Financial Instruments and Exchange Act

The term "securities" as used in this Act means the following:

national government bonds;

municipal bonds;

debentures issued by a corporation pursuant to a special Act (excluding those set forth in the following item and item (xi));

specified corporate bonds prescribed in the Act on the Securitization of Assets (Act No. 105 of 1998);

corporate bond certificates (including those issued by a mutual company; the same applies hereinafter);

investment securities issued by a corporation incorporated pursuant to a special Act (excluding those set forth in the following item, item (viii) and item (xi));

preferred equity investment certificates prescribed in the Act on Preferred Equity Investment by Cooperative Financial Institutions (Act No. 44 of 1993; hereinafter referred to as the "Act on Preferred Equity Investment");

preferred equity securities and securities indicating a right to subscribe for preferred equity which are prescribed in the Act on the Securitization of Assets;

share certificates and share option certificates;

beneficiary certificates of an investment trust or foreign investment trust which are prescribed in the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951);

investment securities, investment equity subscription right certificates, or investment corporation bond certificates or foreign investment securities prescribed in the Act on Investment Trusts and Investment Corporations;

beneficiary certificates of loan trusts;

beneficiary certificates of special purpose trusts prescribed in the Act on the Securitization of Assets;

beneficiary certificates of beneficiary certificate-issuing trusts prescribed in the Trust Act (Act No. 108 of 2006);

promissory notes specified by Cabinet Office Order which have been issued by a corporation in order to raise the funds necessary for business;

mortgage securities prescribed in the Mortgage Securities Act (Act No. 15 of 1931);

instruments or certificates issued by a foreign country or foreign person, and which have the nature of the instruments and certificates set forth in items (i) through (ix) or item (xii) through the preceding item (excluding those specified in the following item);

instruments or certificates which are specified by Cabinet Office Order, which are issued by a foreign person, and which indicate a beneficial interest in a trust that holds the loan claims of a person operating in the banking business or a person otherwise providing money loans on a regular basis, or indicate any other similar rights;

instruments or certificates that indicate the right to a transaction specified in paragraph (21), item (iii) which is conducted on a financial instruments market, in accordance with the standards and means prescribed by the person operating the financial instruments market, right to a transaction that is conducted on a foreign financial instruments market (meaning a foreign financial instruments market provided for in paragraph (8), item (iii), (b); hereinafter the same applies in this item) and which is similar to the transaction specified in paragraph (21), item (iii) (excluding those associated with financial instruments (limited to those listed in paragraph (24), item (iii)-3) or financial indexes (limited to the prices of the relevant financial instruments and the figures calculated based thereon)), or the right to a transaction specified in paragraph (22), item (iii) or (iv) which is conducted in neither a financial instruments market nor a foreign financial instruments market (such rights are hereinafter referred to as "options");

instruments or certificates which the person with whom instruments or certificates set forth in the preceding items has been deposited issues in a state other than the state in which the deposited instruments or certificates were issued, and which indicate a right to the deposited instruments or certificates; and

instruments or certificates other than those set forth in the preceding items, which are specified by Cabinet Order as those with regard to which, in consideration of transferability and other factors, it is found to be necessary to ensure the public interest or the protection of investors.

The rights that must be indicated on securities set forth in items (i) through (xv) of the preceding paragraph, on securities set forth in item (xvii) of that paragraph (excluding those with the nature of securities set forth in item (xvi) of that paragraph), and on securities set forth in item (xviii) of that paragraph (in the case of the rights that must be indicated on securities set forth in item (xiv) of that paragraph and securities set forth in item (xvii) of that paragraph (limited to those that have the nature of securities set forth in item (xiv) of that paragraph), excluding rights which fall under Article 2, paragraph (5), item (iii) or (iv) of the Payment Services Act (Act No. 59 of 2009), and which are specified by Cabinet Order as rights that are found not to compromise the public interest or the protection of investors even if they are not deemed to be securities); and the rights that must be indicated on the securities set forth in item (xvi) of the preceding paragraph, securities set forth in item (xvii) of that paragraph (limited to those with the nature of securities set forth in item (xvi) of that paragraph), and securities set forth in items (xix) through (xxi) of that paragraph which are specified by Cabinet Office Order (hereinafter collectively referred to as "rights that must be indicated on securities" in this and the following paragraphs) are deemed to be the securities indicating these rights even if securities indicating these rights have not been issued; the electronically recorded monetary claims (meaning the electronically recorded monetary claims set forth in Article 2, paragraph (1) of the Electronically Recorded Monetary Claims Act (Act No. 102 of 2007); hereinafter the same applies in this paragraph) specified by Cabinet Order as those which, in consideration of transferability and other circumstances, it is found to be necessary to deem corporate bond certificates or any other securities specified in the items of the preceding paragraph (referred to as the "specified electronically recorded monetary claims" in item (vii) and the following paragraph), are deemed to be such securities; the rights set forth in the following items are deemed to be the relevant securities even if they are not rights which must be indicated on instruments or certificates; and the provisions of this Act apply:

a beneficial interest in a trust (excluding a beneficial interest that must be indicated on the beneficiary certificates of an investment trust specified in item (x) of the preceding paragraph and a beneficial interest that must be indicated on securities set forth in any of items (xii) through (xiv) of that paragraph, and a beneficial interest which falls under Article 2, paragraph (5), item (iii) or (iv) of the Payment Services Act and is specified by Cabinet Order as a beneficial interest that is found not to compromise the public interest or the protection of investors even if it is not deemed to be securities);

