Financial Instruments and Exchange Act

When the Prime Minister finds that securing appropriate performance of specified financial index administration services (meaning the business of calculating and publicizing specified financial indicators; the same applies hereinafter) conducted by a person engaged in specified financial index administration services is necessary for the public interest or protection of investors, the Prime Minister may designate that person as a specified financial index administrator.

When the Prime Minister makes designation under the provisions of the preceding paragraph (hereinafter simply referred to as "designation" in this Chapter), the Prime Minister must give written notice to that effect and of the name of the specified financial indexes subject to the designation to the specified financial index administrator.

When the Prime Minister makes designation, the Prime Minister must give public notice of the trade name or name and the location of the head office or principal business office or office of the specified financial index administrator (in the case of a foreign person that has a business office or office in Japan, including the location of its principal business office or office in Japan; the same applies in paragraph (1), item (iv) of the following Article), and the name of the specified financial indexes subject to the designation in the Official Gazette. The same applies in the event of any changes in those particulars.

When the Prime Minister determines that the reason for designation of a specified financial index administrator no longer exists, the Prime Minister must rescind the designation and give a written notice to that effect to the specified financial index administrator.

When the Prime Minister rescinds the designation under the provisions of the preceding paragraph, the Prime Minister must give public notice to that effect in the Official Gazette.

When a person engaged in specified financial index administration services is a person specified by Cabinet Office Order as a person that is found to be under appropriate supervision with respect to their specified financial index administration services by a foreign administrative organ or any other equivalent organization based on foreign laws and regulations, the Prime Minister is not to make the designation, notwithstanding the provisions of paragraph (1).

A specified financial index administrator must submit a document to the Prime Minister stating the following particulars, during the period specified by Cabinet Order starting from the day they received the designation; provided, however, that this does not apply if the specified financial index administrator discontinues the specified financial index administration services subject to the designation during that period:

its trade name or name;

the amount of stated capital or total amount of contributions, if it is a corporation;

the names of its officers, if it is a corporation;

the name and location of its head office, principal business office or office; and

other particulars specified by Cabinet Office Order.

The articles of incorporation, the certificate of registered information, and other documents specified by Cabinet Office Order must be attached to the document referred to in the preceding paragraph.

In the case referred to in the preceding paragraph, if the articles of incorporation have been prepared as electronic or magnetic records, the electronic or magnetic records (limited to those specified by Cabinet Office Order) may be attached to the document in lieu of written documents.

If any particular set forth in the items of paragraph (1) changes, the specified financial index administrator must notify the Prime Minister of this, pursuant to the provisions of Cabinet Office Order.

A specified financial index administrator must establish operational rules concerning specified financial index administration services pursuant to the provisions of Cabinet Office Order and obtain the authorization starting from the Prime Minister within the period specified by Cabinet Order from the day of receiving designation.

The operational rules set forth in the preceding paragraph must provide for the following matters and any other matters specified by Cabinet Office Order:

particulars concerning the policy and method of calculation and publication of specified financial indexes;

particulars concerning the operational control system for the proper execution of specified financial index administration services;

rules to be observed by a person that provides the calculation basis data (meaning the calculation basis data prescribed in Article 38, item (vii); the same applies in Article 156-89, paragraph (2)) to the specified financial index administrator (the person is referred to as a "data provider" in the following item and Article 156-89, paragraph (2), and the rules are referred to as the "code of conduct" in the following item);

particulars concerning the conclusion of a contract (including a contract related to the code of conduct) with a data provider;

particulars concerning entrustment of specified financial index administration services;

particulars concerning audits related to specified financial index administration services;

particulars concerning public inspection of explanatory documents related to specified financial index administration services; and

particulars concerning suspension or discontinuation of specified financial index administration services.

When a specified financial index administrator seeks to change its operational rules, it must obtain an authorization from the Prime Minister.

After obtaining the authorization set forth in paragraph (1) or the preceding paragraph for its operational rules, a specified financial index administrator must conduct its specified financial index administration services pursuant to the provisions of the operational rules.

If a specified financial index administrator seeks to suspend or discontinue its specified financial index administration services, it must notify the Prime Minister of this in advance, pursuant to the provisions of Cabinet Office Order.

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 a specified financial index administrator or the person that the specified financial index administrator has entrusted with its services (including a person that has received entrustment from that person (including entrustment at two or more degrees of separation from the original entrustment); hereinafter the same applies in this paragraph), to submit reports or materials that should serve as a reference in connection with the specified financial index administration services, and may have the relevant officials inspect the state of the business, or the books, documents, and any other articles, of the specified financial index administrator or the person that the specified financial index administrator has entrusted with its business (limited to the inspection necessary in connection with the specified financial index administration services).

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, within the scope that is found to be necessary for confirming the accuracy of the calculation basis data provided to a specified financial index administrator, order the data provider to submit reports or materials that should serve as a reference in connection with the calculation basis data, and may have the relevant officials inspect the state of the business, or the books, documents, and any other articles, of the data provider.

If the Prime Minister finds that improvement is needed in connection with operations of a specified financial index administration services, the Prime Minister may, to the extent necessary, order the specified financial index administrator to take measures that are necessary for the improvement.

If a specified financial index administrator violates a law or regulation or a disposition based on a law or regulation in connection with its specified financial index administration services, the Prime Minister may order the suspension of all or part of its business during a fixed period of no longer than six months.

If the Prime Minister orders the suspension of all or part of the business pursuant to the provisions of the preceding paragraph, the Prime Minister must issue public notice of this in the Official Gazette.

Irrespective of the category of procedures for hearing statements of opinion under Article 13, paragraph (1) of the Administrative Procedure Act, before seeking to issue a disposition based on the provisions of paragraph (1) or (2), the Prime Minister must conduct a hearing.

If a specified financial index administrator seeks to suspend or discontinue its specified financial index administration services or in any other case specified by Cabinet Office Order, the Prime Minister may recommend the specified financial index administrator to have all or part of its specified financial index administration services conducted by another person.

The procedures for implementing the provisions of Article 156-85 through the preceding Article and other necessary particulars for the implementation are specified by Cabinet Office Order.