Financial Instruments and Exchange Act

Each business year, a financial instruments business operator must prepare explanatory documents stating the particulars specified by Cabinet Office Order as pertinent to the state of its business and assets, and must , pursuant to the provisions of Cabinet Office Order, keep those explanatory documents at all of its business offices and offices and make them available for public inspection, or disclose them using the internet or through other means pursuant to the provisions of Cabinet Office Order, during the one-year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

A financial instruments business operator must lay aside financial instruments transaction liability reserves, pursuant to the provisions of Cabinet Office Order, in proportion to the transaction volume of the purchases and sales and other transactions of securities or cryptoassets and derivatives transactions, etc.

The financial instruments transaction liability reserves referred to in the preceding paragraph must not be used other than when allocated to cover a loss that arises due to problematic conduct in connection with a purchase and sale or other transaction of securities or cryptoassets or a derivatives transaction, etc., or in cases otherwise specified by Cabinet Office Order.

A financial instruments business operator must calculate the ratio of the sum of the amounts of its stated capital, reserve funds, and any other things specified by Cabinet Office Order less the sum total of the amounts of its fixed assets and any other things specified by Cabinet Office Order, to the sum of the amounts specified by Cabinet Office Order as the amount for covering possible risks which may arise due to fluctuations in the prices of the securities or cryptoassets held or due to other reasons (hereinafter referred to as the "capital adequacy ratio"), and notify the Prime Minister of this ratio at the end of each month and in the cases specified by Cabinet Office Order.

A financial instruments business operator must prepare documents stating its capital adequacy ratio as of the last day of a quarter (meaning each three-month period of the business year (for the first business year after changing the last day of the business year, each period specified by Cabinet Office Order); the same applies in Article 57-2, paragraph (5) and Article 57-5, paragraphs (2) and (3)), and, pursuant to the provisions of Cabinet Office Order, keep them at all of its business offices andor offices, and make them available for public inspection , or make them public by using the Internet or by other means, for the three-month period starting from the day on which one month has elapsed since thethat last day of the relevant month.

Subsection 2 Financial Instruments Business Operators Not Engaged in Type-I Financial Instruments Business or Cryptoasset Trading Business

A financial instruments business operator (other than one that is engaged in type-I financial instruments business or cryptoasset trading business; hereinafter the same applies in this Subsection) must prepare and preserve books and documents concerning its business pursuant to the provisions of Cabinet Office Order.

Each business year, pursuant to the provisions of Cabinet Office Order, a financial instruments business operator must prepare explanatory documents stating those of the particulars stated in the business report referred to in the preceding Article which are specified by Cabinet Office Order as particulars that are found to be necessary in terms of investor protection, and must , pursuant to the provisions of Cabinet Office Order, keep them at all of its business offices and offices and make them available for public inspection, or disclose them using the internet or through other means pursuant to the provisions of Cabinet Office Order, during the one-year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

Each business year, pursuant to the provisions of Cabinet Office Order, a financial instruments business operator (but only a foreign corporation engaged in type-I financial instruments business or cryptoasset trading business; hereinafter the same applies in this Subsection) must submit a balance sheet, profit and loss statement, and other financial accounting documents prepared in connection with all of its business, as well as documents summarizing business in the relevant business year, to the Prime Minister within the period specified by Cabinet Order after the end of that business year.

the majority of the voting rights held by all the shareholders, etc. in the financial instruments business operator (limited to one engaged in type-I financial instruments business or, investment management business, or cryptoasset trading business) has come to be held by another corporation or other organization;

the financial instruments business operator (limited to those engaged in type-I financial instruments business; the same applies in paragraphs (11) and (12)) has obtained the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto (limited to the registration related to the type of securities, etc. intermediary business operations; the same applies in paragraphs (11) and (12)) or the registration of change referred to in Article 16, paragraph (1) of that Act (limited to the registration related to the addition of the type of securities, etc. intermediary business operations; the same applies in paragraphs (11) and (12)): the financial instruments business operator that has obtained the registration or the registration of change.