rights that are claimable against a foreign person and which have the nature of the rights specified in the preceding item (excluding rights that must be indicated on the beneficiary certificates of a foreign investment trust specified in item (x) of the preceding paragraph and rights that must be indicated on securities set forth in item (xvii) or item (xviii) of that paragraph);

the membership rights of a general partnership company or limited partnership company (limited to rights specified by Cabinet Order) or membership rights of a limited liability company;

the membership rights of a foreign corporation which have the nature of rights specified in the preceding item;

among the rights based on a partnership contract provided for in Article 667, paragraph (1) of the Civil Code (Act No. 89 of 1896), a silent partnership agreement provided for in Article 535 of the Commercial Code (Act No. 48 of 1899), a limited partnership agreement for investment provided for in Article 3, paragraph (1) of the Limited Partnership Act for Investment (Act No. 90 of 1998), or a limited liability partnership agreement provided for in Article 3, paragraph (1) of the Limited Liability Partnership Act (Act No. 40 of 2005), membership rights in an incorporated association or other rights (excluding rights based on foreign laws and regulations) the holder of which (hereinafter referred to as an "equity holder" in this item) can receive dividends of profits arising from business that is conducted using the money (including anything specified by Cabinet Order as being similar to money) invested or contributed by the equity holder (such business is hereinafter referred to as "business subject to investment" in this item) or a distribution of the assets of the business subject to investment, which do not fall under any of the following categories (excluding rights that must be indicated on securities set forth in the items of the preceding paragraph and rights deemed to be securities pursuant to the provisions of this paragraph (excluding this item)):

rights of an equity holder in cases specified by Cabinet Order as those in which all of the equity holders participate in the business subject to investment;

rights of an equity holder, if it is provided that equity holders will not receive dividends of profits or a distribution of the assets of the business subject to investment in an amount exceeding the amount invested or contributed by them (excluding rights set forth in (a));

rights based on an insurance contract in which a person that engages in the insurance business prescribed in Article 2, paragraph (1) of the Insurance Business Act (Act No. 105 of 1995) is the insurer, a mutual aid contract concluded with a cooperative prescribed in Article 4 of the Agricultural Co-operatives Act (Act No. 132 of 1947) which engages in the services prescribed in Article 10, paragraph (1), item (x) of that Act, a mutual aid contract concluded with a cooperative prescribed in Article 4 of the Consumer Cooperatives Act (Act No. 200 of 1948) which engages in the mutual aid services prescribed in Article 10, paragraph (2) of that Act, a mutual aid contract concluded with a cooperative prescribed in Article 2 of the Fishery Industry Cooperative Act (Act No. 242 of 1948) which engages in the services prescribed in Article 11, paragraph (1), item (xii), Article 93, paragraph (1), item (vi)-2 or Article 100-2, paragraph (1), item (i) of that Act, a mutual aid contract concluded with a cooperative prescribed in Article 3 of the Small and Medium-Sized Enterprise Cooperatives Act (Act No. 181 of 1949) which engages in the mutual aid services prescribed in Article 9-2, paragraph (7) of that Act, or a specified joint real estate venture contract prescribed in Article 2, paragraph (3) of the Act on Specified Joint Real Estate Ventures (Act No. 77 of 1994) (excluding one concluded with the special enterprise operator prescribed in paragraph (9) of that Article and one under which the rights based on the relevant specified joint real estate venture contract are indicated as a financial value (limited to one that is recorded on an electronic device or any other such object by electronic means) that can be transferred by using an electronic data processing system) (excluding rights set forth in sub-item (a) and (b)); or

rights other than those set forth in (a) through (c), which are specified by Cabinet Order as rights in connection with which there is found to be no compromise to the public interest or to the protection of equity holders even if the rights are not deemed to be securities;

rights based on foreign laws and regulations which are similar to those specified in the preceding item; or

rights other than specified electronically recorded monetary claims and the rights set forth in the preceding items, which are specified by Cabinet Order as rights in connection with which it is found that, in consideration of their economic nature being similar to securities prescribed in the preceding paragraph and rights set forth in the preceding items and in consideration of other circumstances, it is necessary and appropriate to ensure the public interest or the protection of investors, by deeming these rights to be securities.

The term "public offering of securities" as used in this Act means, among solicitations of offers to acquire newly issued securities (including acts specified by Cabinet Office Order as being similar to such solicitation (such acts are referred to as "acts similar to solicitation for acquisition" in the following paragraph); hereinafter referred to as "solicitation for acquisition"), the solicitation for acquisition in cases provided for in item (i) or item (ii) below, which is issued with regard to securities set forth in the items of paragraph (1), rights that must be indicated on securities, specified electronically recorded monetary claims, or the rights set forth in the items of that paragraph (but only if they are indicated as a financial value (limited to one that is recorded on an electronic device or any other such object by electronic means) which can be transferred by using an electronic data processing system (excluding the cases that are specified by Cabinet Office Order in consideration of transferability and other circumstances); hereinafter referred to as "electronically recorded transferable rights") that are deemed to be securities under the preceding paragraph (such securities or rights are referred to as the "paragraph (1) securities" in the following paragraph, paragraph (6) of this Article, Article 2-3, paragraphs (4) and (5), and Article 23-13, paragraph (6)); and the solicitation for acquisition in cases provided for in item (iii) below, which is issued with regard to rights that are deemed to be securities under the items of the preceding paragraph (excluding electronically recorded transferable rights; such rights are referred to as the "paragraph (2) securities" in the following paragraph, Article 2-3, paragraphs (4) and (5), and Article 23-13, paragraph (6)); the term "private placement of securities" means solicitation for acquisition which does not come within the purview of a public offering of securities:

