Financial Instruments and Exchange Act

If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors as concerns a financial instruments business operator's business operations or the state of its assets, the Prime Minister may, to the extent necessary, order the financial instruments business operator to change its business methods or otherwise take measures that are necessary for improving its business operations or the state of its assets.

If the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors as concerns a registered financial institution's business operations, the Prime Minister may, to the extent necessary, order the registered financial institution to change its business methods or to otherwise take measures that are necessary for improving its business operations.

If a financial instruments business operator falls under any of the following items, the Prime Minister may rescind its Article 29 registration, rescind its Article 30, paragraph (1) authorization, or order the suspension of all or part of business during a fixed period of no longer than six months:

it comes to fall under any of Article 29-4, paragraph (1), items (i) through (iii).

a financial instruments business operator engaged in type-I financial instruments business, type-II financial instruments business, or investment management business comes to fall under Article 29-4, paragraph (1), item (iv);

a financial instruments business operator engaged in type-I financial instruments business or investment management business comes to fall under Article 29-4, paragraph (1), item (v), (a) or (b);

a financial instruments business operator engaged in type-I financial instruments business comes to fall under Article 29-4, paragraph (1), item (vi), (b);

a financial instruments business operator conducting high-speed trading as type-II financial instruments business comes to fall under Article 29-4, paragraph (1), item (vii);

it has received its Article 29 registration by wrongful means;

it violates a law or regulation (other than Article 46-6, paragraph (2)) or a disposition by a government agency which is based on a law or regulation, in connection with the financial instruments business or services incidental thereto;

in light of the state of its business or assets, it is likely to become insolvent;

a fact has occurred in connection with the operation of investment advisory and agency business or investment management business, which is detrimental to the investors' interests;

it commits a wrongful or extremely unjust act in connection with the financial instruments business, and the circumstances surrounding this are particularly serious;

it violates the conditions attached to the authorization referred to in Article 30, paragraph (1); or

a financial instruments business operator that has obtained the authorization referred to in Article 30, paragraph (1) becomes unable to satisfy the criteria set forth in Article 30-4, items (i) through (iii) or item (v).

If the officer of a financial instruments business operator (for a foreign corporation, this is limited to an officer stationed at its domestic business office or office, and its domestic representative; hereinafter the same applies in this paragraph and paragraph (2) of the following Article) comes to fall under the cases under any of Article 29-4, paragraph (1), item (ii), (a) through (i), is discovered to have fallen under the cases under any of (a) through (i) of that item at the time of obtaining the registration referred to in Article 29, or comes to fall under the cases under any of item (vii) or items (ix) through (xi) of the preceding paragraph, the Prime Minister may order the financial instruments business operator to dismiss that officer.

If a financial instruments business operator that has obtained the registration referred to in Article 30, paragraph (1) comes to fall under Article 50, paragraph (1), item (ii), or if the financial instruments business operator's registration referred to in Article 29 ceases to be effective pursuant to the provisions of Article 50-2, paragraph (2) or (11) or is rescinded pursuant to the provisions of paragraph (1), the following paragraph, Article 53, paragraph (3), Article 54 or Article 57-6, paragraph (3), that authorization ceases to be effective.

If the Prime Minister is unable to ascertain the location of the business offices or offices of a financial instruments business operator or is unable to ascertain the whereabouts of a financial instruments business operator (in the case of a corporation, the whereabouts of the officer representing the corporation), the Prime Minister, pursuant to the provisions of Cabinet Office Order, may issue public notice of that fact and rescind the registration of the financial instruments business operator if no filing is made by the financial instruments business operator even after 30 days past the day of the public notice.

The provisions of Chapter III of the Administrative Procedure Act do not apply to a disposition under the preceding paragraph.

If a registered financial institution falls under any of the following items, the Prime Minister may rescind its registration under Article 33-2, or order the suspension of all or part of business during a fixed period of no longer than six months:

it has come to fall under any of the items of Article 33-5, paragraph (1);

it has received its Article 33-2 registration by wrongful means;

it violates a law or regulation or a disposition by a government agency which is based on a law or regulation, in connection with the services of a registered financial institution or services incidental thereto;

a fact has occurred in connection with the operation of its investment advisory and agency business, which is detrimental to the investors' interests; or

it has committed a wrongful or unjust act in connection with the services of a registered financial institution, and the circumstances surrounding this are particularly serious.

If the officer of a registered financial institution comes to fall under any of the categories in items (iii) through (v) of the preceding paragraph, the Prime Minister may order the registered financial institution to dismiss that officer.

If the Prime Minister is unable to ascertain the location of the business offices or offices of a registered financial institution or is unable to ascertain the whereabouts of the officer representing the registered financial institution, the Prime Minister, pursuant to the provisions of Cabinet Office Order, may issue public notice of that fact and rescind the registration of the registered financial institution if no filing is made by the registered financial institution even after 30 days past the day of the public notice.

The provisions of Chapter III of the Administrative Procedure Act do not apply to a disposition under the preceding paragraph.

If a financial instruments business operator (limited to one engaged in type-I financial instruments business; hereinafter the same applies in this Article) violates the provisions of Article 46-6, paragraph (2) and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may, to the extent necessary, order a change of business methods, order assets to be deposited, or otherwise issue orders with respect to particulars that are necessary from a supervisory perspective.

If a financial instruments business operator violates the provisions of Article 46-6, paragraph (2) (but only if the capital adequacy ratio is less than 100 percent) and the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may, to the extent necessary, order the suspension of all or part of business during a fixed period of no longer than three months.

If the Prime Minister orders the suspension of all or part of the business pursuant to the provisions of the preceding paragraph, and finds that the capital adequacy ratio of the financial instruments business operator as of the day on which three months have elapsed since the day of the order continues to be less than 100 percent and that the financial instruments business operator's capital adequacy ratio status is not likely to recover, the Prime Minister may rescind the Article 29 registration of that financial instruments business operator.

If, without legitimate grounds for doing so, a financial instruments business operator, etc. does not commence business within three months of the day on which it is permitted to begin engaging in financial instruments business, etc. or suspends business for three months or more continually, the Prime Minister may rescind the Article 29 or Article 33-2 registration of that financial instruments business operator, etc.