If it is permissible for an heir to continue engaging in financial instruments business pursuant to the provisions of the preceding paragraph, the heir is deemed to be a financial instruments business operator (limited to one engaged in investment advisory business), and the provisions of Articles 36 through 36-3; Article 37; Article 37-3; Article 37-4; Articles 37-6 through 38-2; Article 40; Articles 41 through 41-5; Article 43-6; Articles 44 through 44-3; Article 45; Articles 47 through 47-3; Article 49, paragraph (3); Article 49-4; Article 49-5; Article 51; Article 52, paragraph (1) (limited to the part that involves item (i) and items (viiviii) through (xxi)); Article 52, paragraph (4) or (5); and Article 56-2 (limited to paragraph (1), (3) or (4)) (including the penal provisions linked with these provisions) apply. In this case, in Article 52, paragraph (1), the term "rescind its Article 29 registration" is deemed to be replaced with "order the discontinuation of financial instruments business".

If a financial instruments business operator, etc. seeks to discontinue financial instruments business, etc. (excluding investment advisory and agency business; the same applies in paragraph (8) and Article 56, paragraph (1)), to implement a merger (limited to a merger in which the financial instruments business operator, etc. disappears), to dissolve for reasons other than merger or an order to commence bankruptcy proceedings, to have all or part of its business succeeded to in a company split, or to transfer all or part of its business, it must issue public notice of this and post a notice in a place easily seen by the public at all of its business offices andor offices pursuant to the provisions of Cabinet Office Order, by 30 days prior to the day on which it does so; provided, however, that in the cases specified by Cabinet Office Order as cases where there is no hindrance to the protection of investors, it is not required to post a notice.

If a financial instruments business operator, etc. issues a public notice under paragraph (6) (unless it issues that public notice in connection with the succession of the whole or part of its business upon merger or in a company split or in connection with the transfer of the whole or part of its business), the financial instruments business operator, etc. must promptly complete the purchase and sale and other transactions of securities and cryptoassets, and the derivatives transactions, etc. it is conducting (referred to as "customer transactions" in Article 56 and, Article 57-9) and Section 4-3), and return or transfer to customers without delay the assets that customers have deposited with it in connection with its financial instruments business, etc. and, the assets on its customers' accounts that are in its possession without delay, and the cryptoassets of customers that it manages (referred to as "customer property" in Article 56, paragraph (1), Article 57-9 and that Section).

If a financial instruments business operator (limited to those engaged only in type-I financial instruments business) has obtained the registration referred to in Article 66 or has obtained the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Developmentany of the Accessible Environment Thereto or the registration of change referred to in Article 16, paragraph (1) of that Actfollowing items applies, the relevant financial instruments business operator's registration referred to in Article 29 ceases to be effective.

when a financial instruments business operator (limited to one engaged only in type-I financial instruments business) obtains the registration referred to in Article 66 (limited to that relating to the type of securities purchase and sale intermediary business, etc. prescribed in Article 66-2, paragraph (1), item (iv); the same applies in item (i) of the following paragraph) or the registration of change referred to in Article 66-5, paragraph (4) (limited to that relating to the addition of the type of securities purchase and sale intermediary business, etc. prescribed in Article 66-2, paragraph (1), item (iv); the same applies in item (i) of the following paragraph), or obtains the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto or the registration of change referred to in Article 16, paragraph (1) of that Act;

when a financial instruments business operator (limited to one engaged only in cryptoasset trading business) obtains the registration referred to in Article 66 (limited to that relating to the type of intermediary services for purchase and sale, etc. of cryptoassets prescribed in Article 66-2, paragraph (1), item (iv); the same applies in (b) of the following item and in item (ii) and item (iii), (b) of the following paragraph) or the registration of change referred to in Article 66-5, paragraph (4) (limited to that relating to the addition of the type of intermediary services for purchase and sale, etc. of cryptoassets prescribed in Article 66-2, paragraph (1), item (iv); the same applies in item (ii) of the following paragraph);