cases specified by Cabinet Order as those in which the solicitation for acquisition is issued (unless the solicitation is issued only to the persons set forth in (a) or (b) below) to a large number of persons (other than qualified institutional investors (meaning persons specified by Cabinet Office Order as having expert knowledge of and experience with investment in securities; the same applies hereinafter), if qualified institutional investors are included in the persons to which the solicitation for acquisition is issued, and the solicitation for acquisition constitutes a case specified by Cabinet Order as one in which there is little likelihood of the relevant securities being transferred from the qualified institutional investor that acquires them to any person other than a qualified institutional investor);

the following persons:

professional investors;

juridical persons (excluding the persons set forth in (1));

individuals set forth in the items of Article 34-4, paragraph (1) (excluding the persons set forth in (1));

the persons to which a solicitation for acquisition specified by Cabinet Order is made, in the case where the issuer of securities (limited to the securities set forth in paragraph (1), item (ix), or, among the securities set forth in item (xvii) of that paragraph, those having the nature of the securities set forth in item (ix) of that paragraph; the same applies in (b) and in item (i), (b) of the following paragraph) makes the solicitation, to officers of the issuer (meaning directors, accounting advisors, company auditors or executive officers; the same applies in item (i), (b) of the following paragraph) or employees of the issuer, or other persons specified by Cabinet Office Order as persons that have already obtained, or can readily obtain, information on the particulars set forth in the items of Article 5, paragraph (1) concerning the securities, for the purpose of causing them to acquire the securities as consideration for the execution of their duties or as a means of promoting their welfare benefits;

cases in which the solicitation for acquisition is other than as specified in the preceding item, and in which it does not fall under any of the following:

a solicitation for acquisition issued only to qualified institutional investors and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant securities being transferred from the person that acquires them to any person other than a qualified institutional investor; and

a solicitation for acquisition issued only to the persons set forth in (a) of the preceding item (hereinafter referred to as "professional investors, etc.") and falling under all of the following requirements (excluding the cases specified in (a)):

in the case where the persons to which the solicitation for acquisition is made are persons other than the State, the Bank of Japan, and qualified institutional investors, a financial instruments business operator, etc. (meaning a financial instruments business operator, etc. prescribed in Article 34; the same applies in the following paragraph, Article 4, paragraph (1), item (iii) and paragraph (3), Article 27-32-2, and Article 27-34-2) conducts the solicitation for acquisition upon entrustment from a customer or for itself;

the relevant securities fall under a case specified by Cabinet Order as one in which there is little likelihood of them being transferred from the person that acquires them to a person other than a professional investor, etc. and a non-resident (meaning a non-resident prescribed in Article 6, paragraph (1), item (vi) of the Foreign Exchange and Foreign Trade Act (Act No. 228 of 1949), limited to a person specified by Cabinet Order; the same applies hereinafter, except in Article 63-8, paragraph (1), item (i) and Article 63-9, paragraph (9)).

the cases prescribed in (b) of the preceding item;

a solicitation for acquisition falling under neither the case specified in the preceding item, nor any of (a) through (c) (except if the solicitation for acquisition meets the requirements that are specified by Cabinet Order in consideration of the status, etc. of the issuance and solicitation of securities of the same class as the relevant securities), and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant securities being held by a large number of persons;

cases specified by Cabinet Order as those in which, in response to the solicitation for acquisition, a considerably large number of persons will come to hold the securities connected with the solicitation.

The term "secondary distribution of securities" as used in this Act means, among offers to sell and solicitation of offers to purchase already-issued securities (excluding offers and solicitation coming under the purview of Acts similar to the solicitation for acquisition and any other offer or solicitation specified by Cabinet Office Order; hereinafter referred to as a "solicitation for selling, etc."), offers to sell, etc. in cases provided for in item (i) or item (ii), which are made with regard to the paragraph (1) securities; and offers to sell, etc. in cases provided for in item (iii), which are made with regard to the paragraph (2) securities (excluding a solicitation for selling, etc. that involves the purchase and sale of securities on a financial instruments exchange market, a transaction equivalent thereto, and any other securities transactions specified by Cabinet Order):

cases specified by Cabinet Order as those in which the solicitation for selling, etc. is made (unless the offer is made only to the persons set forth in (a) or (b) below) to a large number of persons (other than qualified institutional investors, if qualified institutional investors are included in the persons to which the solicitation for selling, etc. is made, and if the solicitation for selling, etc. constitutes a case specified by Cabinet Order as one in which there is little likelihood of the relevant securities being transferred from the qualified institutional investor that acquires them to any person other than a qualified institutional investor);

professional investors, etc.;

the persons to which a solicitation for selling, etc. specified by Cabinet Order is made, in the case where the issuer of securities makes the solicitation, to officers or employees of the issuer, or other persons specified by Cabinet Office Order as persons that have already obtained, or can readily obtain, information on the particulars set forth in the items of Article 5, paragraph (1) concerning the securities, for the purpose of delivering the securities to them as consideration for the execution of their duties or as a means of promoting their welfare benefits;

cases in which the solicitation for selling, etc. is other than as specified in the preceding item, and in which it does not fall under any of the following:

a solicitation for selling, etc. made only to qualified institutional investors and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant securities being transferred from the person that acquires them to any person other than a qualified institutional investor;

a solicitation for selling, etc. made only to professional investors, etc. and falling under all of the following requirements (excluding the cases specified in (a)):

in the case where the other party to the solicitation for selling, etc. is a person other than the State, the Bank of Japan, and a qualified institutional investor, a financial instruments business operator, etc. conducts the solicitation for selling, etc. upon entrustment from a customer or for itself;

the relevant securities fall under a case specified by Cabinet Order as one in which there is little likelihood of them being transferred from the person that acquires them to a person other than a professional investor, etc. and a non-resident.

the cases prescribed in (b) of the preceding item;

a solicitation for selling, etc. falling under neither the case specified in the preceding item, nor any of (a) through (c) (except if the solicitation for selling, etc. meets the requirements that are specified by Cabinet Order in consideration of the status, etc. of the issuance and solicitation of securities of the same class as the relevant securities), and constituting a case specified by Cabinet Order as one in which there is little likelihood of the relevant securities being held by a large number of persons;

cases specified by Cabinet Order as those in which, in response to the solicitation for selling, etc., a considerably large number of persons will come to hold the securities connected with the offer.

