Financial Instruments and Exchange Act

If a financial instruments membership corporation relocates its principal office to the jurisdictional district of any other registry office, it must register the relocation in connection with its former location, and register the particulars set forth in the items of Article 89-2, paragraph (2) in connection with its new location, within two weeks.

If there is a change in the particulars set forth in the items of Article 89-2, paragraph (2), a financial instruments membership corporation must register the change at the locality of its principal office within two weeks.

A document certifying a change in a particular set forth in the items of Article 89-2, paragraph (2) must be attached to a written application to register a change in that particular.

If an order for a provisional disposition is issued suspending the president of a financial instruments membership corporation or a board member that represents the corporation from discharging their duties or appointing a person to act in their place in performing those duties, or if a decision is reached that changes or rescinds the order of provisional disposition, the financial instruments membership corporation must register this in the locality of its principal office.

The legal affairs bureau or district legal affairs bureau or the branch office or sub-branch office of that bureau (hereinafter simply referred to as the "registry office") that has jurisdiction over the locality of a financial instruments membership corporation's office is the competent registry office for the registration of the financial instruments membership corporation.

A register of financial instruments membership corporations is kept at the registry office.

A registration of incorporation is made for a financial instruments membership corporation at the application of the person that is to represent the financial instruments membership corporation.

The articles of incorporation and documents evidencing the payment of the contribution and qualifications of the person with the authority of representation must accompany the financial instruments membership corporation's written application for a registration of incorporation.

The provisions of Articles 2 through 5; Articles 7 through 15; Articles 17 through 19-3; Articles 21 through 23-2; Article 24 (excluding items (xiv) and (xv)); Articles 25 through 27; Article 47, paragraph (1); Articles 51 through 53; Articles 132 through 137; and Articles 139 through 148 of the Commercial Registration Act (Act No. 125 of 1963) apply mutatis mutandis to the registration involving a financial instruments membership corporation. In such a case, in Article 17, paragraph (2), item (i) of that Act, the phrase "trade name and the head office" is deemed to be replaced with "name and the principal office"; in Article 25, paragraph (3), Article 51, paragraph (1) and Article 53 of that Act, the term "head office" is deemed to be replaced with "principal office"; in Article 146-2 of that Act, the phrase "Commercial Registration Act (..." is deemed to be replaced with "Commercial Registration Act as applied mutatis mutandis pursuant to Article 90 of the Financial Instruments and Exchange Act (Act No. 25 of 1948) (...", and the phrase "Article 145 of the Commercial Registration Act" is deemed to be replaced with "Article 145 of the Commercial Registration Act as applied mutatis mutandis pursuant to Article 90 of the Financial Instruments and Exchange Act"; and any other necessary technical replacement of terms is specified by Cabinet Order.

Membership in a financial instruments membership corporation is limited to financial instruments business operators, etc.

A member must make a contribution pursuant to the provisions of the articles of incorporation.

Beyond a member's liability to a financial instruments membership corporation being limited to the expenses prescribed in its articles of incorporation and the burden of any damage that member has caused the financial instruments membership corporation, a member's liability to a financial instruments membership corporation is limited to the amount of its contribution.

A member may transfer its equity only if, pursuant to the provisions of the articles of incorporation, that member seeks to withdraw its membership with the approval of the financial instruments membership corporation.

A member may withdraw its membership with the approval of the financial instruments membership corporation, pursuant to the provisions of the articles of incorporation.

In addition to the case referred to in the preceding Article, the membership of a member is withdrawn for the following reasons:

the member comes to no longer fall under the category of a financial instruments business operator, etc.;

dissolution; or

expulsion.

If a member withdraws its membership, the financial instruments membership corporation must refund the member's equity, pursuant to the provisions of the articles of corporation.

A financial instruments membership corporation must not conduct business for profit.

A financial instruments membership corporation has one president, two or more board members, and two or more inspectors as its officers.

The members elect the board members and inspectors, with the exception of the board members appointed pursuant to the following paragraph, pursuant to the provisions of the articles of incorporation, and the board members (other than board members appointed pursuant to that paragraph) elect the president pursuant to the provisions of the articles of incorporation.

If there are special provisions in the articles of incorporation, the president appoints the number of board members specified by the articles of incorporation, with the consent of a majority of the board members.