if a financial instruments business operator (limited to one engaged only in type-I financial instruments business and cryptoasset trading business) falls under any of the following:

when it obtains the registration referred to in Article 66 (limited to that relating to the types of securities purchase and sale intermediary business, etc. and intermediary services for purchase and sale, etc. of cryptoassets prescribed in Article 66-2, paragraph (1), item (iv); the same applies in item (iii), (a) of the following paragraph);

when it obtains the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto or the registration of change referred to in Article 16, paragraph (1) of that Act, and obtains the registration referred to in Article 66.

If a financial instruments business operator (excluding those engaged only in type-I financial instruments business) has obtained the registration referred to in Article 66 or has obtained the registration referred to in Article 12 of the Act on the Provisionany of Financial Services and the Development of the Accessible Environment Thereto orfollowing items applies, except in the registration of change referred tocase prescribed in Article 16, paragraph (1item (iii) of that Actthe preceding paragraph, the relevant financial instruments business operator is deemed to have obtained the registration of change referred to in Article 31, paragraph (4) towith the effect that it will no longer conduct type-I financial instruments businesscontent specified in the relevant item.

when a financial instruments business operator engaged in type-I financial instruments business (excluding one engaged only in type-I financial instruments business) obtains the registration referred to in Article 66 or the registration of change referred to in Article 66-5, paragraph (4), or obtains the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto or the registration of change referred to in Article 16, paragraph (1) of that Act: to the effect that it will no longer conduct type-I financial instruments business;

when a financial instruments business operator engaged in cryptoasset trading business (excluding one engaged only in cryptoasset trading business) obtains the registration referred to in Article 66 or the registration of change referred to in Article 66-5, paragraph (4): to the effect that it will no longer conduct cryptoasset trading business;

if a financial instruments business operator engaged in type-I financial instruments business and cryptoasset trading business (excluding one engaged only in type-I financial instruments business and cryptoasset trading business) falls under any of the following: to the effect that it will no longer conduct type-I financial instruments business and cryptoasset trading business:

when it obtains the registration referred to in Article 66;

when it obtains the registration referred to in Article 12 of the Act on the Provision of Financial Services and the Development of the Accessible Environment Thereto or the registration of change referred to in Article 16, paragraph (1) of that Act, and obtains the registration referred to in Article 66.

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

it has received its a financial instruments business operator engaged in cryptoasset trading business comes to fall under Article 29 registration by wrongful means29-4, paragraph (1), item (viii);

it violates a law or regulation (other thanhas received its Article 46-6, paragraph (2)) or a disposition29 registration by a government agency which is based on a law or regulation, in connection with the financial instruments business or services incidental theretowrongful means;

in light of the state of its business or assets, it it violates a law or regulation (other than Article 46-6, paragraph (2)) or a disposition by a government agency which is likely to become insolventbased on a law or regulation, in connection with the financial instruments business or services incidental thereto;

a fact has occurred in connection withlight of the operationstate of investment advisory and agencyits business or investment management business, whichassets, it is detrimentallikely to the investors' interestsbecome insolvent;

it commits a wrongful or extremely unjust acta fact has occurred in connection with the financial instruments business, operation of investment advisory and the circumstances surrounding this are particularly seriousagency business or investment management business, which is detrimental to the investors' interests;

it violates the conditions attached to the authorization referred to in Article 30, paragraph (1); orcommits a wrongful or extremely unjust act in connection with the financial instruments business, and the circumstances surrounding this are particularly serious;

a financial instruments business operator that has obtainedit violates the conditions attached to 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).

