Financial Instruments and Exchange Act

If the Prime Minister or the Prime Minister and the Minister of Finance seek to have relevant officials conduct a hearing pursuant to the provisions of this Act, but the person subject to the hearing fails to comply without just cause for doing so, the Prime Minister or the Prime Minister and the Minister of Finance may issue the disposition prescribed in the relevant provisions without having the hearing conducted.

When the Prime Minister or the Prime Minister and the Minister of Finance issue a notice to a person to which they seek to have the relevant officials conduct a hearing, the Prime Minister or the Prime Minister and the Minister of Finance must expressly indicate the subject matter and date of the hearing in that notice.

Hearings are opened to the public; provided, however, that this does not apply if the person subject to the hearing requests that the hearing be closed to the public (but only if it is found that there are reasonable grounds for closing the hearing to the public), or if this is found to be necessary in the public interest.

When the Prime Minister or the Prime Minister and the Minister of Finance have the relevant officials conduct a hearing pursuant to the provisions of this Act, the Prime Minister or the Prime Minister and the Minister of Finance must create a record of this and preserve the record for 10 years.

Hearings involving a disposition under the provisions of this Act are opened to the public; provided, however, that this does not apply if the person subject to the hearing requests that the hearing be closed to the public (but only if it is found that there are reasonable grounds for closing the hearing to the public), or if this is found to be necessary in the public interest.

The Prime Minister or the Prime Minister and the Minister of Finance may have the relevant officials render the following dispositions for the purpose of conducting the investigations necessary for a hearing under the provisions of this Act, a hearing involving a disposition under the provisions of this Act, or a petition under the provisions of Article 192:

ordering a person concerned or a witness to appear and hear that person's opinion, or having the person submit a written opinion or a written report;

ordering an expert to appear and have the expert present an expert opinion;

ordering a person concerned to submit books, documents, and any other articles, or retaining submitted articles; and

inspecting the state of the business or assets, or the books, documents, and any other articles, of a person concerned.

The Prime Minister or the Prime Minister and Minister of Finance may make inquiries to public offices or public or private organizations and request them to report necessary particulars with regard to the investigation under the preceding paragraph.

Except as otherwise prescribed in this Act, a financial instruments business operator, etc., designated parent company, notifier of specially permitted services, notifier of specially permitted services for foreign investors, etc., financial instruments intermediary service provider, credit rating agency, high-speed trader, investment management-related services contractor, authorized financial instruments firms association, certified financial instruments business association under Article 78, paragraph (2), investor protection fund, financial instruments exchange or its member, etc., a self-regulatory organization under Article 85, paragraph (1), financial instruments exchange holding company, foreign financial instruments exchange or the participant in a foreign financial instruments exchange, a financial instruments clearing organization or its clearing member, a foreign financial instruments clearing organization or its clearing member, a securities finance company, designated dispute resolution organization provided for in Article 156-38, paragraph (1), trade repository, or specified financial index administrator must prepare and preserve the books, statements, correspondence, payment slips, and other documents concerning their business, or submit reports on their business, pursuant to the provisions of Cabinet Office Order (or, with regard to an investor protection fund, pursuant to the provisions of Cabinet Office Order and Ministry of Finance Order).

If the Prime Minister receives a request for cooperation from the foreign authority that is responsible for the enforcement of a foreign law or regulation that is equivalent to this Act (hereinafter referred to as a "foreign regulatory authority for financial instruments" in this Article) concerning an administrative investigation it conducts in order to enforce the laws and regulations under its jurisdiction, and the Prime Minister finds it to be appropriate to accommodate the request, the Prime Minister may order a person conducting a purchase and sale or other transaction of securities or a derivatives transaction with a person residing in the foreign country, or any other concerned party or witness, to report or submit materials that should serve as a reference, to the extent that is necessary and appropriate for accommodating the request.

The Prime Minister may not make the disposition referred to in the preceding paragraph in a case that falls under any of the following items:

the foreign regulatory authority for financial instruments has not given its assurance that the authority will accommodate similar requests from Japan;

it is found that if the disposition is made based on the request by the foreign regulatory authority for financial instruments, it is likely to have an adverse material impact on the capital market or to otherwise be detrimental to Japan's national interests; or

it is found that there is a risk of the report or materials submitted pursuant to the disposition under the preceding paragraph being used at the foreign regulatory authority for financial instruments other than for a purpose that contributes to the execution of its duties.