A person that falls under any of the following may not become an officer.

a person specified by Cabinet Office Order as being unable to properly perform their duties due to a mental or physical disorder; or

a person falling under any of Article 29-4, paragraph (1), item (ii), (b) through (i) or Article 331, paragraph (1), item (iii) of the Companies Act.

An officer loses the position of officer upon coming to fall under a person provided for in the preceding paragraph.

A president represents a financial instruments membership corporation and presides over its affairs.

A board member, pursuant to the provisions of the articles of incorporation, represents a financial instruments membership corporation, assists the president in administering the affairs of the financial instruments membership corporation, acts as a proxy in handling the duties of the president if the president is unable to attend to them, and performs the duties of the president if the position is vacant.

An inspector examines the affairs of a financial instruments membership corporation.

A financial instruments membership corporation is dissolved for the following reasons:

the occurrence of a cause for dissolution provided for in the articles of incorporation;

a general meeting resolution;

a merger (but only if the financial instruments membership corporation disappears as the result of the merger);

the number of members falls to five or below;

an order to commence bankruptcy proceedings;

failure to file a license application under the provisions of Article 81, paragraph (1) within six months from the day of establishment;

the decision of the Prime Minister not to grant the license referred to in Article 80, paragraph (1); or

the rescission or expiration of the license referred to in Article 80, paragraph (1).

A financial instruments membership corporation may not adopt a resolution to dissolve without the affirmative votes of three-fourths or more of all members; provided, however, that this does not apply if it is otherwise provided for in the articles of incorporation.

The residual assets in the case of the dissolution of a financial instruments membership corporation must be distributed equally among its members, unless otherwise stipulated by the articles of incorporation or general meeting resolution.

If a financial instruments membership corporation is dissolved pursuant to the provisions of Article 100, paragraph (1) (excluding items (iii) and (v)), the dissolution must be registered in connection with its principal office location within two weeks.

Once the liquidation of a financial instruments membership corporation is completed, the completion of liquidation must be registered in the locality of the principal office within two weeks from the time at which the approval under Article 507, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to Article 100-17, paragraph (1) is obtained.

A document evidencing the reason for dissolution must accompany an application to register the dissolution of a mutually owned financial instruments corporation, and if the president or the board member representing the financial instruments membership corporation is not the liquidator, a document evidencing that the liquidator is the one representing the financial instruments membership corporation must accompany that application, as well.

If a financial instruments membership corporation is dissolved due to a disposition rescinding the license referred to in Article 80, paragraph (1), the registration of the dissolution is made at the request of the Prime Minister.

A document evidencing that the liquidator has obtained the approval referred to in Article 507, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to Article 100-17, paragraph (1) must accompany the written application for the registration under the provisions of Article 100-4.

If a financial instruments membership corporation is unable to pay its debts in full out of its assets, the court, at the petition of the president and the board members or of the creditors, or by its own authority, issues an order to commence bankruptcy proceedings.

In a case provided for in the preceding paragraph, the president and the board members must immediately file a petition to commence bankruptcy proceedings.

A dissolved financial instruments membership corporation is deemed to still exist inasmuch as the task of liquidation is concerned, until the completion of liquidation.

If there is no person that becomes the liquidator pursuant to the provisions of Article 647, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 100-17, paragraph (1), or if any damage is likely to occur due to the position of liquidator being vacant, the court may appoint a liquidator at the request of any interested person or the public prosecutor, or by its own authority.

At the request of an interested person or the public prosecutor or by its own authority, the court may dismiss the liquidator if there are material grounds for it to do so.

The duties of a liquidator are as follows:

conclusion of current business;

collection of debts and performance of obligations; and

delivery of residual assets.

A liquidator may undertake any and all acts that are necessary for performing the duties prescribed in the items of the preceding paragraph.

Within two months from the day on which a liquidator begins to act as liquidator, the liquidator must issue a demand for the creditors to file their claims within a specified period, issuing public notice of this on at least three occasions. In this, the period may not be less than two months.

The public notice referred to in the preceding paragraph must include a supplementary note indicating that if a creditor does not submit a claim within the relevant period, its claim will be excluded from the liquidation process; provided, however, that the liquidator may not exclude any known creditor.

The liquidator must issue an individual demand to each known creditor requiring that creditor to file its claim.

The public notice under paragraph (1) is made through publication in the Official Gazette.