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 thean 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), (for an officer of a financial instruments business operator engaged in cryptoasset trading business, (a) through (i) of that item or item (viii), (c), (1) through (3) of that paragraph; hereinafter the same applies in this paragraph), is discovered to have fallen under the cases under any of (a) through (i) of that itemArticle 29-4, paragraph (1), item (ii), (a) through (i) at the time of obtaining the registration referred to in Article 29, or comes to fall under the cases under any of item (viiviii) or items (ixx) through (xixii) of the preceding paragraph, the Prime Minister may order the financial instruments business operator to dismiss that officer.

If a financial instruments business operator (limited to one engaged in type-I financial instruments business or cryptoasset trading 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.

The provisions of Article 50-2, paragraph (8) apply mutatis mutandis to a person that was a financial instruments business operator, etc. if that financial instruments business operator, etc. dissolves or discontinues financial instruments business, etc., or has the registration referred to in Article 29 or Article 33-2 rescinded pursuant to the provisions of Article 52, paragraph (1); Article 52-2, paragraph (1); Article 53, paragraph (3); or Article 54. In such a case, the person that was the financial instruments business operator, etc. is deemed to still be a financial instruments business operator, etc. to the extent required to complete customer transactions, or to return or transfer customer property to customers.

When the Prime Minister finds it to be necessary and appropriate in the public interest or for the protection of investors, the Prime Minister may order the major shareholder (meaning a major shareholder as provided for in Article 29-4, paragraph (2); hereinafter the same applies in this paragraph) of a financial instruments business operator (limited to one engaged in type-I financial instruments business or, investment management business, or cryptoasset trading business, and excluding a foreign corporation; hereinafter the same applies in this paragraph) or the major shareholder of a holding company that has a financial instruments business operator as its subsidiary company to submit a notification or take measures referred to in Articles 32 through 32-3 (this means Article 32, paragraph (1) or (2); Article 32-2, paragraph (1); or Article 32-3, paragraph (1) as applied mutatis mutandis pursuant to Article 32-4 in the case of the major shareholder of a holding company that has a financial instruments business operator as its subsidiary company; hereinafter the same applies in this paragraph), and to submit reports or materials that should serve as a reference in connection with the business or assets of athat financial instruments business operator, and may have the relevant officials inspect documents or other articles of such a major shareholder (but only as is necessary in connection with the notification or measures referred to in Articles 32 through 32-3 or the business or assets of thethat financial instruments business operator, etc.).

In and after the business year that includes the day on which the period specified by Cabinet Order elapses counting from the notification date, a special financial instruments business operator must prepare explanatory documents on a consolidated basis for the special financial instruments business operator and its subsidiary corporations, etc., stating the particulars specified by Cabinet Office Order as pertinent to the state of the business and assets of the special financial instruments business operator and its subsidiary corporations, etc., and must , pursuant to the provisions of Cabinet Office Order, keep those explanatory documents at all of its business offices and offices and make them available for public inspection, or disclose them using the internet or through other means pursuant to the provisions of Cabinet Office Order, during the one-year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

For each quarter in and after the quarter that includes the day on which the period specified by Cabinet Order elapses counting from the notification date and , a special financial instruments business operator must, pursuant to the provisions of Cabinet Office Order, a special financial instruments business operator must keep a document in which it describes the integrity of management at all of its business offices andor offices and make this document available for public inspection , or make it public by using the Internet or by other means, during the three-month period beginning from the day on which the period specified by Cabinet Order elapses counting from the endlast day of the quarter.

The provisions of Article 50-2, paragraph (8) apply mutatis mutandis to a person that was a special financial instruments business operator if the special financial instruments business operator has had the registration referred to in Article 29 rescinded pursuant to the provisions of Article 57-6, paragraph (3). In such a case, the person that was the special financial instruments business operator is deemed to still be a financial instruments business operator inasmuch as the task of completing customer transactions or returning or transferring customer property to customers is concerned.