The term "issuer" as used in this Act means the person that issues, or seeks to issue, securities (or the person specified by Cabinet Office Order with regard to the securities specified by Cabinet Office Order); and rights other than those which must be indicated on instruments or certificates, but which are deemed to be securities pursuant to paragraph (2), are deemed to have been issued as securities by the person specified by Cabinet Office Order for each kind of right, at the time specified by Cabinet Office Order.

The term "underwriter" as used in this Act (excluding Chapter V) means a person that, at the time of a public offering, secondary distribution, or private placement of securities, or the time of solicitation for selling, etc. only for professional investors, etc. (meaning a solicitation for selling, etc. the paragraph (1) securities which falls under paragraph (4), item (ii), (b) (excluding a solicitation for selling, etc. involving the purchase and sale of securities on a financial instruments exchange market, an equivalent transaction, and any other transaction of securities specified by Cabinet Order); the same applies hereinafter) involving securities, does one of the things set forth in the following items:

acquires all or part of the relevant securities with the aim of having other persons acquire them;

concludes a contract stipulating that if no person acquires all or part of the relevant securities, the underwriter will acquire the remaining securities;

concludes a contract, in the event that the relevant securities are share option certificates (including the securities specified by Cabinet Office Order as being equivalent thereto; hereinafter the same applies in this item), stipulating that if the person that has acquired the share option certificates does not exercise the share options (including the rights specified by Cabinet Office Order as being equivalent thereto; hereinafter the same applies in this item) associated with all or part of those share option certificates, the underwriter will acquire the share option certificates associated with the unexercised share options and that it or a third party will exercise them.

The term "securities registration statement" as used in this Act means the statement referred to in Article 5, paragraph (1) (including as applied mutatis mutandis pursuant to Article 5, paragraph (5); the same applies hereinafter, except in Article 26-4, paragraph (2), item (i) and Article 26-5, paragraph (2), item (iv)), documents accompanying it pursuant to Article 5, paragraph (13), and any amended statement as under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1).

the purchase and sale of securities (excluding those falling under the category of derivatives transactions; the same applies hereinafter), market derivatives transactions (excluding market derivatives transactions associated with financial instruments (limited to those listed in paragraph (24), item (iii)-3) or financial indexes (limited to the prices of those financial instruments and the figures calculated based on the prices) (hereinafter referred to as "commodity-related market derivatives transactions")) or foreign market derivatives transactions (excluding the purchase and sale of securities falling under item (x));

intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency for the purchase and sale of securities, market derivatives transactions, or foreign market derivatives transactions (excluding intermediation, brokerage, or agency for the purchase and sale of securities which falls under item (x));

intermediation, brokerage, or agency for entrustment of the following transactions:

the purchase and sale of securities or market derivatives transactions on a financial instruments exchange market;

the purchase and sale of securities or foreign market derivatives transactions on a foreign financial instruments market (meaning a market in a foreign country which is similar to a financial instruments exchange market; the same applies hereinafter);

over-the-counter derivatives transactions or intermediation, brokerage (excluding brokerage for clearing of securities, etc.), or agency for them (hereinafter referred to as "over-the-counter derivatives transactions, etc.");

brokerage for clearing of securities, etc.;

the underwriting of securities (meaning doing any of the things set forth in an item of paragraph (6) at the time of a public offering, secondary distribution, private placement of securities, or solicitation for selling, etc. only for professional investors, etc.);

the public offering or private placement of securities (limited to those set forth in the following items):

beneficiary certificates of investment trusts specified in paragraph (1), item (x) which are connected to the beneficial interest in an investment trust managed under instructions from the settlor provided for in Article 2, paragraph (1) of the Act on Investment Trusts and Investment Corporations;

beneficiary certificates of foreign investment trusts specified in paragraph (1), item (x);

securities specified in paragraph (1), item (xvi);

securities specified in paragraph (1), item (xvii) which have the nature of securities specified in item (xvi) of that paragraph;

rights that must be indicated on the securities specified in (a) or (b) above, or rights that must be indicated on the securities under (c) or (d) above which are specified by Cabinet Office Order, which are deemed to be securities pursuant to paragraph (2);

rights specified in paragraph (2), item (v) or item (vi) which are deemed to be securities pursuant to that paragraph; and

the securities other than those set forth in (a) through (f) which are specified by Cabinet Order;

secondary distribution of securities or solicitation for selling, etc. only for professional investors, etc.;

the handling of a public offering or secondary distribution of securities, or the handling of a private placement of securities or solicitation for selling, etc. only for professional investors, etc.;

the purchase and sale of securities or intermediation, brokerage, or agency for it, using an electronic data processing system, conducted through any of the following methods for deciding the trading price or other similar methods, with a large number of persons participating simultaneously as parties on one side of the transaction or as parties on both sides of the transaction (excluding those specified by Cabinet Order as transactions that are found to be inappropriate in terms of investor protection if conducted outside a financial instruments exchange market or an over-the-counter securities market (meaning an over-the-counter securities market provided for in Article 67, paragraph (2))):

