(Scope of Specified Financial Instruments Business Operator)
Article 15-27The persons specified by Cabinet Order that are provided for in Article 36, paragraph (3) of the Act are the following persons:
(i)a financial instruments business operator that engages in the securities-related services (meaning securities-related services prescribed in Article 28, paragraph (8) of the Act; the same applies hereinafter) (limited to persons has obtained the registration referred to in Article 29 of the Act for engaging in type I financial instruments business); and
(ii)a registered financial institution.
(Scope of Parent Financial Institution and Subsidiary Financial Institution)
Article 15-28(1)The persons specified by Cabinet Order that are provided for in Article 36, paragraph (4) of the Act are the persons set forth in the items of Article 15-16, paragraph (1).
(2)The persons engaged in financial business specified by Cabinet Order that are provided for in Article 36, paragraphs (4) and (5) are the following persons:
(i)a person set forth in the items of Article 1-9;
(ii)a notifier of specially permitted services (meaning a notifier of specially permitted services prescribed in Article 63, paragraph (5) of the Act; the same applies hereinafter);
(iii)a notifier of specially permitted services for foreign investors, etc. (meaning a notifier of specially permitted services for foreign investors, etc. prescribed in Article 63-9, paragraph (4) of the Act; the same applies hereinafter);
(iv)a person engaged in the following business in a foreign country in compliance with foreign laws and regulations (excluding a financial instruments business operator, bank, cooperative financial institution, and a person set forth in the preceding three items):
(a)financial instruments business;
(b)banking business as defined in Article 2, paragraph (2) of the Banking Act (Act No. 59 of 1981); and
(c)insurance business as defined in Article 2, paragraph (1) of the Insurance Business Act.
(3)The persons specified by Cabinet Order that are provided for in Article 36, paragraph (5) of the Act are the persons set forth in the items of Article 15-16, paragraph (2).
(Solicitation Requiring Notification of the Content of Documents to the Prime Minister)
Article 16-2The solicitation specified by Cabinet Order that is provided for in Article 37-3, paragraph (3) of the Act is solicitation in response to which not less than 500 persons are to conclude the financial instruments transaction contract related to the solicitation.
(Contracts That May Be Cancelled by the Customer)
Article 16-3(1)The financial instruments transaction contract specified by Cabinet Order that is provided for in Article 37-6, paragraph (1) of the Act is an investment advisory contract.
(2)The number of days specified by Cabinet Order that is provided for in Article 37-6, paragraph (1) of the Act is ten days.
(Contracts Prohibiting Uninvited Solicitation)
Article 16-4(1)The financial instruments transaction contracts specified by Cabinet Order that are provided for in Article 38, item (iv) of the Act are the following contracts:
(i)a contract providing that the following transactions from among the over-the-counter derivatives transactions are conducted with customers or a contract providing that the relevant person acts as an intermediary, a broker (excluding brokerage for clearing of securities, etc.), or an agent of those transactions on behalf of the customer:
(a)a transaction comprising a purchase and sale in which the parties to the purchase and sale promise to deliver and take delivery of a financial instrument (limited to those set forth in Article 2, paragraph (24), item (ii) or (iii) of the Act; hereinafter the same applies in this item) and its value at a fixed time in the future, and which the parties may settle by delivering and taking delivery of the difference in values if they sell back or buy back the underlying financial instrument or if they take an act that cancels the purchase and sale contract;
(b)a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the numerical value of a financial index upon which the parties agree in advance (limited to the prices of the financial instruments or the interest rates, etc. (meaning the interest rate, etc. as defined in Article 2, paragraph (21), item (iv) of the Act; the same applies hereinafter) of the financial instruments (excluding those set forth in Article 2, paragraph (24), item (iii) of the Act) or the figures calculated based on the interest rates, etc.; the same applies in sub-item (b)) and the actual numerical value of the financial index at a fixed time in the future, or any other similar transactions;
(c)a transaction comprising the first party's promise to grant the second party the right to close one of the following transactions between them by a unilateral manifestation of the second party's intention, and the second party's promise to pay the value of that right; or any other similar transaction:
1.a purchase and sale of financial instruments (excluding the transactions set forth in sub-item (a)); and
2.a transaction set forth in sub-item (a) or (b);
(d)cryptoasset-related over-the-counter derivatives transactions; and
(ii)a contract providing that an over-the-counter derivatives transaction is to be conducted with individual customers or intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency for over-the-counter derivatives transactions is to be performed on behalf of individual customers (excluding contracts that fall under the contracts set forth in the preceding item).
(2)The contract specified by Cabinet Order that is provided for in Article 38, items (v) and (vi) of the Act is one of the contracts set forth in the items of the preceding paragraph or one of the following contracts:
(i)a contract providing that intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency is to be conducted for the following transactions from among the market derivatives transaction on behalf of customers, or that intermediation, brokerage, or agency is to be conducted for the entrustment of those transactions:
(a)a transaction comprising a purchase and sale in which the parties to the purchase and sale promise to deliver and take delivery of a financial instrument (limited to those set forth in Article 2, paragraph (24), item (ii) or (iii) of the Act or those set forth in Article 2, paragraph (24), item (v) of the Act (limited to those related those set forth in Article 2, paragraph (24), item (ii) of the Act); hereinafter the same applies in this item) and its value at a fixed time in the future, and which the parties may settle by delivering and taking delivery of the difference in values if they sell back or buy back the underlying financial instrument;
(b)a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the numerical value of a financial index upon which the parties agree in advance (limited to the prices of the financial instruments or the interest rates, etc. of the financial instruments (excluding those set forth in Article 2, paragraph (24), item (iii) of the Act) or the figures calculated based on the interest rates, etc.; the same applies insub-item (b)) and the actual numerical value of the financial index at a fixed time in the future;
(c)a transaction comprising the first party's promise to grant the second party the right to close one of the following transactions between them by a unilateral manifestation of the second party's intention, and the second party's promise to pay the value of that right:
1.a purchase and sale of financial instruments (excluding the transaction set forth in sub-item (a)); and
2.a transaction set forth insub-item (a) or (b) (including the transactions equivalent to the transaction set forth in sub-item (b), which are specified by a financial instruments exchange);
(d)cryptoassets-related over-the-counter derivatives transactions prescribed in Article 185-24, paragraph (1) of the Act;
(e)commodity-related market derivatives transactions as defined in Article 2, paragraph (8), item (i) of the Act; and
(ii)a contract providing that intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency for transactions similar to those set forth in sub-items (a) through (d) of the preceding item from among the foreign market derivatives transactions are to be conducted on behalf of customers or that intermediation, brokerage, or agency for entrustment of those transactions are to be conducted.
(Financial Instruments Business Operators and Authorized Firms for On-Exchange Transactions That Are Included in High-Speed Traders)
Article 16-4-2The person specified by Cabinet Order that is provided for in Article 38, item (viii) of the Act (including as applied mutatis mutandis pursuant to Article 60-13 of the Act) is a person that falls under any of the following items:
(i)a person that has obtained the registration referred to in Article 29 of the Act by stating the particulars set forth in Article 29-2, paragraph (1), item (vii), (a) of the Act in the written application for registration or a person that has given a notification under the provsions of Article 31, paragraph (1) of the Act by stating those particulars (excluding a person that has given a notification under the provisions of that paragraph of the fact that changes have been made to a particular subject to that registration or notification);
(ii)a person that has obtained the registration referred to in Article 29 of the Act or the registration of a change referred to in Article 31, paragraph (4) of the Act by stating the particular set forth in Article 29-2, paragraph (1), item (vii), sub-item (b) of the Act in the written application for registration or the written application for registration of a change (excluding a person that has obtained the registration of a change referred to in that paragraph by stating the intention to make a change to a particular subject to that registration or that registration of a change in the written application for registration of a change);
(iii)a person that has obtained the registration referred to in Article 33-2 of the Act by stating the particular set forth in Article 33-3, paragraph (1), item (vi), sub-item (a) of the Act in the written application for registration or a person that has given a notification under the provisions of Article 33-6, paragraph (1) of the Act by stating that particular (excluding a person that has given a notification under the provisions of that paragraph of the fact that a change has been made to a particular subject to that registration or notification); and
(iv)a person that has obtained the permission referred to in Article 60, paragraph (1) of the Act by stating the particular set forth in Article 60-2, paragraph (1), item (iv), sub-item (a) of the Act in the written application for permission or a person that has given a notification under the provisions of Article 60-5, paragraph (1) of the Act by stating that particular (excluding a person that has given a notification under the provisions of that paragraph of the fact that a change has been made to a particular subject to that permission or notification).
(Exemptions to the Prohibition on Compensation for Loss)
Article 16-5The transactions specified by Cabinet Order that are provided for in Article 39, paragraph (1), item (i) of the Act are, the purchase and sale on condition of repurchase related to the securities set forth in Article 2, paragraph (1), items (i) through (v) and item (xv) of the Act (excluding corporate bond certificates with share options; hereinafter the same applies in this Article), the securities set forth in Article 2, paragraph (1), item (xvii) of the Act which have the nature of the securities set forth in Article 2, paragraph (1), items (i) through (v) and item (xv) of the Act, and the securities set forth in Article 1, item (i), for which the repurchase price is set in advance (hereinafter referred to as "purchase and sale of bonds, etc. on condition of repurchase" in this Article), which are conducted by a financial instruments business operator, etc. solely for their own procurement of funds (including those conducted for procuring funds that will become insufficient due to their becoming a counterparty to other purchase and sale of bonds, etc. on condition of repurchase)
(Exemptions to the Application of the Best Execution Policy)
Article 16-6(1)The transactions specified by Cabinet Order that are provided for in Article 40-2, paragraph (1) of the Act are as follows:
(i)purchase and sale of securities (excluding those set forth below):
(a)the purchase and sale of listed share certificates, etc. (meaning the share certificates, corporate bond certificates with share options, and any other securities specified by Cabinet Office Order which are listed on a financial instrument exchange; the same applies in paragraph (3)) (excluding purchase and sale that falls under a derivatives transaction; hereinafter the same applies in this item and paragraph (3));
(b)the purchase and sale of over-the-counter traded securities; and
(c)the purchase and sale of tradable securities; and
(ii)derivatives transactions.
(2)The best execution policy, etc. under the provisions of Article 40-2, paragraph (1) of the Act must be established by stating the method for executing orders under the best terms and conditions for each issue for the transactions of securities, etc. prescribed in that paragraph and the reason for choosing that method.
(3)The transactions specified by Cabinet Order that are provided for in Article 40-2, paragraph (4) of the Act are the purchase and sale of listed share certificates, etc. and over-the-counter traded securities.
(Things Similar to Money)
Article 16-7The thing specified by Cabinet Order as being similar to money that is provided for in Article 40-3 and Article 40-3-2 of the Act is the thing set forth in the items of Article 1-3.