In and after the business year that includes the day on which the period specified by Cabinet Order elapses counting from the day on which a company becomes the highest designated parent company, the highest designated parent company must prepare explanatory documents on a consolidated basis for the highest designated parent company and its subsidiary corporations, etc., stating the particulars specified by Cabinet Office Order as pertinent to the state of the business and assets of the highest designated parent company and its subsidiary corporations, etc., and must , pursuant to the provisions of Cabinet Office Order, keep these explanatory documents at all of the business offices and offices of the subject special financial instruments business operator and make them available for public inspection, or disclose them using the internet or through other means pursuant to the provisions of Cabinet Office Order, during the one-year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

For each highest designated parent company quarter in and after the highest designated parent company quarter that includes the day on which the period specified by Cabinet Order elapses counting from the day on which a company becomes the highest designated parent company, the highest designated parent company must keep a document in which it describes the integrity of management at all of the business offices or offices of the subject special financial instruments business operator and make this document available for public inspection, or make it public by using the Internet or by other means, during the three-month period beginning from the day on which the period specified by Cabinet Order elapses counting from the end of the highest designated parent company quarter, pursuant to the provisions of Cabinet Office Order.

Section 4-3 Management by a Customer Property Administrator

If the Prime Minister finds, in a case where Article 50-2, paragraph (8) (including as applied mutatis mutandis pursuant to Article 56, paragraph (1) and Article 57-9; the same applies in Article 57-30, paragraph (1)) applies, that the completion of customer transactions and the return or transfer of customer property under that provision are hindered because the management of the business of a financial instruments business operator is extremely inappropriate, the Prime Minister may take a disposition ordering that financial instruments business operator to have its business and property administered by a customer property administrator (hereinafter referred to as a "disposition ordering administration" in this Section and Article 207-5, paragraph (2), item (i)).

When the Prime Minister has taken a disposition ordering administration, the Prime Minister must give public notice of this in the Official Gazette.

If the Prime Minister finds that a disposition ordering administration is no longer necessary, the Prime Minister must rescind that disposition ordering administration.

The provisions of paragraph (2) of the preceding Article apply mutatis mutandis to the case referred to in the preceding paragraph.

When a disposition ordering administration has been taken, the right to represent the financial instruments business operator subject to that disposition ordering administration (hereinafter referred to as a "financial instruments business operator under management") and to execute its business and manage and dispose of its property (limited to the extent necessary for the completion of customer transactions and the return or transfer of customer property under the provisions of Article 50-2, paragraph (8)) is vested exclusively in the customer property administrator.

The Prime Minister must appoint one or more customer property administrators simultaneously with a disposition ordering administration.

The Prime Minister may order a customer property administrator to take measures necessary for the management of the business and property of the financial instruments business operator under management that relate to the administrator's duties.

If the Prime Minister finds it necessary, the Prime Minister may appoint a further customer property administrator even after having appointed a customer property administrator pursuant to the provisions of paragraph (2), and may dismiss a customer property administrator if the Prime Minister finds that the customer property administrator is not appropriately managing the business and property of the financial instruments business operator under management.

When the Prime Minister has appointed a customer property administrator pursuant to the provisions of paragraph (2) or the preceding paragraph, or has dismissed a customer property administrator pursuant to the provisions of that paragraph, the Prime Minister must notify the financial instruments business operator under management to that effect and give public notice of this in the Official Gazette.

The provisions of Articles 69, 70 and 80, and Article 81, paragraphs (1) and (5) of the Corporate Reorganization Act (Act No. 154 of 2002) apply mutatis mutandis to customer property administrators, and the provisions of Article 78 of the Act on General Incorporated Associations and General Incorporated Foundations apply mutatis mutandis to financial instruments business operators under management. In this case, the phrase "permission of the court" in the proviso to Article 69, paragraph (1) of the Corporate Reorganization Act is deemed to be replaced with "approval of the Prime Minister", the phrase "trustee representative" in Article 70 of that Act is deemed to be replaced with "customer property administrator representative", the phrase "permission of the court" in paragraph (2) of that Article is deemed to be replaced with "approval of the Prime Minister", the term "court" in Article 81, paragraph (1) of that Act is deemed to be replaced with "Prime Minister", the phrase "trustee representative" in paragraph (5) of that Article is deemed to be replaced with "customer property administrator representative", and the phrase "representative director or other representative" in Article 78 of the Act on General Incorporated Associations and General Incorporated Foundations is deemed to be replaced with "customer property administrator".