by auction (but only if the trading volume of securities satisfies the criteria specified by Cabinet Order);

for securities listed on a financial instruments exchange, by using the trading price of the securities on the financial instruments exchange market that is operated by the relevant financial instruments exchange;

for securities registered under Article 67-11, paragraph (1) (hereinafter referred to as "over-the-counter traded securities"), by using the trading price of the securities which is published by the authorized financial instruments firms association to which the securities are registered;

by using the price decided by negotiation between the customers; and

methods other than those set forth in (a) through (d), which are specified by Cabinet Office Order;

conclusion of a contract in which one of the parties promises to provide the other party with oral, written (excluding newspapers, magazines, books, or any other written work that is issued for sale to many and unspecified persons and which many and unspecified persons can buy as needed), or any other form of advice about the following things, and the other party promises to pay remuneration for this (such a contract is hereinafter referred to as an "investment advisory contract"), and provision of advice under such investment advisory contract:

an entrustment contract for the asset management provided for in Article 188, paragraph (1), item (iv) of the Act on Investment Trusts and Investment Corporations, concluded with a registered investment corporation as defined in Article 2, paragraph (13) of that Act; or

a contract other than what is set forth in (a), in which one of the parties is fully or partly entrusted by the other party with the discretion to make investment decisions based on an analysis of the values, etc. of financial instruments, and is also entrusted with the authority necessary to make investments on behalf of the other party based on such investment decisions (such a contract is hereinafter referred to as a "discretionary investment contract");

agency or intermediation for the conclusion of an investment advisory contract or a discretionary investment contract;

rights indicated on the securities specified in paragraph (1), item (xiv) or securities specified in item (xvii) of that paragraph (limited to those that have the nature of the securities specified in item (xiv) of that paragraph);

rights set forth in paragraph (2), item (i) or (ii); or

rights set forth in paragraph (2), item (v) or (vi);

the acceptance of deposits of money, the instruments or certificates set forth in the items of paragraph (1), or electronically recorded transferable rights from customers, in connection with an act set forth in items (i) through (x) of this paragraph (in the case of conducting the acts set forth in item (ii), (iii) or (v) in connection with commodity-related market derivatives transactions, including acceptance from the customer of deposits of commodities (meaning those set forth in paragraph (24), item (iii)-3; hereinafter the same applies in this item), or instruments or certificates issued in connection with the deposited commodity in relation to these acts);

the transfer of bonds, shares, etc. in response to the opening of an account in order to carry out a transfer of the bonds, shares, etc. defined in Article 2, paragraph (1) of the Act on Book-Entry Transfer of Corporate Bonds and Shares (Act No. 75 of 2001); or

The term "financial instruments business operator" as used in this Act means a person registered by the Prime Minister pursuant to Article 29.

The term "prospectus" as used in this Act means a document describing the business and other particulars of an issuer of securities, which is prepared for a public offering or secondary distribution of securities, a general solicitation involving securities acquired by a qualified institutional investor as defined in Article 4, paragraph (2) (excluding those falling under the category of secondary distribution of securities), or a general solicitation, etc. involving securities acquired by a professional investor, etc. as set forth in Article 4, paragraph (3) (excluding those falling under the category of a secondary distribution of securities), and which is delivered, or is to be delivered upon request, to the other party to the public offering or secondary distribution.

The term "financial instruments intermediary service provider" as used in this Act means a person registered by the Prime Minister pursuant to Article 66.

The term "authorized financial instruments firms association" as used in this Act means a person incorporated based on the provisions of Chapter IV, Section 1, Subsection 1.

The term "financial instruments market" as used in this Act means a market on which the purchase and sale of securities or market derivatives transactions are conducted (excluding a market in which only commodity-related market derivatives transactions are conducted).

The term "financial instruments membership corporation" as used in this Act means a membership association incorporated based on the provisions of Chapter V, Section 2, Subsection 1 for the purpose of operating a financial instruments market.

The term "financial instruments exchange" as used in this Act means a financial instruments membership corporation or stock company which operates a financial instruments market after being licensed by the Prime Minister pursuant to Article 80, paragraph (1).

The term "financial instruments exchange market" as used in this Act means a financial instruments market operated by a financial instruments exchange.

The term "financial instruments exchange holding company" as used in this Act means a stock company whose subsidiary companies (meaning a subsidiary company as set forth in Article 87-3, paragraph (3)) include a stock company that operates a financial instruments exchange market (hereinafter referred to as a "incorporated financial instruments exchange"), which is incorporated after obtaining the authorization of the Prime Minister pursuant Article 106-10, paragraph (1) or which has obtained the authorization of the Prime Minister pursuant to that paragraph or the proviso to paragraph (3) of that Article.

The term "trading participant" as used in this Act means a person that is allowed to participate in the purchase and sale of securities or market derivatives transactions on a financial instruments exchange market, based on a trading license under Article 112, paragraph (1) paragraph (2), or Article 113, paragraph (1) or paragraph (2).

The term "derivatives transactions" as used in this Act means market derivatives transaction, over-the-counter derivatives transactions, or foreign market derivatives transaction.