If the request for cooperation referred to in paragraph (1) is made for the purpose of an administrative disposition (limited to one that restricts the right of the person subject to the disposition or that imposes a duty on that person) by the foreign regulatory authority for financial instruments based on a foreign law or regulation that is equivalent to this Act, the Prime Minister is to consult with the Minister of Foreign Affairs before accommodating the request.

Appropriate measures must be taken in respect of a report or materials submitted pursuant to a disposition under paragraph (1), to ensure that they will not be used for criminal proceedings conducted by a court or a judge in a foreign country.

Necessary particulars relevant to the application of the provisions of the preceding paragraphs are specified by Cabinet Order.

A trial examiner or official that conducts an inspection pursuant to the provisions of Article 26, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27); Article 27-22, paragraph (1) (including as applied mutatis mutandis pursuant to Article 27-22-2, paragraph (2)) or paragraph (2) of that Article; Article 27-30, paragraph (1); Article 27-35, paragraph (1); Article 27-37, paragraph (1); Article 56-2, paragraph (1) (including as applied mutatis mutandis pursuant to Article 65-3, paragraph (3)); Article 56-2, paragraphs (2) through (4); Article 57-10, paragraph (1); Article 57-23; Article 57-26, paragraph (2); Article 60-11 (including as applied mutatis mutandis pursuant to Article 60-12, paragraph (3) (including as applied mutatis mutandis pursuant to Article 60-14, paragraph (2)) and Article 60-14, paragraph (2)); Article 63-6 (including as applied mutatis mutandis pursuant to Article 63-3, paragraph (2)); Article 63-14 (including as applied mutatis mutandis pursuant to Article 63-11, paragraph (2)); Article 66-22; Article 66-45, paragraph (1); Article 66-67; Article 66-88; Article 75; Article 79-4; Article 79-77; Article 103-4; Article 106-6, paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (2) of that Article); Article 106-16; Article 106-20, paragraph (1) (including as applied mutatis mutandis pursuant to paragraph (2) of that Article); Article 106-27 (including as applied mutatis mutandis pursuant to Article 109); Article 151 (including as applied mutatis mutandis pursuant to Article 153-4); Article 155-9; Article 156-5-4; Article 156-5-8; Article 156-15; Article 156-20-12; Article 156-34; Article 156-58; Article 156-80; Article 156-89; Article 177, paragraph (1), item (iii); Article 185-5; or Article 187, paragraph (1), item (iv) must carry an identification card and present the card to the person subject to inspection.

The authority for an inspection under any of the provisions specified in the preceding paragraph must not be interpreted as having been accorded for the purpose of a criminal investigation.

A witness that is ordered to appear or an expert that is ordered to present an expert opinion pursuant to the provisions of Article 187 paragraph (1), item (i) or (ii) may request travel and other expenses pursuant to the provisions of Cabinet Office Order, or the provisions of Cabinet Office Order and Ministry of Finance Order.

If the court finds that the case falls under any of the following items, it may issue an order against a person that has performed or is attempting to perform the acts specified respectively in those items, prohibiting or staying that act, at the petition of the Prime Minister or at the petition of the Prime Minister and the Minister of Finance:

there is urgent necessity and it is necessary and appropriate in the public interest and for the protection of investors:an act in violation of this Act or an order issued based on this Act; or

the business execution related to the business conducted by allocating the money (including anything specified by Cabinet Order as being similar to money) invested or contributed for the rights set forth in Article 2, paragraph (2), item (v) or (vi) or the rights set forth in item (vii) of that paragraph (limited to rights specified by Cabinet Order as having an economic nature similar to the rights set forth in item (v) or (vi) of that paragraph) is highly inappropriate and has actually caused or will obviously cause serious damage to the investors' interests, and there is an urgent need to prevent further damage to investors:the acts set forth in paragraph (8), items (vii) through (ix) of that Article related to these rights.

A court may rescind or change an order issued pursuant to the provisions of the preceding paragraph.

The district court governing the domicile of the respondent or the place where the act prescribed in paragraph (1) was conducted or is to be conducted has jurisdiction over the cases referred to in the preceding two paragraphs.

The judicial decisions referred to in paragraphs (1) and (2) are governed by the Non-Contentious Cases Procedure Act (Act No. 51 of 2011)

When the Prime Minister finds it necessary and appropriate for the public interest or protection of investors, the Prime Minister may, pursuant to the provisions of Cabinet Office Order, make public the name of a person that has committed an act in violation of this Act or orders issued under this Act (hereinafter referred to as an "act in violation of a law or regulation" in this Article) and other matters necessary for preventing the occurrence or spread of damage from the act in violation of a law or regulation or for ensuring fairness in transactions.