(Acts That Are Subject to the Obligation of Notification Related to Securities for Professional Investors)
Article 16-7-2The acts specified by Cabinet Order that are provided for in Article 40-5, paragraph (1) of the Act are the following acts:
(i)selling the thing in question (excluding what is set forth below):
(a)selling the thing in question on a financial instruments exchange market, over-the-counter securities market, or foreign financial instruments market;
(b)selling of share certificates, etc. (meaning share certificates, etc. prescribed in Article 27-2, paragraph (1) of the Act) in connection with a tender offer prescribed in Article 27-2, paragraph (6) of the Act;
(c)selling of listed share certificates, etc. (meaning the listed share certificates, etc. prescribed in Article 24-6, paragraph (1) of the Act) in connection with a tender offer prescribed in Article 27-2, paragraph (6) of the Act as applied mutatis mutandis pursuant to the provisions of Article 27-22-2, paragraph (2) of the Act following the deemed replacement of terms;
(d)selling of the thing in question through a purchase and sale transaction of securities which is closed when the rights acquired or granted in the transactions of securities-related derivatives (meaning transactions of securities-related derivatives prescribed in Article 28, paragraph (8), item (vi) of the Act and limited to the transactions set forth in Article 28, paragraph (8), item (iii), sub-item (c) of the Act (limited to a transaction related to Article 28, paragraph (8), item (iii), sub-item (c), 1. of the Act) or Article 28, paragraph (8), item (iv), sub-item (c) of the Act (limited to a transaction related to Article 28, paragraph (8), item (iv), sub-item (c), 1. of the Act)) are exercised (such a purchase and sale transaction is referred to as the "specified purchase and sale transaction" in the following item);
(e)selling associated with a purchase and sale of securities set forth in Article 2, paragraph (8), item (x) of the Act; and
(f)beyond what is set forth in sub-items (a) through (e), a thing specified by Cabinet Office Order as something that would not compromise the protection of investors;
(ii)the conclusion of a contract providing that intermediation, brokerage, or agency (excluding those set forth below) for purchases (excluding purchases conducted through specified purchase and sale transactions; hereinafter the same applies in this item) are to be conducted:
(a)intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency for purchases made on a financial instruments exchange market, over-the-counter securities market, or foreign financial instruments market;
(b)the acts set forth in Article 2, paragraph (8), item (x) of the Act;
(c)brokerage for clearing of securities, etc.; and
(d)beyond what is set forth in sub-items (a) through (c), acts specified by Cabinet Office Order as those which would not compromise the protection of investors.
(Exemptions to the Prohibition on Purchase and Sale of Securities)
Article 16-8The cases specified by Cabinet Order that are provided for in the proviso to Article 41-3 of the Act are the following cases:
(i)a case in which the acts are carried out as Type II Financial Instruments Business;
(ii)a case in which the acts are performed as registered financial institution business (meaning the registered financial institution business set forth in Article 33-3, paragraph (1), item (vi), sub-item (a) of the Act);
(iii)a case in which a financial instruments business operator that is a financial instruments intermediary service provider performs the acts as a financial instruments intermediary service;
(iv)a case in which a registered financial institution that is a financial institution engaged in trust business (meaning a financial institution that obtained the authorization 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) performs the acts as trust business (meaning trust business set forth in that paragraph; the same applies hereinafter);
(v)a case in which a financial instruments business operator that is a financial service intermediary (meaning the financial service intermediary prescribed in Article 11, paragraph (6) of the Act on the Provision of Financial Services (Act No. 101 of 2000); the same applies hereinafter) conducts the acts as securities, etc. intermediary business operations (meaning the securities, etc. intermediary business operations prescribed in paragraph (4) of that Article; the same applies in Article 16-11, item (iv)); and
(vi)cases specified by Cabinet Office Order as being equivalent to the cases set forth in the preceding items.
(Exemptions to the Prohibition on Receiving Deposits of Money or Securities)
Article 16-9The cases specified by Cabinet Order that are provided for in Article 41-4 and Article 42-5 of the Act are the following cases:
(i)a case in which a registered financial institution that is a financial institution engaged in trust business performs the acts as a trust business;
(ii)a case in which deposits, savings, or installment savings, etc. prescribed in Article 2, paragraph (4) of the Banking Act are accepted; and
(iii)cases specified by Cabinet Office Order as being equivalent to the cases set forth in the preceding two items.
(Scope of Persons Closely Related to a Financial Instruments Business Operator)
Article 16-10The persons specified by Cabinet Order that are provided for in Article 41-4 and Article 42-5 of the Act are any of the following persons that are not a financial instruments business operator, etc. (limited to those engaged in securities, etc. management business (meaning the securities, etc. management business as defined in Article 28, paragraph (5) of the Act; the same applies in Article 18-2)), a bank, or other persons specified by Cabinet Office Order:
(i)a relative (limited to the spouse and the relatives by blood or affinity within the third degree of kinship) of the financial instruments business operator, etc. (limited to one that is an individual);
(ii)officers (meaning the officers prescribed in Article 29-2, paragraph (1), item (iii) of the Act and if the officer is a corporation, this includes the members that are to perform the duties of the corporation; the same applies in Article 18-2, item (ii)) or an employee of the financial instruments business operator, etc. (limited to one that is a corporation; hereinafter the same applies in this Article);
(iii)a parent corporation, etc. (meaning a parent corporation, etc. as defined in Article 31-4, paragraph (3) of the Act; the same applies hereinafter) or subsidiary corporation, etc. (meaning a subsidiary corporation, etc. as defined in Article 31-4, paragraph (4) of the Act; the same applies hereinafter) of the financial instruments business operator, etc.;
(iv)a specified individual shareholder of the financial instruments business operator, etc. (excluding those set forth in item (ii)); and
(v)the persons specified by Cabinet Office Order as being equivalent to the persons set forth in the preceding items.
(Exemptions to the Prohibition on Lending of Money or Securities Concerning Investment Advisory Business)
Article 16-11The cases specified by Cabinet Order that are provided for in the proviso to Article 41-5 of the Act are the following cases:
(i)a case in which a financial instruments business operator (limited to one engaged in a type I financial instruments business) performs the following acts:
(a)lending of money or securities to customers as a business set forth in Article 35, paragraph (1) of the Act (excluding those incidental to a margin transaction; the same applies in sub-item (c) of this item, sub-item (b) of the following item, and item (iv));
(b)intermediation or agency for lending of money to customers which are made by another financial instruments business operator incidentally with a margin transaction;
(c)intermediation or agency for lending of money or securities to customers which are made by another financial instruments business operator as a business prescribed in Article 35, paragraph (1) of the Act;
(ii)a case in which a financial instruments business operator that is a financial instruments intermediary service provider performs the following acts:
(a)intermediation for lending of money or securities to customers which are made by an entrusting financial instruments business operators, etc. (meaning an entrusting financial instruments business operator, etc. prescribed in Article 66-2, paragraph (1), item (iv) of the Act; the same applies hereinafter) incidentally with a margin transaction;
(b)intermediation for lending of money or securities to customers which are made by an entrusting financial instruments business operator, etc. as a business prescribed in Article 35, paragraph (1) of the Act;
(iii)a case in which a registered financial institution that is a financial institution engaged in trust business performs the following acts:
(a)lending of money or securities to customers; and
(b)intermediation or agency for lending money or securities to customers, performed by other financial institutions (limited to banks, cooperative financial institutions, the Shoko Chukin Bank Limited, insurance companies, or securities finance companies);
(iv)a case in which a financial instruments business operator that is a financial service intermediary engages in intermediation for lending of money or securities to customers which are made by the counterparty financial institution (meaning the counterparty to a specified financial service contract (meaning the specified financial service contract prescribed in Article 31, paragraph (2) of the Act on the Provision of Financial Services; the same applies in Article 18-4-15, paragraph (5)) concluded by a customer through the securities, etc. intermediary business operations conducted by a financial service intermediary; the same applies in Article 16-13, item (v)), as the services prescribed in Article 35, paragraph (1) of the Act; and
(v)cases specified by Cabinet Office Order as being equivalent to the cases set forth in the preceding items.
(Persons That May Entrust the Authority for Investment)
Article 16-12The persons specified by Cabinet Order that are provided for in Article 42-3, paragraph (1) of the Act are the following persons:
(i)another financial instruments business operator, etc. (limited to one engaged in an investment management business); and
(ii)a corporation established in accordance with foreign laws and regulations which engages in an investment management business in a foreign country (for the types of businesses prescribed in Article 29-2, paragraph (1), item (v) of the Act which are not investment advisory and agency business, excluding the persons that have obtained the registration referred to in Article 29 of the Act).
(Exemptions to the Prohibition on Lending of Money or Securities in Relation to Investment Management Business)
Article 16-13The cases specified by Cabinet Order that are provided for in the proviso to Article 42-6 of the Act are the following cases:
(i)a case in which a financial instruments business operator, etc. provides intermediation or agency for lending of money or securities to customers which are made by another financial instruments business operator incidentally with a margin transaction;
(ii)a case in which a financial instruments business operator (limited to one engaged in a type I financial instruments business) performs the following acts:
(a)the lending of money or securities to customers as a business set forth in Article 35, paragraph (1) of the Act (excluding those incidental to a margin transaction; the same applies in sub-item (b) of this item, sub-item (b) of the following item, and item (v));
(b)intermediation or agency for lending of money or securities to customers which are made by another financial instruments business operator as a business set forth in Article 35, paragraph (1) of the Act;
(iii)a case in which a financial instruments business operator that is a financial instruments intermediary service provider performs the following acts (excluding the cases set forth in item (i)):
(a)intermediation or agency for lending of money or securities to customers which are made by an entrusting financial instruments business operator, etc. incidentally with a margin transaction;
(b)intermediation for lending of money or securities to customers which are made by an entrusting financial instruments business operator, etc. as a business set forth in Article 35, paragraph (1) of the Act;
(iv)a case in which a registered financial institution which is a financial institution engaged in trust business performs the following acts:
(a)lending of money or securities to customers;
(b)intermediation or agency for lending of money or securities to customers which are made by a financial instruments business operator incidentally with a margin transaction; and
(c)intermediation or agency for lending of money or securities to customers which are made by other financial institutions (limited to banks, cooperative financial institutions, the Shoko Chukin Bank Limited, insurance companies, or securities finance companies);
(v)a case in which a financial instruments business operator that is a financial service intermediary engages in intermediation for lending of money or securities to customers which are made by the counterparty financial institution, as the services prescribed in Article 35, paragraph (1) of the Act; and
(vi)cases specified by Cabinet Office Order as being equivalent to the cases set forth in the preceding items.
(Number of Right Holders Entitled to Investment Property Not Requiring the Submission of Investment Reports)
Article 16-14The number specified by Cabinet Order that is provided for in the proviso to Article 42-7, paragraph (3) of the Act is 499.
(Securities-Related Transactions Excluded from the Subject of Separate Management)
Article 16-15The transactions specified by Cabinet Order that are provided for in Article 43-2, paragraph (1), item (ii) of the Act are transactions falling under the transactions designated by the Commissioner of the Financial Services Agency as being similar to over-the-counter derivatives transactions.
(Order for Public Notice of Business Reports)
Article 16-16The order under the provisions of Article 46-3, paragraph (3) and Article 48-2, paragraph (3) of the Act is to be given by providing that public notice pursuant to these provisions is required to be published in a daily newspaper that publishes information on current events.