A corporation may become a customer property administrator or a customer property administrator representative.

A financial instruments business operator and an association (meaning an authorized financial instruments firms association or a certified financial instruments business association prescribed in Article 78, paragraph (2); the same applies in the following paragraph and Article 207-5, paragraph (1)) may, notwithstanding the provisions of this Act or other laws and regulations, become a customer property administrator or a customer property administrator representative and perform its duties.

When requested by the Prime Minister to become a customer property administrator, a financial instruments business operator and an association must not refuse without justifiable grounds.

When the Prime Minister has taken a disposition ordering administration, the Prime Minister must immediately notify the district court having jurisdiction over the location of the head office or principal office of the financial instruments business operator under management to that effect, and, attaching a certified copy of the relevant written order to the written request, request the registry office at the location of the head office or principal office of the financial instruments business operator under management to register it.

The name and address of the customer property administrator must also be registered in the registration referred to in the preceding paragraph.

The provisions of paragraph (1) apply mutatis mutandis to the case where a change has occurred in the matters prescribed in the preceding paragraph and to the case where a disposition ordering administration has been rescinded.

If the Prime Minister finds it necessary, the Prime Minister may request a customer property administrator to submit reports or materials on the state of the business and assets of the financial instruments business operator under management that relate to the administrator's duties.

When necessary to perform duties, a customer property administrator may request reports from the officers of the financial instruments business operator under management (including, if an officer is a corporation, the person who is to perform its duties) and its accounting auditors (including, if an accounting auditor is a corporation, the members who are to perform its duties), as well as its employees and persons who formerly held those positions, on the state of the business and assets of the financial instruments business operator under management (in the case of persons who formerly held those positions, limited to matters they could have come to know during the period when they were engaged in the business of that financial instruments business operator under management), or inspect the books, documents, and other articles of the financial instruments business operator under management.

When necessary to perform duties, a customer property administrator may make inquiries to, or request cooperation from, government agencies, public bodies and other persons.

A customer property administrator and a customer property administrator representative (hereinafter referred to as "customer property administrator, etc." in this Article) must not divulge any secret that they have come to know in the course of their duties. The same applies after a customer property administrator, etc. has left office.

If a customer property administrator, etc. is a juridical person, its officers and employees engaged in the duties of the customer property administrator, etc. must not divulge any secret that they have come to know in the course of their duties. The same applies after those officers or employees cease to be engaged in the duties of the customer property administrator, etc.

If necessary to perform their duties, a customer property administrator must file an action or take other necessary measures in order to enforce civil liability based on a breach of duty, in the course of their duties, by an officer or accounting auditor of a financial instruments business operator under management, or by a person who was any of these.

If, in the course of performing their duties, a customer property administrator believes that a crime has been committed, they must take required measures toward filing an accusation.

When a customer property administrator conducts a transaction with a financial instruments business operator under management for themselves or for a third party, they must obtain the approval of the Prime Minister. In this case, the provisions of Article 108 of the Civil Code do not apply.

An act performed without obtaining the approval referred to in the preceding paragraph is void; provided, however, that this cannot be asserted against a third party in good faith.

If a director (or, for a company with supervisory committee, a director other than a director who is a supervisory committee member; the same applies in this paragraph through paragraph (3)) or an executive officer of a financial instruments business operator under management that is a stock company has committed or attempted to commit an act that obstructs the performance of the duties of the customer property administrator, or if it is otherwise necessary in order to perform their duties, a customer property administrator may, notwithstanding Article 339, paragraph (1) of the Companies Act (including as applied with replacement of terms pursuant to Article 347, paragraph (1) of that Act) and Article 403, paragraph (1) of that Act, dismiss a director or executive officer of the financial instruments business operator under management that is a stock company, with the permission of the court.