The term "market derivatives transactions" as used in this Act means the following transactions as conducted on a financial instruments market in compliance with the standards and means prescribed by the person that operates the financial instruments market:

a transaction comprising a purchase and sale in which the parties promise to deliver and take delivery of a financial instrument and its value at a fixed time in the future, which the parties may settle by delivering and taking delivery of the difference in values if they sell or buy back the underlying financial instrument;

a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the numerical value of a financial index upon which the parties agree in advance (hereinafter referred to as the "agreed figure") and the actual numerical value of the financial index at a fixed time in the future (hereinafter referred to as the "actual figure");

a transaction comprising the first party's promise to grant the second party the option of effecting any of the following transactions between them by a unilateral manifestation of the second party's intention alone, and the second party's promise to pay the value of that option:

the purchase and sale of financial instruments (excluding a transaction provided for in item (i)); or

a transaction provided for in any of the preceding two items or in the following item to item (vi) (including any transaction designated by the financial instruments exchange that is equivalent to a transaction specified in the preceding item or item (iv)-2);

a transaction comprising the parties' mutual promise that, for the amount of money they have set as the principal, the first party will pay money to the second based on the rate of change in the interest rate, etc. (meaning the interest rate or any other rate specified by Cabinet Office Order as being equivalent to interest rate; the same applies hereinafter) of an agreed-upon financial instrument (excluding those set forth in Article 2, paragraph (24), item (iii) and item (iii)-3) or based on the rate of change in an agreed-upon financial index (excluding interest rates, etc. of financial instruments (excluding those set forth in Article 2, paragraph (24), item (iii) and item (iii)-3) and figures calculated based on them; hereinafter the same applies in this item and item (v) of the following paragraph) during the period they have agreed to, and the second party will pay money to the first based on the rate of change in the interest rate, etc. of an agreed-upon financial instrument (excluding those set forth in these items) or based on the rate of change in an agreed-upon financial index during the period they have agreed to (including transactions in which the parties promise that, in addition to paying those amounts, they will also pay or deliver and receive money or financial instruments equivalent to the amount they have set as the principal);

transactions wherein the parties mutually promise that, for the financial instruments (limited to those listed in paragraph (24), item (iii)-3; hereinafter the same applies in this item) of the quantity the parties have agreed to, one of the parties will pay the amount of money calculated based on the rate of change in the agreed period of a financial index associated with the financial instruments agreed with the other party, and the other party will pay the amount of money calculated based on the rate of change in the agreed period of the financial index agreed with the former party;

a transaction comprising the first party's promise to pay money to the second, and the second party's promise to pay money to the first if any of the following causes that the parties have stipulated in advance occurs (including transactions comprising the first party's promise to transfer a financial instrument, the rights connected to a financial instrument, or a monetary claim (other than a claim that constitutes a financial instrument or the rights connected to a financial instrument), but excluding transactions set forth in item (ii) to the preceding item):

a cause involving the credit status of a corporation or other similar causes specified by Cabinet Order; or

a cause on whose occurrence it is impossible or extremely difficult for either party to exert an influence, and which is specified by Cabinet Order as a thing that may have a material impact on the business activities of the parties or other business persons or firms (excluding causes specified in (a));

transactions similar to a transaction set forth in the preceding items and specified by Cabinet Order.

The term "over-the-counter derivatives transactions" as used in this Act means the following transactions as conducted neither on a financial instruments market nor on a foreign financial instruments market (except those that are specified by Cabinet Order as transactions which, in consideration of their content and other related factors, are found not to compromise the public interest or the protection of investors):

a transaction comprising a purchase and sale in which the parties to the purchase and sale promise to deliver and take delivery of a financial instrument (other than one set forth in paragraph (24), item (iii)-3 and item (v); the same applies in item (iii) and item (vi)) and its value at a fixed time in the future, and which the parties may settle by delivering and taking delivery of the difference in values if they sell back or buy back the underlying financial instrument or if they take other actions specified by Cabinet Order;

a transaction comprising the parties' promises to pay and receive an amount of money calculated based on the difference between the agreed figure (excluding a figure of a financial index associated with the financial instruments set forth in paragraph (24), item (iii)-3 or item (v)) and the actual figure (excluding a figure of a financial indicator associated with the financial instruments set forth in those items) or any transaction similar thereto; and

a transaction comprising the first party's promise to grant the second party the option of effecting any of the following transactions between them by a unilateral manifestation of the second party's intention alone, and the second party's promise to pay the value of that option, or any transaction similar thereto:

the purchase and sale of financial instruments (excluding the transactions specified in item (i)); or

a transaction provided for in the preceding two items or items (v) through (vii);

a transaction comprising the first party's promise to grant the second party the option of effecting a transaction by a unilateral manifestation of the second party's intention alone, in which the parties pay and receive the amount of money calculated based on the difference between the numerical value that they have agreed in advance to use as the agreed figure for the relevant financial index if the second party manifests the intention to effect the transaction, and the actual figure of the financial index (excluding a financial indicator associated with the financial instruments set forth in paragraph (24), item (iii)-3 or item (v)) at the time the second party manifests that intention, and the second party's promise to pay the value of that option, or any transaction similar thereto;

a transaction comprising the parties' mutual promise that, for the amount they have set as the principal, the first party will pay money to the second party based on the interest rate, etc. of an agreed-upon financial instrument (excluding one as set forth in Article 2, paragraph (24), item (iii), item (iii)-3 and item (v)) or based on the rate of change in an agreed-upon financial index during the period they have agreed to, and the second party will pay money to the first party based on the interest rate, etc. of an agreed-upon financial instrument (excluding those set forth in these items) or based on the rate of change in an agreed-upon financial index during the period they have agreed to (including transactions in which the parties promise that, in addition to paying those amounts, they will also pay or deliver and receive money or financial instruments (excluding those listed in item (iii)-3 and item (v) of that paragraph) equivalent to the amount they have set as the principal), or any transaction similar thereto;

a transaction comprising the first party's promise to pay money to the second, and the second party's promise to pay money to the first if any of the following causes that the parties have stipulated in advance occurs (including transactions comprising the first party's promise to transfer a financial instrument, the rights connected to a financial instrument, or a monetary claim (other than a claim that constitutes a financial instrument or the rights connected to a financial instrument), but excluding the transactions set forth in item (ii) to the preceding item), or any transaction similar thereto:

a cause involving the credit status of a corporation or other similar cause as specified by Cabinet Order; or

a cause on whose occurrence it is impossible or extremely difficult for either party to exert an influence, and which is specified by Cabinet Order as a thing that may have a material impact on the business activities of the parties or other persons or firms (excluding causes specified in (a));

a transaction other than what is set forth in the preceding items, but which has an economic nature similar thereto and is specified by Cabinet Order as a transaction regarding which it is found to be necessary to ensure the public interest or the protection of investors.