(Period Until the Commencement of Public Inspection of Explanatory Documents)
Article 16-17The period specified by Cabinet Order that is provided for in the provisions of Article 46-4 and Article 47-3 of the Act is four months; provided, however, that if a financial instruments business operator that is a foreign corporation or an individual having an address in a foreign country is found to be unable to keep the explanatory documents (meaning the explanatory documents prescribed in Article 46-4 or Article 47-3 of the Act) and provide them for public inspection or publicize them using the internet or through other means pursuant to the provisions of Cabinet Office Order that are prescribed in Article 46-4 or Article 47-3 of the Act from the day on which four months have elapsed from the end of its business year due to the laws and regulations or practices in its home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Special Provisions on the Due Date for Submission of Business Reports by Foreign Corporations)
Article 16-18The period specified by Cabinet Order that is provided for in Article 46-3, paragraph (1) of the Act as applied pursuant to the provisions of Article 49, paragraph (1) of the Act following the deemed replacement of terms and provided for in Article 47-2 and Article 48-2, paragraph (1) of the Act as applied pursuant to the provisions of Article 49, paragraph (3) of the Act following the deemed replacement of terms is three months; provided, however, that if a financial instruments business operator that is a foreign corporation or an individual having an addess in a foreign country or a registered financial institution which is a foreign corporation is found to be unable to submit business reports within three months after the end of its business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Due Date for Submission of Other Documents)
Article 16-19The period specified by Cabinet Order that is provided for in Article 49-3, paragraph (1) of the Act is three months; provided, however, that if a financial instruments business operator prescribed in Article 49-3, paragraph (1) of the Act is found to be unable to submit the documents referred to in that paragraph within three months after the end of their business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Assets Required to Be Retained in Japan)
Article 16-20The liabilities on the accounts of all business offices or offices that are provided for in Article 49-5 of the Act which are specified by Cabinet Order are liabilities that are other than obligations against the head office of the financial instruments business operator prescribed in that Article or other non-residents among those liabilities.
(Deemed Replacement of Terms in the Provisions of the Companies Act as Applied Mutatis Mutandis If a Financial Instruments Business Gives Public Notice of the Discontinuation of Financial Instruments Business by Electronic Public Notice)
Article 17If public notice under the provisions of Article 50-2, paragraph (6) of the Act is given by electronic public notice (meaning the electronic public notice as defined in Article 2, item (xxxiv) of the Companies Act; the same applies hereinafter), the technical replacement of terms pursuant to the provsions of Article 50-2, paragraphs (9) and (10) of the Act when the provisions of the Companies Act are applied mutatis mutandis pursuant to Article 50-2, paragraphs (9) and (10) of the Act is as given in the following table:
Provisions of the Companies Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 940, paragraph (3) (excluding the items)
the preceding two paragraphs
paragraph (1)
these provisions
the provisions of that paragraph
(Assets for Which Retention in Japan May Be Ordered)
Article 17-2-1The part specified by Cabinet Order that is provided for in Article 56-3 of the Act is the amount of the stated capital equivalent to the amount of liability calculated pursuant to the provisions of Cabinet Office Order.
(Total Asset Value Threshold Requiring Notification for a Special Financial Instruments Business Operator)
Article 17-2-2The amount specified by Cabinet Order that is provided for in Article 57-2, paragraph (1) of the Act is 1 trillion yen.
(Due Date for Submission of Documents Related to the Parent Company of a Special Financial Instruments Business Operator)
Article 17-2-3(1)The period specified by Cabinet Order that is provided for in Article 57-2, paragraph (2) of the Act is one month (three months in the case of quarterly securities reports and other documents set forth in item (ii) of that paragraph that are specified by Cabinet Office Order as documents that are difficult to submit within that period); provided, however, that if the parent company (meaning the parent company prescribed in paragraph (8) of that Article; hereinafter the same applies in this Chapter) of a special financial instruments business operator (meaning a special financial instruments business operator prescribed in that paragraph; the same applies hereinafter) is a foreign company, and the special financial instruments business operator is found to be unable to submit the documents within three months after the notification date (meaning the notification date prescribed in paragraph (2) of that Article; the same applies in the following paragraph) due to the laws and regulations or practices in the home country of the parent company or any other compelling reasons, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(2)The period specified by Cabinet Order that is provided for in Article 57-2, paragraph (3) of the Act is one month (three months in the case of quarterly securities reports and other documents set forth in paragraph (2), item (ii) of that Article that are specified by Cabinet Office Order as documents that are difficult to submit within that period); provided, however, that if the parent company of a special financial instruments business operator is a foreign company, and the special financial instruments business operator is found to be unable to submit those documents within three months after the date on which the parent company became its parent company on or after the notification date due to the laws and regulations or practices in the home country of the parent company or any other compelling reasons, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(3)The period specified by Cabinet Order that is provided for in Article 57-2, paragraph (5) of the Act is one month (three months in the case of quarterly securities reports and other documents that are specified by Cabinet Office Order as documents that are difficult to submit within that period); provided, however, that if the parent company of a special financial instruments business operator is a foreign company, and the special financial instruments business operator is found to be unable to submit those documents within three months after the end of the quarter (meaning the quarter prescribed in Article 46-6, paragraph (3) of the Act) due to the laws and regulations or practices in the home country of the parent company or any other compelling reasons, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Scope of Subsidiary Corporations of a Special Financial Instruments Business Operator)
Article 17-2-4The persons that satisfy the requirements specified by Cabinet Order that are provided for in Article 57-2, paragraph (9) of the Act are the persons set forth in the items of Article 15-16-2, paragraph (1).
(Transitional Period Related to Submission of Business Reports of a Special Financial Instruments Business Operator)
Article 17-2-5(1)The period specified by Cabinet Order that is provided for in Article 57-3, paragraph (1) of the Act is one month.
(2)The order under the provisions of Article 57-3, paragraph (3) of the Act is to be given by providing that public notice under those provisions is required to be published in a daily newspaper that publishes information on current events.
(Transitional Period Related to Preparation and Public Inspection of Explanatory Documents of a Special Financial Instruments Business Operator)
Article 17-2-6(1)The period specified by Cabinet Order that starts to run from the notification date that is provided for in Article 57-4 of the Act is one month.
(2)The period specified by Cabinet Order after the end of each business year prescribed in Article 57-4 of the Act is four months.
(Transitional Period Related to Notification of Documents Stating the Status of Soundness in Management of a Special Financial Instruments Business Operator)
Article 17-2-7(1)The period specified by Cabinet Order that is provided for in Article 57-5, paragraph (2) of the Act is one month.
(2)The period specified by Cabinet Order that starts to run from the notification date that is provided for in Article 57-5, paragraph (3) of the Act is one month.
(3)The period specified by Cabinet Order that starts to run from the end of the quarter that is provided for in Article 57-5, paragraph (3) of the Act is two months.
(Due Date for Submission of Documents by a Designated Parent Company)
Article 17-2-8The period specified by Cabinet Order that is provided for in Article 57-13, paragraph (1) of the Act is one month.
(Transitional Period Related to Submission of Business Reports of the Ultimate Designated Parent Company)
Article 17-2-9(1)The period specified by Cabinet Order that is provided for in Article 57-15, paragraph (1) of the Act is one month.
(2)The order under the provisions of Article 57-15, paragraph (3) of the Act is to be given by providing that public notice under those provisions is required to be published in a daily newspaper that publishes information on current events.
(Transitional Period Related to Preparation and Public Inspection of Explanatory Documents of the Ultimate Designated Parent Company)
Article 17-2-10(1)The period specified by Cabinet Order from the day on which the company became an ultimate designated parent company that is provided for in Article 57-16 of the Act is one month.
(2)The period specified by Cabinet Order after the end of each business year prescribed in Article 57-16 of the Act is four months; provided, however, that if an ultimate designated parent company (meaning an ultimate designated parent company prescribed in Article 57-12, paragraph (3) of the Act; hereinafter the same applies in paragraph (3) of the following Article and Article 17-2-12, paragraph (2)) that is a foreign company is found to be unable to keep the explanatory documents set forth in Article 57-16 of the Act and provide them for public inspection or publicize them using the internet or through other means pursuant to the provisions of Cabinet Office Order prescribed in that Article from the day on which four months have elapsed from the end of its business year due to the laws and regulations or practices in its home company or any other compelling reasons, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Transitional Period Related to Notification of Documents Stating the Status of Management of an Ultimate Designated Parent Company)
Article 17-2-11(1)The period specified by Cabinet Order that is provided for in Article 57-17, paragraph (2) of the Act is one month.
(2)The period specified by Cabinet Order that starts to run from the day on which the company became an ultimate designated parent company prescribed in Article 57-17, paragraph (3) of the Act is one month.
(3)The period specified by Cabinet Order that starts to run from the end of the quarter for the ultimate designated parent company prescribed in Article 57-17, paragraph (3) of the Act is four months; provided, however, that if an ultimate designated parent company that is a foreign company is found to be unable to keep the documents set forth in paragraph (3) of that Article and provide them for public inspection from the day on which four months have elapsed from the end of the quarter for the ultimate designated parent company prescribed in paragraph (2) of that Article due to the laws and regulations or practices in its home country or any other compelling reasons, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Technical Replacement of Terms for Application of the Provisions of the Act to a Foreign Company)
Article 17-2-12(1)If the parent company of a special financial instruments business operator is a foreign company, the technical replacement of terms pursuant to the provisions of Article 57-27 of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 57-13, paragraph (2), item (ii)
the articles of incorporation, certificate of registered information,
the articles of incorporation, certificate of registered information (including documents equivalent to them), and certificate of registered information of the principal business office or office in Japan
Article 57-18, paragraph (1), item (ii)
it files a petition to commence bankruptcy proceedings, rehabilitation proceedings, or reorganization proceedings
it files a petition to commencebankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or liquidation proceedings in Japan or a files the same kind of petition in a country where its head office or principal business office is located based on the laws and regulations of that country
Article 57-18, paragraph (2), item (ii)
the officer that represented the designated parent company
the officer of a designated parent company
Article 57-18, paragraph (2), item (iii)
it dissolves as a result of an order to commence bankruptcy proceedings
it receives an order to commence bankruptcy proceedings, or has commenced the same kind of procedures as bankruptcy proceedings in a country where its head office or principal business office is located based on the laws and regulations of that country
the bankruptcy trustee
the bankruptcy trustee or the person equivalent to a bankruptcy trustee in that country
Article 57-18, paragraph (2), item (iv)
the liquidator
the liquidator or the person equivalent to a liquidator in the country where its head office or principal business office is located
(2)In applying the provisions of Article 57-15, paragraph (1) of the Act to cases in which an ultimate designated parent company is a foreign company, the term "within three months" in that paragraph is deemed to be replaced with "within three months (within the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order if the ultimate designated parent company is found to be unable to submit its business reports within three months after the end of its business year due to the laws and regulations or practices in its home country or any other compelling reasons)".