If, in seeking to dismiss a director or executive officer of a financial instruments business operator under management pursuant to the preceding paragraph, the dismissal would result in a shortfall in the number of directors or executive officers specified by an Act or the articles of incorporation, the customer property administrator may, notwithstanding Article 329, paragraph (1) and Article 402, paragraph (2) of the Companies Act, appoint a director or executive officer of the financial instruments business operator under management, with the permission of the court.

A director or executive officer of a financial instruments business operator under management who has been appointed pursuant to the preceding paragraph retires, respectively, at the conclusion of the annual shareholders meeting first convened after the end of management by the customer property administrator of that financial instruments business operator under management, or at the conclusion of the first meeting of the board of directors held after that annual shareholders meeting concludes.

If the permission prescribed in paragraph (1) or (2) (hereinafter referred to as "substitute permission" in this Article and the following Article) has been granted, a resolution at a shareholders meeting or class shareholders meeting, or at a board of directors' meeting, is deemed to have been adopted on the matters pertaining to that substitute permission.

A case pertaining to substitute permission falls under the jurisdiction of the district court that has jurisdiction over the location of the head office of the financial instruments business operator under management.

When the court has made a decision granting substitute permission, it must serve its electronic judgment (meaning the electronic judgment prescribed in Article 57, paragraph (1) of the Non-Contentious Case Procedures Act (Act No. 51 of 2011) (limited to that recorded in a file pursuant to paragraph (3) of that Article); the same applies in the following Article) on the financial instruments business operator under management and give public notice of a summary of the decision.

The public notice under the preceding paragraph is to be given by publication in the Official Gazette.

A decision granting substitute permission takes effect from the time when it is served on the financial instruments business operator under management pursuant to paragraph (6).

A shareholder may file an immediate appeal against a decision granting substitute permission within an unextendable period of two weeks from the date of the public notice referred to in paragraph (6).

The provisions of Article 5, Article 6, Article 7, paragraph (2), Article 40, Article 41, Article 56, paragraph (2), and Article 66, paragraphs (1) and (2) of the Non-Contentious Case Procedures Act do not apply to a case pertaining to substitute permission.

If substitute permission has been granted, there must be attached to the written application for registration of the matters pertaining to that substitute permission a certified copy or extract of the written decision granting that substitute permission, or a document stating the matters recorded in the electronic judgment for which a court clerk has certified that the content of the document is identical to the matters recorded in that electronic judgment.

No registration and license tax is imposed on a registration under Article 57-32.

A foreign securities services provider must not perform any act set forth in the items of Article 28, paragraph (810) with a person in Japan as the counterparty; provided, however, that this does not apply if a foreign securities services provider performs such an act with a financial instruments business operator engaged in securities services as the counterparty (excluding cases where the relevant foreign securities broker services provider conducts specified over-the-counter derivatives transactions, or intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency therefor using the electronic data processing system used by the relevant foreign securities brokerservices provider for its business of over-the-counter derivatives transactions, etc.), or if it does so in a case that is specified by Cabinet Order.

The provisions of Article 36-3; Article 36-4, paragraph (1); Article 38 (limited to the part that involves items (i) through (iii) and (ix)); and Article 44-4, paragraph (1) apply mutatis mutandis to the underwriting activities of the foreign securities services provider that has obtained the permission referred to in Article 59, paragraph (1).

The provisions of Article 46-2, Article 46-3, paragraphs (1) through (3), and Article 49-3 apply mutatis mutandis to the on-exchange transaction services of an authorized firm for on-exchange transactions. In this case, in Article 46-3, paragraph (1), the phrase "within three months" is deemed to be replaced with "within the period specified by Cabinet Order".

