Financial Instruments and Exchange Act

A financial instruments business operator, etc. must take the measures specified in the following items in accordance with the category of cases set forth in each of those item:

if the financial instruments business operator, etc. (excluding a registered financial institution; the same applies in the following item to item (iv)) engages in type-I financial instruments business: the measures specified in the relevant of the following (a) and (b) for the category of cases set forth in (a) or (b):

if there is a designated type-I dispute resolution organization (meaning a designated dispute resolution organization (meaning a designated dispute resolution organization as defined in Article 156-38, paragraph (1); hereinafter the same applies in this Chapter and Chapter V-4) for which the category of dispute resolution services (meaning the category of dispute resolution services as defined in paragraph (12) of that Article; hereinafter the same applies in this Chapter and Chapter V-4) is specified type-I financial instruments business (meaning specified type-I financial instruments business as defined in paragraph (2) of that Article; hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)):measures to conclude a basic contract for the implementation of dispute resolution procedures (meaning a basic contract for the implementation of dispute resolution procedures as defined in paragraph (13) of that Article; hereinafter the same applies in this Chapter and Chapter V-4) in connection with specified type-I financial instruments business with a single designated type-I dispute resolution organization;

if there is no designated type-I dispute resolution organization:complaint processing measures (meaning measures to have the person set forth in Article 156-50, paragraph (3), item (iii) provide advice or guidance to the employee or any other worker engaged in the business of processing complaints from customers (including the right holders provided for in Article 42, paragraph (1) that are other than customers; the same applies in (b)) or any other measures specified by Cabinet Office Order as being equivalent thereto; hereinafter the same applies in this Chapter and Chapter V-4) and dispute resolution measures (meaning measures to resolve disputes with customers through certified dispute resolution procedures (meaning certified dispute resolution procedures as defined in Article 2, item (iii) of the Act on Promotion of Use of Alternative Dispute Resolution (Act No. 151 of 2004)) or any other measures specified by Cabinet Office Order as being equivalent thereto) in connection with specified type-I financial instruments business;

if the financial instruments business operator, etc. engages in type-II financial instruments business: the measures specified in the relevant of the following (a) and (b) for the category of cases set forth in (a) or (b):

if there is a designated type-II dispute resolution organization (meaning a designated dispute resolution organization for which the category of dispute resolution services is specified type-II financial instruments business (meaning specified type-II financial instruments business defined in Article 156-38, paragraph (3); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)):measures to conclude a basic contract for the implementation of dispute resolution procedures in connection with specified type-II financial instruments business with a single designated type-II dispute resolution organization;

if there is no designated type-II dispute resolution organization:complaint processing measures and dispute resolution measures in connection with specified type-II financial instruments business;

if the financial instruments business operator, etc. engages in investment advisory and agency business: the measures specified in the relevant of the following (a) and (b) for the category of cases set forth in (a) or (b):

if there is a designated investment advisory and agency business dispute resolution organization (meaning a designated dispute resolution organization for which the category of dispute resolution services is specified investment advisory and agency business (meaning specified investment advisory and agency business as defined in Article 156-38, paragraph (4); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)):measures to conclude a basic contract for the implementation of dispute resolution procedures in connection with specified investment advisory and agency business with a single designated investment advisory and agency business dispute resolution organization;

if there is no designated investment advisory and agency business dispute resolution organization:complaint processing measures and dispute resolution measures in connection with specified investment advisory and agency business;

if the financial instruments business operator, etc. engages in investment management business: the measures specified in the relevant of the following (a) and (b) for the category of cases set forth in (a) or (b):

if there is a designated investment management dispute resolution organization (meaning a designated dispute resolution organization for which the category of dispute resolution services is specified investment management business (meaning specified investment management business as defined in Article 156-38, paragraph (5); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)):measures to conclude a basic contract for the implementation of dispute resolution procedures in connection with specified investment management business with a single designated investment management dispute resolution organization;

if there is no designated investment management dispute resolution organization:complaint processing measures and dispute resolution measures in connection with specified investment management business;

if the financial instruments business operator, etc. is a registered financial institution: the measures specified in the relevant of the following (a) and (b) for the category of cases set forth in (a) or (b):

if there is a designated dispute resolution organization for registered financial institutions (meaning a designated dispute resolution organization for which the category of dispute resolution services is the specified services of a registered financial institution (meaning specified services of a registered financial institution as defined in Article 156-38, paragraph (6); hereinafter the same applies in this item); hereinafter the same applies in this item and paragraph (3), item (ii)):measures to conclude a basic contract for the implementation of dispute resolution procedures in connection with the specified services of a registered financial institution with a single designated dispute resolution organization for registered financial institutions;

if there is no designated registered financial institutions dispute resolution organization:complaint processing measures and dispute resolution measures in connection with the specified services of a registered financial institution.

Once a financial instruments business operator has taken measures to conclude a basic contract for the implementation of dispute resolution procedures pursuant to the provisions of the preceding paragraph, it must disclose the trade name or name of the designated dispute resolution organization that is the counterparty to the basic contract for the implementation of dispute resolution procedures.