(Cases in Which Acts Related to Securities-Related Services May Be Conducted with a Person in Japan)
Article 17-3The cases specified by Cabinet Order that are provided for in the proviso to Article 58-2 of the Act are the following cases (excluding cases in which, for securities for professional investors, the acts set forth in Article 2, paragraph (8), items (i) through (iv) or item (x) of the Act are to be performed with general investors (meaning general investors prescribed in Article 40-4 of the Act; hereinafter the same applies in this Article) (excluding cases in which disclosure has been made for the securities for professional investors, those in which intermediation for a sale on behalf of the general investors not based on a solicitation for general investors is made, or any other cases specified by Cabinet Office Order as being less likely to result in insufficient protection of investors) and cases in which the foreign securities services provider conducts specified over-the-counter derivatives transactions or intermediation, brokerage (excluding brokerage for the clearing of securities, etc.), or agency using an electronic data processing system to be used for its business of over-the-counter derivatives transactions, etc.):
(i)cases in which a foreign securities services provider performs the following acts from a foreign country:
(a)the acts set forth in the items of Article 28, paragraph (8) of the Act performed with the government or the Bank of Japan;
(b)the acts set forth in the items of Article 28, paragraph (8) of the Act performed with financial institutions (meaning banks, cooperative financial institutions, and financial institutions set forth in the items of Article 1-9; hereinafter the same applies in this Article) that are specified by Cabinet Office Order, or a trust company (meaning persons that have obtained the license referred to in Article 3 or Article 53, paragraph (1) of the Trust Business Act (Act No. 154 of 2004)), and are related to the purchase and sale of securities or transactions of securities-related derivatives conducted by those persons for the purpose of investment or on the account of a person that has created a trust under a trust contract;
(c)the acts set forth in the items of Article 28, paragraph (8) of the Act performed with financial instruments business operators that are engaged in an investment management business, which are related to the investment management business conducted by them;
(d)the acts set forth in the items of Article 28, paragraph (8) of the Act performed with financial institutions that are specified by Cabinet Office Order, that are acts specified in Article 33, paragraph (2), items (i) through (v) of the Act related to the securities or transactions set forth in those items;
(e)among the acts set forth in the items of Article 28, paragraph (8) of the Act performed with the financial institution that is specified by Cabinet Office Order, those for which the financial institution makes the purchase and sale of securities upon receiving the customer's order in writing on a customer's account, or the acts set forth in item (iii) or (v) of that paragraph (excluding acts performed based on the solicitation to a customer concerning the order and acts performed upon receiving an order from the customer concerning the investment advisory business conducted by the financial institution), the acts which are related to those specified by Cabinet Office Order;
(f)the acts set forth in the items of Article 28, paragraph (8) of the Act performed with a Long-Term Credit Bank (meaning the persons that have obtained a license from the Prime Minister pursuant to the provisions of Article 4, paragraph (1) of the Long-Term Credit Bank Act (Act No. 187 of 1952)), an ordinary bank prescribed in Article 8, paragraph (1) of the Act on Financial Institutions' Merger and Conversion (Act No. 86 of 1968) (including as applied mutatis mutandis pursuant to Article 55, paragraph (4) of that Act; hereinafter the same applies in this item) that has received an authorization referred to in Article 8, paragraph (1) of that Act (including an ordinary bank prescribed in Article 17-2, paragraph (1) of the Act on Financial Institutions' Merger and Conversion prior to the amendment pursuant to the provisions of Article 168 of the Supplementary Provisions of the Act on Development, etc. of Relevant Acts for Financial System Reform (Act No. 107 of 1998) which are to remain in force pursuant to the provisions of Article 169 of the Supplementary Provisions of that Act (hereinafter referred to as the "Merger and Conversion Act Prior to the Amendment in 1998" in this item) (including as applied mutatis mutandis pursuant to Article 24, paragraph (1) of that Act; hereinafter the same applies in this item) which has received an authorization referred to in Article 17-2, paragraph (1) of that Act, and an ordinary bank which has received an authorization referred to in Article 17-2, paragraph (1) of that Act (including as applied mutatis mutandis pursuant to Article 24, paragraph (1) of that Act; hereinafter the same applies in this item) in implementing a merger or conversion for which a written merger agreement or written conversion agreement has been prepared pursuant to the provisions of the Act on a Financial Institutions' Merger and Conversion prior to the amendment pursuant to the provisions of Article 199 of the Act on Arrangement of Relevant Acts Incidental to Enforcement of the Companies Act (Act No. 87 of 2005; hereinafter referred to as the "Preparation Act for the Companies Act" in this item) which are to be governed by prior laws pursuant to the provisions of Article 200, paragraph (1) of the Preparation Act for the Companies Act (hereinafter referred to as the "Merger and Conversion Act Prior to the Amendment in 2005" in this item), or a trust company, etc. (meaning a trust company, etc. referred to in Article 3, paragraph (1) of the Trust Loan Act (Act No. 195 of 1952)), which are related to the long-term credit bank bonds issued pursuant to the provisions of Article 8 or Article 9 of the Long-Term Credit Bank Act, the specified corporate bonds issued pursuant to the provisions of Article 8 of the Act on Financial Institutions' Merger and Conversion, or the beneficiary certificates prescribed in Article 2, paragraph (2) of the Trust Loan Act, respectively;
(ii)cases in which a foreign securities services provider performs the following acts from a foreign country without making solicitation for the acts set forth in the items of Article 28, paragraph (8) of the Act (excluding the cases which fall under the preceding item):
(a)receiving an order from a person in Japan, the acts set forth in Article 28, paragraph (8), items (i) through (iii) or item (v) of the Act or the acts set forth in item (vi) of that paragraph (excluding intermediation, brokerage, or agency set forth in item (iv) of that paragraph) performed with the person as the counterparty, which are specified by Cabinet Office Order, or the acts set forth in Article 28, paragraph (8), item (iv) of the Act or the acts set forth in item (vi) of that paragraph (excluding intermediation, brokerage, and agency set forth in item (iv) of that paragraph) performed with the person (limited to one that falls under either sub-item (a) or (b) of Article 1-8-6, paragraph (1), item (ii)) as the counterparty;
(b)through the agency or intermediation performed by a financial instruments business operator engaged in securities-related services (limited to one that has obtained the registration referred to in Article 29 of the Act to conduct a type 1 financial instruments business), a purchase and sale of securities or an act set forth in Article 28, paragraph (8), item (iii) or (v) of the Act that is specified by Cabinet Office Order performed with a person in Japan as the counterparty, or an act set forth in Article 28, paragraph (8), item (iv) of the Act performed with a person in Japan as the counterparty (limited to those that fall under either sub-item (a) or (b) of Article 1-8-6, paragraph (1));
(iii)cases in which a foreign securities services provider, pursuant to the provisions of Cabinet Office Order, holds a discussion solely for fixing the content of a wholesale underwriting contract (meaning any of the following contracts concluded through public offering, private placement, or secondary distribution of securities or solicitation for selling, etc. only for professional investors; the same applies in the following Article), among its business of underwriting securities, with the issuer or holder of the securities related to the wholesale underwriting contract in Japan (excluding cases in which the secondary distribution or solicitation for selling, etc. only for professional investors of the securites, or the dealing in public offering, private placement, or secondary distribution of the securities or dealing in soliciatation for selling, etc. only for professional investors is made in Japan):
(a)a contract providing that the relevant party is to acquire all or some of the securities from the issuer or the holder of the securities for the purpose of having the securities acquired by other persons;
(b)a contract providing that, if there are no persons to acquire all or some of the securities, the relevant party is to acquire the remaining securities from the issuer or holder of the securities; and
(c)a contract providing that, if the securities are share option certificates and the person that has acquired them does not exercise the share options associated with all or some of them, the relevant party is to acquire the share option certificates associated with the unexercised share options from the their issuer or holder and the relevant party or a third party is to exercise those share options.
(Acts Requiring Permission Among the Underwriting Activities)
Article 17-4The act specified by Cabinet Order that is provided for in Article 59, paragraph (1) of the Act is, if a foreign securities services provider does not hold a discussion for fixing the content of a wholesale underwriting contract with the issuer or holder of the securities related to the wholesale underwriting contract, and does not conduct the secondary distribution of the securities, soliciatation for selling, etc. only for professional investors or the dealing in public offering, private placement, or secondary distribution of the securities or the dealing in solicitation for selling, etc. only for professional investors in Japan, is to be the participation in that wholesale underwriting contract.
(Calculation of the Amount of Stated Capital or the Total Amount of Contribution)
Article 17-5The amount of stated capital or the total amount of contribution prescribed in Article 59-2, paragraph (2) and Article 60-2, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act) is to be calculated by adding up the total issue value of the issued shares (excluding the amount that has been decided not recorded as the amount of stated capital from its issue value) and the amount recorded as the amount of stated capital by reducing the amount of reserve funds without issuing shares (including the amount equivalent to such an amount).
(Years of Experience in Underwriting Activities)
Article 17-6(1)The period specified by Cabinet Order that is provided for in Article 59-3, item (i) of the Act is three years.
(2)The period referred to in the preceding paragraph is calculated by deeming the period in which the following persons have been performing the same type of activities as underwriting activities (meaning underwriting activities prescribed in Article 59, paragraph (1) of the Act; hereinafter the same applies in this Article) in a foreign country to be the period in which the applicant for permission has performed the same type of activities as underwriting activities:
(i)a person merged with or consolidated into the applicant for permission;
(ii)a person that has had the applicant for permission succeed to all or some of the business involving the same type of activities as underwriting activities through a split;
(iii)a person that has transferred all or some of the business involving the same type of activities as underwriting activities to the applicant for permission;
(iv)a person that holds all the issued shares or equity investment of the applicant for permission; and
(v)persons specified by Cabinet Office Order as being equivalent to the persons set forth in the preceding items.
(Minimum Amount of Stated Capital for Underwriting Activities)
Article 17-7(1)The amount specified by Cabinet Order that is provided for in Article 59-3, item (ii) of the Act is 500 million yen.
(2)If the amount of stated capital or the total amount of contribution referred to in Article 59-3, item (ii) of the Act is to be converted into Japanese currency, the conversion is to be made using the exchange rate at the time of filing the application for permission.
(Years of Experience in On-Exchange Transaction Services)
Article 17-8(1)The period specified by Cabinet Order that is provided for in Article 60-3, paragraph (1), item (i), (c) of the Act is three years.
(2)The cases specified by Cabinet Order that are provided for in Article 60-3, paragraph (1), item (i), sub-item (c) of the Act are, if the relevant period has been calculated by deeming a period during which one of the following persons performed the same type of services as on-exchange transaction services (meaning on-exchange transaction services prescribed in Article 60, paragraph (1) of the Act; hereinafter the same applies in this Article) to be a period during which the applicant for permission performed the same type of operations as on-exchange transaction services, the case in which that period is three continuous years or longer:
(i)a person found to have reorganized into an applicant for permission or a company merged with the applicant for permission;
(ii)a person that has had the applicant for permission succeed to all or some of the business involvingthe same type of services as on-exchange transaction services through a split;
(iii)a person that has transferred all or some of the business involving the same type of services as on-exchange transaction services to the applicant for permission; and
(iv)a person that holds all the issued shares of the applicant for permission.
(Minimum Amount of Stated Capital for On-Exchange Transaction Services)
Article 17-9(1)The amount specified by Cabinet Order that is provided for in Article 60-3, paragraph (1), item (i), (e) of the Act is 50 million yen.
(2)If the amount of stated capital referred to in Article 60-3, paragraph (1), item (i), (e) of the Act is to be converted into Japanese currency, the conversion is to be made using the exchange rate at the time of filing the application for permission.
(Due Date for Submission of Business Reports Related to On-Exchange Transaction Services)
Article 17-10(1)The period specified by Cabinet Order that is provided for in Article 46-3, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 60-6 of the Act (including as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act) following the deemed replacement of terms is three months; provided, however, that if the authorized firm for on-exchange transactions or the business operator authorized to conduct electronic over-the-counter derivatives transactions, etc. is found to be unable to submit business reports within three months after the end of its business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(2)The order under the provisions of Article 46-3, paragraph (3) of the Act as applied mutatis mutandis pursuant to Article 60-6 of the Act (including as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act) is to be given by providing that public notice under these provisions is required to be published in a daily newspaper that publishes information on current events.
