Financial Instruments and Exchange Act

If a document set forth in the items of Article 25, paragraph (1) (excluding items (iv) and (vii)) (hereinafter referred to as a "document" in this Article (excluding paragraph (3))) contains a false statement regarding a material particular, lacks a statement of a material particular that is required to be stated, or lacks a statement of a material fact that is necessary to prevent it from being misleading, the person submitting the document is liable to compensate a person that, during the period the document is being made available for public inspection as required by Article 25, paragraph (1), acquires or disposes of securities issued by the person submitting the document (excluding a document set forth in Article 25, paragraph (1), item (x)) or by a person whose parent company, etc. (meaning a parent company, etc. as defined by Article 24-7, paragraph (1)) is the person submitting the document (limited to a document set forth in Article 25, paragraph (1), item (x)) other than through a public offering or secondary distribution, for damage arising from the statement being false or having been omitted (hereinafter collectively referred to as a "false statement, etc." in this Article), to an extent not exceeding the amount calculated in accordance with the rule provided in Article 19, paragraph (1); provided, however, that this does not apply if the person that acquires or disposes of the securities knows of the false statement, etc. at the time of the acquisition or disposal.

In the case referred to in the preceding paragraph, if the person that would be liable to compensate proves that they did not intentionally or negligently make the false statement, etc. in the relevant document, that person is not liable for the compensation under the provisions of that paragraph.

In the case referred to in paragraph (1), a statement regarding information on forecasts of future business activities and other uncertain information specified by Cabinet Office Order, among the particulars stated in the documents set forth in the items of Article 25, paragraph (1) (limited to items (i) through (iii), item (vi) and item (viii)), must not, in a case specified by Cabinet Office Order as one in which reasonableness is found to be ensured in light of the process of consideration leading to that statement on the part of the company that submitted the relevant document, be construed as falling under a false statement solely because a fact differing from that statement becomes known or because of any other circumstance specified by Cabinet Office Order.

In the case referred to in the main clause of paragraph (1), if the fact that a false statement, etc. in the relevant document is contained is disclosed, a person that has acquired the relevant securities within the one year prior to the day of the disclosure of the existence of the false statement, etc. (hereinafter referred to as the "disclosure date" in this paragraph) and that continues to hold the securities on the disclosure date, may assert the amount calculated by deducting the average market value (or, if no market value exists, the estimated disposal value; hereinafter the same applies in this paragraph) during the one month after the disclosure date from the average market value during one month prior to the disclosure date, to be the amount of damage arising from the document's false statement, etc.

The term "disclosure of the existence of a false statement, etc." as used in the preceding paragraph means that the person submitting the document or a person that has statutory authority over the business or property of the person submitting the document has taken measures to put the material particular that is required to be stated and that the document's false statement, etc. concerns or the material fact that is necessary to prevent the document from being misleading in connection with the same, into a form that allows for a large number of persons to learn of it through public inspection provided in Article 25, paragraph (1) or through other means.

In the case referred to in paragraph (4), if the person that would be liable to compensate proves that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the securities that could have arisen from the document's false statement, etc., the person is not liable for the whole or such part of the compensation.

In a case referred to in paragraph (4) other than one referred to in the preceding paragraph, if the court finds that the whole or part of the damage sustained by the claimant was due to circumstances other than the decline in the value of the securities that could have arisen from the document's false statement, etc., but that it is extremely difficult to prove the amount of damage arising from such other circumstances due to the nature, based on the entire import of oral arguments and the results of an examination of evidence, the court may determine an appropriate amount as the amount of damage for which the relevant person is not liable to compensate.

The provisions of Article 20 apply mutatis mutandis to a claim for compensation under the preceding Article. In this case, in Article 20, the term "Article 18" is deemed to be replaced with "Article 21-2", in item (i) of that Article, the phrase "the securities registration statement or the prospectus" is deemed to be replaced with "a document set forth in one of the items of Article 25, paragraph (1) (excluding items (iv) and (vii))", the term "three years" is deemed to be replaced with "two years", and in item (ii) of that Article, the phrase "for seven years (excluding, if an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) has been issued, the period from the day on which the order for suspension is issued to the day on which the order is canceled) from the time when the notification under the provisions of Article 4, paragraphs (1) through (3) for the public offering or secondary distribution of the securities becomes effective or the prospectus is delivered" is deemed to be replaced with "for five years from the time when the document is submitted".

If a securities registration statement contains a false statement regarding a material particular, omits a statement of a material particular that is required to be stated, or lacks a statement of material fact that is necessary to prevent it from being misleading, persons set forth in Article 21, paragraph (1), items (i), (iii) and (iv) are liable to compensate a person that, without knowing that the statement is false or has been omitted, acquires or disposes of securities issued by the person submitting the securities registration statement other than through a public offering or secondary distribution, for damage arising from the statement being false or having been omitted.

The provisions of Article 21, paragraph (2) (limited to the portions pertaining to items (i) through (iii)) apply mutatis mutandis to a person that would be liable for the compensation set forth in the preceding paragraph.