The provisions of paragraph (1) do not apply during the period specified in the relevant of the following items for the category of cases set forth in each item:

if a case that fell under a category of cases set forth in paragraph (1), item (i), (a); item (ii), (a); item (iii), (a); item (iv), (a); or item (v), (a); has come to fall under a category of cases set forth in item (i), (b); item (ii), (b); item (iii), (b); item (iv), (b); or item (v), (b) of that paragraph:the period specified by the Prime Minister as the period needed for taking the measures specified in paragraph (1), item (i), (b); item (ii), (b); item (iii), (b); item (iv), (b); or item (v), (b); at the time of granting authorization for the discontinuation of dispute resolution services under Article 156-60, paragraph (1) or at the time of rescinding the designation under Article 156-61, paragraph (1);

if a case formerly fell under a category of cases set forth in paragraph (1), item (i), (a); item (ii), (a); item (iii), (a); item (iv), (a); or item (v), (a); but the discontinuation of the dispute resolution services of a single designated type-I dispute resolution organization under item (i), (a) of that paragraph; a single designated type-II dispute resolution organization under item (ii), (a) of that paragraph; a single designated investment advisory and agency business dispute resolution organization under item (iii), (a) of that paragraph; a single designated investment management dispute resolution organization under item (iv), (a) of that paragraph; or a single designated dispute resolution organization for registered financial institutions (hereinafter collectively referred to as the "designated dispute resolution organization for each category of business" in this item) has been authorized under Article 156-60, paragraph (1) or the designation under Article 156-39, paragraph (1) has been rescinded for the designated dispute resolution organization for each category of business pursuant to Article 156-61, paragraph (1) (excluding in a case set forth in the preceding item):the period specified by the Prime Minister as the period needed for taking the measures specified in paragraph (1), item (i), (a); item (ii), (a); item (iii), (a); item (iv), (a); or item (v), (a); at the time of granting such authorization or at the time of rescinding the designation; and

if a case formerly fell under a category of cases set forth in paragraph (1), item (i), (b); item (ii), (b); item (iii), (b); item (iv), (b); or item (v), (b); but come to fall under the cases set forth in item (i), (a); item (ii), (a); item (iii), (a); item (iv), (a); or item (v), (a) of that paragraph:the period specified by the Prime Minister as the period needed for taking the measures specified in paragraph (1), item (i), (a); item (ii), (a); item (iii), (a); item (iv), (a); or item (v), (a) at the time of the designation under Article 156-39, paragraph (1).

It is prohibited for a financial instruments business operator, etc. or their officer or employee to engage in any of the following acts; provided, however, that for the acts set forth in items (iv) through (vi) that are specified by Cabinet Office Order as being unlikely to result in insufficient investor protection, harm the fairness of transactions, or cause financial instruments business lose credibility:

providing a customer with false information in connection with the conclusion of a financial instruments transaction contract or in connection with its solicitation;

providing a customer with a conclusive assessment of a matter that is uncertain or with information that could mislead the customer into believing that a matter that is uncertain is actually certain, thereby soliciting the customer to conclude a financial instruments transaction contract;

supplying a customer with a credit rating that has been determined by a person engaged in credit rating services other than a credit rating agency (excluding a credit rating specified by Cabinet Office Order as one that is found to have little likelihood of resulting in insufficient investor protection), without informing the customer that the person giving the credit rating is not registered as referred to in Article 66-27 and without informing the customer of the matters specified by Cabinet Office Order, including the significance of such a registration and any other matters, thereby soliciting the customer to conclude a financial instruments transaction contract;

visiting or telephoning a customer that is not asking to be solicited for the conclusion of a financial instruments transaction contract (limited to one that is specified by Cabinet Order in consideration of the content of the financial instruments transaction contract and other circumstances, as a contract in connection with which it is particularly necessary to ensure the protection of investors), and soliciting such a customer to conclude a financial instruments transaction contract;

soliciting a customer to conclude a financial instruments transaction contract (limited to one that is specified by Cabinet Order in consideration of the contents of the financial instruments transaction contract and other circumstances, as a contract in connection with which it is necessary to ensure the protection of investors) without obtaining confirmation from the customer, prior to solicitation, regarding whether or not the customer is willing to be solicited;

continuing to solicit a customer to conclude a financial instruments transaction contract (limited to one that is specified by Cabinet Order in consideration of the content of the financial instruments transaction contract and other circumstances, as a contract in connection with which it is necessary to ensure the protection of investors) despite the customer having manifested an intention that indicates an unwillingness to conclude such a financial instruments transaction contract (including an intention that indicates a wish not to continue to be solicited) after being solicited;

providing a specified financial index administrator (meaning the specified financial index administrator prescribed in Article 156-85, paragraph (1); hereinafter the same applies in this item) with calculation basis data (meaning the price, index, figure, or any other information provided to the specified financial index administrator as the basis for calculation of specified financial indexes) to benefit itself or a third party;

accepting consignment of a purchase and sale of securities or a market derivatives transaction related to high-speed trading conducted by a person other than a high-speed trader (including a financial instruments business operator, etc. or an authorized firm for on-exchange transactions (limited to a person specified by Cabinet Order as a person that engages in high-speed trading as financial instruments business, services of a registered financial institution, or on-exchange transaction services)), and other acts specified by Cabinet Office Order as being equivalent to them; and

acts other than what is set forth in the preceding items, which are specified by Cabinet Office Order as acts that result in insufficient investor protection, harm the fairness of transactions, or cause a loss of confidence in the financial instruments business.