The term "foreign market derivatives transaction" as used in this Act means a transaction that is conducted on a foreign financial instruments market and is similar to a market derivatives transaction (excluding those associated with the financial instruments (limited to those set forth in item (iii)-3 of the following paragraph) or financial indexes (limited to the prices of the financial instruments and the figures calculated based on them)).

The term "financial instruments" as used in this Act means the following:

securities;

rights such as claims based on a deposit contract, or instruments or certificates indicating such rights, which are specified by Cabinet Order (excluding those specified in the preceding item);

currencies;

commodities (meaning commodities prescribed in Article 2, paragraph (1) of the Commodity Derivatives Transaction Act (Act No. 239 of 1950) specified by Cabinet Order as those which are deemed unlikely to be adversely affected, in terms of proper price formation, by the market derivatives transactions involving those commodities and are deemed conducive to the national economy if the market derivatives transactions involving those commodities are conducted in a financial instruments exchange market, by taking into consideration the existence or non-existence of measures for the stabilization of the price of those commodities in accordance with the provisions of laws and regulations and other conditions of price formation and supply and demand of those commodities; the same applies hereinafter);

assets other than what is set forth in each of the preceding items, of which there are many of the same kind, which have substantial price volatility, and which are specified by Cabinet Order as assets for with which the necessity to secure the protection of investors with regard to derivatives transactions (including similar transactions) is found (excluding commodities as defined in Article 2, paragraph (1) of the Commodity Derivatives Transaction Act); and

standardized instruments used by a financial instruments exchange for the purpose of facilitating market derivatives transactions by standardizing interest rates, the maturity period, or other conditions of financial Instruments set forth in item (i), item (ii), or item (iii)-2 or the preceding item and specified by Cabinet Office Order.

The term "financial index" as used in this Act means the following:

the price of a financial instrument or the interest rate, etc. of a financial instrument (excluding those specified in item (iii) and item (iii)-3 of the preceding paragraph);

the numerical values associated with the results of meteorological observations published by the meteorological agency and others;

among indexes on whose fluctuation it is impossible or extremely difficult for a person to exert an influence and which may have material impact on the business activities of business firms (excluding indicators provided for in the preceding item) and statistical values associated with social or economic conditions, the indicators and values specified by Cabinet Order as those which are found to be necessary to ensure protection for investors with regard to derivatives transactions (or other similar transactions) related to them (excluding commodity indices as defined in Article 2, paragraph (2) of the Commodity Derivatives Transaction Act which are calculated based on the prices of commodities defined in paragraph (1) of that Article other than commodities); and

numerical values calculated based on anything provided for in the preceding three items.

The term "foreign financial instruments exchange" as used in this Act means a person that has obtained the authorization of the Prime Minister pursuant to Article 155, paragraph (1).

The term "brokerage for clearing of securities, etc." as used in this Act means a subject transaction (meaning a "subject transaction" as defined in the following paragraph; hereinafter the same applies in this paragraph) that is conducted by a financial instruments business operator or registered financial institution under entrustment from a customer and for the account of the customer in accordance with the business rules of the financial instruments clearing organization or foreign financial instruments clearing organization, which is conducted on the condition that the obligation that arises from the subject transaction will be assumed by the financial instruments clearing organization (if such financial instruments clearing organization performs collaborative financial instruments obligation assumption services prescribed in Article 156-20-16, paragraph (1), this includes the collaborating clearing organization, etc. set forth in that paragraph) or the foreign financial instruments clearing organization, and which satisfies either of the following requirements:

the subject transaction is closed by the customer on behalf of the financial instruments business operator or registered financial institution; or

the customer specifies the other party to the subject transaction and other particulars specified by Cabinet Office Order in advance, at the time of the entrustment.

The term "financial instruments obligation assumption service" as used in this Act means taking over, novating, or in any other way bearing, on a regular basis, the obligations of a financial instruments business operator, registered financial institution, or securities finance company (hereinafter referred to as a "business counterparty to financial instruments obligation assumption services" in this paragraph) which arise from subject transactions (meaning the purchase and sale of securities, derivatives transactions (except those that are specified by Cabinet Order as transactions which are, taking into account of the status of the transactions, the impact exerted on Japan's capital market, and other circumstances, found not to compromise the public interest or the protection of investors), or transactions specified by Cabinet Order as incidental or related to them) conducted by, a business counterparty to financial instruments obligation assumption services.

The term "financial instruments clearing organization" as used in this Act means a person that engages in financial instruments obligation assumption services after being licensed by the Prime Minister or obtaining the approval of the Prime Minister pursuant to Article 156-2 or Article 156-19, paragraph (1), and the term "foreign financial instruments clearing organization" as used in this Act means a person that engages in financial instruments obligation assumption service after being licensed by the Prime Minister pursuant to Article 156-20-2.