(3)The period specified by Cabinet Order that is provided for in Article 49-3, paragraph (1) of the Act as applied mutatis mutandis pursuant to Article 60-6 of the Act (including as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act) is three months; provided, however, that if the authorized firm for on-exchange transactions or the business operator authorized to conduct electronic over-the-counter derivatives transactions, etc. is found to be unable to submit the documents set forth in Article 49-3, paragraph (1) of the Act within three months after the end of its business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Cases in Which Electronic Over-the-Counter Derivatives Transactions Business May be Conducted)
Article 17-10-2The cases specified by Cabinet Order that are provided for in Article 60-14, paragraph (1) of the Act are cases in which a person as set forth in Article 1-8-6, paragraph (1), item (ii), sub-item (a) or (b) (excluding a person engaged in securities-related services) is the counterparty.
(Deemed Replacement of Terms in Connection with Electronic Over-the-Counter Derivatives Transactions Business)
Article 17-10-3The technical replacement of terms under Article 60-14, paragraph (2) of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 60, paragraph (2)
the preceding paragraph
Article 60-14, paragraph (1)
Article 60-2, paragraph (1)
paragraph (1) of the preceding Article
Article 60-14, paragraph (1)
on-exchange transaction office
electronic over-the-counter derivatives transactions, etc. ffice
Article 60-2, paragraph (3), item (i)
paragraph (1), item (i), sub-items (a) (h), or sub-item (j) of the following Article
paragraph (1), item (i), sub-items (a) through (c), sub-items (e) through (h), or sub-item (j) of the following Article
Article 60-2, paragraph (3), item (ii)
on-exchange transaction office
electronic over-the-counter derivatives transactions, etc. office
Article 60-3, paragraph (1), item (i)
on-exchange transaction offices
electronic over-the-counter derivatives transactions, etc. offices
as the on-exchange transaction
as the electronic over-the-counter derivatives transactions, etc.
Article 60-3, paragraph (1), item (ii)
on-exchange transaction offices
electronic over-the-counter derivatives transactions, etc. offices
Article 60-3, paragraphs (2) and (3)
Article 60, paragraph (1)
Article 60-14, paragraph (1)
Article 60-5, paragraph (1)
the items of Article 60-2, paragraph (1)
the items of Article 60-2, paragraph (1) (excluding items (iv), (vii), and (x))
Article 60-7
Article 60, paragraph (1)
Article 60-14, paragraph (1)
Article 60-8, paragraph (1)
Article 60, paragraph (1)
Article 60-14, paragraph (1)
Article 60-3, paragraph (1), item (i) (excluding sub-items (c) and (j)), item (ii), or item (iii))
Article 60-3, paragraph (1), item (i) (excluding sub-items (c), (d), and (j)) or item (ii)
Article 60-8, paragraph (3) and Article 60-9, paragraph (1)
Article 60, paragraph (1)
Article 60-14, paragraph (1)
Article 60-10
completing on-exchange transactions
completing electronic over-the-counter derivatives transactions, etc.
Article 60, paragraph (1)
Article 60-14, paragraph (1)
Article 60-12, paragraph (1)
Article 60, paragraph (1)
Article 60-14, paragraph (1)
(Years of Experience in Electronic Over-the-Counter Derivatives Transactions Business)
Article 17-10-4(1)The period specified by Cabinet Order that is provided for in Article 60-3, paragraph (1), item (i), (c) of the Act as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act is one year.
(2)The cases specified by Cabinet Order that are provided for in Article 60-3, paragraph (1), item (i), (c) of the Act as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act are, if the relevant period has been calculated by deeming a period during which one of the following persons has performed the same type of operations as electronic over-the-counter derivatives transactions, etc. business (meaning the electronic over-the-counter derivatives transactions, etc. business prescribed in Article 60-14, paragraph (1) of the Act; hereinafter the same applies in this paragraph) to be a period during which the applicant for permission has performed the same type of business as electronic over-the-counter derivatives transactions, etc. business, the cases in which that period is one continuous year or longer:
(i)a person found to have reorganized into an applicant for permission or a company merged with or consolidated into the applicant for permission;
(ii)a person that has had the applicant for permission succeed to all or some of the business involving the same type of business as an electronic over-the-counter derivatives transactions, etc. busines through a company split;
(iii)a person that has transferred all or some of the business involving the same type of business as electronic over-the-counter derivatives transactions, etc. business to the applicant for permission; and
(iv)a person that holds all the issued shares of the applicant for permission.
(Minimum Amount of Stated Capital for Electronic Over-the-Counter Derivatives Transactions Business)
Article 17-10-5(1)The amount specified by Cabinet Order that is provided for in Article 60-3, paragraph (1), item (i), (e) of the Act as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act is 300 million yen.
(2)If the amount of stated capital referred to in Article 60-3, paragraph (1), item (i), (e) of the Act as applied mutatis mutandis pursuant to Article 60-14, paragraph (2) of the Act is to be converted into Japanese currency, the conversion is to be made by using the exchange rate at the time of filing the application for permission.
(Persons That May Be a Counterparty of the Persons Engaged in Investment Advisory Business or Investment Management Business in a Foreign State)
Article 17-11(1)The persons specified by Cabinet Order that are provided for in Article 61, paragraphs (1) and (3) of the Act are registered financial institutions that are engaged in investment management business.
(2)The persons specified by Cabinet Order that are provided for in Article 61, paragraph (2) of the Act are financial instruments business operators that are engaged in investment management business (excluding business of conducting the acts set forth in Article 2, paragraph (8), item (xii) of the Act under a discretionary investment contract) and the person prescribed in the preceding paragraph.
(Specially Permitted Services for Qualified Institutional Investors)
Article 17-12(1)The persons other than a qualified institutional investor specified by Cabinet Order that are provided for in Article 63, paragraph (1), item (i) of the Act are persons other than a qualified institutional investor that fall under any of the following items at the time when they become a counterparty to a private placement or handling of a private placement involving the rights set forth in Article 2, paragraph (2), item (v) or (vi) of the Act which they acquire:
(i)the State;
(ii)the Bank of Japan;
(iii)a local government;
(iv)a financial instruments business operator, etc.;
(v)a person that, on a regular basis, conducts the act set forth in Article 2, paragraph (8), item (xv) of the Act with regard to the money or any other property invested or contributed by a person that conducts private placements involving the rights set forth in paragraph (2), item (v) or (vi) of that Article or that holds the rights set forth in item (v) or (vi) of that paragraph;
(vi)a person specified by Cabinet Office Order as a person having a close relationship with the person set forth in the preceding item;
(vii)a company that is an issuer of share certificates listed on a financial instruments exchange;
(viii)a corporation whose amount of stated capital is 50 million yen or more;
(ix)a corporation whose amount of net assets (meaning the amount obtained by deducting the amount of liabilities from the amount of assets on the balance sheet) is 50 million yen or more;
(x)a corporation established by a special act of establishment pursuant to the provisions of special laws;
(xi)the specified purpose company prescribed in Article 2, paragraph (3) of the Asset Securitization Act;
(xii)a corporate pension fund that satisfies the requirements specified by Cabinet Office Order in consideration of the status of property and other circumstances;
(xiii)a foreign corporation;
(xiv)an individual that satisfies the requirements specified by Cabinet Office Order in consideration of the status of property and other circumstances; or
(xv)a person specified by Cabinet Office Order as being equivalent to the persons set forth in the preceding items.
(2)If the rights set forth in Article 2, paragraph (2), item (v) or (vi) of the Act satisfy the following requirements, notwithstanding the provisions of the preceding paragraph, the persons that are not qualified institutional investors prescribed in Article 63, paragraph (1), item (i) of the Act, who are specified by Cabinet Order are persons prescribed in the preceding paragraph and persons that are not qualified institutional investors who are specified by Cabinet Office Order as persons that have knowledge and experience in investment:
(i)the business conducted by allocating money and other property invested or contributed by the persons holding the rights (hereinafter referred to as the "investors" in this paragraph) which satisfies the following requirements:
(a)investments that are made in share certificates and other securities specified by Cabinet Office Order (limited to those that are not listed on a financial instruments exchange at the time of making the investment, and excluding those specified by Cabinet Office Order) by allocating an amount exceeding 80 percent of the amount obtained by deducting the amount specified by Cabinet Office Order from the amount of the money and other property invested or contributed; and
(b)borrowing of funds or guarantee of obligations is not to be made, except in the case specified by Cabinet Office Order as a case that is found to have little likelihood of resulting in insufficient investor protection;
(ii)the money and other property cannot be refunded at the request of investors, unless there is a compelling reason;
(iii)the contract connected with those rights stipulates the particulars specified by Cabinet Office Order, that are prescribed in Article 63, paragraph (9) of the Act; and
(iv)a document stating the fact that the requirements set forth in the preceding three items are satisfied is to be delivered, or an electronic or magnetic record (meaning the electronic or magnetic record prescribed in Article 13, paragraph (5) of the Act; the same applies hereinafter) in which that fact is recorded is to be provided, to the investors by the time of concluding the contract connected with the rights.
(3)The number specified by Cabinet Order that is provided for in Article 63, paragraph (1), item (i) of the Act is 49.
(4)The private placement specified by Cabinet Order as having little likelihood of persons other than a qualified institutional investor acquire the rights provided for in Article 63, paragraph (1), item (i) of the Act, is one that satisfies the requirements specified in the following items in accordance with the category of cases set forth in each of those items:
(i)if the acquirer responding to a solicitation for acquisition of the rights is a qualified institutional investor (limited to a person that does not fall under any of the sub-items (a) through (c) of Article 63, paragraph (1), item (i) of the Act; hereinafter the same applies in this item and sub-item (a) of the following item): a restriction prohibiting the transfer of rights other than a transfer to a qualified institutional investor is imposed under the contract for the rights or by other juridical acts;
(ii)if the acquirer responding to a solicitation for acquisition of the rights is an investor subject to specially permitted services (meaning the person prescribed in paragraph (1) (in the case prescribed in paragraph (2), the person prescribed in that paragraph) that does not fall under any of Article 63, paragraph (1), item (i), sub-items (a) through (c) of the Act; the same applies in sub-items (a) and (b)): all of the following requirements:
(a)a restriction prohibiting the person that has acquired or purchased the rights from transferring the rights unless doing so all at once to another single qualified institutional investor or investor subject to specially permitted services is imposed under the contract of the rights or by other juridical acts; and
(b)if other rights specified by Cabinet Office Order as being the same type of rights as the relevant rights (those other rights are referred to as "newly issued rights of the same type" in sub-item (b)) have been issued as securities within six months prior to the day on which the relevant rights are to be issued as securities, the sum of the number of investors subject to specially permitted services that acquire the relevant rights in response to the solicitation for acquisition of the rights and the investors subject to specially permitted services that have acquired newly issued rights of the same type which have been issued within six months prior to the day on which the relevant rights are to be issued as securities in response to the solicitation for acquisition is 49 or less.
(5)The thing specified by Cabinet Order that is prescribed in Article 63, paragraph (1), item (ii) of the Act is the thing that is set forth in the items of Article 1-3.