In the case referred to in paragraph (1), a statement regarding information on forecasts of future business activities and other uncertain information specified by Cabinet Office Order, among the particulars stated in a securities registration statement, must not, in a case specified by Cabinet Office Order as one in which reasonableness is found to be ensured in light of the process of consideration leading to that statement on the part of the person that submitted the securities registration statement, be construed as falling under a false statement solely because a fact differing from that statement becomes known or because of any other circumstance specified by Cabinet Office Order.

No person may deem, based on a notification under Article 4, paragraphs (1) to (3) for a public offering or secondary distribution of securities having been made and having come into effect, nor based on an order for suspension under Article 10, paragraph (1) or Article 11, paragraph (1) having been canceled, that the Prime Minister certifies a statement contained in the securities registration statement submitted for the notification to be true and accurate, that the Prime Minister certifies that the securities registration statement does not omit a statement as to a material particular, or that the Prime Minister guarantees or recognizes the value of the securities.

No person may make a representation that is in violation of the provisions of the preceding paragraph.

With regard to the application of Article 7, Articles 9 through 11, Articles 17 through 21, Article 22, and the preceding Article if a statement to which Article 5, paragraph (4) is applicable or an amended statement in connection with such a statement is submitted, or if a prospectus to which Article 13, paragraph (3) is applicable is prepared, in Article 7, paragraph (1), the phrase "a statement or other document under Article 5, paragraph (1) or paragraph (13)" is deemed to be replaced with "a statement or other document under Article 5, paragraph (1) or paragraph (13) (including the reference documents for the statement, if it is one to which Article 5, paragraph (4) is applicable (including as applied mutatis mutandis pursuant to Article 5, paragraph (5); the same applies in Articles 9 through 11); the same applies in this paragraph)"; in Article 9, paragraph (1), the phrase "a statement or other document under Article 5, paragraph (1) or paragraph (13) or Article 7, paragraph (1)" is deemed to be replaced with "a statement or other document under Article 5, paragraph (1) or paragraph (13) or Article 7, paragraph (1) (including the reference documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), which has been submitted in connection with such a statement)"; in Article 10, paragraph (1), the term "securities registration statement" is deemed to be replaced with "securities registration statement (including the reference documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), paragraph (1) of the preceding Article or this paragraph which has been submitted in connection with such a statement)"; in Article 10, paragraph (4), the term "amended statement" is deemed to be replaced with "amended statement (including the reference documents for the amended statement, if it is connected with a statement to which Article 5, paragraph (4) is applicable)"; in Article 11, paragraph (1), the phrase "a securities registration statement contains" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or paragraph (1) of the preceding Article which has been submitted in connection with such a statement) contains"; in Article 11, paragraph (2), the term "amended statement" is deemed to be replaced with "amended statement (including the reference documents for the amended statement, if it is connected with a statement to which Article 5, paragraph (4) is applicable)"; in Article 17, the phrase "a prospectus referred to in Article 13, paragraph (1)" is deemed to be replaced with "a prospectus referred to in Article 13, paragraph (1) (including the reference documents for the prospectus, if it is a prospectus to which Article 13, paragraph (3) is applicable)"; in Article 18, paragraph (1), the phrase "a securities registration statement contains" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement) contains"; in Article 18, paragraph (2), the phrase "a securities registration statement" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)"; in Article 18, paragraph (3), the phrase "a prospectus referred to in Article 13, paragraph (1) contains" is deemed to be replaced with "a prospectus referred to in Article 13, paragraph (1) (or a prospectus and the reference documents for that prospectus, if it is a prospectus to which Article 13, paragraph (3) is applicable) contains"; in Article 19, paragraph (2) and Article 20, item (i), the term "securities registration statement" is deemed to be replaced with "securities registration statement (including the reference documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)" and the term "prospectus" is deemed to be replaced with "prospectus (or a prospectus and the reference documents for that prospectus, if it is a prospectus to which Article 13, paragraph (3) is applicable)"; in Article 21, paragraph (1), the phrase "a securities registration statement contains" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement) contains"; in Article 21, paragraph (3), the phrase "a securities registration statement" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)"; in Article 21, paragraph (4), the phrase "a prospectus referred to in Article 13, paragraph (1) contains" is deemed to be replaced with "a prospectus referred to in Article 13, paragraph (1) (or a prospectus and the reference documents for that prospectus, if it is a prospectus to which Article 13, paragraph (3) is applicable) contains"; in Article 22, paragraph (1), the phrase "a securities registration statement contains" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement) contains"; in Article 22, paragraph (3), the phrase "a securities registration statement" is deemed to be replaced with "a securities registration statement (or a securities registration statement and the reference documents for that securities registration statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)"; and in paragraph (1) of the preceding Article, the term "securities registration statement" is deemed to be replaced with "securities registration statement (including the reference documents for the statement or amended statement, if it is a statement to which Article 5, paragraph (4) is applicable or an amended statement under Article 7, paragraph (1), Article 9, paragraph (1) or Article 10, paragraph (1) which has been submitted in connection with such a statement)".