Subsection 7 Foreign Cryptoasset Trading Business Operators

A foreign cryptoasset trading business operator (meaning a person other than a financial instruments business operator that conducts cryptoasset trading business in a foreign state in accordance with foreign laws and regulations) must not perform any act set forth in the items of Article 28, paragraph (5) with a person in Japan as the counterparty; provided, however, that this does not apply if the counterparty is a financial instruments business operator (limited to one that conducts cryptoasset trading business) or in any other case specified by Cabinet Order.

A notifier of specially permitted services that has made a notification under paragraph (2) or (8) must, without delay, prepare a document stating the particulars which are set forth in the items of paragraph (2) related to the notifier of specially permitted services and which are specified by Cabinet Office Order, and , pursuant to the provisions of Cabinet Office Order, keep it at its principal business office or office and all of its business offices or offices for specially permitted services for qualified institutional investors, etc. and make it available for public inspection, or disclose it using the internet or through other means pursuant to the provisions of Cabinet Office Order.

Each business year, pursuant to the provisions of Cabinet Office Order, a notifier of specially permitted services must prepare explanatory documents stating those of the particulars stated in the business report referred to in the preceding paragraph which are specified by Cabinet Office Order as particulars that are found to be necessary in terms of investor protection, and must , pursuant to the provisions of Cabinet Office Order, keep them at its principal business office or office and all of its business offices or offices for specially permitted services for qualified institutional investors, etc. and make them available for public inspection, or disclose them using the internet or through other means pursuant to the provisions of Cabinet Office Order, during the one-year period beginning from the day on which the period specified by Cabinet Order elapses following the end of each business year.

A notifier of specially permitted services for foreign investors, etc. that has made a notification under the provisions of paragraph (1) or (7) must, without delay, prepare a document stating the particulars that are set forth in the items of paragraph (1) related to the notifier of specially permitted services for foreign investors, etc. which are specified by Cabinet Office Order, and , pursuant to the provisions of Cabinet Office Order, keep the notificationdocument at the principal business office or office and all of the business offices or offices for conducting specially permitted services for foreign investors, etc. and make it available for public inspection, or publicize it using the internet or through other means, pursuant to the provisions of Cabinet Office Order.

a corporation that has a person falling under Article 29-4, paragraph (1), item (v), (dc) 1. or 2. among its major shareholders that are individuals (meaning the major shareholders prescribed in paragraph (2) of that Article; if the corporation is a subsidiary company (meaning the subsidiary company prescribed in paragraph (4) of that Article) of a holding company, including the major shareholders of the holding company; the same applies in (f));

a corporation that has a person falling under any of Article 29-4, paragraph (1), item (v), (ed) 1. through 3. among its major shareholders that are corporations; or

Each business year, pursuant to the provisions of Cabinet Office Order, a notifier of specially permitted services for foreign investors, etc. must prepare explanatory documents stating the particulars stated in the business report referred to in the preceding paragraph which are specified by Cabinet Office Order as particulars that are found to be necessary for investor protection, and must , pursuant to the provisions of Cabinet Office Order, keep the explanatory documents at the principal business office or office and all of their business offices or offices for conducting specially permitted services for foreign investors, etc. and make them available for public inspection or publicize them using the internet or through other means, pursuant to the provisions of Cabinet Office Order, during the one-year period that begins from the day on which the period specified by Cabinet Order has elapsed after the end of each business year.

beyond what is set forth in the preceding two items, acts specified by Cabinet Order.following acts (hereinafter referred to as "cryptoasset-related duties"):

the acts set forth in Article 2, paragraph (8), items (xviii) through (xx) and item (xxii);

solicitation of offers for a purchase and sale of cryptoassets, or of requests for intermediation, brokerage, or agency for it;

beyond what is set forth in the preceding three items, acts specified by Cabinet Order.

in the case of a person who performs cryptoasset-related duties, a statement to that effect.

a person set forth in Article 29-4, paragraph (1), item (ii), (a) through (i) (if the person seeks to perform cryptoasset-related duties, (a) through (i) of that item or (c) 1. through 3. of item (viii) of that paragraph);