(Employees of a Notifier of Specially Permitted Services)
Article 17-13The employees specified by Cabinet Order that are provided for in Article 63, paragraph (2), item (iv), paragraph (7), item (i), sub-item (c), and item (ii), sub-item (c) of the Act are employees of a person that seeks to make the notification for specially permitted services for qualified institutional investors, etc. (meaning the specially permitted services for qualified institutional investors, etc. prescribed in Article 63, paragraph (2) of the Act; hereinafter the same applies in this Article and the following Article) and fall under any of the following items:
(i)a person that supervises the operations of providing guidance to ensure that laws and regulations, etc. are observed for specially permitted services for qualified institutional investors, etc., or any other persons specified by Cabinet Office Order as being equivalent to the person; or
(ii)a person that supervises the department conducting investments with regard to specially permitted services for qualified institutional investors, etc. and any other person specified by Cabinet Office Order as being equivalent to the person.
(Specially Permitted Services for Qualified Institutional Investors for Which It Is Particularly Necessary to Ensure the Protection of Investors)
Article 17-13-2The specially permitted services for qualified institutional investors, etc. specified by Cabinet Order that are provided for in Article 63, paragraph (9) of the Act (including as applied mutatis mutandis pursuant to Article 63-3, paragraph (2) of the Act) are specially permitted services for qualified institutional investors, etc. regarding the rights set forth in Article 2, paragraph (2), item (v) or (vi) of the Act conducted with persons that are not qualified institutional investors prescribed in Article 17-12, paragraph (2) that are specified by Cabinet Office Order as having knowledge and experience in investment (limited to those that do not fall under any of Article 63, paragraph (1), item (i), sub-items (a) through (c) of the Act) as the counterparties.
(Special Provisions on the Due Date for Submission of Business Reports by Foreign Corporations)
Article 17-13-3The period specified by Cabinet Order that is provided for in Article 63-4, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 63-3, paragraph (2) of the Act) is three months; provided, however, that if a notifier of specially permitted services or a financial instruments business operator, etc. that is a foreign corporation or an individual having an address in a foreign country is found to be unable to submit business reports within the three months after the end of their business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Period Until the Commencement of Public Inspection of Explanatory Documents)
Article 17-13-4The period specified by Cabinet Order that is provided for in Article 63-4, paragraph (3) of the Act (including as applied mutatis mutandis pursuant to Article 63-3, paragraph (2) of the Act; hereinafter the same applies in this Article) is four months; provided, however, that if a notifier of specially permitted services or a financial instruments business operator, etc. that is a foreign corporation or an individual having an address in a foreign country is found to be unable to keep the explanatory documents (meaning the explanatory documents prescribed in Article 63-4, paragraph (3) of the Act) and provide them for public inspection or disclose them using the internet or through other means pursuant to the provisions of Cabinet Office Order prescribed in that paragraph from the day on which four months have elapsed from the end of their business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Specially Permitted Services for Foreign Investors)
Article 17-13-5(1)The things specified by Cabinet Order that are provided for in Article 63-8, paragraph (1), item (i) of the Act are those set forth in the items of Article 1-3.
(2)The public offering or private placement specified by Cabinet Order as having little likelihood of persons that are not foreign investors, etc. acquire the relevant rights that are provided for in Article 63-8, paragraph (1), item (ii) of the Act, is the public offering or private placement for which a restriction prohibiting the transfer of rights other than transfer to a foreign investor, etc. (meaning the foreign investor, etc. prescribed in paragraph (2) of that Article, and limited to those that do not fall under any of paragraph (1), item (i), sub-items (a) through (c) of that Article) is imposed under the contract for the rights or by other juridical acts.
(3)The persons specified by Cabinet Order as being closely related to the person that performs any of the acts set forth in the items of Article 63-8, paragraph (1) prescribed in paragraph (2), item (iii) of that Article, are the following persons:
(i)an officer (meaning an officer prescribed in Article 29-2, paragraph (1), item (iii) of the Act) of the person that performs the act;
(ii)an employee of the person that performs the act;
(iii)the parent company, etc. (meaning a parent company, etc. prescribed in Article 15-16, paragraph (3)) of the person that performs the act; and
(iv)the persons specified by Cabinet Office Order as being equivalent to the persons set forth in the preceding three items.
(Employee of a Notifier of Specially Permitted Services for Foreign Investors)
Article 17-13-6The employees specified by Cabinet Order that are provided for in Article 63-9, paragraph (1), item (iv) of the Act are employees of a person that seeks to make the notification for the specially permitted services for foreign investors, etc. (meaning the specially permitted services for foreign investors, etc. prescribed in Article 63-8, paragraph (1) of the Act; hereinafter the same applies in this Article) and fall under any of the following items:
(i)a person that supervises the operations of providing guidance to ensure that laws and regulations, etc. are observed for specially permitted services for foreign investors, etc., or any other persons specified by Cabinet Office Order as being equivalent to the person; or
(ii)a person that supervises the department conducting investments with regard to specially permitted services for foreign investors, etc. and any other person specified by Cabinet Office Order as being equivalent to the person.
(Deemed Replacement of Terms in Connection with Financial Instruments Business Operators That Have Given the Notification of Specially Permitted Services for Foreign Investors)
Article 17-13-7With regard to a financial instruments business operator that has given the notification under the provsions of Article 63-11, paragraph (1) of the Act, the technical replacement of terms pursuant to the provsions of paragraph (2) of that Article when the provisions of that paragraph are applied mutatis mutandis is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 63-12, paragraph (2)
foreign corporation
foreign corporation or an individual that has an address in a foreign country
(Special Provisions on the Due Date for Submission of Business Reports by Foreign Corporations)
Article 17-13-8The period specified by Cabinet Order that is provided for in Article 63-12, paragraph (2) of the Act (including as applied mutatis mutandis pursuant to Article 63-11, paragraph (2) of the Act) is three months; provided, however, that if a notifier of specially permitted services for foreign investors, etc. or financial instruments business operator that is a foreign corporation or an individual that has an address in a foreign country is found to be unable to submit business reports within the three months after the end of their business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Period Until the Commencement of Public Inspection of Explanatory Documents)
Article 17-13-9The period specified by Cabinet Order that is provided for in the provisions of Article 63-12, paragraph (3) of the Act (including as applied mutatis mutandis pursuant to Article 63-11, paragraph (2); hereinafter the same applies in this Article) is four months; provided, however, that if a notifier of specially permitted services for foreign investors, etc. or financial instruments business operator that is a foreign corporation or an individual that has an address in a foreign country is found to be unable to keep the explanatory documents (meaning the explanatory documents prescribed in Article 63-12, paragraph (3) of the Act), provide them for public inspection, or disclose them using the internet or through other means from the day on which four months have elapsed from the end of their business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Acts That are Subject to Registration as a Sales Representative)
Article 17-14The acts specified by Cabinet Order that are provided for in Article 64, paragraph (1), item (iii) of the Act are the following acts (excluding those related to the securities prescribed in Article 64, paragraph (1), item (i) of the Act):
(i)a market derivatives transaction or foreign market derivatives transaction, or intermediation, brokerage, or agency for those transactions;
(ii)intermediation, brokerage, or agency for the entrustment of a market derivatives transaction or foreign market derivatives transaction;
(iii)a market derivatives transaction or foreign market derivatives transaction, or the solicitation of applications for intermediation, brokerage, or agency for those transactions; and
(iv)solicitation for the entrustment of a market derivatives transaction or foreign market derivatives transaction.
(Registration Fees)
Article 17-15(1)The registration fee under the provisions of Article 64-8, paragraph (1) of the Act (including as applied mutatis mutandis pursuant to Article 66-25 of the Act) is the amount specified by Cabinet Office Order taking into consideration of the actual costs, which is within three thousand yen for one sales representative (meaning a sales representative prescribed in Article 64, paragraph (1) of the Act; the same applies hereinafter).
(2)The fee referred to in the preceding paragraph must be paid by affixing revenue stamps in an amount equivalent to the fee to the written application for registration, if it is paid to the State.
(Technical Replacement of Terms in Appling the Provisions of the Act to a Foreign Corporation)
Article 17-16If a financial instruments business operator, etc., a notifier of specially permitted services, or a notifier of specially permitted services for foreign investors, etc. is a foreign corporation or an individual that has an address in a foreign country, the technical replacement of terms pursuant to the provisions of Article 65-2 of the Act in applying the provisions of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 29-2, paragraph (2), item (iii)
the articles of incorporation, certificate of registered information,
the articles of incorporation, and certificate of registered information (including documents equivalent to them) and certificate of registered information of the principal business office or office in Japan
Article 31-2, paragraph (1)
the deposit office nearest to their principal business office or office.
the deposit office nearest to their principal business office or office in Japan (for those that do not have a business office or office in Japan, the Tokyo Legal Affairs Bureau).
Article 31-4, paragraph (1)
a director, accounting advisor (if the accounting advisor is a corporation, a member who is to perform their duty), company auditor, or executive officer
the representative in Japan or a director, accounting advisor (if the accounting advisor is a corporation, a member who is to perform their duty), company auditor, executive officer, or persons equivalent to those persons stationed at the business office or office established in Japan to perform financial instruments business
Article 31-4, paragraph (2)
a director, accounting advisor, company auditor or executive officer, or employee
the representative in Japan or a director, accounting advisor, company auditor, executive officer (including persons equivalent to those persons), or employee stationed at the business office or office established in Japan to perform financial instruments business
Article 31-4, paragraph (3)
a director (an executive officer for a company with committees)
the representative in Japan or a director, executive officer, or persons equivalent to those persons stationed at the business office or office established in Japan to conduct financial instruments business
Article 31-4, paragraph (4)
a director or executive officer
the representative, a director or executive officer, or persons equivalent to those persons (limited to those engaged in financial instruments business) in Japan
Article 33-3, paragraph (1), item (vii)
the head office, and other business offices, or offices
the head office and the principal business office or office and any other business office or office in Japan
Article 33-3, paragraph (2), item (iv)
articles of incorporation, certificate of registered information,
articles of incorporationand certificate of registered information (including documents equivalent to them), and the certificate of registered information of the principal business office or office in Japan
Article 36-2, paragraph (1)
business offices or other offices
business offices or other offices established in Japan to perform financial instruments business or registered financial institution business
Article 42-2, item (i)
director or executive officer
the representative a director or executive officer, or persons equivalent to those persons in Japan
Article 46-4
all of its business offices or offices
all of its business offices or offices established in Japan to perform financial instruments business (hereinafter referred to as "all of its business offices or offices" in this Subsection and Article 47-3)
Article 46-5, paragraph (1)
the purchase and sale or other transactions of securities or the derivatives transactions, etc.
purchase and sale or other transactions of securities, or derivatives transactions, etc. conducted at all of its business offices or offices
lay aside financial instruments transaction liability reserves
lay aside financial instruments transaction liability reserves at its principal business office or offices in Japan
Article 46-5, paragraph (2)
the purchase and sale or other transactions of securities or the derivatives transactions, etc.
purchase and sale or other transactions of securities, or the derivatives transactions, etc. conducted at all of its business offices or offices
Article 48-3, paragraph (1)
purchase and sale or other transactions of securities or derivatives transactions, etc.
purchase and sale or other transactions of securities, or derivatives transactions, etc. conducted at all of its business offices or offices established in Japan to perform its registered financial institution business (hereinafter referred to as "all of its business offices or offices" in the following paragraph)
lay aside financial instruments transaction liability reserves
lay aside financial instruments transaction liability reserves at its principal business office or offices in Japan
Article 48-3, paragraph (2)
the purchase and sale or other transactions of securities or derivatives transactions, etc.
purchase and sale or other transactions of securities, or the derivatives transactions, etc. conducted at all of its business offices or offices
Article 50, paragraph (1), item (i)
they suspend business (limited to financial instruments business or registered financial institution business (hereinafter referred to as a "financial instruments business, etc." in this Section) or resume business
they suspend or resume business (limited to financial instruments business or registered financial Institution Business (hereinafter referred to as a "financial instruments business, etc." in this Section), or for a person engaged in a Type 1 Financial Instruments Business, the person suspends or resumes the business of the same type as a Financial Instruments Business at their head office
they suspend or resume business subject to the authorization
they suspend or resume the same type of business as that subject to the authorization at their head office, or suspend or resume business subject to the authorization at any of their business offices or offices in Japan
Article 50, paragraph (1), item (ii)
business subject to the authorization referred to in Article 30, paragraph (1)
the same type of business as that subject to authorization referred to in Article 30, paragraph (1) at its head office, or discontinues the business subject to the authorization at any of its business offices or offices in Japan.