The term "securities finance company" as used in this Act means a person that has been licensed by the Prime Minister pursuant to Article 156-24.

The term "professional investor" as used in this Act means the following:

qualified institutional investors;

the State;

the Bank of Japan; and

investor protection funds prescribed in Article 79-21 and other corporations specified by Cabinet Office Order beyond those set forth in the preceding three items.

The term "specified financial instruments exchange market" as used in this Act means a financial instruments exchange market on which, pursuant to the provisions of Article 117-2, paragraph (1), it is prohibited to make a purchase for a general investor as defined in that paragraph.

The term "specified listed securities" as used in this Act means securities listed only on a specified financial instruments exchange market.

The term "credit rating" as used in this Act means a grade which indicates, through symbols or figures (including anything specified by Cabinet Office Order as being similar thereto), the results of an assessment of the credit status of a financial instrument or a corporation (including anything specified by Cabinet Office Order as being similar thereto) (such assessment is hereinafter referred to as "creditworthiness" in this paragraph) (such grade excludes grades specified by Cabinet Office Order as being determined mainly in consideration of any particular other than creditworthiness).

The term "credit rating services" as used in this Act means engagement in the act of determining credit ratings and providing them or making them available for inspection (excluding acts specified by Cabinet Office Order as those that are found to have little likelihood of resulting in insufficient investor protection, in light of the scope of the other party to the act and any other circumstances) on a regular basis.

The term "credit rating agency" as used in this Act means a person registered by the Prime Minister pursuant to Article 66-27.

The term "financial instruments exchange engaged in the operation of a commodity market" as used in this Act means an incorporated financial instruments exchange that operates the necessary market for effecting commodity futures transactions (meaning futures transactions as defined in Article 2, paragraph (3) of the Commodity Derivatives Transaction Act; the same applies hereinafter), with the authorization referred to in the proviso to Article 87-2, paragraph (1).

The term "commodity exchange" as used in this Act means an incorporated association-operated commodity exchange operated as an (meaning an incorporated association–operated commodity exchange as defined in Article 2, paragraph (5) of the Commodity Derivatives Transaction Act) or an incorporated commodity exchange (meaning a stock company-operated commodity exchange as prescribed in paragraph (6) of that Article and limited to those specified by Cabinet Order as being subject to restrictions that are found to be of the same level as restrictions on an incorporated financial instruments exchange).

The term "commodity exchange holding company" as used in this Act means a commodity exchange holding company as defined in Article 2, paragraph (11) of the Commodity Derivatives Transaction Act (limited to those specified by Cabinet Order as being subject to restrictions that are found to be of the same level as restrictions on a financial instruments exchange holding company).

The term "high-speed trading" as used in this Act means any of the following acts for which the determination on performance of the act is automatically made by an electronic data processing system, and the provision of information necessary for conducting the purchase and sale of securities or a market derivatives transaction based on that determination to a financial instruments exchange or any other person specified by Cabinet Office Order is made by means of information and communications technology, which is specified by Cabinet Office Order as a means of shortening the time normally required for the provision of information (excluding acts specified by Cabinet Order as those which, in consideration of their content and other factors, are found not to compromise the protection of investors):

the purchase and sale of securities or a market derivatives transaction;

entrustment of the act set forth in the preceding item; and

beyond what is set forth in the preceding item, an act performed in connection with the act set forth in item (i), which is specified by Cabinet Order as an act equivalent to the acts set forth in the preceding two items.

The term "high-speed trader" as used in this Act means a person registered by the Prime Minister pursuant to Article 66-50.

The term "investment management-related services" as used in this Act means the following services performed in relation to investment management business, etc. (meaning investment management business (meaning the investment management business prescribed in Article 28, paragraph (4)), specially permitted services for qualified institutional investors, etc. (meaning the specially permitted services for qualified institutional investors, etc. prescribed in Article 63, paragraph (2), limited to those conducting the act set forth in paragraph (1), item (ii) of that Article), or specially permitted services for foreign investors, etc. (meaning the specially permitted services for foreign investors, etc. prescribed in Article 63-8, paragraph (1), limited to those conducting the act set forth in item (i) of that paragraph); the same applies in item (i), the following paragraph, and Article 66-80, paragraph (2)):

services related to the calculation of the appraised value of property subject to investment (meaning money and other property that a person that may conduct investment management business, etc. under the provisions of this Act invests for the right holder prescribed in Article 42, paragraph (1)), based on the securities and other assets constituting such property subject to investment, the interest or dividends arising from such assets, and the remuneration and other fees related to the investment of such property subject to investment;

services related to guidance for ensuring compliance with laws and regulations, etc. (meaning laws or regulations, dispositions by a government agency based on laws or regulations, or articles of incorporation and other rules).

The term "investment management-related services contracting business" as used in this Act means conducting, as a business, any of the services set forth in the items of the preceding paragraph for the person that has entrusted them, upon entrustment from a person that may conduct investment management business, etc. under the provisions of this Act.

The term "investment management-related services contractor" as used in this Act means a person registered by the Prime Minister pursuant to Article 66-71.

The term "specified non-financial information audit certification" as used in this Act means audit certification performed with respect to the specified non-financial information prescribed in Article 26-4, paragraph (2), item (ii) that is stated in the covered disclosure document prescribed in item (i) of that paragraph, in accordance with the standards and procedures prescribed in Article 26-5, paragraph (3).

The term "specified non-financial information audit certification business" as used in this Act means conducting specified non-financial information audit certification as a business.

The term "specified non-financial information audit certification provider" as used in this Act means a person registered by the Prime Minister pursuant to Article 26-6.