Article 50, paragraph (1), item (iii)
succeeds to all or part of the other corporation's business (limited to business related to financial instruments business, etc.; hereinafter the same applies in this item and the following Article) in a company split
succeeds to all or part of the other corporation's business (limited to business related to financial instruments business, etc.; hereinafter the same applies in this item and the following Article) in a company split (for a person engaged in a Type 1 Financial Instruments Business, including when the person has had part of their business that is the same type as a financial instruments business in a foreign country succeeded to)
acquires all or part of the other corporation's business
acquires all or part of the other corporation's business (for a person engaged in a Type 1 Financial Instruments Business, including when the person transfers part of their business that is the same type as a financial instruments usiness in a foreign country)
Article 50, paragraph (1), item (vii)
if they file a petition to commence bankruptcy proceedings, rehabilitation proceedings, or reorganization proceedings
if they file a petition to commence bankruptcy proceedings, rehabilitation proceedings, reorganization proceedings, or liquidation in Japan, orfile the same kind petition in a country where the head office is located based on the laws and regulations of that country
Article 50-2, paragraph (1), item (ii)
discontinues financial instruments business, etc.
discontinues financial instruments business, etc. (for a person engaged in a Type 1 Financial Instruments Business, including when they the same type of business as a financial instruments business in a foreign country)
Article 50-2, paragraph (1), item (iii)
an officer that represented the corporation
an officer of a corporation
Article 50-2, paragraph (1), item (iv)
is dissolved due to an order commencing bankruptcy proceedings
has become subject to an order commencing bankruptcy proceedings, or has commenced the same kind of procedures as bankruptcy proceedings in a country where the head office is located based on the laws and regulations of that country
the bankruptcy trustee
the bankruptcy trustee or the person equivalent to a bankruptcy trustee in thatcountry
Article 50-2, paragraph (1), item (v)
is dissolvedfor reasons other than a merger or an order commencing bankruptcy proceedings
is dissolved for reasons other than a merger or an order commencing bankruptcy proceedings (for a person engaged in a Type 1 Financial Instruments Business, including when the person has commenced the liquidation of the business offices or offices in Japan)
the liquidator
the liquidator or the person equivalent to a liquidator in the country where the head office is located
Article 50-2, paragraph (1), item (vi)
has had all or part of its business succeeded to in a company split
has had all or part of its business succeeded to in a company split (for a person engaged in a Type 1 Financial Instruments Business, including when the person has had all of their business that is the same type as a financial instruments business in a foreign country succeeded to)
Article 50-2, paragraph (1), item (vii)
transfers all or part of their business
transfers all or part of their business (for a person engaged in a Type 1 Financial Instruments Business, including when the person transfers all of their business that is the same type as a financial instruments business in a foreign country)
Article 50-2, paragraph (2)
has had all of their business succeeded to
has had part of their business succeeded to
this is only if a Financial Instruments Business Operator, etc. transfers all of their business
excluding if a financial instruments business operator, etc. transfers part oftheir business
Article 50-2, paragraph (6)
discontinue financial instruments business, etc. (excluding investment advisory and agency business; the same applies in paragraph (8) and Article 56, paragraph (1))
discontinue financial instruments business, etc. (excluding investment advisory and agency business; the same applies in paragraph (8) and Article 56, paragraph (1)) (for a person engaged in a Type 1 Financial Instruments Business, including discontinuation of the same type of business as financial instruments business in a foreign country)
have all or part of their business succeeded to in a company split
have all or part of their business succeeded to in a company split (for a person engaged in a Type 1 Financial Instruments Business, including succession to all of their business that is the same type as a financial instruments business in a foreign country)
transfer all or part of their business
transferall or part of their business (for a person engaged in a Type 1 Financial Instruments Business, including transfer of all of their business that is the same type as a financial instruments business in a foreign country)
all of their business offices or offices
all of their business offices or offices established in Japan to perform financial instruments business, etc.
Article 50-2, paragraph (8)
succession of all or part of their business upon merger or in a company split
succession of all or part of their business upon merger or in a company split (for a person engaged in a Type 1 Financial Instruments Business, including succession to all of their business that is the same type as a financial instruments business in a foreign country)
transfer of all or part of their business
transfer of all or part of their business (for a person engaged in a Type 1 Financial Instruments Business, including transfer of all of their business that is the same type as a financial instruments business in a foreign country)
Article 56, paragraph (1)
dissolves
dissolves (for a person engaged in a Type 1 Financial Instruments Business, including commencement of liquidation of the business offices or offices in Japan)
discontinues
discontinues (for a person engaged in a Type 1 Financial Instruments Business, including discontinuation of the same type of business as a financial instruments business in a foreign country)
Article 63, paragraph (6) and Article 63-4, paragraph (3)
their principal business office or office and all of their business offices or offices that conduct specially permitted services for qualified institutional investors, etc.
all business offices and offices in Japan established for conducting specially permitted services for qualified institutional investors, etc.
Article 63-9, paragraph (5) and Article 63-12, paragraph (3)
their principal business office or office and all of their business offices or offices that conduct specially permitted services for foreign investors, etc.
their principal business office or office in Japan and all of its business offices or offices in Japan established for conducting specially permitted services for foreign investors, etc.
Article 64, paragraph (3), item (ii)
the representative
the representative in Japan
Chapter IV-2 Financial Instruments Intermediary Service Providers
(Material Particulars That Impact Customers' Judgment)
Article 18(1)The particulars specified by Cabinet Order that are provided for in Article 66-10, paragraph (1), item (iii) of the Act are as follows:
(i)the particulars specified by Cabinet Office Order regarding the fees, remuneration, or any other consideration payable by the customer with regard to a financial instruments transaction contract involving intermediation for financial instruments (meaning the acts set forth in the items of Article 2, paragraph (11) of the Act; the same applies hereinafter);
(ii)if there is customer margin or other security deposit, or any other thing specified by Cabinet Office Order payable by the customer in connection with a financial instruments transaction contract involving intermediation for financial instruments, its amount or method of calculation;
(iii)if there is a possibility that the amount of derivatives transaction, etc. conducted by a customer will exceed the amount of security deposit, etc., the following particulars:
(a)the fact that the amount of the derivatives transaction, etc. may exceed the amount of security deposit, etc.; and
(b)the ratio of the amount of the derivatives transaction, etc. to the amount of security deposit, etc. (if that ratio cannot be calculated, that fact and the reason for this);
(iv)the following particulars, if there is a risk of a loss arising directly from fluctuations in money rates, the value of currencies, quotations on a financial instruments market, or any other index, regarding an act of a financial instruments transaction conducted by a customer:
(a)the index in question; and
(b)the fact that there is a risk that fluctuations in that index could give rise to a loss and the reasons for this;
(v)if there is a risk that the amount of loss referred to in the preceding item will exceed the amount of security deposit, etc. (hereinafter referred to as "risk of loss in excess of principal" in this item), the following particulars:
(a)among the indexes set forth in the preceding item, those which are the direct cause for the risk of loss in excess of principal; and
(b)the fact that there is a risk of loss in excess of principal due to fluctuations in the indicator set forth in sub-item (a) and the reason for this; and
(vi)any particulars specified by Cabinet Office Order as being equivalent to the particulars set forth in the preceding item.
(2)Notwithstanding the provisions of the preceding paragraph, the particulars specified by Cabinet Order that are provided for in Article 66-10, paragraph (1), item (iii) of the Act if the acts set forth in Article 66-10, paragraph (1) of the Act are to be conducted by broadcasting using the broadcast equipment of a private broadcaster or by any other means specified by Cabinet Office Order as being equivalent to this, are as follows:
(i)if there is a risk of a loss arising directly from fluctuations in money rates, the value of currencies, quotations on a financial instruments market, or any other index, regarding an act that constitutes a financial instruments transaction conducted by a customer, the fact that ther is such a risk (if there is a risk that the amount of the loss may exceed the amount of security deposit, etc., including the fact that there is such a risk); and
(ii)any particulars specified by Cabinet Office Order as being equivalent to the particulars set forth in the preceding item.
(Scope of Persons Closely Related to Financial Instruments Intermediary Service Providers)
Article 18-2The persons specified by Cabinet Order that are provided for in Article 66-13 of the Act are any of the following persons other than a financial instruments business operator (limited to those engaged in securities, etc. management), a bank, or a person specified by Cabinet Office Order:
(i)a relative (limited to the spouse and a relative by blood or affinity within the third degree of kinship) of the financial instruments intermediary service provider (limited to one that is an individual);
(ii)an officer or employee of the financial instruments intermediary service provider (limited to one that is a corporation; hereinafter the same applies in this Article);
(iii)the parent corporation, etc. or subsidiary corporation, etc. of the financial instruments intermediary service provider;
(iv)specified individual shareholders of all shareholders, etc. of the financial instruments intermediary service provider (excluding those set forth in item (ii)); and
(v)any person specified by Cabinet Office Order as being equivalent to the persons set forth in the preceding items.
(Deemed Replacement of Terms in Connection with Financial Instruments Intermediary Service Providers)
Article 18-3With regard to a financial instruments intermediary service provider prescribed in Article 66-15 of the Act or their customers, the registration or the financial instruments intermediary service provider under Article 66 of the Act prescribed in Article 66-23 of the Act, or the financial instruments intermediary service provider prescribed in Article 66-25 of the Act, the technical replacement of terms pursuant to the provisions of Article 66-15, Article 66-23, and Article 66-25 of the Act in applying the provisions of the Act mutatis mutandis is as given in the following table:
Provisions of the Act Whose erms are Deemed to be Replaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 38-2
nvestment advisory and agency business or investment management business
financial instruments intermediary service (limited to functions that perform the acts set forth in Article 2, paragraph (11), item (iv) )
an investment advisory contract, a discretionary investment contract, or a contract set forth in Article 2, paragraph (8), item (xii), sub-item (b)
an investment advisory contract or a discretionary investment contract
Article 39, paragraphs (1) and (3)
purchase and sale or other transactions of securities (excluding purchase and sale with a repurchase requirement and a predetermined repurchase price and other transactions specified by Cabinet Order) or derivatives transactions (hereinafter referred to as "purchase and sale or other transactions of securities, etc." in this Article)
intermediation for financial instruments
the securities or derivatives transactions
the securities, market derivatives transactions, or foreign market derivatives transactions related to the intermediation for financial instruments
purchase and sale of securities or derivative transactions
purchase and sale of securities, market derivatives transactions, or foreign market derivatives transactions
with regard to the purchase and sale or other transactions of securities, etc.,
with regard to the intermediation for financial instruments
this Section and the following Section
this Article
Article 40
an act that constitutes a financial instruments transaction
intermediation for financial instruments
for a financial instruments transaction contract
for a financial instruments transaction contract related to the intermediation for financial instruments
Article 43-6, paragraph (1)
an act that constitutes a financial instruments transaction
intermediation for financial instruments
Article 57
registration under Article 29 or Article 33-2, authorization under Article 30, paragraph (1) , or registration of a change under Article 31, paragraph (4)
registration under Article 66
the applicant for registration or the financial instruments business operator
the applicant for registration
the applicant for registration or the Financial Instruments Business Operator
the applicant for registration
the provisions of Article 51, Article 51-2, Article 52, paragraph (1), Article 52-2, paragraph (1), Article 53, Article 54, or the preceding Article
the provisions of Article 66-20, paragraph (1)
registration under Article 29 or Article 33-2, authorization under Article 30, paragraph (1) or Article 31, paragraph (6) , registration of a change under Article 31, paragraph (4) , or approval under Article 35, paragraph (4)
registration under Article 66
to attach conditions pursuant to the provisions of Article 30-2, paragraph (1), or to issue a disposition based on the provisions of Article 51, Article 51-2, Article 52, paragraph (1) or (2), Article 52-2, paragraph (1) or (2), Article 53, Article 54, or the preceding Article
or to issue a disposition based on the provisions of Article 66-20
Article 64
the following acts on their behalf
the following acts on their behalf (excluding the acts set forth in item (ii))
Article 2, paragraph (8), items (i) through (iii), item (v), item (viii), and item (ix)
Article 2, paragraph (11), items (i) through (iii)
(b) the following acts:
(b) the following acts (excluding the acts set forth in 2. below)
purchase and sale, or in connection with intermediary, brokerage (excluding brokerage for clearing of securities, etc.) or agency for a purchase and sale
intermediation for a purchase and sale
beyond what is set forth in the preceding two items, acts specified by Cabinet Order
the following acts (excluding the acts set forth in item (i)):
(a) intermediary service for entrustment of market derivatives transactions or foreign market derivatives ransactions; and
(b) solicitation for entrustment of market derivatives transactions or foreign market derivatives transactions.
Article 64-3
the items of Article 64, paragraph (1)
the items of Article 64, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25 (excluding the acts set forth in Article 64, paragraph (1), item (ii))
Article 64-4
the provisions of Article 64, paragraph (1)
the provisions of Article 64, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25
Article 64, paragraph (3), item (iii), sub-item (a) or (b)
Article 64, paragraph (3), item (iii), sub-item (a) or (b) as applied mutatis mutandis pursuant to Article 66-25
Article 64-5
the items of Article 64-2, paragraph (1)
the items of Article 64-2, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25
any act set forth in the items of Article 64, paragraph (1) (or in connection with the Registered Financial Institution Business, if it is a egistered financial institution) or incidental business in the financial instruments business
any act set forth in the items of Article 64, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25 (excluding the acts set forth in Article 64, paragraph (1), item (ii)) or incidental service in the financial instruments intermediary services
Article 64-6
the provisions of paragraph (1) of the preceding Article
the provisions of paragraph (1) of the preceding Article as applied mutatis mutandis pursuant to Article 66-25
is dissolved or discontinues the business of performing the acts set forth in the items of Article 64, paragraph (1) (or discontinues the registered inancial institution business, if it is a registered financial institution) in the financial instruments business
has died, is dissolved, or discontinues the business of performing the acts set forth in the items of Article 64, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25 (excluding the acts set forth in Article 64, paragraph (1), item (ii)) in the financial instruments intermediary services
Article 64-7 (excluding paragraph (2))
Article 64, Article 64-2, and the preceding three Articles
the provisions of Article 64, Article 64-2, and the preceding three Articles as applied mutatis mutandis pursuant to Article 66-25
Article 64-9
Article 64-9 as applied mutatis mutandis pursuant to Article 66-25
a financial instruments business operator, etc. belonging to that association
a financial instruments intermediary service provider that has the member of the association as the entrusting financial instruments business operator, etc. (meaning an entrusting financial instruments business operator, etc. prescribed in Article 66-2, paragraph (1), item (iv))
the preceding two paragraphs
paragraph (1)
pursuant to the provisions of paragraph (1) or (2)
pursuant to the provisions of paragraph (1)
a registration under the provisison of Article 64, paragraph (5), change of registration related to the notification under the provisions of Article 64-4, reaches a disposition under the provisions of Article 64-5, paragraph (1) (excluding the deletion of registration), or deletes a registration under the provisions of the preceding Article
a registration under the provisions of Article 64, paragraph (5) as applied mutatis mutandis pursuant to Article 66-25, change of registration related to the notification under the provisions of Article 64-4 as applied mutatis mutandis pursuant to Article 66-25, reaches a disposition under the provisions of Article 64-5, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25 (excluding the deletion of registration), or deletes a registration under the provisions of the preceding Article as applied mutatis mutandis pursuant to Article 66-25
registration work under the provisions of paragraph (1) or paragraph (2)
registration work under the provisions of paragraph (1)
registration work prescribed in paragraph (1) under the provisions of that paragraph as applied mutatis mutandis pursuant to Article 66-25
work related to the registration prescribed in Article 64, Article 64-2, and the preceding three Articles regarding sales representatives of a financial instruments business operator, etc.
a financial instruments business operator, etc. belonging to an association that conducts registration work pursuant to the provisions of paragraph (1)
a financial instruments intermediary service provider
Article 64-5, paragraph (1), item (i)
Article 64-5, paragraph (1), item (i) as applied mutatis mutandis pursuant to Article 66-25
the association... that paragraph
an association... that paragraph
paragraph (1) or (2)
paragraph (1)
these provisions
the provisions of that paragraph
Article 64-8
paragraph (1) or (2) of the preceding Article
paragraph (1) of the preceding Article as applied mutatis mutandis pursuant to Article 66-25
Article 64-9
Article 64-7, paragraph (1) or (2)
Article 64-7, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25
Article 64, paragraph (3)
Article 64, paragraph (3) as applied mutatis mutandis pursuant to Article 66-25
Article 64-2, paragraph (1)
Article 64-2, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25
Article 64-7, paragraph (1)
Article 64-7, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25
Article 64-5, paragraph (1)
Article 64-5, paragraph (1) as applied mutatis mutandis pursuant to Article 66-25
(Provisions on Explanatory Documents)
Article 18-4The provisions specified by Cabinet Order that are provided for in Article 66-18 of the Act are the following provisions:
(i)the provisions of Article 17 of the Long Term Credit Bank Act, Article 89, paragraph (1) of the Credit Union Act (Act No, 238 of 1951), Article 6, paragraph (1) of the Act on Financial Businesses by Cooperatives (Act No. 183 of 1949), or Article 21, paragraphs (1) and (2) of the Banking Act as applied mutatis mutandis pursuant to Article 94, paragraph (1) of the Labor Bank Act (Act No, 227 of 1953);
(ii)the provisions of Article 81, paragraphs (1) and (2) of the Agriculture and Forestry Credit Union Act (Act No. 93 of 2001);
(iii)the provisions of Article 53, paragraphs (1) and (2) of the Shoko Chukin Bank Limited Act (Act No. 74 of 2007);
(iv)the provisions of Article 54-3, paragraphs (1) and (2) of the Agricultural Cooperatives Act (Act No. 132 of 1947);
(v)the provisions of Article 58-3, paragraphs (1) and (2) of the Fisheries Cooperative Act (Act No. 242 of 1948); and
(vi)the provisions of Article 101, paragraphs (1) and (2) of the Insurance Business Act.
Chapter IV-3 Credit Rating Agencies
(Due Date for Submission of Business Reports)
Article 18-4-2The period specified by Cabinet Order that is provided for in Article 66-38 of the Act is three months; provided, however, that if a foreign corporation (including a foreign organization without legal personality for which a representative or an administrator has been designated; hereinafter the same applies in the following Article and Article 18-4-5) is found to be unable to submit business reports within the three months after the end of their business year due to the laws and regulations or practices in their home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Period Until the Commencement of Public Inspection of Explanatory Documents)
Article 18-4-3The period specified by Cabinet Order that is provided for in the provisions of Article 66-39 of the Act is four months; provided, however, that if a foreign corporation is found to be unable to keep its explanatory documents (meaning the explanatory documents prescribed in that Article), provide them for public inspection, and disclose them using the internet or through other means from the day on which four months have elapsed from the end of its business year due to the laws and regulations or practices in its home country, that period is the period approved by the Commissioner of the Financial Services Agency pursuant to the provisions of Cabinet Office Order.
(Deemed Replacement of Terms in the Provisions of the Companies Act as Applied Mutatis Mutandis When a Credit Rating Agency Gives Public Notice of the Discontinuation of Its Credit Rating Services by Electronic Public Notice)
Article 18-4-4If the public notice under Article 66-40, paragraph (3) of the Act is given by electronic public notice, the deemed replacement of terms under Article 66-40, paragraphs (5) and (6) of the Act when the provisions of the Companies Act are applied mutatis mutandis pursuant to Article 66-40, paragraphs (5) and (6) of the Act is as given in the following table:
Provisions of the Companies Act Whose Terms are Deemed to be Replaced
Original Terms
Terms eemed to Replace the Original Terms
Article 940, paragraph (3) (excluding the items)
the preceding two paragraphs
paragraph (1)
these provisions
the provisions of that paragraph
(Technical Replacement of Terms in Applying the Provisions of the Act to Foreign Corporations)
Article 18-4-5If a credit rating agency is a foreign corporation, the technical replacement of terms pursuant to the provisions of Article 66-47 of the Act in applying the provisions of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be eplaced
Original Terms
Terms Deemed to Replace the Original Terms
Article 66-28, paragraph (2), item (iii)
the articles of incorporation, certificate of registered information,
the articles of incorporation and certificate of registered information (including documents equivalent to them), and certificate of registered information of the principal business office or office in Japan
Article 66-39
all of its business offices or offices
all of its business offices or offices established in Japan to conduct credit rating services
Article 66-40, paragraph (1), item (ii)
the officer that represented the corporation
an officer of a corporation
Article 66-40, paragraph (1), item (iii)
is dissolved due to an order to commence bankruptcy proceedings
has become subject to an order commencing bankruptcy proceedings, or has commenced the same kind of procedures as bankruptcy proceedings in a country where its head office is located based on the laws and regulations of that country
the bankruptcy trustee
the bankruptcy trustee or the person equivalent to a bankruptcy trustee in that country
Article 66-40, paragraph (1), item (iv)
is dissolved for reasons other than a merger or an order to commence bankruptcy proceedings
is dissolved for reasons other than a merger or an order to commence bankruptcy proceedings (including when that corporation has commenced the liquidation of the business offices or offices in Japan)
the liquidator
the liquidator or the person equivalent to a liquidator in the country where its head office is located
(Technical Replacement of Terms in Applying the Provisions of the Act to an Organization Without Legal Personality for Which a Representative or an Administrator Has Been Designated)
Article 18-4-6If a credit rating agency is an organization without legal personality for which a representative or an administrator has been designated, the technical replacement of terms pursuant to the provisions of Article 66-47 of the Act for applying the provisions of the Act is as given in the following table:
Provisions of the Act Whose Terms are Deemed to be Replaced
Original Terms